LINKING SMALL FIRMS

Problem

The low-income population in Latin America and the Caribbean has an enormous and growing purchasing power, thus constituting an attractive consumer market. At the same time, many large companies are unable to successfully operate in such Base of the Pyramid (BOP) markets, as they are simply engaged in selling to the poor and are not viewing them as co-creators and co-owners of new enterprise initiatives. Many large companies are not aware of emerging innovative business models that show double-bottom-line benefits: making profits out of their corporate core business, whilst simultaneously achieving social impact by leveraging locally available yet untapped resources.

Objective:

The MIF aims to create better economic opportunities for low income populations by integrating them into the value chains of larger companies. This will be achieved by supporting sustainable business practices, by promoting the inclusion of low-income groups as partners, and by generating and disseminating knowledge to key audiences to sustain the implementation of such practices.

MIF Solutions:

• The MIF develops effective ways of incorporating low-income populations and micro and small enterprises (MSEs) into large companies’ value chains as reliable and efficient suppliers of goods and services, distributors, or other types of partners, based on their knowledge of the local market needs.
• The MIF will also ensure that such interventions have an impact on poverty alleviation, through the development of unique methodologies of profitable corporate business adapted to BOP markets’ social and cultural environment, as well as the involvement of key actors, including governments and civil society, in creating a conducive environment for MSE inclusion.

Results and Impact:

• The expected result is an increase in the number of Individuals and MSEs or smallholder farmers from low-income and vulnerable populations included in larger company value chains.
• The expected impact is an increase in income of individuals and smallholder farmers through commercial partnerships with larger companies.