Feed AFRICA N°1 - Rural Entrepreneurship

CAPITALIZATION NOTES OF THE FIDAfrique - IFADAfrica NETwOrk N°01 - October 2011

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Rural entrepreneurship

2 Feed Africa • CAPITALIZATION NOTES OF THE FIDAfrique - IFADAfrica NETWORK

SOMMAIRE

1. Editorial

2. Introduction to FIDAfrique

3. Rural micro and small enterprises: When risk-sharing guarantees sustainable access to credit

4. Business development service: How to improve the performance of micro and small rural enterprises

7. Equipment grant support to graduate apprentices: An effective scheme for business start-up and em-ployment of rural youths in Ghana

8. District exhibitions and trade shows: A market access tool for rural MSE

9. Managing Business Development Challenges in Rural Ghana: Through decentralized Business Advisory Centres and Rural Technology Facilities.

10. Boubacar Keita, traditional baker: An example of economic and social empowerment

11. Resources

Appreciation

We would like to thank the co-ordinators of

the PROMER 2 and REP 2 projects for the

contributions of their respective teams in the

publication of this very first issue of « Feed

AFRICA ». Our appreciation also goes to all the

Communication and/or Knowledge Management

experts who are partners of the FIDAfrique

network.

Coordination:

Abdou FALL

Editorial Board:

Abdou FALL, Foly AKOUSSAN, El Hadj

KASSE, Anthony YOUDEOWEI, Mohamed

KEBBEH

Graphic design & Printing:

Imprimerie Graphi-Plus

Tél. (221) 33 869 10 16

Dakar - Senegal

Cover photo:

Young people attend the Apprentices

Training Programme at the Ghana National

Tailors and Dressmakers Association, Sefwi

Bekwai Branch (©IFAD/Susan Beccio)

The policy of the Feed AFRICA Editorial

Board is to ensure that contents of this issue

are as exact as possible. However, only the

authors are responsible for the content of

each article. We encourage readers to pho-

tocopy and freely distribute the articles, but

the authors and sources thereof should be

mentioned.

Copyright FRAO 2011

CONTACT

WARF, FIDAfrique-IFADAfrica

General Coordination

N° 10075, Sacre Cœur III VDN,

CP 13 Dakar Fann – Sénégal

Tel. (221) 33 865 00 60

Fax (221) 33 860 66 89

Email: [email protected]

Site web: www.fidafrique.net

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This publication was realized thanks to Grant N°.1035 of the International Fund for Agricultural Development (IFAD).

Its contents are the sole responsibility of the authors and do not necessarily reflect the opinion of IFAD.

Feed AFRICA, capitalization notes of the FIDAfrique/IFADAfrica network. – Dakar, October 2010.

3CAPITALIZATION NOTES OF THE FIDAfrique - IFADAfrica NETWORK • Feed Africa

It is a great pleasure for us to share with you the very first issue of ‘Feed AFRICA’, a thematic newsletter of the IFADAfrica network.

The present publication is an added support to the dissemination of capita-lization products of network members, essentially IFAD financed projects in West and Central Africa. This first issue is devoted to promoting rural micro and small enterprises, a sector which represents an important leverage for the fight against poverty and which has enormous potentials for job creation and for infusing economic dynamism in the rural areas. In effect, successful rural micro and small enterprises can contribute towards improving agricultu-ral productivity and to enhancing agri-cultural products through processing.

Through a total of six articles, the ca-pitalization notes focuses on the expe-rience of two projects geared towards establishing, consolidating and ensu-ring the sustainability of rural micro and small enterprises. The newsletter describes, analysis and draws lessons from the various assistance and sup-port strategies given to rural micro and small enterprises through the Rural En-terprise Project (REP 2) in Ghana and the Rural Entrepreneurship Promotion Project (PROMER 2) in Senegal. The articles were published thanks to IFA-DAfrica, which supported the concep-tion of the capitalization plans of the afore-mentioned. Fact findi ng mis-sions on identification of themes for publication of articles, as well as the convening of exchange and production workshops, enabled the projects criti-cally review their experiences and also share, through the articles, the results and lessons learnt.

The various experiences related to capacity building and equipment subsidy served as a leverage to the development of rural micro and small enterprises; the organization of trade fairs to facilitate market access and

sale of products; the putting in place of a conducive environment for the establishment of a business council centre and equipment manufacturing workshops; sustainable access to loan facilities through an innovative risk distribution system.

Still, as part of the drive to promote rural enterprises, this premier issue of ‘Feed AFRICA’ describes the itinerary of Boubacar Keïta, who, thanks to his entrepreneurial spirit and support from PROMER 2 and its partners, especially the State technical departments, was able to modernize his traditional bakery business and in so doing multiply his turnover eightfold within ten years only.

We hope you will enjoy rea-ding this newsletter and we can’t wait to receive your comments and contribu-tions.

EDITORIAL

Abdou Fall,Programme Officer at WARF

FIDAfrique WCA Co-ordinatorEmail : [email protected]

Dakar, Senegal.

Dear members and partners of the FIDAfrique network,


Introducing FIDAfrique

FIDAfrique is a network linking indi-viduals, organizations and networks and its objective is to promote learn-ing, sharing of experiences and inno-vations in order to reduce rural pov-erty in sub-Saharan Africa.

In its current format, FIDAfrique is a programme funded by the Internation-al Fund for Agricultural Development (IFAD) and its activities are co-ordi-nated by the West Africa Rural Foun-dation (WARF). The first two phases of the programme (1999-2007) centered exclusively on West and Central Af-rica whilst the third phase, known as FIDAfrique-IFADAfrica, was launched in April 2009 in Nairobi. This phase covers a period of three years and

concentrates on the whole of Sub-Saharan Africa. It has three technical components: capacity building and training; support for knowledge gath-ering and sharing and communication and support for consultations on pub-lic policies.

It essentially aims at enhancing the efficacy of projects/programmes and policy consultations by identifying innovative learning and sharing pro-cesses. In so doing, it incorporates the vision of WARF and that of IFAD to strengthen themselves as knowledge-based organizations and to use that knowledge for more efficiency in im-plementing development projects.

The West Africa Rural Foundation is

responsible for the general co-ordi-nation of the Sub-Saharan network as well as the co-ordination of the West and Central programme. The African Rural and Agricultural Credit Associa-tion (AFRACA), which is headquatered in Nairobi, co-ordinates the Eastern and Southern Africa programme.

The FIDAfrique-IFADAfrica Steering Committee, which is the main gover-nance organ of the network, brings to-gether mainly farmer associations and platforms, but also government repre-sentatives and international partners such IFAD, the International Develop-ment Research Center (IDRC) and the Technical Center for Agricultural and Rural Cooperation (CTA).

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In the regions of Tambacounda and Thiès, in Senegal, the micro and small rural enterprises (MSRE) are known for their inadequate assets (movables, real property, etc.). Though assisted by PROMER, the Project for the Pro-motion of Rural Entrepreneurship, they find it difficult to access investment credit and working capital provided by financial institutions, two levers that are essential for their development. These institutions consider that the ab-sence or scarcity of material guarantees constitute high financial risks.

For this reason, the Rural Finance Sup-port Service (SAFIR), a PROMER com-ponent, initiated strategies to resolve this problem with the aim of promoting sustainable relations, based on securi-ty, confidence and partnership, among others. To facilitate the access of micro and small enterprises to financing, SA-FIR relies on its partnership with five decentralized financial systems (DFS) which benefit from a WADB billion franc CFA line of credit. As a result of their proximity and flexibility, these DFS − UIMCEC, URMECS, CAURIE-MF, lCPS/ASACASE and MEC Dimba-lante –, are the best financial domiciles for micro and small rural enterprises.

The DFS/MSRE partnership, with PRO-MER’s involvement, is based on a com-mon vision in which each party advo-cates a secured and sustainable access

to financing, thanks to a concerted financial risk-sharing. Within this fra-mework, the MSRE formed joint ho-mogenous groups to guarantee their credibility in their contacts with DFS. The tripartite partnership – between groups of MSRE, DFS and PROMER – resulting from it , constitutes the ba-sis of a risk-sharing guided by the res-ponsibility which each party will take in the perspective of securing a loan.

Here, there are real innovations illus-trated by the terms and conditions of the participation of each of the three parties in the global risk, on the one hand, and the individual responsibi-lity of MSRE in securing loans, on the other. The notions of «joint guarantee» and «risk-sharing», as stated in the si-gned agreements (DFS/PROMER and MSRE/DFS joint guarantee groups),

mark a real progress in the financing of micro and small rural enterprises.

What does this risk-sharing strategy en-tail and how does it facilitate access to credit? This article is meant to provide answers to these questions in the first part. It then talks about the agreements that have been implemented with em-phasis on the experience of traditional bakeries in the region of Tambacoun-da.of Finally, the positive points and limits noted during the implementation of agreements are reviewed and les-sons drawn.

A three-actor partnershipRisk-sharing is a global strategy in which the actor plays a decisive role. The success of its implementation de-pends on the definition of certain pre-conditions which constitute the basic principles (identification of actors, constitution of the group for joint gua-rantees).

Three key actors intervene in the im-plemented agreements. These are PROMER, DFS in partnership with SA-FIR, and the joint guarantee group.

When risk-sharing guarantees sustainable access to credit

MICRO AND SMALL RURAL ENTERPRISES

Ahmed Hady Seydi, [email protected] Sory Diallo, [email protected]

Coverage of debts abandoned by the Guarantee Fund SAFIR (50 to

70% of debt registering more than a year’s delay in reimbursement).

Decrease in interest rates, in exemptions of the observation period for needed membership...

Annual coverage of a part of late debt by the guarantee fund of the group (x% of the funds from 3 to 12 months late).

Risks related to loans

DECENTRALIZED FINANCIAL PARTNERS

PROMER 2/ SAFIR

Joint guarantee, combined with risk-sharing, facilitates the sustainable access of ru-ral entrepreneurs to the appropriate financial services and guarantees the security of the loan portfolio that has been constituted. In the Senegalese experience of PROMER’s Rural Finance Support Service (SAFIR), close to 700 rural micro-entre-preneurs in Tambacounda and Thiénaba (region of Thiès) had access to financing worth about 58 million francs CFA. The reimbursement rate estimated at over 98%, attests to the solidity of the portfolio.

GUARANTEE GROUP


With its different components, its non-financial service providers and its tech-nical and financial partners, PROMER provides beneficiaries with capacity building support. It set up a guarantee fund in charge of covering 50 to 75% of bad debts (loans registering more than a year’s delay in reimbursement) from the portfolio constituted through the WADB line of credit.

The DFS, partners of PROMER – cur-rently UIMCEC and URMECS –, re-ceive financial support thanks to the line of credit. They are the financial domiciles of the joint guarantee group with which they sign a partnership agreement. They process the finan-cing application, grant loans and en-sure follow-up. They also manage the funds kept in their accounts. Moreo-ver, within the framework of risk-sha-ring, the DFS grant derogations to joint guarantee group on certain provisions which block access to loans: the man-datory waiting period, the interest rate, the collateral process, etc.

As the third actor, the joint guarantee group is composed of micro and small rural enterprises that are PROMER beneficiaries. They are clients of de-centralised financial systems working in partnership with the project. The joint guarantee group whose condi-tions of creation are defined below, will provide a guarantee to the debtor MSRE. It is represented by an office that is a signatory of the agreement with the DFS. The office approves the financing request issued by the MSRE and supports the DFS to recover outstanding debts.

