Mauritius Business Growth Scheme Unit

The Problem

The Mauritius Business Growth Scheme (MBGS) was set up by the Government of Mauritius (GM) in June 2010 in collaboration with the World Bank (WB) in order to support enterprise growth and competitiveness in the manufacturing and services sectors. The over-riding objective of MBGS was to maximise the rate of sales growth in supported enterprises by delivering two core services to them: Hand-holding/mentoring/coaching services on a free-of-charge basis; and a 50-50 cost-sharing scheme for the buying-in of specialised outside expert services.

A dedicated MBGS Unit was thus set up in July 2010 to act as the implementing agency. It was set up as a separate, semi-autonomous and independent entity staffed by individuals recruited on individual contracts. The Unit was to be headed by a Manager to be recruited on the international scene.

However, ever since its inception, the MBGS Unit has been facing tough constraints and challenges at various levels. It became, for instance, fully operational only around March 2011, i.e., some eight months after creation. Prior to that, it had to go through painful teething problems. The reasons were manifold and included: heavy bureaucratic constraints (given the relatively large number of stakeholders involved); red-tapism; delays at all levels despite the good faith of stakeholders; tedious approval procedures; under- and poor- staffing, since the initial recruitment process was flawed and incomplete; and lack of appropriate infrastructure at the MBGS Unit.

Another problem was the fact that the Unit had already been officially launched in November 2010. Its objectives and targets for the year had been announced in public. Yet, despite the fact that a number of applications were being received and an increasing number of visitors turning up, the MBGS Unit could not deliver an exceptional service as promised. The essential business tools, instruments and templates (such as a website, brochures, and registration forms) were not available and were being created and used internally in a haphasard manner.

In addition, whilst a Grants Approval Committee had been set up to approve applications submitted by enterprises, it could only hold its first meeting in November 2010. At that time, most of the core MBGS documents (such as the client’s contract) were not ready implying that, despite the fact that projects were being approved, beneficiaries could not proceed to implementation stage.

The credibility of the MBGS Unit was being questioned, especially by the business community, which MBGS was supposed to serve.

It became clear by early 2011 that, should nothing bold be undertaken, the whole MBGS initiative would be threatened, with serious reputational consequences for those involved in crafting and implementing the project.

It is also noteworthy that both the WB and GM acknowledged the fact that there had been no prior experience for such a royalties-based matching grants program open to all enterprises in the past. Past international experience was scarce: In Israel where this scheme had been run, it was only for start-ups and highly innovative firms.

The challenge, therefore, was enormous for Mauritius.

Solution and Key Benefits

 What is the initiative about? (the solution)
In January 2011, it was decided that bold measures had to be taken to ensure that the MBGS Unit became what it was destined for, i.e., an institution “for business people, by business people” and managed as a private sector-like entity putting customer-centricity first. The challenge was defying given the experience of the MBGS Unit during the first six months of operations.

The initiative revolved around the following central themes: getting rid of bureaucratic constraints and red-tapism; studying how to simplify things, how to make the whole process become smoother, faster and more efficient, how to reduce steps, paperwork and increase speed at all levels; providing quantifiable guarantees (committing in terms of hours when MBGS will respond) to enterprises; becoming highly customer-centric by consistently under-promising but over-delivering; working hand-in-hand with private sector organisations and SME Associations to restore credibility; and providing as much hand-holding/mentoring/coaching as necessary for free.

Two other key initiatives taken were as follows: First it was decided that Government should take a more active role in the system, while the World Bank should slowly withdraw. After several series of negotiations with stakeholders, the MBGS managed to introduce a new Scheme (called the 90-10 Technical Assistance Scheme), which would be called upon to replace the 50-50 Matching Grants proposed by the World Bank. This would give the MBGS Unit direct control on the management of the scheme thus eliminating bureaucratic procedures.

Second, it was decided to depart from the World Bank Manual, which had initially recommended the hiring of three Advisors. In early 2011, only two Advisors had been recruited. It was thus decided not to recruit an additional Advisor but rather a Senior Advisor with significant experience in business and with entrepreneurs and with international exposure (which was not the case earlier, except in the case of the MBGS Manager).
These two decisions together the ones highlighted further above contributed to spearheading the MBGS Unit to new heights. Indeed, it became fully operational in March 2011, with the signing of the first contract, which had been approved in November 2010! In April, the Senior Advisor was recruited to support the Manager in his daunting task. The 90-10 Scheme finally fully replaced the 50-50 one in July 2011; and the World Bank began to withdraw from the system as early as May 2011.

The credibility and reputation of MBGS were finally restored at all levels. In only nine months since it began to operate at full scale, nearly 400 applications have been received from entrepreneurs. 92 schemes have been approved. The target (on a pro-rata basis) was 80. In monetary terms, the total value of schemes approved approached the Rs100 million mark, far exceeding the full-year target of Rs60 million.

