Bank Project Seeks New Business Opportunities for Low-Income Communities

Bank Project Seeks New Business Opportunities for Low-Income Communities

A new project aims to increase awareness about unmet needs among low-income Mexican communities while building the capacities of local micro-, small- and medium-sized enterprises to address them.

This is the focus of an innovative project launched by the Business Council for Sustainable Development (BCSD) Mexico/CESPEDES in partnership with the Mexican Ministry for Economy and with funding from the Inter-American Development Bank (IDB). This four-year program will improve market opportunities for local entrepreneurs, creating new business networks involving smaller companies, and lifting people out of the informal economy.

Fifty-five million people live on less than three dollars a day in Mexico. Housing and construction, food processing and distribution, energy, water, recycling and waste disposal are some of the sectors where innovative, lower cost and better quality goods and services are needed.

By leveraging the advantages of smaller firms - their proximity to clients, their outreach and knowledge of local needs and culture - the project will bring smaller companies into business ventures with larger companies to supply these low-income communities with improved products and services.

The World Business Council for Sustainable Development (WBCSD) has been invited to be part of the Advisory Council of the project and will be represented by Marcel Engel, Director of the Regional Network.

Six pilot projects have already been identified, representing an investment of about US$ 1.2 million by leading Mexican companies (members of the Mexican BCSD). The project portfolio is to be expanded during implementation.

Implementation will take place over a period of 46 months, including four months for the production of the final documents. The main phases of the project are:

1. Development of action plans for new products and services. Awareness creation and promotion of the program in order to identify new business opportunities and partnerships for the design of new projects.

2. Selection and implementation of projects. Selection of the best project proposals by a committee (see eligibility criteria below).

3. Institutional capacity building and dissemination of results. Activities to disseminate information on the processes, results and lessons learned.

The eligibility criteria for the projects are the following:

  • Potential demand from the low-income community for the new product or service;

  • A business model that provides a real opportunity for innovation and growth for the companies involved;

  • Existence of a supply chain that promotes the growth of MSMEs;

  • Existence of clear indicators for follow-up, monitoring and evaluation.

    The lessons learned will provide input to the wider Building Opportunity for the Majority initiative of the IDB.