Systemic action

In depth
The M4P approach recognizes that the lives of the poor are inextricably linked t
o the functioning of the systems around them. Too often, poorly functioning mark
et systems - uncompetitive and unresponsive to producer, worker and consumer nee
ds - have a disproportionately negative impact upon the poor, who lack the resou
rces to overcome such dysfunctions.
The M4P approach fosters understanding of the functions and players within marke
t systems and how these can be strengthened in order to better serve the needs o
f hte poor. The approach targets intervention at critical weaknesses in the mark
et system, building capacity within the system to enable key players more effect
ively for the benefit of the poor.
In practice
Access to financial services is low, reaching only 38% of the adult population.
The mainstream financial sector is at an impasse: a frustrated government is pro
posing coercive regulation or establishment of a dedicated ‘bank for the poor’; anti
-bank hostility is rife amongst politicians and the public; banks are conservati
ve and defensive. Efforts to develop alternative microfinance providers have had
little impact on levels of access. An M4P programme recognises that significant
improvement in financial access will only be achieved if the resources and ince
ntives of the mainstream banks are harnessed to serve the mass low-income market
.
The programme’s analysis finds that: (a) there is no common vision to improve fina
ncial access, resulting in inappropriate policies and uncoordinated actions; and
(b) banks have limited understanding of the low-income consumer segment – informa
tion services are weak. Using this analysis and its neutral status, the programm
e brings together regulators, banks and their representatives and other interest
groups to develop a coherent vision for improving financial access. The program
me then works with different players to pursue the vision: improving regulation
and coordination processes and consumer education; developing an industry-owned
syndicated market research product; stimulating industry innovation. This effort
contributes to an increase in financial access to 60% in six years (an addition
al 7.1m people).
Sustainable change
In depth
M4P is about creating the foundation for lasting change where market systems are
better equipped to respond to future needs and priorities. It acknowledges that
the lives and livelihoods of the poor are continually adapting to the changing
environment around them, and that the poor need solutions that adapt with them.
The M4P approach recognises that the process through which market system constra
ints are identified and addressed is as important as the solution itself. If the
system, its functions and players, can be equipped to meet future challenges an
d continue to meet the changing needs of the poor then impact is sustained, rath
er than short-lived or dependent on further injections of aid.

