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RURAL ENTERPRISE DEVELOPMENT IN
KANDAHAR 2013 ANNUAL PROJECT PROGRESS REPORT
UNITED NATIONS DEVELOPMENT PROGRAMME
DONOR
Canadian International Development Agency (CIDA)
PROJECT INFORMATION
Project ID: 00074522 Duration: June 2010- 31th Dec 2014 Strategic Plan Component: Poverty reduction and achievement of the MDGs CPAP Component: Increased Opportunities for income generation through promotion of diversified livelihoods, private sector development and public private partnership ANDS Component: Social and Economic Development Total Project Budget: USD $ 8,818,011 Annual Budget 2013: USD 5,094,335 Implementing Partner: AREDP Responsible Agency: Ministry of Rural Rehabilitation and Development Project Manager: Mr. Rahmatullah Quraishi Responsible Assistant Country Director: Mr. Shoaib Taimory
COVER PAGE PHOTO: SG formation process in Daman District of Kandahar (Photo credit: AREDP)
ACRONYMS
AICB Afghanistan Innovative Consultancy Bureau AREDP Afghanistan Rural Enterprise Development Program BDSO Business Development Service Officer BDSP Business Development Service Provider BP Business Plan CDC Community Development Council CED Community Enterprise Development CIDA Canadian International Development Agency EG Enterprise Groups EV Economic Viability LIRE Literacy for Improvement of Rural Enterprises” project MEDA Mennonite Economic Development Associates MISFA Microfinance Investment Support Facility for Afghanistan NLD National Literacy department PEF Provincial Enterprise Facilitator PA Producer Associations PSA Provincial Situational Analysis PRG Partial Risk Guarantee REDKAN Rural Enterprise Development in Kandahar SGs Savings Groups SME Small and Medium-sized Enterprise TF Technical Feasibility VEF Village Enterprise Facilitator
TABLE OF CONTENTS
I. EXECUTIVE SUMMARY .................................................................................................................... 1
III. RESULTS: ..................................................................................................................................... 4
A. Activity 1: Community enterprise have developed feasible action plans .................................... 4
B. Activity 2: Community enterprise have developed feasible action plans ...................................... 7
C. Activity 3: Five new elements supplemented to the project scope of work .................................. 7
D. Activity 4: Targeted SMEs have received technical advisory services and have received financial
assistance from program or financial institutions ............................................................................ 10
E. Activity 5: SMEs who have demonstrated innovative business models have received the SME
innovation prize ................................................................................................................................ 14
F. Activity 6: project Monitoring and learning system established .................................................. 14
EXPENSES FOR THE YEAR .............................................................................................................. 15
IV. GENDER SPECIFIC RESULTS ....................................................................................................... 17
V. PARTNERSHIPS .............................................................................................................................. 17
VI. ISSUES ....................................................................................................................................... 18
VII. RISKS .......................................................................................................................................... 19
VIII. LESSONS LEARNED .................................................................................................................... 19
IX. FUTURE PLANS .......................................................................................................................... 20
X. ANNEXES ....................................................................................................................................... 21
A. Annex 1: FINANCIAL TABLE ..................................................................................................... 21
B. ANNEX 2: EXPENSES BY ACTIVITY ............................................................................................. 22
C. ANNEX 3: ISSUE LOG ................................................................................................................. 23
D. RISK LOG .................................................................................................................................... 24
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I. EXECUTIVE SUMMARY
