Business Development Service Providers

Business Development Service Providers –
Way Forward for SME Development
Syed Saquib Mohyuddin
Chief Executive Officer

A successful model of Public-Private Partnership.

1700 SMEs graduated to a higher level of competitiveness,
innovation and profitability

400 export-based SMEs were supported

100 SMEs initiated exports through BSF funded projects
Origin of BSF
Loan Agreement
• Established in 2005
• A Guarantee Ltd Company under Section
42 of Companies Ordinance 1984
• 9 Board Members
• Total Outlay of USD 5.7 M (For grant
allocation)

To road test the concept of Business Development Service Providers
for supporting the SMEs
 Enhance the competitiveness of SMEs by enabling them to utilize
external business development services
 Promote and stimulate the outreach of business development
services providers to SMEs.
 Market development.
The only Government organization
involved in BDSP Registrations
•Currently over 200 BDSPs registered
•Initiated a “BDSP Accreditation and
Ranking Program”
•Providing platform for Handholding
and Matchmaking between SMEs –
BDSPs
BSF Utilizing BDSPs for all SME
Development Programs
•Ensuring timely availability and access
of BDS to the SMEs.
•Outsourcing all its programs through
BDSPs to ensure:
•Better Outreach
•Effective Value Chain Management
•Operational and professional
expertise
•Lean organizational structures for
timely decision making and program
execution.
globalization
technological
advances
deregulations
increased competition
product
performance
product
variety
product
costs
no time to learn and do by ourselves
shorter
life-cycles
Outcome
Observed Outcome
with intervention
Additionality
What would have happened
without intervention
Time
Internal Practice
External Expertise
Demand
Driven
Unique
Sector based
program
lending
SMEs are
willing to pay
for the
services
Utilize
services of
professionals
in form of
BDSPs
pril-May 2009.
Factors
Average Quantitative Impact
Sales Growth
24 %
Cost Reduction
13 %
Production Increase
12 %
Employment
6%
Profitability
21 %
*
Impact assessment carried out by third party auditors.
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This sector has emerged as a lifeline of Pakistan’s economy
constituting nearly 96% of all economic establishments.
• 82% sole proprietorships
• 12% Partnerships
SMEs jointly contribute approximately 30% to GDP, employing 80%
of the non agricultural labor force, 25% to total exports, and 35% to
manufacturing value addition.
Most SMEs are in a low growth trap dealing in traditional products
and unable to climb up the technology ladder.
19% SMEs are less than 15 years old and only 4% are able to survive
beyond 25 years.

Lack of professional management

Market accessibility

Access to formal financing

Technology foresight
Making SMEs competitive and sustainable
through innovation and efficiency
Inculcating
Business
Processes/
Models in
Rural
Enterprises
Supporting
existing
enterprises
through
BDSPs
Developing new
enterprises

Sector-based program lending
◦ Criteria


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Contribution to GDP
Employment generation
Share of Exports (current and potential)
Entry into new markets
SME concentration in a sector
◦ Small scale Manufacturing
 Textiles (Made-up sector and woolen industry)
 Light engineering (Fans, Cutlery, Surgical goods, Auto parts)
 Sports goods
◦ Services
 Wholesale and Retail Trade (inc. Hotels and Restaurants)
 Logistics
 Printing/Publishing
◦ Agriculture
 Minor crops
 Livestock
◦ Emerging sectors including but not limited to:
 Halal Meat
 Honey
 Gems and Jewellery
Pakistan Entrepreneur & Leaders Program
(Promoting Entrepreneurship in SME sector)

PELP (Pakistan Entrepreneurs & Leaders
Program):
◦ Highlighting the role of entrepreneurship in economic
development
◦ Enabling entrepreneur to generate income,
employment and profitability through innovation &
efficiency.
◦ University collaborations

CEL: Centre for Entrepreneurship &
Leadership
◦ Self employment opportunities
◦ Advocacy

