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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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Presentation on theme: "UN ECONOMIC COMMISSION FOR AFRICA SME BUSINESS LINKAGES: KEY LEARNINGS FROM UGANDA ADDIS, ETHIOPIA, 17-18 NOV. 2011."— Presentation transcript:

1 UN ECONOMIC COMMISSION FOR AFRICA SME BUSINESS LINKAGES: KEY LEARNINGS FROM UGANDA ADDIS, ETHIOPIA, 17-18 NOV. 2011

2 THE CONCEPT A 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.

3 APPROACH Target 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.

4 PROJECT IMPACT Behavioral 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.

5 CHALLENGES Internal – operational challenges. External – Inadequate policies. Local content - outsourcing; Taxation; Infrastructure; Capacity Building.

6 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.

7 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.

8 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.

9 Thank You


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