This report describes the progress made under the Rural Enterprise Development Project for Kandahar (REDKAN) of the Afghanistan Rural Enterprise Development Programme (AREDP) implemented by Ministry of Rural Rehabilitation and Development (MRRD) during 2013. The Government of Canada, as one of world’s top donors for Afghanistan, focused in Kandahar, wants to build a stable, democratic and self-sufficient society. Canada’s efforts are guided by the Afghanistan compact, a five year International agreement to coordinate the work of Afghan government and its International partners. The Government of Canada is funding REDKAN through Canadian International Development Agency (CIDA). This aims to increase the income of rural population and provide sustainable employment opportunities for men and women through higher market participation of targeted rural enterprises. The fund is channeled through the United Nations Development Programme (UNDP) which approves the budgets; ensure appropriate Programme appraisal and capacity assessment and co-ordinates the auditing process and evaluation, ensures financial and substantive oversight of the Programme as project assurer, liaises with concerned partners and mobilizes resources. The programme is designed around the following components Component A: Community Enterprise Development Under activity 1, community enterprises have developed feasible action plans. During 2013 REDKAN established 479 Saving Groups (SGs) out of which 165 were female SGs (34.4%). The project also set up 362 Enterprise Groups (EGs). 119 of the enterprise groups are run by women (37.4%). On the whole there are 2100 SGs (Male 1272 and Female 828) and 450 EGs (132 female, 318 male) in Kandahar. Moreover, the member of the SGs saved Afs. 26.4 million. The SGs disbursed Afs 4.23 million in loans to 1539 individuals to set up various businesses in Kandahar. Additionally, six Producer Associations (PAs) and 163 Village Saving Loan Associations (VSLAs) were formed. This helped the SGs and EGs to initiate and manage their enterprises. REDKAN arranged 23 technical trainings and exposure visits with 216 participants (male 100 female 116) to build the capacity of EGs and SGs in saving mobilization and enterprise development activities. Under activity 2, community enterprise groups have received financial assistance from Micro Finance Institutions or by other means access to a local cadre of service providers. REDKAN provided seed capital to 154 SGs worth Afs 2.74 million which accelerated the inter-loaning process among SGs. Under activity 3, five new elements supplemented the project scope of work. In the one district one product component, 10 groups from four districts of Kandahar were supported. They received business management, product development and packaging trainings. In order to support vertical farming, activities of six new initiatives on enterprise development were completed in Kandahar through establishing green houses, provision of solar systems to and arranged reservoirs for the selected farms. This has increased the production of farmers. To improve the literacy among female saving groups, 6475 female SG members received 257 literacy courses in six provinces (1650 female SG members in Kandahar). Moreover, to boost female enterprise activities and link them with urban market, AREDP established an outlet inside MRRD premises, which showed significant sales in few days.
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Component B: Small and Medium-size Enterprise Development Under Activity 4, Targeted SMEs received technical advisory services and financial assistance from programme or financial institutions. SIMSPA the consultancy firm hired by REDKAN conducted Provincial Situational Analysis (PSA) in Kandahar, which will guide REDKAN interventions at district and community level. The information reported by SIMPSA shall be used by REDKAN as a baseline for future planning. To enhance the technical skills of the SMEs, REDKAN organized know-how training and exposure visits for the SMEs working in the poultry, food and cotton seed processing sectors. Similarly training on value chain development, Islamic banking and training on enterprise development was also arranged during 2013. Under Activity 5, SMEs, which demonstrated innovative business models, received the SME innovation award. AREDP established awarding mechanism in Kandahar to recognize potential SMEs that demonstrate innovations). It is based on successful experiences and lessons learnt in Helmand. Under Activity 6, Project monitoring and learning systems established, AREDP M&E department established monitoring framework, monitoring checklists (for SGs, EGs, VSLAs and SMEs), Monitoring database, and reporting templates, which helped AREDP to monitor and evaluate its progress transparently. The project continued to face challenges of engaging with the community elders, non-availability of the electricity in the province, limited participation of women in the project, lack of skilled labours and access to advanced technology. To counter these constraints a number of measures were taken such as including a literacy component in the project and building strong ties and consultations with the communities. Regarding the planning for the next six months, REDKAN will disburse seed capital to 356 SGs and matching grant to 21 VSLAs in order to enhance their inter- loaning capacity. Additionally to the planned technical know-how trainings and exposure visits for various groups, AREDP in order to encourage innovation business models will award innovation prizes to the potential SMEs supported by REDKAN.