The joint guarantee group draws up a MSRE membership charter, defines the terms and conditions of joint gua-rantees and mobilises a guarantee fund meant to cover part of the portfolio’s bad debts (the level of coverage will be defined in the agreement which binds the group to the DFS).

Security and guarantee Joint guarantee has facilitated the di-sadvantaged populations’ access to financial services all over the world. In the experiences of Tambacounda and Thies, the joint guarantee group is based on the principle of joint gua-rantee which is a response to the non existence of real estates to offer as guarantee, transaction costs for the provision of financing and the high risks of loans, three key factors that explain the exclusion of the poor from the financing market.

Indeed, the financial institutions have always considered that the financing of the poor was incompatible with their viability requirement. Based on the principle of solidarity and mutual assistance, joint guarantee brought fi-nancial institutions closer to their poor clients. It was an alternative to the ab-sence of real estates to serve as a gua-rantee to secure financing. In a way, it is a method adopted by micro-finance to establish confidence between them and their poor clients.

Joint guarantee is underpinned by a homogenous and organized group. In this nucleus, the personal and reci-procal acquaintance of members is a key element. The debts incurred by

a member, within the framework of joint guarantee, is the moral responsi-bility of the entire group that exerts social pressure on the beneficiary of the loan. However, to be efficient, joint guarantee entails the possibility of fines in case of failure to reimburse loans. It is the raison d’être of the gua-rantee fund set up by members. As a way of sharing the risks incurred by the joint guarantee group, it is meant to cover part of the bad debts.

While the guarantee funds are often considered as demobilising cash re-serves – examples of dilapidation of these funds are commonplace −, it is admitted that for them to function properly, they are required to be in line with an agreement which calls for consistent, transparent and collective management. The funds thus kept in a term account will be mobilised accor-ding to the terms and conditions de-fined in the agreement which moreo-ver fixes the interest rate and types of loans that will be backed by it.

Securitizing InstrumentIn South-Eastern Senegal, the risk-sharing strategy, initiated by the joint guarantee group of members of the professional organisation of traditional bakers of the region of Tambacounda, was a response to the crisis which opposed it to a financial institution, UIMCEC. Following the negative out-come of a collective financing granted in August 2007, the relations between the institution and the professional or-ganisation deteriorated seriously: The 7 million CFA francs used to finance 42 micro and small rural enterprises, were reimbursed with over a year’s delay, after being transformed into waived debts.

After the regularization of this situa-tion, SAFIR invited the different parties – professional organisation, financial institution and PROMER’s Southern branch – to come together and reflect on the causes of such a setback. De-lays in payment were due to the fact that the purpose of the loan was se-riously diverted and debtors were not properly monitored. There was thus need to rapidly remedy this situation so as to provide micro and small rural enterprises with access to financing in order to carry out their activities suc-cessfully.

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The financial institution was no lon-ger prepared to renew the financing in the same conditions as before –the saying has it that “once burned, twice shy”. SAFIR, which sought to facilitate the sustainable access of MSRE to fi-nancial services, then proposed a so-lution: risk-sharing among the institu-tion, the professional organisation and PROMER. The guarantee fund emana-ting from the WADB line of credit was to serve as a loan securing instrument. This original approach marked a total break with what existed before then.

The participation of the professional organisation in the risk incurred by future financing supposed the organi-sation of its members into joint gua-rantee group. The funding will thus be done within the framework of an agreement signed between the finan-cial institution and the joint guarantee group. This agreement defines the spe-cific provisions for the provision and management of the loan.

Beyond the conditions linked to the notion of joint guarantee on which it is based, the formation of the joint gua-rantee group of bakers of the Tamba region complied with specific provi-sions. The group opened a collective account at UIMCEC and urged mem-ber MSRE to do so as well. A guarantee fund to which each MSRE contributed, was kept there. The guarantee fund will be mobilised in compliance with the provisions defined in the agree-ment signed by the two sides, and ac-cording to the level of commitment of the MSRE. The group provides the de-btors with moral support. The « joint guarantee group/DFS » agreement which incorporates the «Refinancing/Guarantee Fund» links PROMER to the financial institution.

The joint guarantee group will have access to financing under a certain number of conditions. To be eligible for a loan, member MSRE should, be-forehand, be PROMER partners and members of the decentralised finan-cial system and have an account there.

They should moreover benefit from prior support (pre-diagnosis and dia-gnosis) and be a member of the joint guarantee group according to the conditions defined. Besides, their requests for financing should be va-lid and their financial needs justified. The bureau of the group validates the

request for financing, in the form of a letter of credit. This is a very impor-tant stage and represents an innova-tion as the first level of control of the relevance of the request. It is also the first milestone of a participation in se-curing the loan and sharing risks. It is thus tantamount to the caution that the group provides to the member MSRE, in accordance with the terms and conditions of the joint guarantee.

After the approval of the loan appli-cation by the Loan Committee of the DFS, the micro enterprise receives the information and goes to the counter of the financial institution, signs an individual loan contract and pays the application fee. The loan amount will be paid into his account to ensure the traceability of the funds and the indivi-dual accountability of the MSRE. The latter is fully responsible for reimbur-sements and will not receive any gua-rantee except in cases where failure to pay is established. Then the guarantee fund is mobilised according to the pro-visions stipulated in the agreement (co-verage of part of the loans registering a delay of between 3 to 12 months).

98% reimbursement rateThe strategy consisting in facilitating MSRE’s access to credit through their joint guarantee groups has become increasingly relevant judging by the results obtained. At this stage of the implementation of PROMER’s pro-gramme dubbed «Access to finan-cial services», three agreements have been jointly signed between guarantee groups and DFS partners of the pro-ject (one in Tambacounda, one in Kao-lack and one in Thiénaba).

In the region of Tambacounda, the fi-nancing of traditional bakers has be-come a reality. The President of the professional organisation, Bouba-car Keïta, was pleased with the glo-bally fruitful results of the first finan-cing cycle of close to 8 000 000 CFA francs. The group’s satisfaction was particularly due to the possibility it has to directly negotiate its members’ ac-cess to financial services. Three other agreements are being finalized (two in Thiénaba and one in Tambacoun-da). This triggered enthusiasm among MSRE benefitting from PROMER, as well as the adherence of financial ins-titutions to this approach.

Thanks to this approach, access to financing was facilitated for close to 693 people. They received a total of 58 200 000 CFA francs. The interest of the approach also lies in the fact that the most vulnerable populations may have access to financing. For example, 93% of MSRE regrouped into joint guarantee groups and benefiting from loans are women. In addition to the amount provided, the quality of the portfolio is an important reason for sa-tisfaction. On the whole, the declared reimbursement rate is over 98% for a portfolio with close to zero risk for more than 90 days.

From the viewpoint of the group’s or-ganisation, the participation of the dif-ferent actors in the risks incurred when the loans are put in place enhance the establishment of confidence. The indi-vidual accountability of debtor MSRE which agree to share the risk promotes the sustainability of the arrangement and the securing of financing.

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However, the implementation of the risk-sharing strategy by PROMER, DFS and Joint guarantee groups, came up against difficulties like lack of involve-ment of the majority of members in the activities of the joint guarantee group. There were also problems linked to the effective dissemination of informa-tion. Finally, the relationship between DFS and Joint guarantee groups occurs in an environment marked by the dif-ferent levels of technical capacities. Thus, the partnership is not managed with the same level of appreciation.

Providing services to a neglected clientele Risk-sharing as a tool to facilitate ac-cess to credit by PROMER beneficiary MSREs needs to be replicated in IFAD (International Fund for agricultural Development) projects’ intervention areas. However, its success entails its implementation through joint gua-rantee groups. Seen from this angle, it represents real prospects for pro-fessional organisations that constitute naturally homogeneous and organised groups.

The approach is all the more credible since in addition to access to finan-cing, the securing of funds is at play. This is the real issue perceived by DFS, which consider this process as a way of serving an abandoned clientele. Moreover, the concerted action for the definition of the terms and conditions of risk-sharing and the validation of MRSE applications were a real innova-tion in the management of their needs in financial services.

El Hadji Moussa Diongue, URMECS Director, said he was pleased with the agreement signed with women active in the processing of cashew nuts in Thiénaba, adding: « In initiating this approach, SAFIR did well since it is a way of securing loans. By partici-pating in the group’s guarantee fund, each debtor feels responsible for the reimbursement of the loans. By pre-serving their guarantee fund which should cover 15% of loans registering repayment delays of three to twelve months, they ensure the security of PROMER’s guarantee fund which is mobilised to cover loans with over a year’s reimbursement delay. Further-more, the guarantee fund (15% of the loan amount) is an efficient way of

mobilising funds at least cost (interest rate of 2 to 3%), steady savings which enables the counter to practice sustai-nable financing».

Beyond access to credit and the se-curity of granted loans, risk-sharing guarantees the durability of relations between the DFS and the MSRE. In-deed, as was said by Ibrahima Sory Diallo, provider in charge of financial support to the Tambacounda Ope-rational Unit, « if it is effectively ma-naged, the guarantee fund set up by joint guarantee groups will outlive PROMER which is a fixed duration project. As long as this fund exists, the relationship with the financial institu-tion will continue ».

The joint guarantee group, which de-pends on professional organisations are important stages in the establish-ment of surety companies which will be coordinated by inter-sector consul-tation frameworks. There is need to explore this axis to ensure an effective and appropriate financing of operators of the sectors.

ABBREVIATIONS ANDS ACRONYMS:SAFIR: Service d’Appui à la Finance Rurale/Rural Finance Support Service

BOAD /WADB: West African Deve-lopment Bank

DFS: Decentralized Financial System

MSRE: Micro and Small Rural Enter-prises

PO: Professional Organisations

IFAD: International Fund for Agricul-tural Development

BIBLIOGRAPHY:PROMER II Strategic and Operational Guide

Partnership Agreement Professional Organisation of Bakers and UIMCEC

Partnership Agreement Cashew Nuts Women Processsors of Thiènéba/ URMECS

«Refinancing/Guarantee Fund » Agreement, PROMER/UIMCEC

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Visit www.fidafrique.net/?lang=en


How to improve the performance of micro and small rural enterprises

BUSINESS DEVELOPMENT SERVICE

Fatoumata Sané Guissé, [email protected] Ousseynou Ndiaye, [email protected] Diarra, [email protected]

A quality business development service guarantees the performance and competi-tiveness of micro and small rural enterprises (MSRE). The experience of business development service markets launched within the Project for the promotion of rural entrepreneurship of Senegal (PROMER) shows that the availability of service pro-viders with established skills, methodological tools and the appropriate standards can bring about an increase in MSRE productivity and jobs. It also improves the quality of products, facilitates access to local markets and provides opportunities in national and regional markets.

Prior to the implementation of the first phase of the Project for the promotion of rural micro-enterprises (PROMER), the business development service was practically non-existent. The few of-fers available in this sector came from urban centres to the rural areas. There was a real problem to match the sup-ply and the demand and this impeded the productivity and competitiveness of rural enterprises.

The business development service, for micro and small rural enterprises

(MSRE), emerged with the advent of PROMER. During its first phase, PROMER had a pool of 24 internal business advisers disseminated in as many Proximity Business Advisory Service Zones (ZAEP). They were responsible for sensitization and pro-viding guidance about the opportu-nities, opening of current and savings accounts, identification of proponents of business initiatives, providing them with support to prepare project docu-ments and their monitoring-assistance.

These advisers were selected on the basis of a call for candidatures and in-terviews.