In practice
Poor farmers and businesses in rural areas are hampered by a paucity of informat
ion. Commercial radio is a primary source of information: 95% of households regu
larly access radio, far higher than any other form of mass media. Research shows
that rural audiences desire informative and responsive programmes and are dissa
tisfied with prevailing urban-centric, paternalistic broadcasting. Development a
gencies exacerbate the problem, paying for their own content to be broadcast, wh
ich is unsustainable and doesn’t give stations incentives to improve. The project
recognises that a different business model is needed, where radio stations respo
nd to rural demand and attract and retain audiences, which in turn secures comme
rcial sponsors who wish to be associated with popular programmes – ensuring commer
cial viability.
Using its research on rural demand the project encourages several radio stations
to pilot the new business model, providing technical support to introduce new f
ormats and improve production and journalism practices. Having demonstrated a vi
able business case, the project focuses on strengthening market-supporting funct
ions to ensure that the new programming approach continues: (a) building the cap
acity of local technical services that stations can use to develop future progra
mmes; (b) stimulating audience researchers to cover rural areas so that sponsors
and advertisers have accurate information; (c) improving media relations practi
ces and links between sources of information and radio stations; and (d) working
with regulators and industry bodies to support the new approach. As a consequen
ce, over fifty new rural business programmes continue to be broadcast by 25 stat
ions nationwide, reaching 7m regular listeners – with documented impacts on rural
businesses – without any further aid-funded support.
Large-scale impact
In depth
The M4P approach explicitly aims to reach large numbers of poor by harnessing th
e dynamism of the market system to achieve scale and sustainability. It does thi
s by alleviating the constraints that restrict equitable participation and bette
r terms of access to all those who engage with the system.
Through a rigorous analysis of the role of the poor within market systems, the M
4P approach identifies and targets those markets that are of the greatest import
ance to the poor and intervenes to trigger improvements which will have the grea
test and most durable impact on reducing levels of poverty.
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In practice
The vegetable sector is growing and is important to the livelihoods of large num
bers of poor farmers, but supply cannot keep up with rising consumer demand. Pro
ductivity is far lower than in neighbouring countries, constrained by poor farme
rs’ lack of knowledge about good practices (eg planting techniques, use of inputs
and recognition and treatment of problems). Conventional efforts to improve farm
ers’ access to knowledge through public extension services and NGOs lack scale and
sustainability. Analysis indicates that farmers tend to look to local retailers
of agricultural inputs for advice, but this is of variable quality and reliabil
ity.
Supporting retailers directly to improve the advice they provide to farmers isn’t
a feasible strategy for achieving scale. Instead the programme looks for other m
arket players with the capacity and incentives to improve retailer performance.
It concludes that large input suppliers have a clear commercial interest: if ret
ailers provide reliable advice to farmers, not only will farmers improve product
ivity, but their satisfaction with retailers will increase, creating customer lo
yalty and increasing sales of inputs. The programme works with input suppliers t
o introduce a retailer training course which focuses on enhancing retailers’ abili
ty to provide practical advice to farmers. Successful pilots see farmer producti
vity increase by 30%, a dramatic improvement in retailer-farmer relations and in
creased input sales. With no further programme support, input suppliers train ov
er 14,000 retailers, serving approximately 2m farmers. Retailer training is also
adopted by sixteen other input suppliers in a variety of other agricultural sec
tors in seven regions.
Facilitative role
In depth
Within the M4P approach, facilitation is a central element to achieving sustaina
bility. Lasting, systemic change requires that important market functions are em
bedded within the system, performed by market players with the capacity and ince
ntives to undertake those roles in the long term. An M4P programme aims to stimu
late private and public sector players to take on new (or adapted) functions – to ‘c
rowd in’ – whilst avoiding becoming an active market player itself.
The role of the development agent (or agency) in the M4P approach is explicitly
catalytic – working towards a future vision of a market which does not require aid
-funded support and ensuring that any intervention is guided by a clearly define
d exit strategy. Being a facilitator means also means being conscious of the dis
torting effects that intervention can have on markets and seeking at all times t
o minimize those effects.
In practice
In the examples above, the intervening agencies faced a choice about their role:
to provide solutions directly or facilitate key market players to provide solut
ions on a continuing basis:
• In the financial services sector the programme might have provided the banks wit
h market research directly, but it understood that research will always be neede
d in a dynamic market situation. Consequently, it worked with banks and a consum
er research firm to develop a syndicated market research product, which continue
s to be used on a commercial basis.
• In the radio sector, recognising that paying radio stations to broadcast develop
ment information is never sustainable, the project built on the commercial incen
tives of radio stations. It assisted them to respond to the unmet demand of the
mass rural market and encouraged key industry stakeholders to support the shift
in broadcasting approach. The project did not finance broadcasters or provide in
formation to be broadcast.
• In the vegetable sector, the programme saw that it wouldn’t be able to achieve sca
le or sustainability by training retailers directly; it needed to find a ‘leverage’
point which would enable it to achieve a larger, more lasting impact on the sect
or. It recognised that input suppliers had a long-term interest in better perfor
mance and capacity to reach thousands of retailers (and therefore millions of fa
rmers). The programme’s support was technical rather than financial: it assisted i
nput suppliers to develop and introduce more innovative, pro-poor practices in t
heir supply chain management.

Facilitative role
In depth
Within the M4P approach, facilitation is a central element to achieving sustaina
bility. Lasting, systemic change requires that important market functions are em
bedded within the system, performed by market players with the capacity and ince
ntives to undertake those roles in the long term. An M4P programme aims to stimu
late private and public sector players to take on new (or adapted) functions – to ‘c
rowd in’ – whilst avoiding becoming an active market player itself.
The role of the development agent (or agency) in the M4P aproach is explicitly c
atalytic – working towards a future vision of a market which does not require aid-
funded support and ensuring that any intervention is guided by a clearly defined
exit strategy. Being a facilitator means also means being conscious of the dist
orting effects that intervention can have on markets and seeking at all times to
minimise those effects.
In practice
In the examples above, the intervening agencies faced a choice about their role:
to provide solutions directly or facilitate key market players to provide solut
ions on a continuing basis:
• In the financial services sector the programme might have provided the banks wit
h market research directly, but it understood that research will always be neede
d in a dynamic market situation. Consequently, it worked with banks and a consum
er research firm to develop a syndicated market research product, which continue
s to be used on a commercial basis.
• In the radio sector, recognising that paying radio stations to broadcast develop
ment information is never sustainable, the project built on the commercial incen
tives of radio stations. It assisted them to respond to the unmet demand of the
mass rural market and encouraged key industry stakeholders to support the shift
in broadcasting approach. The project did not finance broadcasters or provide in
formation to be broadcast.
• In the vegetable sector, the programme saw that it wouldn’t be able to achieve sca
le or sustainability by training retailers directly; it needed to find a ‘leverage’
point which would enable it to achieve a larger, more lasting impact on the sect
or. It recognised that input suppliers had a long-term interest in better perfor
mance and capacity to reach thousands of retailers (and therefore millions of fa
rmers). The programme’s support was technical rather than financial: it assisted i
nput suppliers to develop and introduce more innovative, pro-poor practices in t
heir supply chain management.