PHOTO CREDIT: THE LEMELSON FOUNDATION
Institutions are already working with SGBs to help them grow and develop. From investors providing needed funding to high-potential entrepreneurs, to capacity development providers helping SGBs get the skills they need to compete, different organizations have critical roles to play. The four types of organizations highlighted here–corporations, development agencies, foundations, and banks–have the potential to transform the sector.
Corporations must both grow their businesses in a global environment of high competition and dwindling natural resources and support the environment and the communities where they operate. Supporting SGBs can help. Through their core business, their sustainability practices, or both, corporations that work with SGBs see concrete returns.
Development Finance institutions & agencies
Countries with robust communities of SGBs have better development prospects than those without. When the SGBs succeed, they create jobs and provide solutions to social challenges. Yet it is rare for a poor country to have a strong SGB community. Weak systems— from education, to transportation, to financial policy—all make it more difficult to start, run, and grow a business. Development institutions are uniquely positioned to build the entrepreneurial ecosystems that SGBs need to thrive.
Foundations want their investments to make a measurable difference in the lives of the poor. Investing in small and growing businesses promises outsized returns. SGBs not only supply low-income communities with needed services, such as electricity, safe food, and health care. They also act as employment engines, bringing jobs and incomes to people who critically need them.
Banks and Financial Institutions
Small businesses need capital to grow, and financial institutions (FIs) need new customers to expand their lines of business. These needs complement each other. By embracing small businesses as borrowers, FIs are both growing their customer base and—through the growth of the SGB—contributing to job growth and economic well-being in the communities they serve.