The lessons learnt from this expe-rience, at the end of PROMER I, led the project to externalize this function during its second phase. The latter thus sought to go further by granting autonomy and a sense of responsibi-lity to non-financial service providers with the aim of perpetuating a quality close-by offer for the development of MSRE. Fortified by this conviction, PROMER considers that a high-qua-lity business development service fa-cilitates the effective performance and competitiveness of micro and small rural enterprises defined as businesses established in the rural areas and em-ploying not more than 20 people with a turnover of not more than 25 million CFAF for service providers, or 50 million CFAF for operators involved in the delivery of goods.

The principle of implementing PRO-MER support is based on «getting something done». It seeks to develop a permanent and sustainable market of financial and non-financial support services. The approach consists in identifying, selecting and strengthe-ning local providers to enable them to offer quality services, accessible to MSRE. These services translated into an improvement of productivity in the various sub-sectors in which PROMER intervenes (best turnover and job crea-tion) and competitiveness of products of concerned businesses (availability and access to local, regional and na-tional markets).

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This article is intended to show how PROMER provided its support and guidance to put in place an offer adap-ted to the MSRE development service in order to draw the necessary lessons for possible replication. The in-depth analysis of the SDE/PROMER issue as a tool likely to boost the development of micro rural enterprises will then lead to the review of the quality offer, the improvement of MSRE performance, the competitiveness and sustainability prospects.

Training of Trainers The development of micro-enterprises in the rural areas is a wonderful op-portunity for poverty reduction in the Senegalese countryside. It can pro-mote the emergence of proximity ser-vices and facilitate access to inputs.

PROMER I helped to develop and adapt methodological tools in support of rural micro enterprises (RME) es-sentially based on communication and guidance, the identification of propo-nents of business initiatives, pre-dia-gnosis, diagnosis, monitoring and sup-port counselling. The second phase is meant to consolidate the accom-plishments of the pilot experience by implementing the « getting something done» strategy. By organizing the supply and secured demand, this ap-proach brought about the emergence and consolidation of services offered to micro and small rural enterprises (MSRE) to ensure their sustenance.

Thus, a system of service providers was set up using a selection process

based on objective criteria. The pro-vider of non-financial service provider (NFSP) is an independent professional consultant or a group of consultants (research consultancy, firm, associa-tion, training structure) specialized in providing business advice services (in-formation, diagnosis, assistance, mo-nitoring.), training services (technical, management, literacy) and specific support services (commercial innova-tion, commercial promotion, technical and technological innovation).

The process begins with the identifica-tion of non-financial service providers. Applicants fill an information form on their profile (firm, specialized training institution, independent consultant, corporate name, address, contacts, legal form, trade registration number, human resources, physical resources, experience, references). A technical commission then selects applicants on the basis of criteria listed in a grid. The final selection is done by a committee comprising representatives of ILO (In-ternational Labour Office) and PRO-MER, with the help of a guide. The selection criteria are based on the le-vel of education, experience in mana-gement and setting up a business, the understanding of the stages of business creation and management, training ac-tivities performed, motivation, availa-bility and ability to take initiatives.

The selected providers undergo a se-ries of training. The training of trainers prepares them to assist proponents of business initiatives and micro and small rural enterprises in the pursuing

training modules: GERME level 1, GERME classical and TRIE/CREE and Follow-up. Providers undergo trai-ners’ training courses taught by ILO experts and are then coached up to certification.

Providers also undergo training in dia-gnosis techniques to acquire the abi-lity to effectively conduct a business diagnosis, a key phase of the rural en-terprise assistance mechanism. Some providers benefit from enhanced training in specific areas like gender, marketing, quality control and the ma-nagement of supplies. Moreover, res-killing workshops are regularly held to inform and sensitize providers about the different sub-sectors, the MSRE and PROMER environment or, more generally, to strengthen their capaci-ties.

The training of providers and micro and small rural enterprises is a key component in the PROMER strategy. It includes several aspects: business management, capacitation of profes-sional organisations, pre-diagnosis and diagnosis techniques… Moreover, PROMER II rapidly understood that in addition to strengthening the capacity of providers, there was need –to make them more operational- to increase their level of equipment. For this rea-son, these providers are assisted to access credit. Thierno Ibrahima Dial-lo, a non-financial service provider in Kaolack thus obtained a credit of 1 755 000 CFAF which he used to buy a motorcycle, computers (desk top and portable) and office furniture.

Meeting the needs of rural populationsThe actors participating in this initia-tive – PROMER, non-financial service providers, micro and small rural en-terprises, professional organisations – contributed to the success and pro-gress registered.

PROMER informs and sensitizes mi-cro and small rural enterprises about the importance of the business de-velopment service. It also identi-fies the providers with whom it has contract-based links to meet the sup-port needs of enterprises. To that end, it strengthens their capacity before entrusting them with pre-diagnosis, diagnosis, support in the definition of financing and training plans. After

Evaluation of service providers by a BIT trainer focusing on quality

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undergoing the appropriate training, these providers may also provide trai-ning and management support.

At the technical level, non-financial service providers assist proponents of business initiatives and micro and small rural enterprises. The assistance ranges from diagnosing their follow-up activities to training and support-counselling. The providers are located in 6 regions, 12 concentration zones and 33 rural communities.

Micro and small rural enterprises are the receptacle of all the support pro-vided by PROMER through its opera-tional partners. The MSRE include pro-ponents of business initiatives, income generating activities, rural micro enter-prises) and small rural enterprises. The MSREs deliver a service as well as products of quality to meet the needs of the rural populations. They seek to perpetuate the offer by satisfying the demand.

The actors also include professional organisations, a regrouping of people or rural micro enterprises around the same chain. The professional organisa-tion or PO is a platform for the capa-city building of its members. It is also a credible point of contact for political authorities and development partners, in the defence of the interest of its members.

Within the framework of a partnership agreement, the International Labour Office, between 2006 and Septem-ber 2010, provided methodological support in the application of GERME standards for the acquisition of a po-tentially profitable marketfor the bene-fit of providers.

427 new rural jobsThe key missions of PROMER2 in-cludes support for the emergence and consolidation of the non-financial services offer to MSRE through the organisation of demand and supply and the sustainable development of an appropriate support service mar-ket for MSRE. The implementation of this recommendation, drawn from the lessons of PROMER I, is based on the establishment of contractual links with non-financial service providers. The approach consists in making a thorough selection of local providers

sufficiently equipped to offer quality, accessible and permanent services to micro and small rural enterprises.

In fact, the quality approach, which underpins this innovative approach, partly contributed to the performance of PROMER-backed MSREs, marked by an increase in their productivity and turnover. This situation is illustra-ted by the quantitative, qualitative and impact analysis of PROMER’s techni-cal achievements report for 2010. A network of 71 non-financial service providers formed since the commen-cement of the project (including 47 operational NFSP) contributed to achieving the following results.

At the quantitative level, 352 MSRE out of an initial target of 405 were set up and consolidated in 2010, i.e. an 87 % accomplishment rate which brings the global portfolio of supported MSRE (setting up and consolidation) to 1101 MSRE out of the project’s global target of 1330, i.e. a 83 % accomplishment rate two years away from the end of the project. At the qualitative level, the use of non-financial support in technical training, management and apprenticeship, promoted the deve-lopment of a strong MSRE network, the structuring of short distribution chains in the intervention areas as well as the emergence of local professional organisations and the effectiveness of frameworks for sub and inter-sector consultations.

The effects of this project support are perceptible among entrepreneurs through their familiarity with instru-ments and processes used to process and preserve products. The informa-tion deriving from the monitoring-as-sistance of 48 % of MSRE reveal the creation of 427 new rural jobs and the consolidation of 1977 others, and a 26% increase in the turnover of en-trepreneurs between September 2009 and September 2010. The accumu-lated turnover rose from 1 030 787 969 FCFA to 1 298 939596 CFAF, an increase of 268 151 627 CFAF in ab-solute terms.

Despite the innovations and advan-tages introduced by this approach which promotes the emergence and availability of a local quality service of-fer leading to enhanced performance, a few social and economic difficulties are observed. Illiteracy is still very high and there are real difficulties to access investment financing.

Increase in competitivenessHere, the competitiveness of MSRE corresponds to their capacity to satisfy the local and national market both in quality and in quantity. Actually, the implementation of PROMER I, like its second phase, helped create favou-rable conditions which enabled mi-cro and small rural enterprises to take advantage of all market opportunities. The RME shop, in the first phase and

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then the commercial/chain infrastruc-ture, in the second phase, falls within this framework.

The actions taken generated noticeable results in terms of improving the com-petitiveness of MSRE. For example, in the region of Kolda, the analysis of reports on the monitoring-assistance of local milk processing units shows that the support received from PRO-MER for the acquisition of equipment and financing, but especially for com-mercial support (packaging, develop-ment of a logo and event concept to launch new products) helped increase their annual earnings by about 30 % in 2010. The annual turnover estimated at 7 300 000 CFA F reached 9 490 000 with daily earnings of 30 000 to 35 000. Today, thanks to PROMER’s com-mercial support, quality improvement, the financing of microbiological tests to obtain authorisation to fabricate

food products and the preparation of guides for good practices stepped up the competitiveness of MSRE products at both local and regional levels, as il-lustrated in the cases referred to. At the national and sub-regional levels, trade fairs and professional meetings are important barometers to measure the competitiveness of MSRE products.

The participation of PROMER-backed MSRE in the twelve editions of the FIARA ( International Fair for Agri-culture and Animal Resources ), a showcase for the promotion of MSRE products at national and sub-regional level, attests to PROMER’s commit-ment to promote these products. The last two FIARA editions, in 2010 and in 2011, registered an increase in turno-ver. The turnover of MSREs during the 2010 FIARA was 2 776 875 CFAF and several contacts were established. In 2011, it rose to about 3 900 000 CFAF,

representing an increase of over 45%. This qualitative leap is due to the qua-lity assistance given to MSREs by non-financial service providers, which mo-nitor them regularly.

MSREs ready to pay for servicesThe sustainability of the supply and demand is measured through the MS-RE’s contribution to the costs of ser-vices and the providers’ access to the market. The evaluation of the situation shows an insignificant participation of MSREs to the costs of services. Prior to PROMER’s mid-course review, no mo-nitoring-assistance activity had been undertaken by the project because the MSREs had to pay up to 33% of costs during the first year, 66% during the second year and 100% in the third year. The activity was able to kick-off only after the IFAD mission decided to provide monitoring-assistance free of

The training of providers and micro and small rural enterprises is a key component in the PROMER strategy. It includes several aspects: business management, empowerment of pro-fessional organisations, pre-diagnosis and diagnosis techniques….

Better Manage your Business. This training addressed to both poten-tial entrepreneurs and those already in activity, seeks to sustainably im-prove MSRE performance. The to-ols used, according to a participatory approach, are simple, practical and adapted to reality. There is a comple-mentary tool based on the corporate game. In order to adapt the tools to PROMER targets, GERME level 1 (training in business management adapted to entrepreneurs with low literacy skills) was initiated. It consists in a set of modules addressed to tar-gets with low literacy skills engaged in income-generating type (IGA) mi-cro-activities and intending to mi-grate towards an enterprise.

Partnership for concerted actions through transfers and exchanges (PACTE). PACTE is a training meant to strengthen the capacities of pro-

fessional organisations to better as-sume their roles and responsibilities as platforms of services for micro and small enterprises in the rural areas. It is a reference tool for the Ministry of Agriculture and Rural Development, the International Fund for Agricultu-ral Development (IFAD) and the ILO sub-regional Office for the Sahel in Dakar, which strives to provide sup-port in training with a view to equip-ping professional organisations with tools and documents to help them carry out training activities for their members.

