New prospects for growth and learning for small businesses in Balochistan and KP

Jul 28, 2016

Inclusive markets are a way of building vibrant economies in which the poor and marginalized groups, such as women and young people, participate actively in building a prosperous society. In 2003, UNDP created the Suppliers Development Programme (SDP) in Mexico to develop such markets. The successful initiative spread to other countries across Latin America, including El Salvador, Honduras, Haiti and Colombia. Now, Pakistan is the first country in Asia to replicate this initiative, guided by the SDP management team of El Salvador, in an important example of cooperation between countries of the Global South.

Developing micro, small and medium enterprises (MSMEs), which are at the heart of inclusive markets, has knock-on benefits all the way along the value chain and in the broader economy. Large companies depend on good inputs from their suppliers in order to offer high quality products and services. Other companies in the MSME network benefit from strong business relationships and a more integrated supplier landscape. And communities benefit as MSMEs which employ or are run by marginalized groups prosper.

The SDP improves the competitiveness of MSMEs, helping them strengthen their financial situation, labour practices and security with the final aim to facilitate their linkage with the market. Companies from any sector, which show potential in terms of business development or community impact, can participate, while companies all along the same value chain are encouraged to invest in the programme. This means that smaller companies bear a lesser share of the financial burden, whilst creating a close-knit business landscape with a strong sense of shared purpose.

Documented experience from other countries has shown that companies which participate in the SDP improve their quality and delivery times, and reduce wastage. They gain access new markets, increase sales and access finance which was previously unavailable to them.

To achieve this, companies will be assisted by consultants coordinated by two management teams: one each in Quetta and Peshawar, working in alignment with UNDP’s Balochistan Economic Development Project and Khyber Pakhtunkhwa Development Programme respectively. In each of these provinces, management teams are currently delivering a course in Suppliers Development Methodology to 45 trainee consultants selected from a pool of private sector professionals. These consultants are charged for training in order to ensure their commitment, and undergo a four-month training in partnership with an SME to which they apply their learning.

The first cohorts of SDP consultants will complete their training at the end of July 2016, and be rigorously assessed to determine if they can be certified. After the SDP launches over the coming months, certified trainees will support 50 value chains with about 500 MSMEs across the two provinces over the next four years, and lead the way in building a more integrated supplier landscape.

Links

SDP Pakistan: http://www.sdppakistan.org/

SDP el Salvador: http://www.pdp.com.sv/main/eng/inpr/inpr-objpro.jsp

Video on SDP Haiti https://www.youtube.com/watch?v=1VtRadn3Wxg  (in French; English subtitles available)