MBGS is now being praised by all parties (private sector organisations, entrepreneurs, journalists, Government key executives, and many other institutions) and is highly acclaimed by the World Bank as a success story.

Actors and Stakeholders

 Who proposed the solution, who implemented it and who were the stakeholders?
The solution was a joint effort proposed and led by the MBGS Unit’s Manager, Mr Henri Stetter, who worked in close collaboration with the Senior Advisor (Mr Deven Padiachy). The latter was recruited upon the Manager’s recommendation in April 2011. The decision has to be approved by MOBEC, who had to get the approval of MOFED given higher costs were involved. The World Bank had the final say in approving the profile of the Senior Advisor. It is noteworthy that the MBGS Unit is a small one (and will remain small in nature in the foresseable future) with one Manager, one Senior Advisor, two Advisors, one M&E Coordinator (recently recruited) and four support staff.

At the time of the creation of the MBGS Unit, the Manager had to work closely with the Principal Assistant Secretary of the Ministry of Business, Enterprise and Cooperatives (MOBEC) and his core team as well as with the key officers of the Ministry of Finance & Economic Development (MOFED), including the Financial Secretary.

Initially indeed, a plethora of stakeholders were involved in the whole system, thus causing bottlenecks at all levels. Stakeholders included the: World Bank; Grants Approval Committee; MOBEC (Administration, HR, Finance, and Procurement Divisions, each one acting as an individual stakeholder); MOFED (including the Financial Secretary, who was instrumental to help implementing the new system whereby the World Bank would have a lesser, if not insignificant, role); Development Bank of Mauritius; State Law Office; Accountant General Office; Small and Medium Enterprise Development Authority; and, above all, the Ministers representing MOBEC and MOFED, who also shaped policy decisions.

Other institutions which were also involved in one way or another included the: Mauritius Standards Bureau; Economic Restructuring & Competitiveness Programme; Government Online Centre; Enterprise Mauritius; Board of Investment; Mauritius Research Council; and so forth.

On the other side, there was the business community represented by a host of organisations, including the: Mauritius Export Association; Mauritius Chamber of Commerce and Industry; Association of Mauritian Manufacturers; SME Federation; National Women Entrepreneurship Council; Jewelry Advisory Council; and so forth.

The role of the MBGS Manager, who got support from the new Senior Advisor of the MBGS Unit as from April 2011, was to coordinate efforts in the most efficient manner and with the minimum bureaucracy as possible. This was being made despite the fact that the MBGS Unit was and is still 60% fully equipped (in terms of communication technologies, IT system, knowledge management system and so forth).

(a) Strategies

 Describe how and when the initiative was implemented by answering these questions
 a.      What were the strategies used to implement the initiative? In no more than 500 words, provide a summary of the main objectives and strategies of the initiative, how they were established and by whom.
The strategies revolved around the following central themes: building capacity within the MBGS Unit in early 2011; getting rid of bureaucratic constraints and red-tapism; studying how to simplify things, how to make the whole process become smoother, faster and more efficient, how to reduce steps, paperwork and increase speed at all levels; providing quantifiable guarantees (committing in terms of hours when MBGS will respond) to enterprises; becoming highly customer-centric by under-promising but over-delivering; working with private sector organisations to build credibility; and providing as much hand-holding/mentoring/coaching as necessary for free.

At the level of capacity-building, the MBGS Manager played a leading role to convince the various ministries as well as the World Bank to recruit a Senior Advisor and not a third Advisor. This was done in April 2011. The MBGS Manager and the Senior Advisor then were instrumental to implement the other strategies to spearhead the MBGS Unit to new heights.

Another strategy was to ensure the management of the MBGS Unit was not influenced by other stakeholders. It was essential for the Unit to be run by business people, for business people. The intervention of civil servants in the day-to-day affairs of the Unit was reduced to a significant extent. The only instance when matters could be discussed was during the Grants Approval Committee on a monthly basis, or such other times as dictated by policy changes. The MBGS Manager ensured that this remained the case at all times. Around July 2011, the World Bank withdrew from the system thus giving much leeway to the MBGS Unit to run its own affairs and to remain highly customer-centric.

Indeed, heavy emphasis was being laid on customer-centricity, in order to exceed expectations of any person or institution approaching the MBGS Unit. The MBGS Unit consistently, repeatedly and systematically under-promised but over-delivered not only to beneficiary firms but also to any entrepreneur contacting the Unit.

Another strategy is for the MBGS Team to provide as much hand-holding, mentoring and coaching as required on a free-of-charge basis. Bureaucratic hassles, which are inevitably and typically associated with any public service institution, are kept to a strict minimum.