Today, the PACTE is implemented in more than nine countries. Its metho-dology is based on a three-phase triangular approach: learn to know us better ; reflect together on solutions to our problems ; act to progress to-gether. This triangular approach, fun-damentally participatory with a view to creating a collective dynamics, should be fully understood by PACTE trainer advisers and be taken into ac-count in the development of the to-ols. Training, based on the demand, is done using a package of modules.

Pre diagnosis and diagnosis tech-

niques. The MSRE diagnosis mission consists in an objective evaluation of the characteristics and functions of enterprises which results in an operational and realistic plan. It is intended to conduct an in-depth ana-lysis of the enterprise by examining all its functions (supply, production, human resource management, finan-cing, marketing) and its environment (market, competition). The obstacles and solutionsshould be identified and analysed in a participatory manner.

The purpose of the exercise is to give a sense of responsibility to MSRE and autonomy to carry out activities at all levels with minimum outside in-tervention. They should be made to feel responsible for its successes and failures, and this encourages them to undergo training in order to make progress with regard to its results. The MSRE’s autonomy is also reflec-ted in the financing of activities if, from the onset, financial or mate-rial support is necessary to launch the activities. Monitoring leads the MSRE to enhance the support by in-creasing profits in order to be able to reinvest in the activities.

TRAINING FOR PERFORMANCE


charge for the first time. In any case, the payment of the service, especially for the first time, is inherent in the qua-lity of the services rendered and thus to the provider’s capacity to develop the entrepreneur’s activity.

The interviewed MSREs said they would gladly pay for the service if they matched their interests. An MSRE like Sira Fofana said it was ready to pay for the service because it addressed its concerns, notably its training and packaging needs through the provi-der assisting it. Entrepreneur Wassa Senghor of Dassilamé Socé, who is engaged in the processing of cashew nuts, said he was prepared to pay for the service provided that the expertise acquired would help him develop his activity. Boubacar Keita, of the Tam-bacounda bakers MSRE said he too was ready to pay for it even after the project ends because « monitoring-as-sistance enables the MSRE to apply ac-counting rules and hygiene and quality standards ».

According to the non-financial ser-vice provider, Thierno Abdoul Diallo, to ensure perpetuation of the service even after the end of the project, there was need to « establish a rela-tionship of confidence by encouraging the MSREs to consider the NFSP as advisers and not as simple providers ». This work can involve chairmen of rural councils. There is also need to reinforce/recycle the technical and institutional skills of providers. The lat-ter should also diversify their income by accessing other markets outside

PROMER. There is room for hope since, from 2007 to 2010, there has been a net increase in the amounts of providers’ benefits, as shown in the graph below.

A beneficial innovation The availability of a quality business development service offer in the rural areas guarantees the emergence and viability of micro and small enterprises that are either freshly set up or being consolidated. However, to ensure that the perpetuation of the service, the training modules should, at all times, be adapted to the context and targets. In other words, the best development strategy is the one that adapts to the realities of the environment and not the one that would expect the envi-ronment to adapt to it. This is the first lesson that we wanted to demonstrate and share through the PROMER expe-rience within the context of the SDE approach.

The second lesson to be learnt from the emergence of a business develop-ment service market in the rural areas is the fact that providers of non-finan-cial services are empowered to take ownership of the tools and adapt them to the needs of PROMER targets, ac-cording to their level of education and literacy. Thus, the need to manage with greater care the selection of non-financial service providers.

Finally, GERME level 1 is a benefi-cial innovation in PROMER’s SDE approach, since it takes into account in its support strategy, those who are literate in local languages. However, for it to be more efficient, it should be translated into local languages.

The totally illiterate targets, who have not yet been catered for in the bu-siness management training, need to be given special attention within the research/development framework of training modules meant to complete PROMER’s support strategy.

BIBLIOGRAPHY:1. PROMER 2 Pre-evaluation Report (RPE)

2. Operational Strategy Guide (GUISOP)

3. Manual of Technical Operations (MET)

4. MSRE Monitoring-Assistance Reports 4 (Sud- East Kolda Branch)

5. PROMER 2 Annual Report 2010

6. Final External Evaluation Report on the Impact of the Non-Financial Service Providers’ intervention

7. Report of the PROMER II Mid- Course Review

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2007 2008 2009 2010

0

50000000

10000000

15000000

20000000

25000000

30000000

35000000

Year

Am

ou

nt

Evolu�on of amounts paid to the NFSP by PROMER 2 2007 à 2010

Amount

Year


An Effective Scheme for Business Start-up and Employment of Rural Youths in Ghana

EqUIPMENT GRANT SUPPORT TO GRADUATE APPRENTICES

Cletus Kayenwee, [email protected] Appiah Gambrah, [email protected] Justice Darko, [email protected]

Since 2006, the Rural Enterprises Project (REP) has supported graduate apprentices with basic equipment and tools to start their businesses in rural areas of Ghana. In rural communi-ties of Ghana,, many young people face serious challenges to establish

themselves after successfully complet-ing apprenticeships. The inability of graduate apprentices to start their own businesses is due to the lack of start-up capital, which is a consequence of the relatively high poverty levels in the rural areas. The objective of the

equipment grant support scheme to the graduate apprentices is to facilitate business establishment, create job op-portunities, improve standards of liv-ing and ultimately reduce poverty in the rural areas.

The provision of equipment grant support to graduate apprentices facilitates early establishment, development and promotion of businesses. This had been realised since 2006 through collaboration between the REP, the District Assemblies and the graduate apprentices in the project intervention districts. Support consisted of procurement of the start-up equipment through a cost-sharing arrangement involving the Project and the District Assemblies and complemented by commitments from the youths.

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The workshop of graduate apprentice supported by REP in Juaso, Asante Akim South District


Equipment grant support to graduate apprentices was part of the integrat-ed activities of the Rural Enterprises Project. This activity was targeted at young people who successfully gradu-ate from traditional apprenticeship in all the sixty-six (66) Project districts in the 10 regions of Ghana. To benefit from this facility the Project developed standard criteria for grant allocation to interested individual graduate appren-tices aimed at achieving effectiveness and sustainability.

The experience of REP with this ini-tiative strongly suggests that providing equipment as grant to graduate ap-prentices in the rural areas of Ghana facilitates business establishment, de-velopment and promotion.

Traditional Apprenticeship and Youth Targeting

In Ghana, apprenticeship has been or-ganized mainly through the traditional system where the youth are attached to master crafts persons to acquire skills through learning on the job. The duration of traditional apprenticeship ranged from 2 to 3 years, with the costs involved usually borne by the apprentices themselves and/or their guardians or sponsors.

On the successful completion of the apprenticeship, opportunities become available for employment in existing establishments or through the estab-lishment of their own business. How-ever, in the rural areas where poverty levels are relatively high, many gradu-ate apprentices are unable to acquire the equipment to set-up their own businesses. Consequently some of these young graduate apprentices con-tinue to remain attached to their mas-ters even for several years after gradu-ation, while others accept menial jobs in unrelated trades or migrate to the urban centres to hassle in the hope of finding some form of employment.

To address these challenges, REP’s intervention targeted the vulnerable rural traditional graduate apprentices between the ages of 18 - 30 years who demonstrated potentials to use the skills obtained from training to improve their communities. REP activities were

also targeted at the families of the reci-pient graduate apprentices who would otherwise have had to find resources to set up their wards in business.

Stakeholders and Develop-ment Partners

The major stakeholders involved in the equipment grant support intervention and their roles can be grouped into three categorises as follows.

Category 1 comprised the major fi-nanciers of the Project, namely the Ministry of Trade and Industry (MOTI), the International Fund for Agricultural Development (IFAD) and the African Development Bank (AfDB). MOTI was the Executing Agency and Super-vising Ministry for the Project, provi-ding policy and strategic directions for Project implementation. MOTI also chaired the Project Steering Com-mittee meetings (PSC). IFAD was a key development partner providing development assistance funds for the Business Development Services, Rural Financial Services, Institutional De-velopment and Project Management components of REP II. AfDB was also a key development partner which pro-vided funding for the Technology Pro-motion and Support to Apprenticeship component and Business Develop-ment Services for the implementation of REP II. in some districts.

Category 2 consisted of representatives of the Government of Ghana, from the Ministry of Local Government and Rural Development (MLGRD) and the

GRATIS Foundation. The MLGRD pro-vided strategic direction in Project im-plementation and served on the pro-ject steering committee. The GRATIS Foundation was the key Implementing Agency for the provision of techno-logy promotion and apprenticeship training.

Category 3 comprised the Project beneficiaries, including the participa-ting District Assemblies (DAs) which were the seat of Project implementa-tion, and provided counterpart fun-ding; Local Business Associations (LBAs) which helped to identify bene-ficiaries and Project clients who were the eventual owners of the Project.

Finally a key stakeholder was the Pro-ject management which had responsi-bility for the overall management of project implementation.

The Project specifically targeted the vulnerable rural youth who demons-trated commitment through skills ac-quisition. A cost sharing arrangement was established between the Project and DAs for financing the grant equip-ment awarded to beneficiary graduate apprentices. The beneficiaries provi-ded their own working space and wor-king capital as an indication of their readiness to benefit from the scheme.

Implementing the equipment grant support protocol involved sensitiza-tion of participating District Assem-blies, assessment of equipment needs of the graduate apprentices by the BACs/RTFs, selection of the beneficia-ries by the District Assemblies through

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A graduate apprentice supported by REP II at his Bicycle repairer shop in Donkorkrom


the BACs and RTFs, procurement of the equipment by the Project.Distribu-tion of grant equipment to beneficia-ries, follow-up technical backstopping to assist in establishing and operating the businesses.

Equipment Grant Support for Business Establishment and Development Over the last five years of REP imple-mentation of the equipment grant sup-port scheme substantial impact has been evident on the lives of the tar-get groups. Impacts occurred in three main areas, namely (i) access to equip-ment as grant; (ii) business establish-ment, and (iii) business development and promotion.

Access to grant equipment: As a result of easy access to equipment as grants, the equipment support activity spread rapidly to 52 districts in the country. This spread of equipment grant sup-port contributed to an equitable dis-tribution of the national development programme and bridging of the gap between employment opportuni-ties gap between the rural and urban areas. Furthermore, access to equip-

ment grant support at the district level generated growing interest among the youth to undertake apprenticeship trai-ning to acquire practical and manage-ment skills and possibly to also receive support for starting up their own enter-prises. Some District Assemblies, for example the Mporhor Wassa East Dis-trict Assembly, had also taken up the challenge to implement this activity in their districts without Project support,.

Business establishment: In the area of business establishment, an effective mechanism was created for providing young people with business start-up capital.. To date, 3,182 rural youth had benefited from the activity, out of which, over 70% have already esta-blished their businesses. Consequently, the level of economic activities had increased significantly in the benefi-ciary districts. Through the increased economic activities, the owners of the enterprises earn incomes to support their families as well as contribute to the overall development of the districts through the payment of various levies and taxes.

The establishment of businesses by the graduate apprentices has also resulted in value addition to the rural economy.