Franchising
◦ SMEs and youth
◦ Franchising Pakistan Portal launched
◦ Formalized platform for SMEs to establish businesses through
franchise model
www.franchisingpakistan.com
Franchising
(Employment Generation)
Gems & Jewellery - Exports

Gems & Jewellery - Exports
Category
Jul-Nov (08-09)*
Jul-Nov (09-10)*
Change%
Gems
1.5
1.3
-13.3
Jewellery
82
263.7
221.6
• Figures in million of US Dollars (Source: SBP)
◦ Country holds reserve in the region of US$ 84 billion
◦ Pakistan has meager 1.6% stake in the Global market.
◦ According to GRP, Pakistan has the capability to increase its
exports to over US$ 20 billion and create over 2 million jobs

Gems & Jewellery
◦ Certified distance learning programs
◦ Cutting and Polishing Centers to be established
◦ Women entrepreneurs to be encouraged
Peach, Peace & Prosperity
SWAT & MALAKAND

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Special Initiative for farmers of Swat hit by terrorism and floods.
Peach, Peace Prosperity project launched in 2010. Phase II launched
in June 2011
Hybrid value chain model based on Multi-dimensional Approach
experimented
Objectives:
Financial empowerment (Endowment Fund)
Training on Enterprise Development and Post Harvest management.
Market access
Community development (technical, vocational training for the youth,
and health services)
 Engaging farmers in economic activity





Peach, Peace & Prosperity:
◦
◦
◦
◦
◦
6 Enterprise Development Centers (EDCs) formed
1100 enterprises created
2200 farmers trained in PHM
Distribution of 550,000 boxes
Training on Entrepreneurship, Branding, Packaging
(Reduction in Cost of Doing Business)

First Phase
◦ Data collection of 150 SMEs
◦ Carried out Preliminary Energy Audit

Second Phase
◦ Detailed energy audits

Third Phase
◦ Solutions will be provided
◦ Donor funding required
•
Objectives
– Introduce energy efficiency, conservation and renewable in the
SME sector through a suitable outreach and communication
program.
•
The primary objectives are as follows:
– Reduction of Energy Consumption.
– Reduction of Energy Demand.
– Reduction of Energy Bills.
– Meeting production Targets.
– Meeting Export Targets.


Analysis of 150 SMIs has been completed
Comprehensive report
◦ Detailed Overall Analysis of Energy consumption of SMIs in Kot
Lakhpat
◦ Detailed Energy Consumption Analysis of Each Sector
◦ Company Profile and Energy consumption Analysis of Each of
the 150 SMIs
TABLE 15. KLIE. SURVEY STATUS SUMMARY
NO.
STATUS
NO. OF SMIS
1
Closed
42
2
Surveyed
142
3
Empty Plot
1
4
Not Interested
25
TOTAL
210
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IFC, a member of the World Bank Group, recently appointed
SME BSF as Assessors of IFC’s Business Edge trainers in
Pakistan.

Khushali Bank / Tameer Bank
SME Leasing Ltd.
Establishment of 28 CELs

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Venture Capital Fund

HR Plus Program (BSF’s 15 Competitiveness Modules)

BSF participation in competitive bidding on various
Government/Donor Funded Consultancy Projects

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BSF intends to take SME into the next level of professional
management, increase their access to the global value chain through
its export wide orientation and expand their scope for greater
competitiveness, innovation and profitability.
Each one of BSF programs report their assessment to the Monitoring
and Evaluation (M&E) department on a continuous basis. The
Knowledge Management department develop the KPI’s of these
program while the M&E department ensure its compliance.
With BSF having extensive knowledge and experience with grant
management, the organization serves as an excellent intermediary
to launch innovative programs for the SME sectors of Pakistan.
64B D/1, Ghalib Road,
Gulberg III, Lahore. Pakistan
Tel: +92 42 99268150-53
Fax: +92 42 35871318 & 99268161
Email: [email protected]
Website: www.bsf.org.pk