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The Katalyst Approach

Katalyst’s approach is designed to benefit the poor as producers, entrepreneurs, employees and consumers. The market development approach is based on the premise that better business services and an improved enabling environment lead to more competitive enterprises, which in turn results in sustainable economic growth and poverty reduction.

Katalyst implemented a pro-poor, market development approach to economic growth. The project focused on sectors with high growth potential in terms of jobs, productivity, profitability, outreach, and the potential for sustainable change. The project partnered with a wide range of private and public sector organisations in order to leverage resources and maximise impact.

 
Working on a sector-wide basis; targeting growth opportunities and removing constraints. As a guiding principle, Katalyst employed a comprehensive sector-wide strategy, identifying leverage potential and synergies, while focusing on achieving scale of impact. In partnership with market players, Katalyst implemented interventions to treat the underlying causes of weak markets, not merely the superficial symptoms. A key feature of these interventions was that they harnessed market incentives to encourage scaling up and ensure sustainability.

Katalyst’s approach is distinctive not simply because of its objectives for pro-poor market development, but also because of how it goes about achieving them. More conventional development initiatives support the poor by providing them directly with knowledge, goods and services. While such a direct approach can achieve quick results, it has limited sustainability, is often unable to achieve scale, and it can may distortionary effects on markets.

The project therefore worked indirectly, focusing on achieving systemic change, and partnering with a wide range of domestic and international private and public sector intermediaries who have long-term business interests or a mandate in a particular sector. By harnessing their resources and incentives, Katalyst’s interventions could leverage its own, thereby stimulating larger-scale and more sustainable impact than if it attempted to provide solutions in isolation.

What makes Katalyst useful

Inclusive Business

Katalyst’s key strength is that it understands both the local development dynamics and the realities of the business world, and that it is able to bring the two together in ways which create viable businesses which provide a sustainable vehicle to address the developmental challenges of Bangladesh.

The success of the project over its long life has been monitored closely by the measurement and evaluation teams of the funding donor agencies. That Katalyst has been highly successful in creating jobs and raising incomes has been clearly demonstrated. Katalyst is a development project with a difference. Whereas many development programmes are based on making grants to governments and others, Katalyst’s approach was to work very closely with the private sector. Katalyst facilitated companies in the development of business models which provided benefits to poor people – be that by engaging the poor as producers and suppliers, or by developing goods and services they might consume.

In developmental terms therefore inclusive business works well as a tool for inclusivity. Inclusive business is a strategy which more companies might use to identify and enter new markets, and which can provide the skills and capabilities to do so successfully.

 


Why has Katalyst Succeeded?

Katalyst has undertaken a wide range of activities and interventions over its lifetime, but what did the project do to ensure an inclusive business approach to addressing societal challenges where more traditional donor approaches had failed?

Collaboration with Katalyst has given companies services and support that has enabled them to create successful businesses. Katalyst is still valuable to private sector companies because it can identify and stimulate new business. It has a deep understanding of the needs of smallholder farmers in Bangladesh, while simultaneously being able to advise companies on how these needs might translate into profitable, durable business.

As donor agencies seek to work more closely with the corporate sector and engage companies in development, the experience of Katalyst will continue to provide vital lessons.

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