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II. BACKGROUND Foreign direct investment represented 2.5% of GDP in 2006. The World Bank reported a positive GDP growth of 11.8% in 2012/2013 for Afghanistan. It was1due to favorable weather and an exceptional harvest. However, the positive development is generally offset by a weaker services and industry sector which is mainly due to consumer uncertainty in view of stepping up of attacks by insurgents in 20142. There has been little growth in enterprise related activities in rural Afghanistan, and most people still live on subsistence farming. Even where Afghanistan could be self-sufficient in agriculture-related products, the country imports vast quantities of food and other easily manufactured items for daily use, while the export sector remains small and undiversified. Achieving significant reduction in poverty requires a strong focus on agriculture and rural employment generation, promotion of sustainable livelihoods and rural infrastructure development. The REDKAN project is responding to the challenges of poverty in Kandahar by supporting increased income and sustainable employment opportunities for men and women and achieving higher market participation of targeted rural enterprises. On-the ground implementing partner for REDKAN is the Ministry of Rural Rehabilitation and Development (MRRD), a Ministry with a strong track record of programme implementation. As a pilot project REDKAN will increase its impact by closely integrating and coordinating with complementary CIDA economic programming. Kandahar producers lost previous markets when the transport infrastructures disrupted in the 1980s and 1990s. REDKAN works with the 95 SMEs to develop their capacity and thus enabling them to meet the financial institutions requirements and address current SME capacity gaps. Currently, there is less co-ordination between the local producers, SMEs, national export/import markets, and technology providers, which has dramatically lowered the profit margins of local producers and SMEs. REDKAN project is well aligned with national development policies and strategies, as articulated in various GoA documents, such as the ANDS, National Priority Programme 2 under the agriculture rural development cluster and the Afghanistan compact. It is also well aligned to UNDP country programme and its sustainable livelihoods, community development and economic development objectives remain critical areas of support for donors towards achieving the MDGs in Afghanistan.
1 http://www.worldbank.org/en/country/afghanistan/overview 2 http://www.adb.org/countries/afghanistan/economy
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III. RESULTS
Component A: Community Enterprise Development
Component A is the bottom-up development to support Savings Groups, Enterprise Groups and Producer Associations. Poor families require small repeat loans to meet micro credit needs and continue to grapple with this challenge. Rural entrepreneurs are largely unorganized and not able to access required technical and financial services as well as market linkages. These rural entrepreneurs continue to grapple with lack of access to affordable finance, and cannot build on their rural micro enterprises. The regular collective savings-credit services and enterprise based linkages will assist rural entrepreneurs in rebuilding their micro enterprises and income generation activities. This would lead towards enhancing rural livelihoods and creating self-employed opportunities after years of civil war and droughts.
A. Activity 1: Community enterprise have developed feasible action plans
After an effective mobilization in the communities, the REDKAN team established 479 SGs (male 314 and female 165 SGs). This has resulted in regular savings of Afs 26.4 million by the saving groups. The team has arranged several workshops for the SG members on programme orientation, process of holding meetings as well as savings and book keeping training arranged by the Provincial Enterprise Facilitators (PEFs) and Village Enterprise Facilitators (VEFs) of the respective district and villages. Because of these trainings, SG members learnt about program objectives and activities, know-how on conducting weekly meetings and the importance of keeping records of the regular savings. Community mobilization was undertaken in four districts: Dand, Daman, Arghandab and Spin Boldak. These districts were selected based on criteria of growth potential, proximity to adjoining districts, connectivity and security amongst others. During 2013, 20 communities agreed to form SGs in Kandahar.