For example, many of the beneficiaries of this programme are currently offe-ring complimentary services to people who are engaged in various forms of agricultural activities, e.g. welders, fabricators and blacksmiths who are producing basic farm implements and providing equipment repair services for farmers and agro- processors. Gra-duate apprentices operating as auto-electricians and auto-mechanics in the rural areas are providing vital re-pair services for agricultural machinery and transport in the agricultural sector. A further impact of establishment of businesses by supported graduate ap-prentices is the creation of jobs and generation of incomes for the bene-ficiaries and their employees. So far, 70% of the recipients have successfully established their own businesses. As at March 201, 2,227 direct jobs were created The businesses and jobs crea-ted enabled beneficiaries to generate incomes reduce rural-urban drift and contribute to the GDP at the district le-vel. Besides direct or indirect employ-ment, the graduate apprentices have also created opportunities for other young people in the rural areas to un-dergo apprenticeships

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The Monitoring and Evaluation Officer of REP in a hand shake with a graduate apprentice at his workshop at Sogakope in the Volta Region


Business development & promotion: The third area of impact from the equipment support activity is in bu-siness development and promotion in rural communities. Continuous support is provided to young entrepreneurs through further training to strengthen their entrepreneurial capacities and help them to learn new ways of offering quality services to customers. In addi-tion to capacity development through training, follow-up and business coun-selling services were also offered to young entrepreneurs to motivate them to improve their competences.

One key result of the equipment sup-port is the interest of the young entre-preneurs to formalise their business as early as feasible. The project has so far supported 41 enterprises owned by graduate apprentices to register their businesses with the Registrar General’s Department. These enterprises have gained credibility in the business com-munity and are now in a position to compete more effectively in the mar-ket place.

The increased production and levels of product sale by enterprises established by the beneficiaries served as a catalyst for the creation of other businesses (e.g. suppliers/retailers) within the districts. The increased assets base of the enter-prises established by the beneficiaries leads to higher levels of sustainability of the businesses.

Funding Arrangements and ChallengesREP and participating DAs contribute towards the funding of the equipment support scheme. The total cost in-volved in the acquisition of the equip-ment for the 3,182 beneficiaries was GHc 1,800,000 (= US$ 1,200,000). REP contributed about 80% and DAs 20% of the funds, while the target ben-eficiaries are expected to contribute by providing workshop space and work-ing capital. Examples of equipment and their average costs are as follows: hair dressing (hair drier, hand drier, rollers, rollers stand, set of combs, hair dress-ers washing basin, scissors, hair brash) – GHc 206.30 ($150); carpentry (sand-ing machine, iron plan, bit and brace, spoke shave, glass cutter, F-clamp, tape measure, 25mm hammer, 20mm hammer, claw hammer, hand saw 24 inches,18inches hand saw, carpen-

ters square, 8 inches pinches) – GHc 442.50 ($295); and dressmaking (sew-ing machine, electric iron, box iron, medium sized scissors, large sized scis-sors, over-lock machine) – GHc 368.70 ($245). Others are welding (electric welding machine, welding cable, welding earth cable, electrode holder, transformer oil, electric drill, bench vice, measuring tape, hammers, chip-ping hammer, angle grinder) – GHc 1151.00 ($767); and auto-mechanics (open ended spanner, combination spanner, mechanical puller, heavy duty shifting spanner, heavy duty shifting spanner, wheel spanners screw driv-ers, hydraulic jack, tools box) – GHc 451.00 ($300).

Implementation of this equipment grant scheme encountered interesting challenges, including lack of interest from a few districts that consequently had not taken advantage of the facility. This negatively affected the objective of promoting rapid establishment of new businesses by the youth in all the project districts.. The Project was also unable to respond adequately to the high levels of demand for the interven-tion.

Although standard guidelines were prepared to ensure smooth selection of beneficiaries, the process sometimes created conflicts amongst various inte-rest groups such as LBAs, DAs (autho-rity and assembly members), and RTFs/BACs competing for the limited num-ber of available places...A further chal-lenge was the unauthorized relocation of some beneficiaries to other loca-tions, making it difficult for the RTFs or BACs to track them. Other challenges were; lack of willingness of some of the beneficiaries to make further in-vestments in the business by paying for training, weak record keeping and unwillingness by some beneficiaries to share information and experiences about their businesses especially on fi-nancial transactions, as well as access to credits to cover working capital for new enterprises.

Despite these constraints, there is strong evidence to show that imple-mentation of the equipment grant scheme to graduate apprentices facili-tated early business establishment, de-velopment and promotion. However, higher levels of success can be achie-ved if the clients and the DAs remain

committed to contribute resources to the graduate apprentices. Furthermore, more efficient monitoring and super-vision of the use of equipment by the BACs and RTFs should be introduced and beneficiaries should be given ini-tial training in a Start Your Business Workshop to equip them with practical entrepreneurial knowledge and skills.

Conclusions and the Way ForwardTo improve implementation of this equipment grant scheme, to build on and optimize the current achieve-ments, a few critical issues need to be addressed. Firstly, the Local Business Associations (LBAs) should be more in-volved in the selection of beneficiaries. This will ensure greater transparency and minimise undesirable interference in the scheme. Secondly, more young women should be encouraged to par-ticipate in distinctly male-dominated trades and should be given equipment after graduation to set up their own bu-sinesses. Thirdly, the project should in-crease the number of beneficiaries per district every year. Fourthly, in order to ensure sustainability of the scheme, District Assemblies should be encou-raged to allocate funds, in their annual budgets, for equipment support to gra-duate apprentices. Fifthly, there should be a platform for sharing experiences with other institutions implementing this or similar activities to achieve grea-ter impact. For example collaboration should be established with the Natio-nal Youth Employment Programme (NYEP) which provides apprenticeship and equipment support to unemployed youths.

During the past five years of project life, REP has provided equipment sup-port to the rural youths who, othe-rwise, would probably never be able to set up their own business.

The experience of REP in undertaking this scheme is consistent with the po-verty reduction component of the Project. This scheme has contributed significantly to facilitating the establish-ment, development and promotion of businesses by the youth in rural Ghana.

The Graduate Apprentice Equipment Grant support Scheme is a major tool for fast-tracking youth employment and should be up-scaled and replica-ted by other development partners.


A Market Access Tool for Rural Micro and Small Enterprises

DISTRICT ExhIBITIONS AND TRADE ShOwS

Elizabeth Nguah, [email protected] ; Marina Serwaa Kusi, [email protected] ; Roland Roosevelt, Agodzo [email protected]

The Rural Enterprises Project orga-nized district exhibitions and trade shows to create opportunities for mi-cro and small enterprises (MSEs) to exhibit their products, and to seek new business opportunities, especially market outlets outside their home dis-tricts. These events also enabled en-trepreneurs to share knowledge and experiences as well as acquiring new techniques which will generate new ideas on products. The participation of MSEs in exhibitions and trades-hows thus created opportunities for

expanded markets and increased pro-ducts sales.

MSEs in Ghana encounter a variety of demand and market access challenges such as poor product quality and limi-ted business opportunities. Therefore, they are unable to explore markets beyond their localities and thus fail to expand their market share to increase products sales.

Exhibitions and trade shows are an-nual stage-set trade events which faci-litate direct contacts between manu-facturers, distributors and consumers.

Tradeshows and exhibitions provide opportunities for entrepreneurs to dis-play their products and thus serve as a Market Access Tool for rural micro and small enterprises

Organization of exhibitions and trade shows by the Rural Enterprises ProjectThe organization of Trade Fairs in Gha-na was initiated by the Ghana Trade Fair Authority in 1967. Since then, international trade fairs have been or-ganized mainly for medium and large

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enterprises in Accra and in selected regional capitals. However, MSEs have had limited access to internatio-nal fairs because of high participation costs and lack of sufficient capacity to participate in such events. Therefore, the Rural Enterprises Project (REP) I or-ganized district exhibitions and trade shows to assist rural micro and small enterprises display their products and thus explore new and potential mar-kets beyond their rural communities.

The first such event was organized in the Techiman district of the Brong-Ahafo region where clients from the thirteen (13) participating districts of the Project exhibited their products. The event was named “REP Clients’ Exhibition and Trade Show” to depict the exclusiveness of the event for Pro-ject Clients. Subsequently this event was institutionalized in line with pro-ject services.

Organization of the tradeshows in-volves the participation of several stakeholders who play different roles to ensure success of the event. Stake-holders include International Fund for Agricultural Development (IFAD), Afri-can Development Bank (AfDB), Dis-trict Assemblies and various Clients. The Project has organized nine (9) dis-trict tradeshows for 1,507 operators including 48% women entrepreneurs. The total cost of organising a client ex-hibition and trade show for 200 exhi-bitors was about Ghana Cedi 102,075 (= US$68,050)

Tradeshows were organized in res-ponse to demands from and commit-ments by the host districts and clients, thus a demand driven approach was adopted for the organization of these events. Successful organisation of tra-deshows involved selection of a host district with high levels of commercial activities and financial commitment to support the event. The District As-sembly should also become involved through forming a planning committee with different experts overseeing the selection and preparation of appro-priate venue, publicity, and logistical arrangements of the exhibitors. In ad-dition, the exhibitors are selected and prepared at the district level based on the marketability of their products and ability to be fully responsible for their participation in the tradeshow. Fur-thermore, business development ser-vice was provided to clients to harness

business linkages established during the tradeshow.

The Project clients are given the op-portunity to exhibit agro processed products (cassava based products, palm oil, soap, cashew, sheanut); agri-culture and forest products (grasscut-ter, guinea fowl, rabbit, bee keeping, mushroom, fish farming); traditional crafts (batik tie & dye, pottery, leathe-rworks); primary fabrication and re-pairs of agro-processing equipment, farm implements and tools as well as the display of clothes, garments, and beauty care products.

ExperiencesThe participation of rural MSEs in tradeshows created opportunities for expanded markets, and increased pro-duct sales. For example, in 2009, the tradeshow in Asamankese resulted in 800 business executives expressing interest in the products of clients. Fur-thermore, 140 out of the 232 client ex-hibitors gained customers outside their home districts. During the event which lasted for one week, total sales revenue of Ghana Cedi 55,059 (=US$36,706) was realized and on their return from the tradeshows, to their communities, the records of clients revealed in-creasing sales trends. There was also a spill-over effect of the client exhibition and trade show at Asamankese where a local FM station organized a similar

tradeshow six months later. The event exposed the trade potentials of the host districts and recorded a high tur-nover of visitors who occupied all the major guest houses and hotels.

The organization of the clients’ exhibi-tion and tradeshow was capital inten-sive and sustainability of the event was a major challenge. Therefore, the Ru-ral Enterprise Project therefore plans to sensitize the District Assemblies to take full responsibility for the organi-zation of the event on rotational basis. The Ghana Trade Fair Authority will also be sensitized to consider esta-blishing partnerships with the District Assemblies to organize district trades-hows. Furthermore, exhibitors are en-couraged to contribute to the cost of the events.

ConclusionDistrict exhibitions and tradeshow were essential for improving market access for rural MSEs and has proven to be a more effective and appropriate marketing strategy to provide ade-quate exposure and visibility for rural MSEs within and beyond their districts. Endorsement of these events by host District Assemblies, clients and other stakeholders demonstrated that parti-cipation of rural MSEs in tradeshows created opportunities for expanded markets and increased product sales.

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An Exhibitor being assisted by a Project staff to display her wares, Asamankese exhibition grounds


Through decentralized Business Advisory Centres and Rural Technology Facilities

MANAGING BUSINESS DEVELOPMENT ChALLENGES IN RURAL GhANA

Richard Boateng, [email protected] Mrs Juliana Adubofour, [email protected] Nanabanyin Brown-Addo, [email protected] Oppong Isaac

Decentralized Business Advisory Cen-ters (BACs) and Rural Technology Fa-cilities (RFTs) are designed to create a favourable environment for the esta-blishment and sustained growth of ru-ral Micro and Small Enterprises(MSEs) in Ghana.

