It is 8.30 am in Dhaka, capital city of Bangladesh. Sitting in his office is Mustafizur Rahman Shazid, who is in charge of sales and marketing at Butterfly Marketing.
Butterfly Marketing began as a family business (by Shazid’s father) selling imported fridges, TVs, air conditioners and other white goods in 1987 with three people. Today there are 200 outlets all over the country. It has 1,400 direct employees and provides indirect employment for 15,000 people in roles such as retail agents and suppliers.
Although the company has grown steadily over the past two decades, there are challenges to running a business in developing countries like Bangladesh.
In a recent report by the IFC on jobs, key findings on major constraints to businesses were finance (in particular for SMEs), infrastructure (reliable power supplies), the investment climate and training and skills (the latter more applicable to larger companies).
CDC’S INVESTMENT IN BUTTERFLY MARKETING
Although Butterfly Marketing has been successful, many businesses in developing countries, particularly those which have faced political instability such as Bangladesh, struggle to find the investment they need to grow.
CDC is the UK’s development finance institution and it supports the building of businesses throughout South Asia and Africa creating jobs and making a lasting difference to people’s lives in some of the world’s poorest places.
Investing in more risky climates is one of CDC’s key contributions. Working with local fund manager, Brummer and Partners, CDC first invested nearly US $1m in Butterfly Marketing in 2011 through the Frontier Fund. Frontier was the first private equity fund set up in Bangladesh.
Private equity can play a big role in Bangladesh through adding value in strategy, networks and professionalising management teams. This helps expand the business and create more jobs.
DEVELOPMENT IMPACT AND FINANCIAL RETURN
Businesses such as Butterfly Marketing reflect business success and development impact. It creates employment and provides an income to thousands of people in the supply chain.
Thanks, in part, to the continued support of CDC and Brummer and Partners, Butterfly Marketing isnow expanding significantly, with two new factories manufacturing fridges due to open shortly. An expanding business means the creation of more jobs, which means an improved standard of living for people like Mr. Haider.
BUSINESS SUCCESS CREATES MORE JOBS
Butterfly Marketing has expanded significantly since it first started as a family business in 1987.As well as importing white goods, Butterfly Marketing has now started manufacturing white goods in factories in Bangladesh itself. Manufacturing adds to the growth of the economy – and hundreds more jobs will be created in the factories as well as many more with retail agents and suppliers.
Jobs offer a way out of poverty and, according to a recent World Bank report, nearly 90 per cent of jobs are created in the private sector. Successful businesses such as Butterfly Marketing are crucial for creating jobs.
||Brummer and Partners
|CDC Commitment to the fund
|Date of Commitment