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SMEs

What’s new: In start-ups, SMEs, and sharing platforms?

Denis Medvedev's picture
Rifat, at her cosmetics shop and general store in Gujar Khan Town, World Bank Flickr
Entrepreneurship encompasses multiple dimensions, which is why it's always a pleasure to follow the NBER Entrepreneurship Working Group meetings – both for the high quality of papers and discussions as well as for the breadth of topics. This year's winter workshop was no exception, with topics ranging from start-up job creation, to corporate structure in Imperial Russia, to negative externalities of ride-sharing platforms.

Here are a few highlights:

Making marble from bottles: plastic waste’s second life in Kenya

Justine White's picture
It is estimated that every day Nairobi generates 3,000 tons of waste; 12% is plastic. At the same time, the demand for new houses is growing at a rate of 600 per day. Innovative climate technologies can offer solutions that tackle both the challenges of plastic recycling and the increasing housing demand. But what is an effective approach to introducing technologies that can impact a critical number of companies in the value chain?
 
“From plastic waste to building materials,” a partnership supported by the World Bank Group gathering six private sector frontrunners in Kenya, is testing exactly this.
From plastic to marble. Photo © Better Future Factories
From plastic to marble. Photo © Better Future Factory

A network approach to growing green entrepreneurship

Samantha Power's picture
Climate Business Innovation Network participants at the end of a workshop held in Pretoria, South Africa. Photo © World Bank


How do you empower local entrepreneurs to advance bottom-up solutions to climate change? How do you provide local green entrepreneurs with the technical assistance and market intelligence they need to validate innovative technologies and business models? How do you improve these entrepreneurs' access to capital?
 
These are some of the questions discussed by the World Bank Group’s Climate Business Innovation Network (CBIN) at its most recent meeting in Pretoria, South Africa earlier this month.
 
This network of leaders of incubators and accelerators from around the world meets bi-annually to share their experiences supporting green entrepreneurs, brainstorm solutions to common challenges, and learn from business incubation experts in this emerging field.
 

Powering up Africa through innovation

Simon Bell's picture
Recent World Bank investment climate surveys find that the top two constraints for small and medium enterprises (SMEs) in Africa are access to finance and access to energy. Given that SMEs contribute disproportionately to boosting job creation, GDP, and exports, addressing these two constraints is critical to promoting economic development on the continent.
 
A new project combining skills across the World Bank Group and IFC is taking advantage of disruptive advances in the energy and finance sectors to address these longstanding challenges for SMEs.
 
Current access to electricity remains woefully low and is a major impediment to economic growth. More than half of Africa’s population isn’t connected to the energy grid and has no access to reliable power. At the same time, fewer than 50% of adults have an account with a formal financial institution.
 
In recent years, however, two important developments have made it possible to begin addressing these challenges:
  1. Off-grid energy solutions—notably solar power—have fallen dramatically in price with new business models working to scale them
  2. New digital-based financing mechanisms, such as crowdfunding, cryptocurrencies, peer-to-peer lending, psychometric testing, big data, and blockchain have emerged as tools for under-served finance markets.

There are strong parallels in these advances for both sectors. Whereas both energy and finance are traditionally provided by large-scale, centralized service providers—state-owned electricity utilities and large commercial banks, respectively—new solutions have effectively decentralized and democratized the provision of these services. Now a range of smaller, innovative companies can provide these services and consumers can go “off-the-grid” for both their energy and financial needs.
 

Anne Mwaniki, CEO of Solimpexs Africa, a Kenyan company producing solar-powered heating systems.
Photo © infoDev / World Bank

India: Digital finance models for lending to small businesses

Mihasonirina Andrianaivo's picture
Economic analysis suggests that the next impetus for growth in India's economy will come from micro, small, medium-size enterprises (MSMEs) and startups.

A slew of programs announced in recent years have fostered a more favorable business environment for financial technology – or fintech – models to emerge in the MSME lending space – in India. 

