Helping small business grow

Investing in real change

Helping small business grow

Investing in real change

The role of small business

Micro, small and medium enterprises (MSMEs) are the backbone of economic growth and are by far the largest employers in low-income countries (accounting for 78 percent of employment ), creating stable jobs, raising incomes, making connections to regional and global markets, moving people out of poverty, and often increasing access to critical goods and services for underserved communities.

In developing countries, there is significant evidence to show that small businesses suffer from low productivity which constrains economic impact. With a USD $5 trillion global credit gap for MSMEs, developing economies in particular are missing out on sustainable local jobs, goods and services due to small business financial constraints. These businesses are trapped in the "missing middle".

The Most Missing Middle

Recognising the needs of the credit gap known as the "missing middle", World Vision Australia and its microfinance subsidiary VisionFund International began providing loans and business coaching to high growth potential Small and Growing Businesses (SGBs) in Sri Lanka in 2015 using Australian Government funding, to reach the "most missing middle".

Following on from the successful pilot in Sri Lanka, World Vision and VisionFund have again teamed up to provide "missing middle" finance and business advisory services at scale across Myanmar and Ghana, both promising hubs for business in their regions. In addition to suitable finance, World Vision offers tailored one-on-one coaching to build the capacity of entrepreneurs to improve business practices and grow.

World Vision focuses on helping high-growth potential entrepreneurs, particularly women entrepreneurs, in the "most missing middle" to maximise their potential. This generates stable and inclusive employment in their local communities and facilitates increased trade flows through additional purchasing and processing in their local economies.

How Wasantha scaled her small business

Wasantha is 49 years old, and owns and runs an agri-processing and trading business with her husband out of her home in Sri Lanka. She has two teenage daughters, both in school. She first met VisionFund over 10 years ago, just after the family had been through a financial crisis and were facing a life of poverty.

Looking for a way to earn a stable income to support her family, she spotted a market opportunity and started her business buying bulk grain, processing and repackaging for resale at a tiny scale at home and with handwritten labels. Little by little, the business grew, but soon microfinance loans were too small and she was unable to capitalise on opportunities to grow her business.

With two SGB loans (of approximately AUD 8,000 and AUD 15,000 respectively) as well as business coaching support, Wasantha was empowered to expand her business, using her loans to take advantage of market opportunities to purchase stock to sell in the off season, and business has boomed. She now has eight full time women employees, two storerooms, a packaging room and a machinery shed.

She has also set up a unique business model, using poor and disadvantaged women in her community as distributors. The women buy packaged grain and seed and sell the products for a profit. This allows these women to earn a decent income while still managing their households. She understands the impact this has on the livelihoods of her distributors, and would rather continue to support them than sell direct to markets and homes which might generate higher financial returns but jeopardise the incomes of these women.

We sold the packages for 35 rupees, and they were able to sell it in town for 70, which means they themselves had a 35 rupee profit. I realised that every day they were able to buy things for their family and they looked very happy…This journey is a journey we did together, me and the community, all of this is because of the community people who started selling our things. It is because of them, that we have come to this place.
- Wasantha

See more information on similar projects supported by World Vision Australia’s Social Entrepreneurship and Economic Development team
How Wasantha scaled her small business
Small & Growing Businesses – Nishanthi’s story

This project is funded by the Australian Government Department of Foreign Affairs and Trade’s innovationXchange and Aid for Trade divisions.


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