Development programs generally focus on financial assistance to entrepreneurs, SMMEs and microfinanciers
After start-up, microfinanciers must acquire a variety of business skills to run their businesses. However, it is often overwhelming for a business with few employees to acquire these non-core skills
Microfinanciers require BDS support to develop the skills in-house, or to outsource to local providers
International best practice
What BDS services are offered?
How is BDS offered?
Who are the players in BDS?
BDS success criteria
Barriers to BDS success
A best-practice BDS model
Current BDS in South Africa
Strategic Options for BDS for microfinanciers
Summary: International Best Practice
Best practice for successful BDS
BDS services must be demand-driven to ensure a greater, more positive impact
The SMME community must have a strong sense of ownership in the BDS initiative to ensure commitment
The BDS center must reach a maximum portion of the target audience
BDS services must be provided to the right clientele, and who will make good use of the services
The BDS center and its service providers must achieve financial stability to be sustainable over the long term
Barriers to success
Providing all BDS services for free often results in poor commitment from the users
Private sector funding alone may not be sufficient, necessitating participation by public donors
Support services are often too generalised, thereby resulting in poor use by the target audience
Support services are sometimes not accessible by the target users, thereby resulting in poor use by the target audience
What BDS Services are Offered?
How is BDS Offered?
BDS can be delivered as part of an existing business-to-business relationship, generally as part of another transaction
e.g. training received as part of the purchase of equipment
Caters for training or support which is only required infrequently
Who are the Players in BDS?
BDS Success Criteria
BDS services must be demand-driven
Ensures a greater, more positive impact, and encourages clients to pay for the services they value
BDS services must be provided to the right clientele
The main objective of a BDS is to facilitate growth, profitability and competitiveness of SMMEs. The BDS must therefore be provided to SMMEs who exhibit good entrepreneurial characteristics and can make good use of the services
The SMME community must have a strong sense of ownership in the BDS
The best business providers generally work in the environment, resulting in commitment and strong ownership
The BDS center must achieve maximum outreach
Maximum impact can be achieved by strengthening private sector service providers, creating better networks between service providers, and promoting informal systems of learning
The BDS center and its service providers must achieve financial sustainability
The institutional and financial sustainability must be achieved by controlling costs to maintain competitive and to increase profits
Barriers to BDS Success
Not charging for services often results in poor commitment from the users
There must be a balance between free and paid-for services
Relying solely on private market finance can be detrimental
Businesses may be reluctant to incur the costs of setting up BDS initiatives, as their competitors may be just as likely to benefit
Provides a rationale for donor support justified on a cost-benefit basis, rather than on the return on investment that individual businesses usually make