1. Katalyst’s Experiences with
Small and Medium Service Providers in Bangladesh
Study team
Ashutosh Tiwari
Md. Abdul Awal
Presented by
Jannat Adib Chowdhury 14 February 2018

2. Content Part 1: BACKGROUND Part 2: CASE STUDY EXAMPLES
14/02/2018
Content
Part 1: BACKGROUND
Study mandate
Methodology
Part 2: CASE STUDY EXAMPLES
Part 3: ANALYSIS & RECOMMENDATIONS
Value proposition from Katalyst to SMEs and value addition from SMEs to Market System
Comparative analysis of working with large versus small service providers
Lessons for MSD Projects/Financial Institutes/relevant institutes 2

3. 14/02/2018
Part 1
Background 3

4. 14/02/2018
Case Study Mandate 1
Examine Katalyst’s approach of identifying, selecting and collaborating with SMEs, especially those located regionally
Examine the Katalyst offer to these SMEs and assess how they compare viz a viz larger companies. 2
1. MSD projects- targets to be reached - the natural tendency could be to the choice to work with large service providers- however K worked wiith large number of SMEs. In 2016 K worked on developing a case study (peter davies) that focused on large service providers
And captured why IB matters for large service, but this year we wanted to dig deeper
Katalyst- targets to be reached - the natural tendency could be to the choice to work wih large service providers- however K worked wiith large number of SMEs
In 2016 K worked on developing a case study (peter davies) that focused on large service providers
Extract challenges and lesson’s learned in collaborating with SMEs (particularly in relation to the service quality, sustainability and scaling up). 3
Recommend engagement strategy with SMEs for the ongoing/future Market System’s Development projects. 4

5. About SMEs in Bangladesh
14/02/2018
About SMEs in Bangladesh
Total 7.81 million economic entities in Bangladesh ( BBS, 2013)
- 88% cottage enterprises , 11% SMEs.
SMEs constitute
- 75% of non-agricultural employment,
-25% to the national GDP.
Little data available on service sector SMEs of Bangladesh 21

6. Definition of SMEs in Bangladesh
Type of Industry
Replacement Cost
(Excluidng land and factory building cost)
Numbers of Worker Employed
Small Industry
Manufacturing
BDT 7.5 million to 150 million
31 to 120
Service
BDT 1 million to 20 million
16 to 50
Medium
Industry
BDT 150 million to 500 million
121 to 30. But for RMG/labour intensive industries, not more than 1000
BDT 20 million to 300 million
51 to 120
Source: National Industrial Policy 2016

7. Study methodology ( Qualitative in nature)
Review 25 engagements
Adherence to the government’s definition of SMEs
Regional location and non-industrial set-up
Nature of service provision
However, it’s worthe mentioning that while reviewing- it was evident there were some entities which were acting as service provider, but did not have all the elements of SMEs. Therefore, we used the term SME-SPs in the study.

8. In-depth review of interventions
Study methodology ( Qualitative in nature)
Review 25 engagements
In-depth review of interventions
Adherence to the government’s definition of an SMEs
Regional location and non-industrial set-up
Nature of service provision
Review of project archives
KIIs with SME focal persons through field visits in Mymensingh, Bogra, Rangpur and Jessore

9. Study methodology ( Qualitative in nature)
Review 25 engagements
In-depth review of interventions
Data analysis and develop recommendations
Adherence to the government’s definition of an SMEs
Regional location and non-industrial set-up
Nature of service provision
Review of project archives
KIIs with SME focal persons through field visits in Mymensingh, Bogra, Rangpur and Jessore
Factors to consider while collaborating with SMEs
Comparative analysis of engagement between large versus SMEs

10. SMEs Covered in the study
Location
KII
Nilpahamary 1
Bogra 3
Mymensingh 3
Dhaka 5
Jessore 1
Bagherhat 1

11. SMEs Covered in the study
Annapurna Fertiliser
Compost Fertiliser
Location
KII
Nilpahamary 1
Bogra 2
Mymensingh 3
Dhaka 6
Jessore 1
Bagherhat 3

12. SMEs Covered in the study
Location
KII
Bhai Bhai Store
Maize Contract Farming
UZBMO
Agri. Information
Nilpahamary 1
Bogra 2
GHEL
Chilling and Storage
Mymensingh 3
Dhaka 6
Jessore 1
Bagherhat 3

13. SMEs Covered in the study
Location
KII
Nilpahamary 1
Shanrnalata fish hatchary
Fish Fry
Bogra 2
Rupaly fish hatchary
Mymensingh 3
Fish Fry
Dhaka 6
Jessore 1
First hope feed
Poultry and fish feed
Bagherhat 3

