UN ECONOMIC COMMISSION FOR AFRICA SME BUSINESS LINKAGES: KEY LEARNINGS FROM UGANDA ADDIS, ETHIOPIA,...
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Transcript of UN ECONOMIC COMMISSION FOR AFRICA SME BUSINESS LINKAGES: KEY LEARNINGS FROM UGANDA ADDIS, ETHIOPIA,...
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UN ECONOMIC COMMISSION FOR AFRICA
SME BUSINESS LINKAGES: KEY LEARNINGS FROM UGANDA
ADDIS, ETHIOPIA, 17-18 NOV. 2011
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THE CONCEPTA supplier development program that upgrades MSME suppliers and increases their competitiveness and sustainability;
A pro-poor business model that creates mutually beneficial business linkages between MSME producers and large local and TNCs;
Piloted on 5 sectors ; Agribusiness, Real estate, Telecom, Services, and Manufacturing with National BDS Agency and Investment Centre and joint implementers.
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APPROACHTarget large companies and TNCs of repute;Together with TNC, Identify SME suppliers;Carry out Business Health Check (BHC) on SMEs;Basing on BHC, offer tailored BDS to the SMEs;Basing on TNC’s strategy, produce SMEs business plans to assist TNC achieve their Strategies;Let TNC coach and mentor SME partners and develop them to meet required standards.Identify policy issues that need to be addressed to enhance robustness of BL.
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PROJECT IMPACTBehavioral transformation of SMEs reflected in adherence to contracts;Improved business management control systems; Increased sales turnover of 100% to 300% within two years;Two to three fold rise in employment;Increased access to financing; market information; technical assistance and markets.
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CHALLENGES
Internal – operational challenges.External – Inadequate policies.
Local content - outsourcing;Taxation;Infrastructure;Capacity Building.
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CRITICAL SUCCESS FACTORS
• Significance of the economic sectors selected;
• Involvement of a credible BDS provider; • Existence of reputable corporates that value
ethical way of doing business and respect canons of corporate governance;
• Conducive business environment that allows investment in and nurturing of long-term business partnerships;
• Robustness of the banking and financial sector;
• A well managed publicity campaign.
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KEY LEARNINGS
• Importance of harmonisation of private sector development policies, programmes and institutional framework;
• In LDCs business linkages are can be long and painful, requiring a strong institutional support mechanism to address multifaceted dimensions necessary for their success;
• The cost of and expertise required for creating linkage-ready SMEs in developing countries cannot be wholly found in or accommodated by TNCs in today’s global village.
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KEY LEARNINGS
• SMEs are capable of learning best practice in standards and business management but just need a strong reason to do so on long-term basis;
• Business Linkages can be a fast truck way of introducing SMEs into mainstream banking and keeping them there;
• There are many TNCs that are willing to work with SMEs but just do not understand what it takes to make SMEs dependable partners.
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Thank You