7 Learning and outreach event on scaling-up
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Scaling up projects, programs, and their impact involves expanding their scope, coverage, funding, and replication. This allows benefits to reach more people, but it requires overcoming challenges like limited budgets. Strategies include leveraging co-financing, mainstreaming into government programs, and helping smallholders organize collectively to gain influence and access markets and services. The goal of scaling up is to sustainably improve livelihoods at a wide scale. It works best by strengthening community institutions first and then linking smallholder groups to private sector partners and financing sources. With the right models and incentives, scaling up can bridge the viability gap between what communities and the private sector can support alone.
7 Learning and outreach event on scaling-up
- 1. SCALING UP An Empowering Tool Adolfo Brizzi, Director PTA, IFAD June 14, 2012
- 2. WHAT ARE WE SCALING UP ? Our projects – From small to big – Limited scope to larger coverage – Phase 1 to Phase 2 ….. This is a money issue The more money is available the easier it is
- 3. WHAT ARE WE SCALING UP ? What about if the money is short ? $ We have ideas • Innovate, make it work and hope for someone else to pick it up and replicate • Co-financing • Leverage remittances • Mainstreaming into Government Programs (MIC agenda) • Policy dialogue
- 4. What about helping the poor reach scale ? • Scaling up not an end but a means to achieve wide-spread benefits • When you are poor, voice and scale is the best hope to be heard and create opportunities • Scale is power, collective action, organization, becoming a market (consumers and producers), economy of scale, efficiency, reduced transaction costs, bargaining capacity, access to services • The bottom of the pyramid: potentially the biggest untapped market by the private sector. • Scale up as a leverage to sustainability
- 5. IFAD Agenda ? • BOP: Largely a poor small-holder business • Organize the tail-end of the value chains • Micro-finance, risk management tools • Institutions of the poor, social empowerment, “facebook effect” • Mostly a software agenda, (not a money issue) • Can be self-replicated • Enhance private sector ability to access BOP as organized markets (supply chains) • Leveraging a potentially much bigger financing capacity • Need to operationalize the concept of “pathway to scaling up” in project design as a way to build collective action
- 6. Where are we coming from: a dysfunctional model Dominant, Inefficient Public Sector Private Sector Public Sector Disinterested Private Sector Intermediaries High transaction costs of all sorts Communities Do-Good Projects Disorganized smallholders and groups
- 7. We need a new model: PPP with a “P” for people Devise regulatory framework and incentive mechanism for PPP Public Sector Private Sector Private Sectr Rethink public sector Attract private sector and link their business intervention and model with find better ways to development objectives deliver services People Sector Smallholder Sector Becoming a market and Demand for governance & leveraging more accountability competition, access to banking, markets, etc. Institutions of the poor
- 8. The graduation model Franchising Community Retailing Trade Marketing enterprises Banking Commodity Savings & services Cooperatives Federation of Loans Coops User Groups Different levels of associative and federative tiers Resource-based Affinity-based Activity-based Value Chains Irrigation, Savings and Loans Assets/marketing Watershed, forestry
- 9. Institutions first Money second Money and Influence Banks Agri-business Control over nat. res. Microfinance Input suppliers (land, water, forest, fish) Insurance Co. Service Providers Sustainable Use/finance Service Providers Insurance/warehouse Agri-business Going to Scale People Sector Institutions
- 10. Bridge the viability gap Agriculture is a business, but for the private sector to work with smallholders it costs more. We can help bridge the viability gap. On the demand side: – create a new market. BOP, People Sector, scale, collective action. – Demonstrate creditworthiness of our clients to banks/MFIs, leverage remittances On the Supply side. If “people sector” scale is not enough (transaction costs too high), devise an incentive mechanism to attract the private sector. – Subsidizing private goods through matching grants not a solution. – Better to finance (semi) public goods as part of matching grants, but associated to the private sector business plan. – Design matching grants competitively and look for leveraging private sector money in project design (co-financing)
- 11. Take away • Scale up results not necessarily projects • Financial sustainability and scaling up more likely to come through the private sector, remittances, banks, beneficiaries contribution, rather than ODA or Government. • In MIC, need a different engagement approach. Innovation, KM, policy dialogue, leveraging public and private sector money • Build scale up strategy in project design (“pathway”) • Develop delivery “products” around the “people sector” models, brand them and sell them. Wholesale rather than retail
- 12. Make ideas converge 1000 flower bloom Branding & Customizing
- 13. Scaling Up: deal with growing complexity by keeping things simple • Highly distinctive core business • Keep the business model as simple as possible • Apply it relentlessly to new opportunities and innovate • In pruning your catalogue and bringing it to scale make sure you keep what works • Keep flexibility, constant revision and innovation to adapt your core products and survive changes • Keep some part of your business on innovation only • Innovation leads to scaling up which can lead to more innovation