About LBSC

[ Mission Statement | Background | Who We Are | Operating Model ]

LBSC’s mission is to alleviate poverty in the Western and Mid-Western Regions of Nepal. This will be accomplished by building rural entrepreneurial capacity through simultaneous provision of equity financing and technical assistance to small and medium enterprises/entrepreneurs, believing that every producer regardless of gender can be an entrepreneur.

By developing and implementing a sustainable innovative model, LBSC seeks to eventually replicate its success in other regions of Nepal, to encourage private sector development and improve public service delivery to the rural poor.

LBSC Background

The Gulmi-Arghakhanchi Rural Development Project (GARDP) Phase II, a European Commission funded project, phased out on July 31st, 2003 following 18 years of operation in the region. In order to continue providing services to the area with more sustainable impact, the Lumbini Business Support Centre (LBSC) was conceived during the last year of the project as a self-sustaining, for-profit organization targeting rural private sector development through the combination of equity investment and technical assistance to small and medium enterprises (SMEs). The LBSC is a Private Limited Company initially partially capitalized by employee contributions. In its current developmental stage, LBSC actively seeks additional financing from private / public sector and international organizations.

Most developing nations which have successfully industrialized their economies have relied on, or still continue to be led by the dynamism of their SME sector. Traditionally, SMEs face two overwhelming obstacles to growth – capital constraints and lack of know-how. Without institutional support and financing availability, it is almost impossible for SMEs to succeed. Several organizations, including private investment funds and large multilateral institutions, have initiated investment vehicles to address the needs of SMEs, most notably in Latin America where the combination of equity capital with hands-on technical assistance has provided tremendous benefits to SMEs in the region. This approach has also been implemented in several other developing regions including Sub-Saharan Africa, the Caribbean, the former Soviet Republics, China, and other parts of Asia.

In Nepal, however, few programmes have been initiated to target the development of SMEs, whether through private equity investment or other channels. LBSC therefore seeks to step into this void by introducing and implementing a sustainable model for providing equity capital and technical assistance to the SME sector.

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A team of rural private sector development experts who produce extraordinary results

At LBSC, our mission is clear and uncompromising: to help rural enterprises and entrepreneurs achieve sustainability and realize profound, tangible results for the rural communities. Our staff is committed to helping our enterprise partners improve their working capital capacity, products and services, marketing strategies, trading networks, and profitability, while maximizing positive social impact.

We accomplish our goals through a multi-disciplinary, collaborative team approach, which combines private sector business experience with a deep understanding of specific sectors, geographies, and enterprise constraints in the hill regions of Nepal.

LBSC is the only organization to provide “hands-on” equity financing with technical assistance to SMEs in rural Nepal. Our staff members are highly motivated to develop and implement innovative ideas that will enable rural entrepreneurs to achieve impressive results.

We also provide thought leadership through our cumulative experiences to other organizations, which may wish to replicate this pioneering operating model in other rural parts of Nepal. In addition, LBSC maintains and strictly enforces a high standard of uncompromising integrity and moral guidelines to ensure maximum transparency and neutrality when implementing activities in the rural district.

The initial value proposition of LBSC is simple…Rural SMEs will benefit from a simultaneous
improvement in access to capital and know-how, while providing profitable exit avenues for
LBSC and its investors

LBSC’s scope of operations is designed to take into account the specific challenges associated with the implementation of equity investment in Nepal’s rural areas. The company shall initially focus on the Gulmi and Arghakhanchi districts to fully leverage current expertise and previous GARDP investments. It will then expand its area of operations to eight other districts in the Western and Mid-Western regions, and ultimately seek to replicate its model to other areas of Nepal.

To achieve its mission, LBSC’s management team endeavours to maintain a lean and efficient organizational structure, consisting of the following:

• Senior Management
  
  
• Investment Analysts
  
  
• Community Mobilisers / Organisers
  
  
• Technical Experts (sector-specific)
  
  
• Information Management & Communications Specialist
  
  
• GIS Specialist
  
  
• Marketing Specialist
  
  
• Administrative & Support Staff

1. Determining and analyzing commercial comparative advantages to identify sectors / products in which LBSC investees are most likely to succeed
   
   
2. Gathering, verifying, and analyzing information about a potential or current investee, including pre-investment business evaluation and post-investment monitoring

3. Maintaining a clear investment strategy regarding enterprise sector, revenue, size, environmental and labor regulations, etc.
   
   
4. Providing business support to investees through technical assistance, training, and/or participation in specific enterprise activities of the investees

5. Determining how to increase or decrease LBSC’s level of involvement or investment with an investee
   
   
6. Conducting baseline studies to enable impact monitoring & evaluation of LBSC’s activities
   
   
7. Conducting non-investment related activities to ensure LBSC smooth operations and continued vocational capacity building of LBSC staff
   

8. Increasing awareness among funding community, establishment of strategic alliances, dissemination of information / lessons learned, and solicitation of investment

LBSC utilises a two-stage process in identifying, implementing, monitoring, and exiting investments as depicted below:

Investments are made through majority / minority equity participation, sometimes combined with quasi-equity or other short-term financing instruments. LBSC targets investments to help build SME sustainability and achieve capital growth to enable LBSC investors to attain attractive returns.

At the same time, investments are only made in consideration of the maximum positive impact on local communities and the environment with measurable, sustainable benefits.

Furthermore, periodic monitoring and evaluation programmes are conducted to assess the impact of LBSC.