Prior to 1995, Ghanaian rural entre-preneurs often went to national and regional capitals to seek solutions to their business development challenges because of the absence of permanent district-owned structures responsible for delivering business development services. The establishment of Business Advisory Centres (BACs) and Rural Technology Facilities (RTFs) at the dis-trict level brought these services close to rural micro and small enterprises (MSEs) to create the enabling environ-ment for the development and growth of MSEs, sustainability of business de-velopment services as well as opening up opportunities for employment cre-ation.

Until 1995, state sponsored support for small business development in Ghana was concentrated in the urban areas, especially in Accra, and the regional capitals. The key national Micro and Small Enterprises (MSE) support insti-tutions include the National Board for Small Scale Industries (NBSSI), GRATIS Foundation and the EMPRETEC Ghana Foundation. The NBSSI and GRATIS

Foundation operated through regional Business Advisory Centres (BACs) and the Intermediate Technology Transfer Units (ITTUs) respectively.

Thus permanent district-owned struc-tures responsible for addressing bu-siness development challenges of rural MSEs were not available to entrepre-neurs. The challenges confronting business development included limi-ted access to business management skills training, low levels of business counselling and advisory services and inefficient transfer of relevant techno-logies. Other challenges include the rudimentary nature of apprenticeship training, poor access to financial re-

sources and highly restricted engage-ment of MSEs in policy dialogues.

MSEs Entrepreneurs were therefore compelled to travel relatively long distances from the districts to the re-gional and national capitals to seek so-lutions to their business management problems.

This paper describes the experiences gained and the lessons learned during implementation of the Rural Enterprise Project to examine how “Decentral-ized BACs and RTFs create a favoura-ble environment for the establishment and sustained growth of rural MSEs” and the implications of the findings for district socio-economic development.

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BAC in Asante Akim North Municipal


Institutions and stakeholders supporting the development of MSEs

The concept of decentralized BACs and RTFs in Ghana was an interven-tion initiated by the Rural Enterprises Project (REP) in 1995 to address the problem of rural MSEs entrepreneurs undertaking relatively long distance travels to seek management solutions their business development challenges. The first two BACs and RTFs were es-tablished in the Sekyere West (now Mampong Municipal) and Techiman Districts. District based BACs and RTFs were established to provide business development services and to stimulate the establishment and growth of rural MSEs, to contribute to employment creation, increase incomes of rural communities and address issues of po-verty reduction

Target beneficiaries for these initia-tives were the rural micro and small-scale entrepreneurs who constitute the major players in rural socio-economic activities The other beneficiaries targe-ted were the District Councils which have the overall responsibility for pro-moting the socio-economic develop-ment of rural communities..

Stakeholders: A variety of stakeholders contributed to the implementation of this innovative intervention. The stake-holders and their contributions were as follows: (i) the Ministry of Trade and In-dustry, the Supervising Ministry for the Project, provided policy and strategic direction in Project implementation. (ii) The Ministry of Local Government and Rural Development - provided strategic direction in Project imple-mentation with particular reference to the district councils; and (iii) the Dis-trict Councils, which were the centres of Project implementation, and led the co-ordination of project activities of relevant stakeholders. Other stakehold-ers included the National Board for Small Scale Industries (NBSSI) which was the key Implementing Agency for the provision of business development services in the districts; GRATIS Foun-dation which was the Implementing Agency responsible for the provision of technology promotion and apprentice training; Community and Rural Banks which provided financial resources in-cluding savings mobilization and credit

delivery. The REP provided financial and material resources as well as tech-nical support to the BACs and the Dis-trict Councils.

Outputs of the intervention

Five (5) main steps are adopted in the process of establishing a BAC and RTF in a district. First, a sensitization semi-nar on the Project was organized for the leadership of all District Councils, followed by a formal expression of interest by the District Council. The Project then conducted on-site assess-ment of the preparations made by the District Council to contribute towards implementation of the Project, through providing office accommodation, fur-niture and equipment; project staff; and some indicative commitment of budgetary allocation for the operations of the BAC/RTF. At the same time, the Project liaised with NBSSI and GRA-TIS Foundation to provide staff for the BACs and RTFs respectively. After these issues were resolved, a District Start-up workshop was organized to launch the Project in the district.

The first two district-based pilot BACs and RTFs operated in the Sekyere West (now Mampong Municipal) and Techiman districts from 1995 to 1997, with direct involvement of the District Councils. District Assemblies (DAs) provided land for the construction of office facilities and a workshop, access road, as well as utilities, namely water and electricity on the site.

The Project management constructed the office building and provided vehi-cles, office equipment, furniture and funded training activities and operatio-nal expenditures. NBSSI and GRATIS provided staff for the two units and paid their salaries and other emolu-ments.

By March 2011, the BACs and RTFs had delivered business development services to a total of 207,048 clients. These beneficiaries included 171,342 clients trained in Community Based & Small Enterprises Skills, Business Management & Marketing; 3,519 mas-ter-craftpersons trained; 11,358 ap-prentices trained; 3,182 graduate ap-prentices supported with equipment and the sum of GH¢ 2,200,000.00 credit funds was disbursed to 5,081 entrepreneurs.

Up-Scaling of BACs and RTFs: Between 1997 and 2002, the concept was scaled up to 11 additional districts with increased commitment of the Dis-trict Councils including provision of office space and setting up a District Implementation Committee (DIC). Pro-fessional staff (Business Development Officer [BDO]) were also seconded to the BAC, to complement the staff pro-vided by NBSSI.

Under REP Phase II, activities were fur-ther scaled up to cover 53 additional districts.

The District Assemblies provided two staff (an Administrative Assistant and a BDO) to the BAC and four staff (2 tech-nicians, General Duty Clerk and Secu-rity person) to the RTFs and paid their salaries. The DAs also provided office space, furniture and an air conditioner and contributed to operational expens-es in an increasing order from zero in year one; 25% in year two; 50% in year three; 75% in year four and 100% after wean-off. Furthermore, DAs con-tributed to the construction of the RTF workshop and provided utilities to the RTF site.

The Project provided vehicles, training funds general operating funds in a de-creasing order from 100% in year one; 75% in year two; 50% in year three and 25% in year four. The Project also provided office equipment and imple-mented capacity development pro-grammes, through training, for the field staff.

NBSSI and the GRATIS Foundation provided staff, paid their salaries and organized capacity development activ-ities, through practical training, as well as undertaking technical backstopping missions to monitor the activities of the BACs and RTFs.

These outputs were achieved through financial and other resource commit-ments amounting to US$12,213,819 contributed by the Government of Ghana, the International Fund for Agricultural Development (IFAD), the African Development Bank (AfDB) and the District Assemblies for the 53 REP-II districts during 2010; while US$ 208,310 was spent for the REP districts during the 2008 operating project year. These costs included the amounts spent on the provision of equipment and furniture; vehicles; staff training and operational funds; payment of sa-laries of project staff.


Collaboration and partnership: Du-ring project implementation, the BACs and RTFs established collabo-ration and partnerships with relevant institutions and non-governmental or-ganizations (NGO) in the delivery of business development services. Colla-borating partners included Sinapi Aba Trust – to provide credit education and loans to Project clients; Roots and Tuber Improvement and Marketing Programme and CARE International – to manufacture improved equipment for agro-processing. The following ins-titutions collaborated with the BACs and RTFs through offering Skills and small business management training services, The Hunger Project Ghana, Millennium Villages Project, Metho-dist Development and Relief Services and Presbyterian Relief Services and Development. Other collaborators were the National Vocational and Technical Institute which provided certification for apprentices in the va-rious trade areas and the International Center for Enterprises and Sustainable Development.

Experiences and lessons learned: successes of the interventionFavourable environment for MSE establishment and growth: By March 2011, 66 BACs and 21 RTFs had been established in 66 municipalities and districts across the ten regions of Gha-na and touched 211,604 beneficiaries BACs and RTFs are permanent insti-tutional structures at the district level whose services are easily available to rural MSE entrepreneurs. The services provided included Community Based & Small Enterprises Skills training; Business Management & Marketing training; apprentices training; master-cratftpersons training business coun-seling, facilitation of access to credit, equipment manufacture; field demon-stration of equipment manufactured, occupation, safety, health and envi-ronmental management.

Beneficiaries by July 2010 included agro – processing such as cassava (cli-ents trained 534; adoption 85%) and oil palm (clients trained 270; adoption 74%) processing; clothing and tex-tiles such as batik tie and dye (clients trained 1794; adoption 45%), kente and smock weaving and fashion de-

signing; aquaculture (clients trained 130; adoption 73%) and fish process-ing (clients trained 286; adoption 71%) along the coastal areas; beekeeping (clients trained 2895; adoption 61%); guinea fowl production (clients trained 1143; adoption 57%) and grass cutter rearing (clients trained 3056; adoption 37%)

The RTFs supported rural MSEs with fabricating equipment eg agro-pro-cessing equipment. They also fabricat-ed farm implements, and small scale mining equipment. As at March 2011, the RTFs demonstrated improved equipment to 2,013 entrepreneurs consisting of 889 males and 1,124 fe-males. The equipment demonstrated included cassava processing equip-ment such as graters, single screw press, solar dryer; oil palm process-ing equipment such as digester, single screw press, palm oil expeller, palm fruit stripper; maize threshers and shellers; shea nut and and groundnut cracker About 70% of 3,182 graduate apprentices who benefited from the Project’s Equipment Support Scheme have set up their own businesses.

Some District Councils directly re-cruited Assistant BDO and national service personnel to the BACs. under REP-I, and Asante Akim South and Mfantseman under REP-II.

Spill-over Effect: Districts which were created from existing Project districts established their own BACs and are funding activities in order to pro-vide business development services to their MSEs. These districts include

Tano North, Amansie Central, Offin-so North, Sekyere Afram Plains, and Pru districts. Others are Tain, Sefwi Akontombra, Sissala West, Ellem-belle, Lambushie and Bosome Freho. The Sissala West District Assembly has supported the construction of a structure to be used by an RTF. This initiative has motivated the Project management to supply the facility with workshop equipment.

National instruments for the promo-tion and growth of MSE: Two impor-tant instruments to promote the esta-blishment and to support the growth of MSE were developed. These are (i) the Establishment of MSE sub-com-mittees within the District Assembly system and (ii) Legislative Instrument 1961 which seeks to establish a De-partment of Trade, Industry and Tou-rism within the District Assemblies.

Through these instruments, the pro-motion of MSE was mainstreamed within the District Assembly system to facilitate local socio-economic de-velopment through integrating funds into annual budgets of the 66 District Assemblies, to support annual work programmes of the BACs and RTFs, .

The BACs and RTFs have developed into the focal points of all issues re-lating MSE promotion within the dis-tricts. As at March 2011, the BACs and RTFs were effectively collaborating with eleven (11) other MSE support institutions. These included CARE International, Ghana, The Hunger Project-Ghana, Millennium Villages Project, Methodist Development and

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Donkorkrom RTF


Relief Services, Presbyterian Relief Ser-vices and Development, Sinapi Aba Trust, National Vocational and Tech-nical Institute and International Center for Enterprises and Sustainable De-velopment. Collaboration with these MSE support institutions created syner-gies and leveraging of resources in the promotion and development of district rural enterprises. For example in the Asante Akim South District, a total of GH¢622,278.33 was leveraged by the BAC for MSE promotion..

In the context of transformation of the business environment in the rural areas, the BACs and RTFs supported 796 businesses to register with the Re-gistrar General’s Department between April and September 2010. Business registration assisted the MSEs to forma-lize their business plans and increased access to business services and orders from the District Councils as well as from formal public and private sector institutions.