The MBGS Manager also set the following rules at the very outset: All emails, missed telephone calls and queries are to be replied to on the same day, if possible within the next two hours. All applications are not only to be replied on the same day but also followed through via a telephone call to the applicant in order to plan a site visit within the next 48 hours. Within a period of ten days, any applicant should obtain a formal reply from MBGS regarding his eligibility for a scheme. It is also guaranteed to beneficiaries that their claims for disbursements will be attended to within a period of five days. This was unheard of in Mauritius. Up to now, most beneficiaries are satisfied with the system. This obsession with customer-centricity has now become the core strategy of MBGS, above all other considerations.

(b) Implementation

 b.      What were the key development and implementation steps and the chronology? No more than 500 words
Priority was given to the full operationalisation of the MBGS Unit in order to be able to become a fully-fledged customer-centric private sector-like organisation. This was achieved in March 2011, when the first contract for a scheme was signed. The applicant’s scheme had been approved in November 2010 but since there was no legal document prepared yet, implementation had to be delayed for several months! This happened in five cases.

In terms of logistic support, the MBGS Unit was first moved from the Ministry of Business, Enterprise and Cooperatives to a posh office in a building in the central business district of Port Louis in August 2010. Given the success of the MBGS since April 2011, the Manager took the decision to relocate to another bigger office within the premises of the Development Bank of Mauritius in August 2011.

Between November and March 2011, efforts were being stepped up in order to get all the legal documents, business tools and templates, the website, brochures and other materials ready.
A Senior Advisor was recruited in April 2011. Since then, both the MBGS Manager and the Senior Advisor have worked hand-in-hand, with the staunch support of the MBGS Team, to meet the initial targets sets for the Unit. In the same vein, a dedicated Monitoring & Evaluation Coordinator was recruited in September 2011 to reinforce capacity with the MBGS Team. Two other Advisors are expected to join the Unit in early 2012.
During the past twelve months, more than 1,200 hours of hand-holding/mentoring/coaching has been provided to entrepreneurs by the small MBGS Team. This is an ongoing step to build credibility amongst the business community. It will be called upon to increase as from 2012.

The collaboration with the plethora of institutions comprising the private sector (MCCI, MEXA, AMM, SMEF, etc) and the public sector institutions (NWEC, SMEDA, ERCP, NPCC, various ministries) is also an ongoing step. This is being done on top of the normal business operations of the MBGS Unit.

A new 90-10 Technical Assistance Scheme replaced the World Bank’s 50-50 Scheme in July 2011. Two new schemes will be operational in January 2012, namely the California-style Start-ups Entrepreneurship Scheme and the revised 90-10 Technical Assistance Scheme. All these have been prepared and vetted in a period of two months (since the Budget Speech of the Minister of Finance) and despite the fact that two new Advisors have yet to join the MBGS Team.

Other initiatives taken to build capacity include: the launch of a new website in December 2011; the design of a new IT system at the MBGS Unit (to be implemented in the first quarter of 2012); a new knowledge management system (first quarter of 2011); subscription to international magazines; training of Advisors; and so forth.

(c) Overcoming Obstacles

 c.      What were the main obstacles encountered? How were they overcome? No more than 500 words
The main obstacles encountered were delays in decision-making due to the involvement of several stakeholders (at least a dozen) and a heavy bureaucratic system, both at the level of the Government of Mauritius at the World Bank level. This has been streamlined to a significant extent after the phasing out of the 50-50 Scheme and the introduction of the 90-10 Scheme, a step which eliminated one stakeholder (the World Bank) from the already-long list. The MBGS Team also managed to operate in an autonomous and independent manner, thus preventing other stakeholders from undermining the MBGS’s core philosophy, which is to be highly customer-centric, and to under-promise but over-deliver at all times.

There was also unconsciously stiff resistance to change, especially at the level of civil servants who appeared to be uncomfortable with MBGS’s strategy to be a private sector-like “for business and by business people”. It took several months to get everybody onboard and to ensure that the guarantees provided by the MBGS Team (5 days for all reimbursement of claims; same day replies to all emails and application forms; etc) are fully adhered to.

The human resource capabilities of the MBGS Unit were also relatively poor at the beginning. This has been addressed by recruiting a Senior Advisor as well as a full-time person for monitoring and evaluation.

New equipment have been purchased and a proper IT system will be implemented during the first quarter of 2012.
The MBGS Team strategy has also been to maintain constant and relentless communication channels with all stakeholders, including with entrepreneurs. The team responds rapidly, during the same day, to any query or other question from stakeholders, irrespective of the time of the day.

