Strengthening Grassroots Business Initiative SGBI

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Strengthening Grassroots Business
Initiative(SGBI)
Technical Briefing on the IFC Educational/Retail
Facility and the Strengthening Grassroots
Business Initiative (SGBI) Washington, DC
January 31, 2005
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What is the Gap?

• Direct support for those at the Base of the
  Pyramid
• 4 billion poor and marginalized living on 2/day
• Few economic opportunities or links to markets/
  limited access to social services
• WBG is challenged to reach this segment
  directly
• WBG addresses them indirectly thru education,
  health, infrastructure projects
• New type of clients Grassroots Business
  Organizations (GBOs)
• But GBOs face constraints to growth.. we can
  address these
• Capacity building, linkages and/or patient
  capital to support expansion and improved
  operations

3
Why should WBG engage?

• Strong synergy with WBG mission activities and
  priorities
• Direct poverty-reduction impact
• Opportunities for linkages to mainstream WBG
  projects
• Knowledge management and relationship building
• WBG offers much that is needed in this field
• IFC-SME experience, TA expertise, business
  knowledge, partnerships
• WB Local presence, convening power
• Good for reputation and image of WBG
• GBOs are visible and local
• Many interesting stakeholders

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Whats been done so far?

• Strengthening Grassroots Business Initiative
  (SGBI)
• launched May 2004
• 9 projects approved, 5 more under preparation,
  total
• portfolio of some 10 projects (taken on from
  the
• Development Marketplace and Capacity
  Building Facility)
• Systems and procedures established, including
  links
• to other IFC departments
• Good donor interest at the project level, with
  approx.
• 7.0 m mobilized (31 ratio). Potential
  for initiative-
• level and GBO level fundraising
• Good foundation of wholesale initiatives and
  good
• tie-in with local business community

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Plan for the next 3 years

• Cull, modest expansion
• Scale up efficiently, selectively
• Broaden impact in hubs, and in the field
• Structural broaden, as results warrant
• Funding
• Process, when the Board will be hearing more

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IFC Retail and Educational Facility Why?

• Objective Showcase for GBOs to find markets
  and educate wholesale buyers
• Both retail and e-tail access through the web
• Best way to tell the story is with the goods
  themselves
• Active program of themes, with outreach to
  local and development communities
• Positive public relations image for IFC and WBG
  as a whole

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IFC Retail and Educational Facility How?

• Management contracted out to third-party with
  solid
• experience
• Separate entity with professional management
• Dont expect a large profit, but rental income
  should
• cover operating costs, plus capital costs
  over a
• reasonable period
• Merchandising interwoven with story-telling,
  big
• potential for IFC/WBG image and outreach

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In summary

• Gap in WBG services to provide direct support
  to the base
• of the pyramid
• GBOs are appropriate vehicles - - non-financial
  equivalents
• to MFIs
• Strong alignment with WBG mission,
  capabilities, activities
• and messages
• Growing track record at project level, with
  good pilots also
• in wholesale and scaling up
• Retail shop compliments supports field-based
  efforts, and
• offers good outreach opportunities for
  IFC/WBG, and for
• GBOs themselves

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SGBI
THANK YOU! For more information about our
activities, visit our website at http//www.ifc.o
rg/gbo