This document discusses promoting business development service (BDS) providers to support micro-enterprises in India's value chains. It notes that while various organizations have emphasized promoting micro-enterprises, they often lack external support. The document advocates a value chain approach to connect micro-enterprises and provide them with systematic BDS. Specifically, it proposes identifying key value chains, profiling micro-enterprises and existing BDS providers within those chains, and developing a plan to build capacity and linkages between BDS providers and micro-enterprises to strengthen the value chains.

1. Promoting Value Chain based Business Development Service (BDS) Providers in India
Jitesh Panda1
In India, micro Enterprises have enormous potential to provide sustainable income to
poor and marginalized families. Hence, there has always been some focus on promoting
micro Enterprises. Different Ministries of Government of India like Ministry of Rural
Development (MoRD) and Ministry of Micro Small Medium Enterprises (MSME); Bilateral
/Multilateral Projects and also Civil Society Organizations have been emphasizing on
promotion of micro Enterprises. However, field observations reveal that, nothing much has
happened with regards to promotion and strengthening of micro Enterprises. Typically,
micro Enterprises are on their own with out any external linkage or support. Micro
Enterprises are yet to be positively influenced by growth in Indian economy.
Value Chain refers to sequence of activities required to make a product or a service. It
includes actors, activities and enterprises. In recent years, there has been increasing
emphasis on Value Chain based Development. This is mainly because of growing concern
that globalization and growth in National economies is not benefiting the poor and the
marginalized communities. There is also realization that, past and ongoing efforts with
focus on poverty alleviation or industrialization have not been yielding results. There is
need for more and more focus on promoting Inclusive Value Chain Development.
Meanwhile, a positive momentum is getting generated, where in Private Sector associated
with industries, Civil Society Organizations (CSOs) with concern for the community,
Government with thrust on welfare of poor and also community in general are keen on
strengthening the value chains in the interest of poor. Inclusive Value Chain approaches
can positively influence most of the micro Enterprises.
Value Chain Analysis is a prerequisite to strategize micro Enterprise promotion in Value
Chain Approach. Recent analysis of some of the Value Chains by Vrutti livelihoods
Resource Centre reveals that in most of the Value Chains, there is near absence of formal
Business Development Services (BDS) to micro Enterprises. BDS includes information,
facilitation and linkage services to enterprises related to production, technology, marketing
and credit. Generally, micro entrepreneurs informally access such BDS services from
friends, relatives and other micro entrepreneurs. At times, BDS services come as an
embedded service (typically with vested interest) from the higher level enterprises (like
traders) associated with the value chain. Nevertheless, in the past, there have been efforts
by Government to enhance agriculture productivity and by CSOs/micro Finance
Institutions (mFIs)/Banks to enhance access to credit services. The need of the hour is to
give thrust on providing systematic BDS to micro Enterprises.
1
Vrutti Livelihoods Resource Centre – part of Catalyst Group
1st Cross, 1st Main, Aswath Nagar, RMV 2nd Stage, Bangalore – 560 094, India

2. Business Development Services to micro Enterprises can be provided to different micro
Enterprises in a village. Such services can also be provided to existing/potential micro
Enterprises in a value chain. With increasing shift from village based economy to a global
village economy, promoting “Value Chain based BDS” can be a core strategy for promotion
and strengthening of micro Enterprises.
Unlike large enterprises, wherein BDS can be one off event through assignment based
support, in case of micro Enterprises, BDS is more of a process, which need to be delivered
through hand holding, facilitation and mentoring mode. Hence, in case of promotion of
micro Enterprises, BDS provider (the person) assumes more significance than the
facilitating organization that may be associated with the individual BDS provider.
Nevertheless, the role of facilitating organization to capacitate the BDS provider is also
equally important. There is a need to promote Value Chain based BDS Providers in India.
Vrutti Livelihoods Resource Centre has just initiated promotion of Value Chain based BDS
Providers in Angul district of Orissa.
The approach to promoting Value Chain based BDS Providers could be:
• Identifying the key Value Chains in the area - through discussion with key
informants and review of literature
• Field study led preliminary Value Chain Analysis – specific Value Chains
• Profiling the micro Enterprises in specific Value Chains
• Profiling the informal/formal BDS Providers – both individual and institution
based
• Consultative meeting with Individual BDS providers - linked to specific value
chains
• Developing a Plan for “Capacity Building and Linkage” for the BDS providers
relating to specific value chains
• Implementing the Plan
• Tracking progress of BDS services and impact of BDS on Value Chain based micro
Enterprises
• Sharing experience, learning and best practices relating to promotion of Value
Chain base BDS Providers
Promoting network of Value Chain based BDS Providers would help in promoting and
strengthening micro Enterprises linked to different value chains. Introduction of this
“Support Service Link i.e. Value Chain based BDS Provider” would enable all the actors
and supporters in transforming the current value chains as “Inclusive Value Chains”. Such
initiatives would contribute to “Inclusive Livelihood Promotion” finally leading to
Inclusive Development in India.