Sustainability of business development services in the districtsMSEs have easier access to Local Ser-vice Providers to satisfy their training needs (skills training, business manage-ment and marketing). By March 2011, a total of 182 Local service providers collaborated with the BACs and RTFs to deliver business development ser-vices. Over 67 percent (122) of the Lo-cal Service Providers were trained by the BACs and RTFs during the Project Phase I and the early part of the current phase of the Project Phase II.

To obtain the services of the Local Ser-vice Providers, clients were required to pay a minimum commitment fee of 20% of the total training cost. This commitment enabled the clients to place a high value on the intervention received and encouraged them to start their businesses. Commitment fees were paid in cash and kind to ensure flexibility in payment and easier access to Project services.

Fifty three (53) participating districts of the REP Phase II established their MSE sub-committees by March 2011. The District MSE Sub-Committees pro-vided a formal platform for coordinat-ing all the programme initiatives and activities on MSE promotion within the entire district. Furthermore, the opera-

tions of the BACs and RTFs were suc-cessfully integrated into the District Assembly’s development plans and annual budgets, thereby establishing ownership of the BACs and RTFs by the District Councils. Eleven (11) out of the 13 REP-I districts established MSE Sub-Committees which are now fully operational. These districts are: Afigya Sekyere, Sekyere West, Ejura-Sekyedu-mase and Offinso and Tano, Berekum, Jaman, Wenchi and Atebubu.

In the Asante Akim South, Fanteakwa and Sefwi Wiawso districts, the MSE Sub Committees formed monitoring sub-committees to monitor micro and small scale enterprises within their districts to identify their development concerns and the areas for which the District Assembly could provide assis-tance..

The NBSSI and GRATIS Foundation continued to provide support for the operations of the BACs and RTFs. Sup-port includes the payment of the sala-ries of staff appointed to the two units. For example, NBSSI pays a net month-ly salary of GH¢8661 to the BAC Head and GHc 316.00 to the driver respecti-vely while GRATIS Foundation pays a net monthly salary of GH¢1,110 to the RTF Manager and GHc 1,109.00 to the RTF Supervisor respectively. They also support the training and operational expenses of the BACs and RTFs, with NBSSI supporting the BAC in Atebubu Amantin District with training funds in the amount of GH¢28,029 during the period 2004 – March 2011. It is impor-tant to note that the Atebubu Amantin District was weaned off direct support of REP II in 2004. The continued sup-port of the NBSSI and the District As-sembly to the district BAC operations demonstrates sustainability of the ins-titutional mechanisms established at the district level by the Project for MSE promotion.

Self initiatives by the District Councils on the promotion and growth of MSEs Development – oriented self initiatives by some District Councils contributed to enhancing MSE promotion in their districts. The Amansie East, Berekum, Techiman, Sefwi Wiawso, Aowin Sua-man, Asutifi and Tano South Districts established Light Industrial Sites with

1 1 cedi=0,61$ US

support from GTZ, the German In-ternational Cooperation to provide a decent work environment for MSEs. Five (5) newly established districts, na-mely Tano North, Pru, Offinso North, Sekyere Afram Plains and Tain, have also established BACs and are suppor-ting them.

Continuous investment in the BACs and RTFs by the District Councils: Dis-trict Assemblies appreciated the impact of the activities of the REP-I BACs and RTFs on their development agendas and provided the necessary financial resources to support them. By 2008, the total support received by these dis-tricts amounted to GH¢249,972.00

Employment creation: Fifty three (53) participating districts of REP-II estab-lished thriving micro enterprises which created jobs for the youth in rural com-munities. By March 2011, BACs and RTFs established 25,702 micro and small businesses which created 52,486 jobs. These include jobs created di-rectly by new businesses established as well as existing businesses supported by the BACs and RTFs. Performing jobs results in income generation by both employers and employees and leads to marked improvements in sustainable rural livelihoods.

Challenges: The successes achieved by the BACs and RTFs in managing the constraints holding back the suc-cessful establishment and operation of rural MSEs experienced interesting challenges. For example, some rural District Councils were unable to raise enough internal revenue to support de-velopment activities. They thus relyied heavily on the ‘District Assembly Com-mon Fund’ provided by the Central Government quarterly. However the release of funds from this source was always delayed and thus affected the timely payment of counterpart funds by some District Councils. Further-more, the MSE sub-committees formed by the District Councils were mainly constituted of elected and/or appoin-ted members of the District Councils. Since district council elections are conducted every four years, this means that changes often occur in the mem-bership of MSE sub-committees. A change in Central Government, which appoints District Chief Executives, also results in changes in the leadership of the District Councils. Consequently, new leaders have to undergo a period


of learning which often slows down implementation of Project interven-tions.To effectively manage these chal-lenges, the REP created a programme to periodically engage and sensitise the ‘new’ leadership of the District Councils on relevant issues of MSE de-velopment. This sensitization activity was complemented with field visits to the districts by Project Management Staff to engage the leadership of the District Councils on relevant MSE de-velopment issues. Furthermore, the establishment of the District Sub Com-mittees on MSE Promotion provided a formal institutional structure which en-sured that the operations of the BACs and RTFs were fully integrated into the District Council’s Medium Term Deve-lopment Plan and Annual Work Plans and Budgets

Implications for district socio-economic developmentThe MSE sub-sector constitutes the backbone of private sector led dis-trict community socio-economic de-velopment and a major pillar of the economies of the districts. This sector plays a critical role in absorbing new entrants into the labour force, particu-larly rural women and the youths.

Implementation of the decentralized BACs and RTFs by REP concept has demonstrated that building permanent institutional structures at the district level to deliver business development services helped to promote the deve-lopment and growth of rural MSEs and job creation.

This model of district level BACs and RTFs could therefore be up-scaled to cover all rural districts in the country to increase the establishment of busi-nesses, job creation and improve the quality of life of the vulnerable rural poor.

The existing BACs and RTFs should also be strengthened to deliver quality improvement services to rural MSEs to diversify their incomes, create new sources of economic growth and ge-nerate additional employment oppor-tunities (including self-employment) in rural areas.

Building partnerships with relevant stakeholders in development pro-grammes and project activities which work with the BACs and RTFs helps to pool resources together and promotes complementarity for sustained MSE promotion and job creation at the dis-trict level.

Finally, opportunities should be crea-ted for relevant MSE support institu-tions at the district level to engage in policy dialogue on MSE promotion in order to develop local solutions and ownerships of MSE in rural areas.

ConclusionThis paper describes the establishment and operation of district based BACs and RTFs as permanent institutional structures for effectively address-ing business development challenges faced by rural MSEs entrepreneurs. Determinants of success factors used to define the benefits of the interven-

tion include favourable environments for MSE establishment and growth; sustainability of business development services in the districts and employ-ment creation.

Based on these success factors we conclude that “Decentralized BACs and RTFs create a favourable environ-ment for the establishment and sustai-ned growth rural MSE”

The concept of the BACs and RTFs at the district level is an innovation by the Rural Enterprises Project to pro-mote MSEs in rural communities. The lessons learned and the experiences gained from this project should be replicated by other Projects and pro-grammes in the promotion and deve-lopment of rural MSEs

REFERENCES Rural Enterprise Project (REP) -II Interim Evaluation Report, July 2010, Prepared by the IFAD Interim Evaluation Mission

Rural Enterprise Project (REP) Progress Report March 2011, Prepared by the Project Co-ordination and Management Unit

Ghana Living Standards Survey, 2006 (GLSS 2005), Published by Ghana Statistical Service, Accra,Ghana

Ghana: Growth and Poverty Reduction Strategy ( GPRSII), (2006 – 2009), Published by NATIONAL DEVELOPMENT PLANNING COMMISSION, November 2005

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Training in Pastries making in Nadowli in the Upper West Region


An example of economic and social empowerment

BOUBACAR KEITA, TRADITIONAL BAKER

The traditional bakery business has si-gnificantly improved in the rural areas in Senegal. After an in-depth analysis of the situation on the ground, PRO-MER has put in place the appropriate support mechanisms aimed at building the capacity of the target groups in the intervention zones. The immediate impact, which was felt instantly, trans-lated into the emergence of micro-en-trepreneur bakers who, having signifi-

cantly improved their living conditions, are able to survive decently thanks to their activities.

Boubacar Keita is a classical example: based at Mbourkou village, 15 km west of Tambacounda, eastern Senegal, this micro-entrepreneur from the rural community of Ndoga Boubacar, PRO-MER intervention zone n° 2, is among the group of micro-entrepreneurs in-volved in the first phase of the project.

In 2000, Boubacar, a 26-year old unemployed youth like many adoles-cents in his village, decided to aban-don the dangerous trade in contraband goods and ventured into the bakery business to meet the ever-increasing demand for the local bread – known as « tapa-lapa » − by the village and the environs.

Meeting PROMER in 2000 was a de-cisive moment in making his project

Traditional bakery is a means of economic and social empowerment in rural areas. The case of Boubacar Keita is a perfect example: from 2000 to 2011, the monthly turnover of his bakery business increased from 300 000 to 2 400 000 CFA francs. Thanks to assistance from PROMER, he was able to establish a small pioneer rural micro enterprise and in so doing develop real expertise as a local trainer.

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Ahmed Hady Seydi, [email protected] Sow Bousso, [email protected]


a reality. PROMER, whose main ob-jective is poverty alleviation, works towards creating revenue and decent-ly paid jobs, by supporting, among others, the traditional bakery business. In so doing, PROMER enhances agri-cultural production by encouraging the use of local cereals in bread making.

Boubacar, a very enterprising baker, was able to benefit from the opportuni-ties offered by PROMER. The progress of his business is described below with a focus on the capacity building assis-tance he benefited from. Then follows an analysis of his success as well as the future possibilities available for his en-terprise. Particular emphasis is placed on the increase of his production and concomitantly, his income, but also on the improvement in his living standards and personal progress.

A successful enterprise, thanks to synergyPROMER is implementing a capa-city building programme with both non-financial and financial support. With respect to non-financial sup-port, it identifies and recruits, within the framework of an empowerment programme, service providers who provide the initial support, prepare bu-siness plans and monitor the activities. These non-finance service providers took over from the company advisers involved in the first phase of the project (initially known as all purpose econo-mic facilitators). With respect to non-fi-nancial support, PROMER partners up with decentralized financial systems, which gives the beneficiaries the pos-sibility of opening bank accounts, mo-bilize savings and access funding. The stakeholders who benefitted from the non-financial and financial support are the technical and financial partners of PROMER

The decentralized and technical units of the State played an important role in the assistance given to Boubacar. Thus, the Institute of Food Technology (ITA) trained him on bread-making tech-niques using local cereals as well as on hygiene and how to produce quality products. It also gave Boubacar some special flour used in traditional bakery. CERER built the improved bakery oven for him whilst the Department of Fo-restry and Water Resources handled the environmental protection part of the project.

Boubacar’s business became success-ful thanks to the synergy between PROMER, its technical and financial partners and the decentralized depart-ments of the State.

From the start, PROMER initiated an information and awareness creation campaign which enabled it to reach persons with good business plans as well as entrepreneurs who wanted to be beneficiaries of the assistance project. Service providers, radio pro-grammes as well as the direct targeting technique were all used for that pur-pose. Particular emphasis was placed on the modalities of access to project assistance. The reaction of the target populations was beyond expectations, because they sensed that through en-trepreneurship, they can get out of poverty. That was the decisive moment for young Boubacar Keita. His applica-tion for assistance was accepted and that represented the beginning of long partnership with PROMER, from 2000 to-date. Indeed, PROMER assisted him, through its non-financial service providers, to conceive a well prepared business plan, with development ob-jectives and analysis based on realistic market data.

