Promoting innovative business models for a sustainable economy
Title: Inclusive Business Action Network (iBAN)
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ), European Union
Country: Global. One priority area of the programme activities lies in Cambodia, Nigeria and Zambia
Overall term: 2020 to 2022
Over the last five years, the importance of inclusive business has increased worldwide. This approach integrates people with low incomes into the value chains of companies: as customers, producers or suppliers. Inclusive business models are not only profitable but also improve the livelihoods of people surviving on less than eight dollars per day. They provide access to essential products and services or to new income opportunities. Women in particular benefit from this, as they are more greatly affected by poverty and its negative impacts.
Despite the advantages of inclusive business, there are only a few isolated examples of applications that have proven successful. However, there is a lack of strategies and concepts to ensure the broad-scale implementation of the approach. This is due to a series of systemic barriers:
- Poorly accessible market information
- A lack of capital or alternative financing opportunities
- Inefficient regulations
- A lack of expertise and capacities in the companies
This is where the project comes in, working together with policymakers, companies and experts to develop solutions that allow increased and improved implementation of inclusive business models. In this way, the project contributes to the Africa policy pursued by the German Federal Ministry for Economic Cooperation and Development (BMZ) under the Marshall Plan “Africa and Europe – A new partnership for development, peace and a better future”. Moreover, the project contributes towards the G20 partnership with Africa, which was initiated under the German Presidency.
The preconditions for inclusive business have improved and companies are increasingly implementing inclusive business models.
The project processes practical knowledge and scales up tried-and-tested approaches in collaboration with partners in Africa and Asia. It helps get companies ready for investment, advocates better policy environments, and improves access to and the processing of knowledge regarding inclusive business.
In order to strengthen companies directly, the project develops learning resources and conveys them with intermediary organisations such as impact investors, foundations or consulting firms. This gives rise to alternative sources of funding for companies and an increase in investment in business models that are relevant to social policy.
In addition, the project supports governments in the partner countries in improving framework conditions and developing appropriate incentive systems for the implementation of the business models. For this purpose, it provides targeted training courses for decision-makers in ministries and authorities. Moreover, the project promotes a South-South dialogue between African and Asian cooperation partners.
The project improves access to a range of digital information, knowledge and training solutions. One central component of this is an online platform offering practical information on business models, research findings or investment opportunities. With a view to being able to respond to current events, the project works together with a large number of partners to process knowledge. In this way, knowledge on what support is available is collated centrally, as for instance in the case of a site providing information on the current Covid-19 crisis.
Thanks to its holistic approach, the project not only strengthens individual companies, but also has a systemic impact that improves the implementation of inclusive business models in the partner countries in the long term. The key factor here is that the project promotes a change of perspective among the various stakeholders and thus sharpens their understanding of the challenges and potential associated with inclusive business models.
- In cooperation with Impact Capital Africa, the project helped 27 Zambian companies in 2019 to get ready for investment and supported investment offers worth a total of 10 million US dollars.
- Since 2017, the project has been using policy dialogues to advocate the implementation of an enabling environment for inclusive business models in South-East Asia. Inclusive business was incorporated into the Chairman’s Statement at the summits of the Association of Southeast Asian Nations (ASEAN) in 2017 and 2019. In addition, six out of ten ASEAN Member States have, with the support of the project, developed policy instruments and measures to improve the framework conditions for companies.
- In 2018, three existing websites were merged to form the innovative online knowledge platform inclusivebusiness.net. This platform provides a wide range of information for companies including, for example, the online magazine ‘CLUED-iN’, a publications database containing 2,300 entries or the Funder and Investor Database with 650 organisations offering financial assistance and technical support.