In general, all commercial interactions, all selling or buying activities between firms can be classified as business linkages. However, different from this general definition, this report focuses on collaborative business linkages, which are explicitly built up by firms out of mutual interest. Enterprises join a formal or informal group with the aim of bringing about a win-win situation for the parties involved.
We specialize in two types of collaborative business linkages:
(a)horizontal business linkages
horizontal among MSE or SMEs or vertical with suppliers on the one hand and buyers on the other:
Horizontal business linkages are especially advantageous for MSMEs because, by cooperation, they can overcome the limits set by size.
(b) Vertical business linkages
MSE and SME integrate themselves into market driven domestic or international value chains.
As entrepreneurs in the business sector, enterprises that we collaborate with can benefit from:
- the rising demand for their services and preliminary products from the enterprises of the
modern sector with respect to the core business and non-core business (business linkages)
- the rising demand for consumer goods from employees of the modern sector to be met
by the informal urban and rural sector (market opportunities)
It can generally be stated that, in regions of dynamically increasing business opportunities, there is considerable potential for supporting entrepreneurs in the formal urban and rural sectors through financing and customized BL-measures. This will enable them to tap into the full potential of the market of rising consumer demands amongst businesses.
The potential of direct business linkages between entrepreneurs and the national or global value chains is limited. This is due to the typical characteristics of entrepreneurs: limited access to assets, comparatively low technological and management skills and small size.