ENHANCING CAPACITIES OF MSMEs

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ENHANCING CAPACITIES OF MSMEs
by Felix A. Tonog

• Rural Bankers Association of the Philippines
• 52nd Charter Anniversary Symposium
• October 8-9, 2009
• Sofitel Philippine Plaza-Manila

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• The Philippine Business for Social Progress
  (PBSP) is the largest corporate-led, non-profit,
  social development foundation in the Philippines.
  Founded in the 1970s by 50 business leaders,
  PBSP is at the forefront in the fight against
  poverty through trailblazing corporate social
  responsibility (CSR) or corporate citizenship
  programs developed and implemented with the
  strategic commitment of more than 240 PBSP
  member-companies.

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• OUR VISION
• To be the leader in promoting business sector
  commitment to social development
• OUR MISSION
• PBSP is committed to the empowerment of the poor
  by promoting business sector leadership in, and
  commitment to, poverty reduction programs that
  lead to self-reliance

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PBSPs Poverty Reduction Program
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THE WAY TO GO
PBSPs Enterprise Development Program
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PBSPs Enterprise Development Program Goals
Objectives
To contribute to reducing poverty in the
Philippines
To create and grow enterprises, generating jobs
and income opportunities for men and women
Increased MSMEs access to financial and business
development services
Enhanced institutional capacity of accredited
intermediary financial and microfinance
institutions through wholesale credit and
business support services
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Small and Medium Enterprise Credit (SMEC) Program

• a wholesale lending program that aims to help
  accredited rural and thrift banks and
  microfinance institutions increase their loan
  portfolios to MSMEs.
• Alongside Credit, SMEC provides business support
  to accredited financial intermediaries to enhance
  their lending capabilities to MSMEs.

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Business Development Services

• Institutional capacity development of accredited
  intermediary financial and microfinance
  institutions
• Improving MSMEs competitiveness through the
  Business Advisory Program (BAP)
• Facilitating access to market through information
  brokering, trade fairs, and business-to-business
  networking
• Providing MSMEs and IFIs information critical to
  their businesses

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Institutional Development Support to RBAP
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• The most effective new models (of enterprise
  development) combine the provision of capital
  with mentoring, business education, and skills
  training.

Hammond, et al. (2007) The Next 4 Billion
Market Size and Business Strategy at the Base of
the Pyramid
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What is BDS?

• BDS refers to the wide range of services used by
  entrepreneurs to help them operate efficiently
  and grow their business with the broader purpose
  of contributing to economic growth, employment
  generation, and poverty alleviation.
• Studies have shown that BDS increases the
  survival of small-scale enterprises, and
  contribute to their growth

Donor Committee for Enterprise Development,
Guiding Principles, 2001
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Types of BDS

• Market Access
• Infrastructure
• Policy/Advocacy
• Input Supply
• Training Technical Assistance (including
  Business Advising)
• Technology and Product Development
• Alternative Financing Mechanisms

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PBSP-Business Advisory Program

• PBSP-BAP delivers business advice and technical
  assistance to MSMEs by engaging Filipino
  professional experts as Volunteer Advisers
• It covers almost all dimensions of business such
  as Accounting and Finance, Marketing, Production,
  and Organizational Management

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Profile of Clients Served
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Profile of Clients Served
n299
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Results of BAPs Assistance

• 73 reported higher income and sales
• 95 improved access to market
• 58 hired more workers to cope with increased
  demand
• 27 maintained employment level
• 9 were able to avail of financing from various
  sources

CESO-BAPII End-of-Project Evaluation Report (2008)
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(No Transcript)
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Integrating Business Advising with Financing

• Improve loan repayment loan quality
• Enhance the financial performance and
  credit-worthiness of MSME-clients
• Improve business of MSME-clients, thus expanding
  demand for financing
• Strengthen MSME-client relations
• Improve the bank/MFIs social performance

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• Financing, coupled with BDS, can be a unique
  expression of Corporate Social Responsibility of
  Financial Institutionsa business solution to
  addressing poverty.

If we can spend the early decades of the 21st
century finding approaches that meet the needs of
the poor in ways that generate profits and
recognition for business, we will have found a
sustainable way to reduce poverty in the
world. Bill Gates (2008), Davos.
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• Private enterprise must discharge its social
  responsibility towards society in a way which
  benefits its unique competence. It should involve
  itself more and more in social development for
  the total well-being of the nation.
• PBSP Statement of Commitment

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• Private enterprise is financially and
  technologically equipped to participate actively
  in social development. In terms of scientific
  technology and managerial competence, private
  enterprise can help provide the total approach
  for social development in our depressed
  communities.
• PBSP Statement of Commitment

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• PBSP aims to combat poverty through enterprise
  development via job generating programs, and by
  creating and assisting micro, small and medium
  enterprises through credit and non-credit
  programs. This recognizes the role which
  enterprise plays in development, democracy and in
  the protection of human rights.

Manuel V. Pangilinan Chairman, PBSP PLDT
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For more information, please contact

• The Group Director
• Enterprise Development Group
• PHILIPPINE BUSINESS FOR SOCIAL PROGRESS
• PSDC Building, Magallanes cor. Real Sts.,
• 1002 Intramuros, Manila, Philippines
• Telephones (63-2) 527-7741 to 48 Fax (63-2)
  527-3751
• Email pbsp_at_pbsp.org.ph
• www.pbsp.org.ph

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Thank You!