Project Name: Business Innovation Facility 1
Client: PWC as prime contractor with Imani Development as consortium contractor
Donor: DFID
Location: Malawi and Zambia (Imani managed) as well as Bangladesh, India, Nigeria
Time Span: 2010 – 2013
Budget: £500k for technical assistance and £500k for management

This long-term, ground breaking project launched in 2010 to identify and support inclusive business project opportunities in five pilot countries, with Imani as the consortium partner delivering the BIF strategy in both Malawi and Zambia.

About:

Imani worked directly with commercial companies: agro-processors, information and communications technology firms, agricultural estates, utility companies, farmer associations, as well as community groups and development organisations engaging with the poor.  Many of the business models identified increase smallholder farmer or other Small and Medium Enterprise benefits by integrating them in the ‘last mile’ of supply chains of larger businesses, thus directly encouraging private sector development and pro-poor growth. Beneficiaries were either consumers or producers of goods and services with many projects focused on climate resilience. A key principle of these projects was that they demonstrated wealth creation through an inclusive, commercially viable approach.

As country manager, Imani’s role included:

-Knowledge exchange
-Brokering partnerships and encouraging the participation of businesses, NGOs, governments and civil society groups
-Identifying high impact business models deserving technical assistance funding
-Providing specialised assistance to measure impact for businesses and the Facility
-Improvement of the project’s financial modeling and business planning

Three project highlights, demonstrating BIF’s impact: 

BIF pic 3Malawi Mangoes:
First of its kind fruit processing plant requiring £25 million investment. It’s an inclusive business – the directors are passionate about community involvement and has a supply chain sourced from both smallholder farmers and the company’s own estates.

BIF’s assistance included:
-Cost of living survey among local communities
-Various aspects of farm planning including irrigation, organic trials and smallholder management systems
-Assisted in access to soft finance with a successful Africa Enterprise Challenge Fund application of £1 million
-At the time of the project wrap up, the processing plant was on track to becoming operational after a long struggle to obtain financing
-The plant has 300+ employees with 5 000 smallholders

BIF pic 2MEGA:
An EU-funded micro-hydro in Mulanje, Malawi, proposed to be the country’s first private power company.

BIF’s contribution to the project included:

-A community awareness report
-Registration of MEGA as a company
-Developed a business plan
-Recruited a General Manager

The initial scheme became operational as of May 2013, reaching 400 households, a school, clinic, business centre and maize mill with two further schemes in the design process. MEGA highlighted as a social business with commercial returns not possible in the short term. The high levels of interest from both local and international donors left the board confident of securing the further £1.5 million required to reach operational sustainability.

BIF pic 1UNIVERSAL INDUSTRIES LTD.:
Universal Industries Ltd. (UIL) was keen to test the possibilities of producing high quality cassava flour (HQCF). Due to its potential as an import substitute for wheat flour and as a glue export product, it has a high potential for foreign exchange.

BIF assistance included:
-Development of a business model
-Conducting market research
-Development of smallholder engagement strategy
-Delivering Key Performance Indicators
-The initial business idea was deemed higher risk by the board. BIF helped test the business model, improve its efficiency and shorten the time frame for the business to become profitable.
-Buy in and investment from the company was a critical component of BIF’s support
-Five year plans are in place to increase volumes in business unit to 600mT / year with a $500 000 turnover, employing 350 staff and purchasing cassava from 4 000 farmers

Lessons learnt:

  • Malawi as a country is focused on agriculture with a large proportion of households functioning as producers. The best way to assist with increasing the outcomes of the households is to incorporate these producers into business models
  • Many of the projects that BIF engaged with did not contain consumer products and as a result there was a lack of employment-related benefits
  • A lack of high quality business development services in Malawi is evident, therefore BIF’s biggest offering was business planning
  • Workshops received excellent feedback as facilitation of networking is regarded as having high value
  • An opportunistic approach lead to projects in unexpected industries that demonstrated pro-poor potential such as EcoBricks, and Warehouse Receipts
  • BIF offered a good fit to local inclusive business needs in terms of modality, scale and flexibility
  • Access to finance is a major constraint to business and BIF had limited capacity to assist in this aspect