Chocolate innovation: Sweet tooth hackers solve cocoa farmers’ challenges

Katie Nunner's picture

While chocolate is a sweet treat for consumers around the world, its producers face many challenges. Every year, more than five million family farmers in countries like Côte d’Ivoire, Cameroon, Indonesia and Brazil produce about four and a half million tons of cocoa beans, according to the World Cocoa Foundation. Farm-level input providers, financial institutions, chocolate manufacturers, development organizations and more are coming together to create digital solutions to improve access to finance and boost agricultural productivity for a sustainable and climate smart cocoa supply chain. 

Last week, the World Cocoa Foundation’s partnership meeting brought together key stakeholders from small scale farmers to large multinationals including Cargill, Nestle, and Mars, under the theme “Accelerating Sustainability Through Technology and Innovation.”

To spark the industry into further innovation and collaboration, infoDev partnered with the WCF to sponsor the second annual Chocothon, a two-day hackathon where three teams came together to “hack” the cocoa supply chain and generate new creative solutions to the common challenges cocoa farmers and suppliers face. The Future Food Institute, the International Trade Center, and Valrhona, a premium chocolate manufacturer, were all heavily involved in the Chocothon as mentors and a number of us from infoDev joined in the excitement. Given their experience with cocoa supply chain partners, Valrhona’s co-sponsorship and engagement provided valuable insights to guide the ‘choco-hackers.’  
 

The Geo Cocoa, Kejetia, and Cocoa Run teams pose together with some of the Chocothon mentors.
Photo Credit: World Cocoa Foundation

Rethinking saving practices in the digital era

Margaret Miller's picture



3-1-0 Three minutes to complete the online loan application, one second for approval and with zero human touch for SME loans. This is the marketing slogan used by Ant Financial, one of China’s largest online lenders with more than 400 million active users.

Digital finance is a cost-effective route to financial inclusion for many unbanked and underserved consumers in emerging markets. But digital finance is also still developing and maturing, with many open questions on the impact it will have. One of the most important of these is whether digital finance will ultimately help consumers to make better financial decisions over time.

October 31 is World Savings Day, a day which emphasizes the importance of savings to economic development, and provides a good occasion to look at how fintech may help solve the challenge of savings.

Re-igniting SME development in Zimbabwe

Simon Bell's picture


Zimbabwe is not known as an economic dynamo in Africa.  In fact, most people who know anything about the country probably have the opposite impression.  Yet not so long ago, Zimbabwe was the bread basket of Africa – endowed with amazingly fertile land, abundant mineral resources, and one of the best educated populations on the continent.
 

India, Malaysia share experiences how to support start-up SMEs

Mihasonirina Andrianaivo's picture



Both Malaysia and India are countries steeped in innovation with a strong desire to foster new, innovative start-up enterprises. 
 
With a global focus on providing more support to Small and Medium Scale Enterprises (SMEs) – and recognizing that start-ups play a crucial role in creating jobs, growth, exports and innovation within most economies – Asian countries are keen to learn from each other’s experiences. These efforts have taken on a greater priority in India under the leadership of Prime Minister Modi and his “Make in India” and “Start-Up India” campaigns.
 
The World Bank has been supporting India for several years in the area of MSME finance, which is one of the most widely recognized impediments to SMEs, particularly for start-up enterprises.  Through the $500 million MSME Growth Innovation and Inclusive Finance Project, the World Bank supports MSMEs in the service and manufacturing sectors as well as start-up financing for early stage entrepreneurs.  The start-up support under this project ($150 million) is for early stage debt funding (venture debt) which isn’t well evolved. (Unlike India’s market for early stage equity which is considered to already be reasonably well developed.)
 
As part of this project, the World Bank and the Small Industries Development Bank of India (SIDBI), recently held a workshop in Mumbai to allow market participants to learn from one another, and particularly about Malaysia’s successful support for innovative start-up SMEs. The workshop’s participants included banks, venture capital companies, entrepreneurs, fintech companies, seed funders and representatives from the Malaysian Innovation Agency (Agensi Inovasi Malaysia – AIM).

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