Micro-, Small and Medium-sized Enterprises Day: Lessons from research on the food environment in Bangladesh, Ethiopia, and Viet Nam

By Alan de Brauw, originally posted as an IFPRI blog. 

Improving diets is a key element of food systems transformation, which in turn depends on the availability and affordability of nutritious foods. Micro-, small and medium-sized enterprises (MSMEs) play a crucial role in providing both food and employment in many low-income countries—making them a key target for food systems transformation policies.

Making such interventions work depends on a clear understanding of the challenges that MSMEs working in the food environment face in diverse countries and contexts. To mark UN Micro-, Small and Medium-sized Enterprises Day (June 27), here is a look at recent research in Bangladesh, Ethiopia, and Viet Nam by IFPRI and partners that sheds light on specific challenges these enterprises face.

From 2022-2024, researchers from IFPRI, the Alliance of Bioversity and CIAT, Wageningen University and Research in the Netherlands, and country partners in Bangladesh, Ethiopia, and Viet Nam collaborated under the CGIAR Research Initiative on Sustainable Healthy Diets through Food Systems Transformation to study methods of improving dietary outcomes. One component of this research aimed to better understand what constraints MSMEs within the food environment face in conducting and growing their businesses, and how those constraints vary by the gender of the enterprise owner, by location, and by business type. Overall, our aim was to help pinpoint types of interventions that could help these businesses grow and thrive, increase employment, and increase availability of nutritious foods.

We conducted primary research in different locations in both Viet Nam and Ethiopia, first fielding listing exercises that captured basic information about all businesses selling food within the boundaries of selected neighborhoods. These businesses varied from supermarkets to chain restaurants, and from mobile fruit vendors to more established food stalls in each country. In a second step, we removed businesses unlikely to be MSMEs (e.g., supermarkets) from our sample frame and randomly selected businesses to include in a larger survey.

The survey asked about employment, infrastructure, supply chains, formality, management skills, access to finance, and nutritional knowledge—finding both similarities and notable differences between Ethiopia and Viet Nam.

Viet Nam

In Viet Nam, we found that while women owned a reasonably large proportion of enterprises, most were solo operators; very few enterprises employed anyone else. At the same time, those with employees said few fell into the category of youth, defined as individuals aged 15 to 24. This suggests that expanding MSMEs in Viet Nam could increase incomes among women, but is unlikely to help meet global employment goals among youth.

We found that businesses in Viet Nam face few constraints in supplies of more nutrient-dense foods such as fruits, vegetables, nuts, legumes, and animal source foods. Less than 10% of all businesses selling such foods suggested they would have any trouble obtaining more, even at short notice. We also asked whether respondents wanted to sell more nutrient-dense foods; less than half said yes. Among those, we asked what the main challenge would be in selling more; the modal answer was “none.”

These findings suggest that conditions are positive for the food environment to provide more nutrient-dense foods: If demand were to increase, retailers and other food vendors are confident they could meet that demand without having to raise prices or search for new sources.

However, we did find challenges related to business management, access to finance, and nutritional knowledge among Vietnamese MSMEs. Interventions could focus on these challenges, rather than supply constraints. Finally, controlling for differences in these outcomes by gender of ownership, location, and type of enterprises, we found that most of the variation is explained by outlet type, suggesting that specific outlet types should be targeted in interventions rather than male or female owners.

Ethiopia

As in Viet Nam, the data we collected in Ethiopia show that the majority of businesses selling food are owned by women, there are few employees, and only a small proportion of those employees are considered youth. Few enterprises use recommended business practices, and we documented a clear correlation between the number of recommended practices used and enterprise profits. In addition, access to finance is lacking in most enterprises, particularly formal finance.

In contrast to Viet Nam, however, MSMEs in Ethiopia face constraints in supplies of nutrient-dense foods: 86% indicated they wanted to sell more, with many of those saying the main obstacle was high prices.

Another difference with Viet Nam was evidence of infrastructure constraints. MSME owners in Ethiopia who indicated they had cold storage said they also faced challenges with inconsistent electricity supply. Water supplies were a constraint for many MSMEs as well. Respondents also noted issues with inconsistent supply and varying quality of food products when they received them.

Bangladesh

In Bangladesh, we took a different approach, analyzing secondary data on MSMEs collected by the CGIAR Transforming Agrifood Systems in South Asia initiative. That effort was focused in rural areas, and business practice questions were more limited. We used them, however, to provide some initial information about constraints faced by Bangladesh MSMEs.

One striking difference between Bangladesh and the other two countries is in enterprise ownership—the data show most retail businesses are owned by men, and almost all market vendors are men. Retailers sell mostly edible oils, pulses, and eggs, while fruits and vegetables are almost exclusively available from MSMEs within wet markets.

That said, MSMEs face significant obstacles. We found that only about half of retailers have access to cold storage, and many report significant amounts of spoilage. Moreover, less than 40% have bank accounts—so access to formal finance is also an issue. However, we do not have much information about business practices or supply constraints.

Conclusion

Our data suggest that in Viet Nam and Ethiopia, promotion of MSMEs that sell nutrient-dense foods can help boost incomes among women. At the same time, MSMEs face a range of issues with access to finance, which likely hinders business growth, and business practices could use improvement in both countries. In Bangladesh, where data are more limited, innovations that lead to more reliable cold storage could address the food spoilage problem and positively affect supply.

Overall, these findings show the importance of understanding country and local conditions and contexts in developing effective interventions to transform food systems. The challenges MSMEs face are complex; if business practices improved, for example, enterprise owners might find that selling ultra-processed foods is more profitable—setting back efforts to improve diets. Potential interventions to support MSMEs should also take available supplies of important foods into account; it would be counterproductive to apply the same approach in Ethiopia, which faces clear supply constraints, as in Viet Nam where constraints are all but nonexistent. As our work carries forward under the new CGIAR Science Program on Better Diets and Nutrition, we will continue to explore country-specific solutions to support MSMEs in delivering safe and affordable nutrient-dense foods.

Alan de Brauw is a Senior Research Fellow with IFPRI’s Markets, Trade, and Institutions (MTI) Unit. This post is based on research that is not yet peer-reviewed. Opinions are the author’s.

Header image: A market vendor in Viet Nam works on bookkeeping. In a survey, Vietnamese food vendors reported having ample supplies of produce and other nutrient-dense foods. C. de Bode/CGIAR.

The work was supported by the CGIAR Initiatives on Sustainable Healthy Diets through Food Systems Transformation (SHiFT) and Transforming Agrifood Systems in South Asia. We would like to thank all funders who supported this research through their contributions to the CGIAR Trust Fund: https://www.cgiar.org/funders/.

Referenced papers:
Ceballos, Francisco; Aguilar, Francisco; de Brauw, Alan; Nguyen, Trang; and van den Berg, Marrit. 2025. Business aspects along the rural-urban continuum, outlet type, and gender of ownership among MSMEs in the Vietnamese food environment. IFPRI Discussion Paper 2333. Washington, DC: International Food Policy Research Institute. https://hdl.handle.net/10568/174099

de Brauw, Alan; Hirvonen, Kalle; Mekonnen, Daniel; and Chege, Christine. 2024. MSMEs in the Food Environment in urban and peri-urban Ethiopia. Washington, DC: International Food Policy Research Institute. https://hdl.handle.net/10568/155237