The ‘big brothers’ helping our MSMEs

Everyone needs a big brother; everyone needs someone to guide them and help them grow. In my work with MSMEs, I talk about big-brother companies all the time when I give interviews, deliver speeches and in meetings. They are crucial in our mission to scale up MSMEs.

In a sense, government can be a big brother to MSMEs. Just last week, we had Department of Trade and Industry Secretary Cris Roque as our guest “CEO” in our continuing program with the Department of Education, The Boardroom Experience. Twenty students from San Lorenzo Ruiz Senior High School joined us at the boardroom of the DTI in Makati City to spend about half an hour with Secretary Cris.

It was the first time for these students to set foot in a boardroom, and a very important one at that. Secretary Cris told them that this particular boardroom is where companies, big and small, come to get assistance from the DTI. Not only that, foreign investors also come to that same boardroom to discuss millions of pesos worth of investments. I could feel the awe in the students as they took in what Secretary Cris just told them, and I saw the glimmer of ambition in their eyes: what would it be like to sit in that same boardroom, 10 or 20 years from now, and be part of an important deal?

Secretary Cris further inspired them by sharing that she was once a small entrepreneur herself, and that through hard work, she is now in a position to help other small entrepreneurs. That’s a big brother (or sister) at work right there.

In the private sector, the big brothers are the large corporations. They are the ones Go Negosyo acknowledges in its advertisements and during events, the leaders of the big corporations who share their resources, time and network to help smaller businesses scale up. They are our allies in helping the micro businesses become small, the small become medium and the medium become large businesses. Big brothers don’t see the smaller players as competitors; rather, they see them as part of a larger ecosystem that generates employment, supplies goods and services and keeps the pool of business ideas fresh. They see the MSMEs as complementary to their own businesses.

As I said here before, it makes sense for big companies to help the smaller companies in their value chain. When these small companies grow, the business becomes stronger and more sustainable.

During the pandemic, we fought hard to help MSMEs keep their heads above water. Eventually, big businesses felt the impact of the small business closures. Consumer spending suffered, the stalls that used to populate the walkways and ground floors shut down one by one, the businesses that made up supply chains suffered disruptions that were felt down the line. I recall this to bring home the point that being a big-brother to small companies is not purely an act of altruism (although there are exceptions: I have seen business owners – big and small – who do give without expectation of anything in return) – it just makes good business sense.

And when I see these big-brother companies thrive, I am filled with hope. Just last week, Yovel East Devt. Corp., one of our pioneer big-brother companies at Kapatid Angat Lahat sa Agri Program (KALAP), signed two important agreements. One was with the Land Bank of the Philippines, which will combine Yovel East’s expertise in farm clustering under its We Will Rice program and LandBank’s financial support through its Agrisenso Plus Lending Program. The other agreement was with a Malaysian company, and that one leverages the complementary durian harvesting seasons in the Philippines and Malaysia, and harnesses the expertise and resources of both countries. This agreement is timely, too, as the global demand for durian could now be met year-round by both countries. The plantations will be in the Philippines and hopefully will employ more Filipinos and put to good use the farmlands that are suitable to durian farming.

As Yovel East became a big brother to thousands of farmers under its corporative farming model We Will Rice, LandBank and the Malaysian company became its big brother in unlocking many opportunities for it to thrive.

Banks and other financial institutions, meanwhile, are also key to unlocking so much of our MSMEs’ potential for success. LandBank president Lynette Ortiz was correct in saying financing is only one of the keys, but it is important nonetheless. As Yovel East president and CEO James Amparo observed, there is so much uncertainty in farming: uncertainties in weather, uncertainties in water, uncertainties of where they can get financing for their fertilizers and machineries and even the uncertainties of where to sell their produce after harvest.

James recalls: “I remember vividly during pandemic, I encounter farmers crying to me for help and begging me to buy their palay. I accommodated a few and granted their request but my resources are limited. I needed to prioritize farmers who were part of our program, but my warehouse facility can only hold a certain volume. Even though I wanted to help, and give them relief, my resources are few and limited. I politely declined … I feel the pain of our farmers. Taking care of the crop for months, the survival of their family dependent on the money they will earn and help the family to survive for the next coming months. This has been the cycle of a Filipino farmer, day to day...”

I can’t blame the banks and finance institutions for their reluctance to lend. Risk management is a big part of their job. That is why the big brother model can help mitigate that risk. With proven models and a ready market for the farmers – as Yovel East has successfully demonstrated for five years now – banks are assured that they are lending to a sound business.

I can’t emphasize enough the urgency of addressing the needs of our farmers. Our country’s food security is at stake here. And as James recounted, his experience with the farmers during the pandemic only drove home the fact that they needed to grow, and grow fast.

With the help of big brothers – whether they are the conglomerates or institutions like the DTI and LandBank – we can give farmers and MSMEs a fighting chance to survive and succeed and have access to all the three essentials of successful entrepreneurship – Money, Markets and Mentoring.