Post on 15-Mar-2018
Foundation for a
Sustainable Society
• Non-government organization (NGO) that provides financing & development 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
Philippines Debt to the Swiss Government
50% Payment Cancelled
50% Counterpart Fund
Endowment Facility
Product of a debt-for-development swap
“Development requires debt relief”
Three-years completion
Our Roots
Our Bottom Lines: 3BL
• Convergence or focus areas where sustainable local economy development happens.
• Sustainable communities = confluence & interaction of people (& their culture), economic produce, and ecology
Economic Viability
Profitable Employment and
Value-adding at local level
Social equity
Small farmers Fishers IPs Women Agricultural workers
Environment
Production areas Water resources
Air and soil Coastal resources
Pathways & Approaches: From livelihood, pre-SE and 3BL Social
Entrepreneurship
Dev’t NGOs Civil Society
Social Entrepreneurs (individual)
CSR Social Businesses
“Opportunity Entrepreneurship” Beyond-the-backyard Clearer growth & expansion path
“Necessity Entrepreneurs” Production for consumption Petty trading for cash income Backyard businesses
3BL-SOCIAL ENTERPRISES
Are we a nation of petty traders?
• Sari-sari stores
• Charcoal (uling/firewood)
• Fresh fruits/vegetables
• Kakanin/delicacies
• Copra
• Alimango
• Dried fish
• Firecrakers
• Soap/detergents
• Karaokes Kiosks
• Cigarettes, e-load
• Vinegar
• House/cooking wares
• Brooms
“By 2016, we shall have contributed to the sustainability of local economies & ecosystems in 6 priority/focus areas in the country”
Commodities
Eco-system Social Sector
Food & derivatives Health Public utilities
Small farmers
Fishers
IPs
Women & Gender
Agricultural workers
Forests & protected areas
Production areas
Water resources
Air and soil
Coastal resources
Support services/ Ancillaries:
• Microfinance services (along VC)
• Market product and research
• Technology and innovation
• Renewable energy technologies
• Cooperative and enterprise
development services
“3BL enterprises in local communities, economies and ecosystems”
FSSI initiatives related to value
chain and enterprise development
• What are the reasons for starting the
program?
• How was the program developed?
• What client needs are being addressed by the program?
• How is it being implemented?
Evolution of Development
Interventions
Working towards alternative development paradigms:
• The early years 1995-2003: Sustainable livelihood & ecosystems start-up approach: Focus on beneficiary entitlement
• 2004 to 2010: Social enterprise and sub-sector development [value & supply chain]
• 2011 to 2016: Triple bottom line (3BL) SEs towards Local Economy Development (LED) and sustainable ecosystems [community-commodity-ecology]
Evolution of Development
Interventions
Start-up: Sustainable livelihood & ecosystems approach:
Pro-poor & people empowerment thrust of government thru asset reform & public entitlements
FSSI – “beneficiary or actor-focused” sustainable economic development of marginalized communities:
Emerging & “niche” enterprises of farmer-owners, microcredit and microfinance institutions and in diverse array of community enterprises (coco coir, indigenous crafts, sustainable crop production, organic farming, seaweeds, etc.)
First Eight Years
Actor & beneficiary focus
Beneficiary Public Entitlements
(Advocacy)
Economic/ Commodity
Social Environment
Small rice & corn
farmers
Land reform, Support
Services
Sustainable agri
& organic farming
Farmers organizing
into coops
Low input/low chemical
agri, organic farm
practices
Coconut farmers Land reform, coco
levy advocacy,
support services
Coco coir Husks gatherers, coir
workers, twinners
weavers
Use of coco wastes,
peat
Fishers Fisher code, access
to alternative
livelihood
Seaweeds
production
Organizing Coastal resource
management
Women Recognition in role in
development
Access to
microfinance
Women organizing Support to sustainable
production
Indigenous Peoples Rights-based
advocacy; anti-
mining; support
services
Crafts & other
products of IPs
Support to organizing Anti-mining, IEC
advocacy
Poorest of the Poor (Informal, unbanked &
w/out access to
finance)
Social welfare
programs
Self-employment
assistance
Microcredit Organization of Small
Self-Help Groups
(solidarity lending)
Indigenous and natural
agricultural production;
nurseries for refo
Economic Subsector Approach: 2004 - 2010
• Triple bottom line “eco-enterprises” through the following programs: • Coco coir business integration and development, • Microfinance (wholesale), • Sustainable waste, and • Sustainable partnerships along diverse start-up enterprises
(miscellany/niche enterprises)
Result: Dispersed impact; resources spread thinly across programs & communities
Evolution of Development
Interventions
Source: http://www.zeromillion.com/econ/how-the-market-system-works.html
SEs
Communities
Socially-prepared LED- & Social Enterprise ready LGU-supported
Market System and SEs
Rural Poverty
in the Philippines
• Poverty is most severe and most widespread in the rural areas and almost 80 % of the country’s poor people live there.
• Agriculture is the primary and often only source of income for poor rural people, most of whom depend on subsistence farming and fishing for their livelihood.
