Endline Evaluation of the Inclusive Business Accelerator (IBA), 2014-2016

This endline evaluation assesses the effectiveness, relevance, efficiency, and financial sustainability of the Inclusive Business Accelerator (IBA) programme supported by the Ministry of Foreign Affairs of the Netherlands during 2014-2016. The key findings and lessons learned are summarised below.

The Inclusive Business Accelerator (IBA) was created by the Dutch Ministry of Foreign Affairs (MFA) in 2014, with the aim to facilitate the acceleration of impactful private entrepreneurship in Base of the Pyramid (BoP) markets. The programme was set up in the form of three pillars (IBA Global, IBA Local, IBA Online) that together aimed to support the delivery of investment-ready business plans that would promote Inclusive Business (IB) at both the global and the local level. The ultimate objective was to improve the well-being of BoP producers, employees, entrepreneurs, and consumers.

At the request of MFA, this endline evaluation assesses the effectiveness, relevance, efficiency and financial sustainability of the IBA programme (during January 2014 – December 2016), and identifies lessons learned. As per the Terms of Reference (ToR), the evaluation focusses on assessing results at the “service market output” and “service market outcome” levels (i.e., at the level of the beneficiary local SMEs) for which quantitative indicators were developed as part of the programme’s Monitoring & Evaluation framework. In addition, the evaluation assesses, on a more qualitative basis, the likelihood of achieving the envisaged results at the “BoP outcome” and “BoP impact” levels (i.e., at the level of the customers and suppliers of the supported SMEs). Primary data collection took place through online and telephone surveys, as well as field trips to Vietnam and Mozambique that took place in May 2007.

In terms of effectiveness, this evaluation finds that each IBA pillar has been reasonably effective at achieving the intended outputs. Numerous activities were implemented in each pillar that in general have been effective at output level and service market outcome level. An online system was set up and filled with content; trainers and consultants were trained; and local SNV staff supported local companies.

However, some outputs did not lead to the expected outcomes. A number of targets regarding ‘collective impact initiatives’ were not met; in many cases the support provided to SMEs did not lead to direct outcomes in terms of jobs or sales growth; the number of investors registered on the website and the matches between companies and consultants on the website fell short of the target (or was not measured). We also encountered various measurement problems, as a result of which some outcomes may have been lower than reported in some cases.

There are several reasons for the lower-than-expected effectiveness at outcome and impact level. First, the coordination between the three pillars was weak. Second, the targets were likely too ambitious, which may have led to a relaxation of selection criteria. Third, the choice of countries may not have been the most appropriate; in particular; Mozambique turned out to be a challenging environment for private sector support programmes. Finally, external factors also contributed to lower-than-expected outcomes in both countries.

While the goal of becoming a hands-on ‘one stop shop’ for IB support was not achieved, IBA still made steps towards becoming a recognised global player in the IB field. Interviews and desk research revealed a number of examples that suggest that IBA was successful in raising awareness of the importance of an IB strategy, both globally and locally in Vietnam and Mozambique. At the global level, BoPInc was able to place itself strategically in the IB space through its collective agenda setting activities, the many IB partnerships and increased network that BoPInc has generated and the follow-up IB projects that BoPInc was able to secure in developing countries. At the local level, SNV also raised awareness of the importance of an IB strategy, through training workshops and support for local companies.

With respect to relevance, the IBA programme did not fully address the needs of all target groups, and the impact at end-beneficiary level is largely unknown. For investors and local SMEs, IBA Online and IBA Local did not (yet) fulfill the goal of matching these two target groups. For local BDS advisors, the IB toolkit training offered by IBA Global was considered valuable but did not always address what was needed locally. At the level of BoP suppliers and consumers, this evaluation was not able to assess impact, as this takes time to materialise and the M&E system has not generated reliable baseline data against which to measure the impact. Nevertheless, our survey indicates that many participants in the IB training increased their IB knowledge and improved their IB advisory services, which may eventually generate impact at the BoP level.

With respect to efficiency, we have three findings. First, IBA Online seems to have been the most cost-effective, and IBA Local the least, also when compared with other similar programme. Second, IBA was generally efficient at the overall management level, but the coordination between the three pillars and between the two SNV offices was insufficient. Third, IBA efficiency was better in terms of “smart cooperation”; leveraging activities and assets with like-minded partners and programmes. IBA was quite successful in cooperating with other stakeholders, both at the global and at the local level. For instance, the IB toolkit was developed by BoPInc in close cooperation with SEED and SNV among others. At the local level, there was a lot of cooperation with other stakeholders both for training and consulting purposes, as well as for securing the required co-funding and identifying companies to be supported.

While complete financial sustainability will not be possible, achieving 50% co-funding from non-donor sources may be feasible. This is illustrated by the case of Vietnam, where the supported SMEs contributed more than half of the co-funding for IBA activities, as compared with Mozambique, where they contributed hardly anything. However, even when defining financial sustainability liberally, as 50% funding from client fees, this will be difficult to achieve in general for a larger number of countries. What may be more realistic is to aim to eventually cover 50% of the budget from non-donor sources, which could include own revenues, private sector support, and contributions from members, in addition to contributions from clients. Defined in this sense, the fee-based network model that is proposed for the new IBA foundation may have the potential to become financially sustainable, although that is not likely to be the case in Mozambique.

Based on this evaluation, we draw three important lessons for future IBA-type programmes. The first lesson is that cooperation and coordination between different implementing organisations of a programme is crucial for maximizing synergies. The second lesson is that beneficiary countries should be selected very carefully in future programmes, and that external factors such as the level of private sector development and political stability should be seriously taken into account. The third and final lesson is that programmes should set clear and realistic targets, with well-defined indicators. If an indicator turns out to be impossible to measure or a target appears to be impossible to achieve, it is preferable to explicitly acknowledge this, instead of redefining or deleting the indicator at a later stage.