Establishment of Savings Groups and Village Saving Loan Associations: REDKAN promotes SGs as an entry point in rural areas to promote livelihood, increase revenue and income generation. A SG is a platform for learning and practicing micro savings, accessing credit, and investing in micro rural enterprises. In 2013, REDKAN successfully established 479 SGs including 165 female SGs (34.4 %) in 20 communities. This bringing the total of to 2100 SGs out of which 828 was female SGs (39.4%). Furthermore, the SGs were able to collect savings of Afs 26.4 million. In addition, 200 SGs prepared their investment plans. Investment plans is one of the requirements for SGs to become eligible for seed capital. 154 SGs received seed capital of worth Afs. 2.74 million, which helped the qualified SGs to expand their inter-loaning capacity. During 2013, the SGs positively
Figure 1 SG formation process in Daman
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changed the lives of rural communities in Kandahar. The formation of 2100 SGs (828 female SGs) resulted increase in saving and employment generation. It also provided a platform to over 4000 rural men and women (member of SGs and EGs) to work together for the better future of their communities. Out of the total savings of Afs.26.4 million, Afs.4.23 million in inter loans was disbursed to 1539 members including 624 female members in Kandahar. It enabled them to launch their embroidery, retail shops, fuel trade, livestock and other microenterprises. Village Savings and Loan Associations (VSLAs) are formed from a minimum of 10 savings groups to facilitate larger loan through the savings of the Savings Groups. This occurs after the savings groups have crossed the threshold level and the group has had a certain period of internal lending. During 2013, 163 VSLA were established, out of which 59 were owned by female. This resulted a total of 230 VSLAs (72 female VSLAs).This will lead the community towards microfinance banks in the future.
Success Story.1 Forming Female Saving Group in Kandahar
When REDKAN under AREDP programme was inaugurated in four targeted districts of Kandahar, the project team expanded the implementation process of ‘Community based Enterprise Development’ to the indicated communities of each district with the ultimate goal of strengthening the economy of the residents.
Hikmatullah who works in Spin Boldak district as (PEF) recounts, “most of the time, while I was going to the villages for implementation of programme following, I was faced with a lot of difficulties. The problem was that while I was going to village for formation of male saving groups and I mentioned them to establish female saving groups along with male saving groups. Whenever, I mentioned of the formation of female saving groups, the villagers shouted and became angry and informed me that they would never accept this program of forming female saving groups in communities. It was shameful for men if woman would go out of home and work in offices. Then I tried my best and explained to the villagers, the advantages of the program. Eventually, I managed to get their consent to create female saving groups. At present we can see that there are several saving groups and I am hopeful that in the future we can advance this program further.”
935
604
1539
915
624
1539
1850
1228
3078
0
500
1000
1500
2000
2500
3000
3500
Male Female Total
2011‐2012 2013 Grand Total
Graph 2 No of Inter‐loans under REDKAN
958
314
1272
663
165
828
1621
479
2100
02004006008001000120014001600180020002200
2011‐2012 2013 Grand Total
MALE FEMALE TOTAL
Graph1 Status of SGs under REDKAN
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Establishment of Enterprise Groups: REDKAN encourages rural micro entrepreneurs who are members of different saving groups, but are also engaged in similar enterprises or value chains to organize themselves into an enterprise group (EG). The members of these EGs are mainly engaged in production, processing and/or marketing of dairy products, bakery, dry fruits, vegetables, pickles, jam, cheese, carpentry, carpet weaving, tailoring, handicrafts and embroidery etc. In 2013, 362 EGs including 119 female EGs were formed. It resulted 450 EGs (male 318 and female 132) in the project period. In the reporting period, REDKAN facilitated the formation of 6 PAs totaling to 15 PAs. The PAs link EGs, which produce similar products, or are part of the same value chain, to share information and knowledge on products and markets.
Table 1. One year status of SGs, loans disbursed and VSLAs formed.