(d) Use of Resources

 d.      What resources were used for the initiative and what were its key benefits? In no more than 500 words, specify what were the financial, technical and human resources’ costs associated with this initiative. Describe how resources were mobilized
The resources used (which would not have been the case had no initiative been undertkane) included the recruitment of a Senior Advisor with significant experience in business and management, and with international exposure, to complement the team of Advisors in the MBGS Unit. Initially, the World Bank had provided for only a third Advisor. Upon the insistence of the MBGS Manager, the ministries involved and the World Bank gave their go-ahead for the recruitment of the Senior Advisor. He joined the team in April 2011.

Due to the success of the MBGS Unit, two new Advisors are also expected to join the team in 2012. This had not been budgeted earlier. Two new support staff have already been recruited during the year to assist the team of Advisors to uphold the highest standards of service delivery.

The increase in the compensation budget of the MBGS is expected to increase by some 50% in the first quarter of 2012.
The MBGS Unit has also already relocated twice in about 18 months in order to be able to deliver an exceptional service to entrepreneurs. The new office has been fully refurbished and can now accommodate a large number of staff as well as clients. All meetings related to the MBGS are also held in the new, larger conference room of the MBGS Unit (which was not the case previously, when meetings had to be organised at the other ministries).

A new website is now operational. A modern IT and Knowledge Management System will be implemented during the quarter of 2012. Currently no such system is available at MBGS.
The key benefits out of the new resources being used are obvious, namely: More than 90% client satisfaction so far; full stakeholder satisfaction; added credibility; all targets fixed at the beginning of the year have been exceeded by far; a new California-style scheme added by the Minister of Finance in his Budget Speech in November 2011 to complement the portfolio of services offered by the MBGS; and above all, a strengthened, dedicated MBGS Team available round-the-clock to support entrepreneurs to innovate, improve competitiveness and grow in a sustainable manner in an ever-more challenging global business environment.

Sustainability and Transferability

  Is the initiative sustainable and transferable?
Most of the stakeholders involved have acclaimed the initiative undertaken by the MBGS Team under the leadership of the Manager. Most of the praise, however, comes from the entrepreneurs themselves. Press coverage is also generous in terms of praise attributed to the MBGS Unit.

Since the results have exceeded expectations by far (despite the fact that the MBGS Unit has remain in a go-slow mode for several months after its creation), the Minister of Finance & Economic Development has decided in November 2011 that the MBGS Unit should play an even-more important role in the economy of Mauritius. A new financial scheme is thus being proposed in order to encourage innovative and game-changing start-ups in key sectors of the economy. The MBGS has been entrusted this challenging task by the Government of Mauritius.

Several other Government institutions now seek to emulate the success of MBGS by being more customer-centric and less bureaucratic. The MBGS Unit often collaborates with these institutions in order to enhance the environment within which entrepreneurs operate.

It is believed that the whole initiative could be replicated in other economies. Indeed at the inception of the MBGS in May-June 2010, it was acknowledged that such a royalties-based matching grants programme had not been implemented elsewhere in its current form. There had been no prior experience for such a programme opened to all enterprises (it used to be only for a specific type of enterprise or sector). In Israel, for instance, where this scheme had been run, it was only for start-ups and highly innovative firms. The initiative undertaken in early January 2011, therefore, bears testimony to the fact that it is possible to have such a scheme implemented successfully in any economy but the bottom line should remain: Customer-centricity; simplify things to make the whole process become smoother, faster and more efficient; reduce steps, paperwork and increase speed at all levels; and eliminate bureaucracy and red-tapism in all its forms. The initiative adopted by the MBGS Unit is about transparency, predictability, fairness, speed of delivery, and credibility.

Lessons Learned

 What are the impact of your initiative and the lessons learned?
The impact of the initiative was direct and straight-forward: It helped the MBGS Team transform the MBGS Unit into a customer-centric private sector-like organisation solely dedicated to making businesses grow faster than they would have aspired. The MBGS Team believes that the MBGS Unit, in less than a year of operations, and thanks to the 92 schemes provided to companies for a total value of nearly Rs100 million, has led to direct and spillover effects in the economy to the tune of some Rs500 million (in terms of additional investments generated by the schemes) and to the creation of some 500 new jobs. These effects are expected to double in each subsequent year.

The bottom line explaining the MBGS success remains: Be customer-centric at all times and no matter what; simplify things to make the whole process become smoother, faster and more efficient; reduce steps, paperwork and increase speed at all levels; and eliminate bureaucracy and red-tapism in all its forms. The initiative adopted by the MBGS Unit, which can be replicated elsewhere (provided a dedicated team is in place) is about transparency, predictability, fairness, speed of delivery, and credibility.

Contact Information

Institution Name:   Mauritius Business Growth Scheme Unit
Institution Type:   Government Agency  
Contact Person:   Deven Padiachy
Title:   Mr  
Telephone/ Fax:   2302110641
Institution's / Project's Website:
Address:   MBGS Unit
Postal Code:   DBM Building
City:   Port Louis
Country:   Mauritius

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