• The poor remain marginalized: Bonded to age-old economic
& financial relationships (landlords, patrons, traders, informal lenders)
Unorganized suppliers of raw materials/produce of agri-corporations, middlemen
Failure of Traditional Economic Model
and the Rise of social Entrepreneurship
Government strategy is: • Investment promotion from the conglomerates or large
corporations (foreign and local) • Multinationals locating in eco-zones/industrial estates (malls,
BPOs/call centers, EPZs, power plants, etc) Employment generation of large investors/ enterprises • Overseas employment Trickle down to the poor “maambunan” LGUs encouraged (with incentives) to host IEs, malls,
BPOs/call centers, mining corps, coal-fired power plants, agri-processing
Policy environment has to failed to sustainably reduce poverty through its MSME policy & programs
While microfinance has contributed to poverty alleviation – studies show that:
• Only 3% of microcredit beneficiaries graduate from “necessity entrepreneurs” (informal / petty trading) to near-small or small enterprises or regular businesses
• The poor are still treated as clients or transactional recipients of services (not as participants in their own poverty reduction)
Failure of Traditional Economic Model
and the Rise of social Entrepreneurship
Policies, laws and issuances governing MSMEs have not adequately served the MSME sector & the marginalized sectors– the missing middle is still missing:
• The country’s industry has not change for the past 2
decades (despite the Magna Carta for MSME)
• BMBE & Agri-Agra laws – enforcement have been problematic; intended goals have failed miserably
Failure of Traditional Economic Model
and the Rise of social Entrepreneurship
Limitations of
Microfinance in Agriculture
• Microcredit for small-scale production of raw / semi-processed products/materials: • Consumption • Generation of petty cash income • Prone to household shocks • Very rarely asset forming
• Omnibus or general purpose MF does not address economic & market potentials of processed products at a quality & quantity demanded by commerce
Allow small producers to seize new opportunities in agriculture by: • Increase producers knowledge of market
demand and pricing • Increase investments from farmers and
the other private sector • Increase access of small farmers to
knowledge, finance, inputs and technology
• Reduce transactions costs of the producer-processor/marketing interface
• Increase the share of value added captured by primary producers
Empowering Rural
Value Chains
Basic Value Chain
Primary Production
Processing &
Higher Value Adding
Marketing Consumption
Production Distribution Consumption
• Who are the actors & financiers in the VC? • What is the scale of influence of the actors & financiers in the VC? • Who controls (owns) & dominates the VC? • Can fair cooperation between actors & financiers be forged? • What economic / financial relationships should be dismantled?
Suppliers of raw materials
Labor supply in processing
Processor Consolida
tor/Trader Retailer
Consu
mer
Marketing & Distribution
Assessing the VC: 3BL Qtns 1. Where are the poor in the value chain?
2. Where in the VC is the profit margin highest? 3. Where in the value chain is the environmental impact (+/-) created?
Production
EXPORT
DOMESTIC
SUPPORT MECHANISMS
Developing SEs in VCs of
Strategic Economic Subsectors
• Single social enterprise interventions limited in terms of impact and sustainability
• Importance of interventions at the level of economic subsectors network of related actors and enterprises performing various functions in competing value chains; may be identified by major raw material source, finished product or final service provided
Strategic Economic Subsectors
• have a potential for growth
• large numbers of the poor are players or could become players
Examples of strategic economic subsectors where SEPPS are already playing key roles:
coco coir, muscovado sugar, organic rice, essential oils, bamboo, educational toys , school chairs, brewed coffee, dairy, organic fertilizer, etc. PLUS
combination of these subsectors:
(ex. organic rice & corn + organic fertilizer + dairy +
free range chicken + organic sillage | in a contiguous ecosystem)
Developing SEs in VCs of
Strategic Economic Subsectors
On-ground demonstration of 3BL-LED in Mallig, Isabela
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
Implications of the shift
for FSSI
• Allocate budget for BDS and other “matching or conditional” grants
• Loan-BDS grant combination
• Ensure grants perform to desired project outcomes
• Innovative financing: Social enterprise incubation soft loans
• Enterprise Incubation or “Valley of death”: Between livelihood and commercial start-up business
• Commodity/product, social and environmental scanning
• Entrepreneurial entities (cooperatives, farmer social entrepreneur-led enterprises, etc.)
• Presence of commercial winners or niche product
• Environmentally sustainable practices
• Enable on-ground convergence of community actors who matter
URBAN CORE ZONE
URBAN CENTER ZONE
GENERAL URBAN ZONE
SUB-URBAN ZONE
RURAL ZONE
NATURAL ZONE
3BL SEs+Communities Social & Solidarity
Economies
Protection & conservation advocacy + access of upland to livelihood
Sustainable & organic agriculture, common service facilities, cooperatives & SE consortia
Strong National cooperatives & sector
consortiums poised to access PPP
Stakes in power & utilities, small infra/econ facilities, health & medical, finance (micro/meso), food, education sectors