6
0
66
3
99
3
15
0
5
10
15
20
Male Female
2013
Period Amount saved by SGs
Amount disbursed as loans
No of VSLAs formed
During 2013 26,395,386Afs 4,320,000Afs 163 Total 163 During 2011 and 2012
11,699,924Afs 5,894,941 Afs
57
Total 57G. Total 38,095,310
Afs 12,465,901 Afs 220
75
13
88
243
119
362318
132
450
0
100
200
300
400
500
Male Female Total
2011‐2012 2013 Grand Total
Graph 3 No of Enterprise Groups under REDKAN Figure 4 No of Producer Associations under REDKAN
Figure 2 EG members in Daman
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Capacity Building Training to SGs, EGs and VEFs
Based on the project needs and expansion of the mobilization process, AREDPs training unit (TU) delivered training packages to the master trainers, Village Enterprise Facilitators (VEFs) and other staff of AICB on Islamic Banking, Book keeping, marketing, financial management, business management and TOT on enterprise development. As a result, of these trainings overall 143 PEFs and VEFs were trained. The trainings qualified them to arrange several workshops for the SG members on programme orientation, process of holding meetings as well as saving and bookkeeping training held by the PEFs and VEFs of the respective districts and villages. These trainings provided knowledge to SG members on program operations and objectives as well as information on the benefits of weekly meetings and regular savings.
B. Activity 2: Community enterprise have developed feasible action plans
Village saving loan association (VSLA) act as federation of well governing SGs promoted in a village, which works as community financial institutions for community members participating in the SGs at a lower cost and through simpler processes. It also helps in aggregating management functions related to financial services required for enterprise promotions at the village level, particularly in the areas of establishing possible linkages with MFIs and receives matching grants from AREDP. During 2013, REDKAN provided seed capital to 154 SGs worth Afs.2.74 million. Since the small amount of saving from SGs provides limited opportunities for inter loaning; the seed capital triggered the inter-loaning process. The initial seed capital provided SGs larger amounts of inter-loan finances for establishing a robust system of prioritization of activities, rotation of savings among SG members and assisted in the repayment of loans.
C. Activity 3: Five new elements supplemented to the project scope of work
In order to serve better and reach different categories of rural poor, REDKAN has introduced new elements to enterprise development. These ideas have been added to the plan during 2013 and good progress has been made. Following are the details of each component along with the progress made and current status of these new elements.
a) Enterprise development for People with Disability People with disabilities or ‘differently abled’ in Kandahar have typically experienced less exposure to schools, workplace, marketplace, family decision making than their able bodied peers. Due to both social and economic exclusion, other community members, employers, or service providers often do not see them as productive citizens. In the reporting period REDKAN identified and assessed 40 target disabled for necessary support. The project team provided trainings on business development and prepared business plans for 37 target disables. The targeted people started 8 new micro enterprises of retail shopping, Husbandry and sheep rising in Kandahar.
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b) One district one product Rural enterprise Development on “One District One Product (ODOP)” concept has been introduced to contribute immensely to enterprise development, as witnessed in Japan and later on in other countries. ODOP leads towards creating and strengthening employment opportunities and enhancing income of rural community. During 2013, REDKAN under the aegis of AREDP team finalized the criteria for ODOP in Kandahar based on the studies in the selected four districts by various aid agencies. REDKAN project team covered 10 groups (Producers, Processor, Services and marketing of the same value chain of the selected products) as a pilot project in the selected districts with each group comprising of 3-4 persons. These groups received training on capacity building, market assessment, product labeling and packaging.
c) Multiplier farm Enterprises (Vertical Farming) The new element “Multiplier farm Enterprises” is introduced to help hundreds of people in the rural economy to maximize earnings from available land resources by applying intensive cropping systems in layers combined with pre-harvest and post-harvest technology transfer based on market demand. Under vertical farming REDKAN completed 6 initiatives of enterprise development activities by establishing green houses, providing solar systems to and arranged reservoirs for the selected farms. These activities raised the income and employment of the selected farmers.