The business plan, which served as a dash board to Boubacar and the proj-ect, facilitated needs identification and provision of support through training in management accounts, training in business management modules known as GERME (Gérer Mieux son Entre-prise), technical training and exchange visits. What he learnt from these train-ing programmes radically changed Boubacar’s business perception which is now geared towards its development and profitability. Furthermore, new business perspectives now opened up to him: training courses in pastry mak-ing (2001), in hygiene and quality pro-duction (2002), in bread-making and the use of local cereals in bread mak-ing (2004 and 2008) naturally enabled him increase and diversify his produc-tion which increased from 80 loaves of bread in 2000, to 800 in 2011, in addition to his pastry-making business.

Five dossiers for fundingThe availability of a local market and the craze by the inhabitants living in the outskirts of the urban settlements for traditional bread (that the modern bakeries cannot satisfy) was an eye

opener for Boubacar. Imbued, with the entrepreneurial spirit, he started his business with the very basic of instal-lations.

Apart from enhanced productivity and improvement of the quality of bread produced, the acquisition of a new oven enabled Boubacar to drastically reduce consumption of firewood, which fell approximately by 25%. This acquisition was made possible thanks to easy access to financial services by interconnecting Baboucar to financial institutions and the decentralized fi-nancial bodies which opened local branches. Besides, the building of the oven is the concretization of the envi-ronmental protection policy advocated by the donors (the Government and IFAD, the International Fund for Agri-cultural Development).

The Crédit Mutuel du Sénégal (CMS), the Alliance par le Crédit et l’Epargne pour la Production (ACEP) and the Union des Institutions Mutualistes Communautaires d’Epargne et de Cré-dit (UIMCEC) provided financial assis-tance to Boubacar since the first phase of the project. The accounts he opened at these institutions enabled him access funding practically at all times. From 2000 to 2009, five requests for funding amounting to 2.500.0000 CFA Francs were processed. The loans contracted enabled Boubacar not only purchase equipment but also set up working capital. Since 2010, Boubacar’s bakery operates on own funds and the whole business except the building construc-tion, was financed with his savings of 600.000 CFA Francs.

The initiative not only involved ma-nagement consultants (first phase of PROMER) but also service providers (second phase of PROMER) on infor-mation, sensitization, analysis, capaci-ty building and monitoring issues. The following were involved : the project team (for financial and non-financial support, monitoring, quality control), the local and administrative authorities (for project support), the decentralized financial systems (to facilitate funding access), the technical departments of the State – the regional trade office – (for monitoring and follow up), profes-sional associations (to protect the inte-rests of the sector, access to loans and sustainability of the activity), the Insti-tute for Food Techniques (for providing baking flour), the CERER for building


the ovens and the Grands Moulins (for establishing a purchasing point and providing access to raw materials).

Boubacar has inspired work ethics in childrenThe fact that his production was re-gular, coupled with his satisfactory supply to the market and to the sa-tisfaction of his clientele, made Bou-bacar a hero in the eyes of his peers and gained him fame within the local populace. People saw him as a model of professional and social success and entrusted their children to him to teach them the trade. Thanks to his success, the job of a baker is now well respec-ted and the fact that it brings regular income means it is a promising enter-prise in the eyes of the villagers.

The role played by Boubacar in the fight against youth unemployment in his neighbourhood is therefore ob-vious. Since he set up his bakery bu-siness, about twenty youngsters have learnt the trade thanks to him, and as soon as they finished the training, they have set up their own business. As soon as they are established, they have brought in other youth who will undergo similar training. Apart from the creation of about twenty direct jobs, more that 84 indirect jobs were created in the rual community. The testimony of the village head is in itself quite eloquent: « Boubacar has incul-cated work ethics among our youth who as a result have now abandoned fraudulent activities are not lazy any-more. Right now, a lot of them are ca-

tering for their needs and this is quite wonderful. »

Youth training in traditional baking, the various training programmes and experience garnered over the years have developed Boubacar’s unde-niable technical abilities. Naturally geared towards youth training, Bouba-car makes use of the new PROMER vi-sion aimed at fostering the emergence of endogenous trainers in order to po-sition himself.

Thus, since 2009, he has been tende-ring for and winning PROMER mar-kets and other projects. In this vein, he carried out three training sessions for PROMER and for the NGO Action Group for Global Endogenous Deve-lopment. These training sessions ear-ned him close to 5 million CFA Francs.

Increases in his revenue and the change of mentality have had a posi-tive impact on his social life. In addi-tion, he and his family have access to medical care, his children go to school at Tambacounda and there is more va-riety in the family feeding, based on the consumption of local cereal pro-ducts obtained from crops.

Improved Traditional Baking Cognizant of the difficulties encoun-tered in the traditional baking sector, Boubacar very quickly understood the interest of the association to har-monize efforts. Literate in Pulaar, he is immersed in mass movements and understands that there is need to put

in place a corporate body of bakers to participate in dialogue on policies concerning recognition of their inte-rests by the State. In deed, restrictive legislation on production and sale of traditional bread is a real constraint, for it limits their sales area. It is forbid-den of them to sell traditional bread in urban settings.

From the beginning, Boubacar played a part in the creation of the Bakers Economic Interest Group in Decem-ber 2004. This has evolved into a pro-fessional organization of which he was the Chairman in 2007. It is PROMER’s partner; and PROMER has given it ins-titutional support and advice, particu-larly in regard to sustainable access to funding. The organization has enabled them resolve problems related to sup-ply, training of young bakers, easy ac-cess to credit through the creation of a joint security group, but also and es-pecially for the defense of the corpo-rate body for better leverage and total recognition. It was with this in mind that a Techno Forum on traditional baking was held on the 4th and 5th of June, 2010, at Kaolack, the centre of Senegal. This manifestation was ini-tiated by PROMER, together with the Professional Organization of Tamba-counda Bakers and other partners. It was about ushering in an improved traditional baking system, lobbying, sharing views on the different pro-cesses involved in bread making and oven technologies and to capitalize on the project experience.

Engaged in the fight for the recogni-tion and emergence of rural bakery projects, Boubacar and his peers try various initiatives that hinge on the lives of the rural inhabitants. One can cite, among others, the initiatives cara-van, the forum of rural bakers and the techno forum on traditional baking. Boubacar has also contributed to the information and sensitization of the youth on the interest of the network (radio broadcast, village meetings, caravan, trainings, fora), to the gua-ranteeing of the activity by protecting the environment and the introduction of improved ovens. He has helped create awareness about the impor-tance of hygiene, quality and formali-zation.

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A Way of Social Promotion In all, numerous results have been re-gistered, among which are the acqui-sition of an improved oven, kneading tables, equipment for bread produc-tion (shovels, bowls, kneading troughs, tins, plastic bowls, cake tins, two tiled tables for bread preparation, 30 and 20 1iter cans). It is also worth men-tioning the purchase of three bicycles and of one motorcycle, the training of more than 20 apprentices who afte-rwards established their own business, the production of ‘tapa-lapa’ bread, cakes, rich cereal cakes. More over, two plots of land have been bought in Tambacounda, one of which is under construction, cattle has been acquired for breeding and bank accounts have been opened with CMS, ACEP and UIMCEC.

Today, confident in himself and in the training he has received, Boubacar aims to make inroads into the town market of Tambacounda. His bakery has become a reference micro-enter-prise and Boubacarr himself has be-come, thanks to PROMER’s support, a master trainer in traditional baking in the area covered by the project. He secures a lot of markets and aims, pre-sently, at the markets of Bouroukhou and those of the surrounding villages of Tambacounda. In 2011, he benefited from a pilot programme in gas ovens to strengthen his activity and ensure it

functions as a service platform for fu-ture creations in this sector.

According to Boubacar, « the associa-tion is a very important pillar for the defense of the interests of the entire bu-siness corporation for recognition and positioning”. He confesses learning that financial management and supply ma-nagement are “two big entry points” to venture in his business; next comes the techniques in the use of inputs (flour, wood, sugar…) and the construction of an improved oven. Finally, he learnt the importance of quality thanks to the training programmes (management of accounts, literacy, marketing, sprouts, job creation, etc), exchange visits to Morocco and within the area covered by the project.

The success of such an enterprise has mobilized some 2.5 million CFA Francs, for the acquisition of tools, the development of the oven, supply of raw materials, etc. Among the various difficulties encountered, one can cite, in the first place, constraints relating to trade regulations, especially those forbidding the sale of traditional bread in urban settings. Illiteracy among the rural inhabitants has also been a si-gnificant setback. But the experiment, rich in information, has shown that traditional baking is a means of econo-mic and social elevation for the rural community. Its development however necessitates capacity building and pro-

fessionalizing the sector, through the acquisition adequate tools and building technical capacities, prior to quality and hygiene demands.

In spite of these acquisitions, the chal-lenges he has to face in traditional ba-king remain wholesome. Appropriate technologies should be introduced to reduce consumption of firewood, the only way to respond to the legal res-trictions imposed on environmental management and on access to urban markets. Stakeholders in this network should also be organized to have leve-rage in political dialogue. It is the surest way to have access to some decision-making authorities in order to have access to information, to make them-selves known and to form a group that can defend their interests.

Baboucar counts on PROMER’s sup-port to expand his work base, acquire other means of mobility to meet the demand. He needs this support to build supplementary ovens in four sur-rounding villages, to promote energy saving methods and to protect the en-vironment by the installation of solar and gas ovens, to obtain permission for sale of rural products, like bread, in the cities. He however remains convinced that with the knowledge that he has acquired to venture and succeed, he “can draw from his own reserves and progress alone, even without external support”.

©PR

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RESOURCESCapitalisation of Experiences of Development Projects et Programmes: The GuideThis guide is addressed to personnel of IFAD projects and programmes in West and Central Africa. It provides an approach that will assist them in the implementation of an internal reflec-tion, experience and knowledge sha-ring process.

The document and some of its parti-cipatory media could prove useful to cooperating institutions and IFAD of-ficials when they engage in reflection, during supervision missions and/or those undertaken to prepare the Work Plan and Annual Budget (WPAB).

It perfectly fits into the strategy of IFA-DAfrica’s network consisting in devi-sing an approach for IFAD projects and their partners, in order to help them to

develop their own experience capitali-zation and exchange plans. While we agree that it is inspired by practices that have already been tested in other similar IFAD-supported projects in La-tin America and Asia, we observe that it seeks to maintain a certain specificity in relation to sharing habits and prac-tices which are typically cultural or due to poverty (oral character, illiteracy), and imbalanced access to a certain communication environment.

Finally, it is addressed to all projects and programmes which share the vi-sion whereby sustainable development is a transformation process which takes place because different actors inter-vene. This means that knowledge has no value unless it is shared; knowledge can be acquired only through expe-riential learning, regardless of whether the experience is profitable or not.

Available online http://www.fidafrique.net/article2380.html or at WARF Tel. (221) 33 865 00 60 Fax (221) 33 860 66 89 Email: [email protected] Dakar - Senegal)

IFAD-Projects Regional Forum in Western and Central Africa - Libreville, 14-17/11/2011The 6th IFAD Regional Forum (previously “Implementation Workshop”) will take place from 14th to 17th of November 2011, in Libreville, Gabon. The forum is being organized and financed jointly with the Ministry of Agriculture, Livestock, Fisheries and Rural Development of the Republic of Gabon.

The central theme of the forum is “Making Small Farms in West and Central Africa More Productive and Profitable”. The theme captures the dynamic approach to rural development, and expresses the broad range of contexts and issues that the forum will focus on from the challenges communities are facing in meeting basic food security needs, to helping rural commu-nities engage more profitably with market opportunities.

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