Synergies through Linkages: Who Benefits from Linking Micro-Finance and Business Development Services?

SummaryAccess to both financial and business development services (BDS) can aid the growth of micro and small enterprises. Early efforts to combine or “link” these two types of services proved unsuccessful, however. BDS was supply driven, of poor quality, and often confined to management training. A renewed interest in linking services is driven both by a concern that “credit is not enough” to generate bottom-up poverty reduction and by a new approach to BDS. Business services must be demand driven, managed in a sustainable manner, and diversified beyond management training. For success, linkages must provide benefits to the three key actors involved: enterprises, BDS providers, and micro-finance institutions. Thirty linked programs are analyzed using a six-part typology.