Inclusive Economies through

3BL Entrepreneurship

Foundation for a

Sustainable Society, Inc

• Non-government organization (NGO) that provides development and financing assistance to social enterprises of the marginalized sectors

• Focuses on assisting enterprises that adopts triple bottom line (3BL) principles: people, profit, planet

• Partners with other local resource institutions and

development-oriented organizations

50% Payment Cancelled

50% Counterpart Fund

Three-years completion

Endowment Facility

Product of a debt-for-development swap

Philippines Debt to the Swiss Government

“Development requires debt relief ”

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DEVELOPMENT AND FINANCIAL SERVICES

Triple bottom line enterprises of CSOs: o Cooperatives (primary or secondary),

o NGOs owning or managing 3BL enterprises,

o MFIs, Thrift, Rural or Cooperative banks,

o Registered People’s organizations (POs) into entrepreneurship

o Single proprietorships with SEs & community stakeholders

Financial products:

o Grants (start-up, capacity building/BDS, advocacy)

o Loans (term, credit line, PO financing, procurement of enterprise assets etc.)

o Development deposits

o Equities

o Guarantees

o Fund syndication

o Special project for agri-business incubation - Soft loan facility with BDS

3BL SOCIAL ENTERPRISES AND 3BL COMMUNITIES Profitable enterprises | Local economic value-adding

Managed & owned by the poor | Inclusive & dynamic communities

Environmentally-sound practices | Sustainable local ecosystems

Economic goods & services

Eco-system

Social Sector

Food & derivatives Health Public utilities

Small farmers

Fishers

IPs

Women

Rural workers

Forests & protected

areas

Production areas

Water resources

Air and soil

Coastal resources

Support services

•Microfinance services

•Organic farming technologies

• Small Enterprise Technologies

•Cooperative Dev’t Services

Triple bottom line enterprises for LED & Inclusive Economies

mSMEs to 3BL SEs for inclusive enterprise & economic participation

1. Economic value adding of micro and small enterprises of the poor in the economy is low and marginal. • 68 percent of our economy’s total output can be attributed just to the largest 0.4 percent of

Philippine enterprises • 91% are microenterprises, most of which are in the informal economy (backyard livelihood, petty

trading, etc.) • Combined with small enterprises (8%), micros and small comprise 99% of country’s enterprises. This

has remained unchanged in the past decade. • There very few examples where micros & small link with large enterprises

2. Triple bottom line enterprises stand a better chance of meaningful participation in (a) sustainable poverty reduction and (b) enhanced contribution to local economy (value adding & employment)

MF-ASKI

Malaya Devt Coop 1,289 farmers (657 women,

632 men) Organic Rice & Corn Dairy production Organic Sillage

DA-NDA DAR LGU(s)

Kapatagan MPC Organic fertilizer

From ARBs to livelihood to diversified

SE to LED consortium

SE as business innovation for poverty reduction & economic inclusion

Pathways: Poverty to Sustainable Enterprise From livelihood, pre-SE and 3BL Social Entrepreneurship

Social / Community Entrepreneurs, NGOs, Coops/Pos, local stakeholders :

Enterprise & investment collaboration & value chain organizing for scaling-up

CSR - Social Businesses : Link to bigger markets

“Opportunity Entrepreneurship” Beyond-the-backyard Clearer growth & expansion path

3BL-SOCIAL ENTERPRISES

“Necessity Entrepreneurs” Production for consumption Petty trading for cash income Backyard businesses

Challenges to mSMEs & SEs Economic inclusion & onset of ASEAN Integration

1. Regardless of the liberalization wave (ASEAN AEC, AFTA, etc.), mSMEs (& SEs) are already facing various structural constraints to economic inclusion and greater contribution: a. SMEs need to hurdle the following:

• Access to financing, technology, sustainable supply of raw materials, markets • Internally: Improve bankability -- responsible business and financial management • Barriers to scaling-up: Collaboration and clustering to achieve scale

b. Microenterprises • More coherent and viable micro entrepreneurship program that enables micros to near-small or

small enterprise stage (BMBE, Agri-Agra, Go Negosyo + national & local gov’t programs) • Internally: Necessity enterprises need to transcend basic household needs and build assets to be

regular businesses with a clearer growth path

Challenges to mSMEs & SEs Economic inclusion & onset of ASEAN Integration

c. Social enterprises: • Predominantly FDI- and conglomerate-oriented investment policy: Weak recognition &

sporadic support by the government and public finance sector (national government, local government, banking & finance sector) of multiple bottom line businesses that can help in poverty reduction and enterprise/economic inclusion of the poor; much less for SEs with the poor as primary stakeholders (SEPPS)

SEs that have penetrated ASEAN are largely civil society led: Human Nature (Gawad Kalinga) and GreatWomen (Echosi Foundation and Echostore)

SEPPS – Tubigon Loomweavers MPC in Bohol (DTI-assisted, FSSI grant partner) – Raffia products

2. Stiff competition due to #1: • Agri sector, particularly sugar (FSSI partner: Alter Trade Foundation Inc)

• Internal: Inefficient operations • External: Access to finance (small farmers) & infra support

Opportunities to mSMEs & SEs with the onset of ASEAN Integration

1. Larger market for SMEs & SEs that have niche and/or better-positioned products

2. Access to better technology & supply chain of raw materials • Opportunity to import specialized machineries • Opportunity to source cheaper raw materials & supplies

3. Access to venture partnership and investors 4. Availability of DTI programs designed for SMEs wanting to access

ASEAN opportunities

Inclusive economies & ASEAN

For mSMEs and SEs & SEPPS:

1. The main work agenda is demonstration of inclusive entrepreneurship at various levels:

• Community-level convergences for local economy & ecosystems development

2. ASEAN & AEC integration: People-to-people solidarity with the SEs of the poor in ASEAN

www.fssi.com.ph

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