The sustainable production approach: a way to facilitate access to finance for Small and Medium Enterprises
31 July 2017
Cover image by Mackenzie Enich, University of Montana.
The Sustainable Production approach can facilitate access to finance for Small to Medium Enterprises as it integrates some key parameters in the business planning, such as energy efficiency, waste valorisation, process optimisation and, also, stable collaboration with partners (e.g. farmers and traders). From the perspective of a potential investor, the sustainable production approach helps securing an investment in the long run, and participates to risk mitigation. This last week, the relevancy of the sustainable production approach was tested in the context of the Vietnamese rice sector. The project team worked in collaboration with private millers willing to apply for the credit line of the World Bank’s Vietnam Sustainable Agriculture Transformation (VnSAT) project. The VnSAT credit line is dedicated to rice millers to support investment under certain conditions of model of interaction with farmers.
a one day audit on Resource Efficiency and Cleaner Production was conducted in the factories. These quick assessment led to recommendations for better maintenance and process control, involving almost no investment, with short-term impacts such as energy cost-savings (up to 10%) and a more secure working environment.
the development of a Business Case and an Investment Proposal in collaboration with the company, with support in best relevant technology identification and project evaluation (cash flows projection, Internal Rate of Return, environmental impacts, etc.). BIDV, in charge of distributing the VnSAT credit line, assisted to the working sessions. Their participation brought some pragmatics recommendations related to the application to the credit line, and helped to validate the relevancy of the sustainable production approach in this context.
Business Meetings with rice millers
Since now, Sofies’s Sustainable Production approach and its related toolkit has been applied to, amongst others, the Vietnamese coffee sector, the Vietnamese rice sector and the Chinese cassava sector. The toolkit could be adjusted to many more sectors, supporting innovative and sustainable investment projects with positive impacts at environmental and value chain level.