14. SMEs Covered in the study
Location
KII
Nilpahamary 1
Direct Fresh
E-commerce
Bogra 2
Intefa
Micronutrient
Mymensingh 3
Dhaka 6
Dipshikha
Financial Services
Jessore 1
Agro Solutions
Fish Feed Formulation
Bagherhat 3
Radio Jhenuk
Agro based radio programs

15. SMEs Covered in the study
Location
KII
Nilpahamary 1
Bogra 2
Mymensingh 3
Dhaka 6
Bamboo basket
Entrepreneurs
Vegetable Transport Solution
Jessore 1
Bagherhat 3

16. SMEs Covered in the study
Location
KII
Nilpahamary 1
Bogra 2
Mymensingh 3
Dhaka 6
Jessore 1
Udayan Microfinance
Micro-finance
Bagherhat 3

17. Part 2: Case Study Examples 7
14/02/2018
Part 2:
Case Study Examples
1. The photo is overlapping the logo. See below slide 7

18. Annapurna Agro-service ltd.

19. Annapurna Agro-service ltd.

20. Katalyst Fertiliser market system Annapurna Acting as Sounding board
Product Development
Annapurna Fertilisers was focused primarily on production. Initially, it saw farmers as consumers, and not as possible producers of its products.
Annapurna received two awards- 'Bangabandhu National Agri award' for their outstanding contribution to Bangladesh’s Agriculture in 2017
And infact today, they are receiving Best  Agro- Entrepreneur for KIB krisi padak 2018.
Proof of concept
Know-how
Market Structure

21. Direct Fresh

22. Direct Fresh

23. Katalyst Forward market system Direct Fresh Market Expansion Know how
Risk Mitigation
Niche innovation
Enhancing Credibility
Market Structure
Proof of concept

24. Dipshikha

25. Dipshikha

26. Katalyst Vegetable market system Dipshikha Know how
Product Development
Proof of concept
Confidence building
Pro poor reach
Local knowledge

27. 14/02/2018
Flipped the photo
Part 3
Analysis and
Recommendations 13

28. Value proposition from Katalyst to SMEs
Market expansion
Product development
Risk mitigation
Confidence building
Know How
Acting as a sounding board
Enhancing credibility
Value proposition from Katalyst to SMEs
Co-financing obviously

29. Value addition from SMEs to the Market Systems Development
Value addition from SMEs to develop markets
Niche innovation
Market structure
Proof of concept
Local knowledge
Pro-poor reach

30. Replicability and scale
Factors to consider while engaging with SMEs
Finding the
right SMEs
Relevance of the SMEs
Feasibility
Additionality
Opportunity to introduce innovation
Replicability and scale
Outreach
Sustainability

31. Factors to consider while engaging with SMEs
14/02/2018
Factors to consider while engaging with SMEs
Finding the right SMEs
Leveraging on market intelligence (e.g. co-facilitator, retailer network)
Open call for partnership grants
Relevance of the SMEs
Sector alignment
Local rootedness
Inclusion of poor in their supply chain
Feasibility
- Five criteria/dimensions
Finding the right SMEs- market network, retailer, Phase 3- challenge grant
Relevance of the SMEs- three criteria 19

32. Factors to consider while engaging with SMEs
14/02/2018
Factors to consider while engaging with SMEs
4. Additionality - Contextualizing offer - Can farmer only act as suppliers/consumers? 5. Engagement - Depth of collaboration through co-facilitators/sector-focals 6. Outreach - regional location and remoteness - Interest and ability to generate high-user numbers
1. Priorities of project over a life cycle may change; but clear and justified alignment 20

33. Factors to consider while engaging with SME SPs
14/02/2018
Factors to consider while engaging with SME SPs
7. Replicability and Scale - Possibility of applying learning in another conext 8. Sustainability - Growth of income of farmers and SME service providers
1. Priorities of project over a life cycle may change; but clear and justified alignment 20

34. A comparative analysis between large versus small service providers
14/02/2018
A comparative analysis between large versus small service providers
Similarities
Openness to adopt inclusive
business models
Generating outreach
Facilitating Regulatory reform
Distinctions
- Monetary cost sharing
- Searching cost and time
- Geographical relevance
- Extent of openness to innovation
Lessons for local economic development
- Boosting local employment
Boosting local economy
Contributing to export earnings
Generating TAX base
Regulatory reforrm- brood policy, generating outreach, both are open to IB model 21

35. 14/02/2018
Thank You
Thank Asif Shahan, Swisscontact – Katalyst, last but not the least thanks to the persons who gave time for the interviews and for being candid. 22