d) Literacy classes for 6,475 women among the SG member in 6 provinces One of the main achievements of REDKAN programme has been its ability to successfully incorporate women into programme activities. This success can be seen both at the
Success Story # 2
Decades of instability in Afghanistan, has led to very high poverty and unemployment levels in the rural areas of Afghanistan. Therefore, Government of the Islamic Republic of Afghanistan is struggling to reduce poverty and unemployment in rural areas and striving to make its population self-sufficient through community based enterprise development programme implementation. The ‘Community Based Enterprise Development’ component in Kandahar tries to address these challenges since July 2011. The aforementioned AREDP programme component-A has covered 111 different communities in four districts where various SGs and EGs have been established with both men and women. In the Naqilin area of Daman district located in the east of Kandahar city, residents are engaged in farming. The community is not economically sound and has a presence of disabled male and female residents. Mrs. Jamal who has been disabled for the past 11 years comes from a very poor family. She joined the Community Based Enterprise Development programme, as a female SG member and over time was nominated as the president of the EG.
She quoted: “I am a disabled woman living in Naqilin and belong to a family who can’t afford to meet the family’s expenses. Since Community Based Enterprise Development programme has commenced I became a SG member and regularly deposit cash to the saving box. In addition, I am the president of female EG in our village and I am very happy that I am self-sufficient and capable of supporting my family financially through the profit of EG contribution in future.”
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beneficiary level and in the number of female staff at the field that have been employed by AREDP. Whilst women’s mobility was not specified as a programme objective; REDKAN has facilitated women’s exposure visit both nationally and internationally. Data collected by the M&E team found that 85% of SG members felt that the programme had a positive impact on the lives of women.
In May 2013, AREDP signed a Memorandum of Understanding (MOU) with national literacy department (NLD) to provide female community members with literacy courses through their Joint “Literacy for Improvement of Rural Enterprises” project (LIRE). NLD is providing 259 literacy classes for 6,475 students (Female Saving Group members) in selected districts of Bamyan, Balkh, Nangarhar, Parwan, Kandahar and Herat provinces. The NLD recruited the teachers and the classrooms have been equipped with necessary teaching materials. A two days workshop on the project Implementation and operations was conducted in the NLD conference hall for all AREDP literacy focal points. The classes in the selected provinces are running smoothly and will be completed in March 2014.The female saving group members appreciated AREDPs efforts in providing them literacy courses and helping them to manage their saving generated activities effectively. Table 2. Detail of literacy classes province and district wise
No Province Districts Students (literates) Courses (literacy)
1 Bamyan Centre of Bamyan 1,075 43
2 Balkh Nahrshahi 925 37
3 Nangrahar Behsod 800 32
4 Parwan JableSeraj 600 24
5 Kandahar Dand 1,650 66
6 Herat Karokh 1,425 57
Total 6 provinces 6,475 259
e) Economic Development and Marketing for Women Enterprise Groups AREDP encourages members of different SGs who are engaged in similar rural micro enterprise activities to work together to develop their businesses. Although, REDKAN has given technical support to improve the capacity of the female enterprise group members, more targeted technical support is needed to improve the quality of their products and to increase their production. Majority of women are engaged in food processing (pickle making, tomato paste, cheese, or jams making), animal husbandry (poultry, goat/sheep keeping) or handicrafts (carpet weaving or embroidery). REDKAN has already trained EGs in marketing, which is essential for the sustainability of EGs. REDKAN, in order to boost the economic development and marketing activities for women enterprise groups, has established an outlet inside MRRD premises. The working mechanism for the outlet has been developed. Various EGs send their products like
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pickles, cheese, handicrafts, chips and honey. MRRD employees and guests purchase the products and appreciated the quality and price of the products. The outlet is serving as a source of revenue for female enterprise groups and links them with the urban market.
Component B: Small and Medium-size Enterprise Development
Component B is SME Development Component which addresses SME facilitation, SME support and business development services, enabling environment for SMEs, identifying their opportunities, potentials in the market as well as failures and risks in the market and financial services to SMEs. SME component also focuses on market linkages and market expansion; looking at backward and forward opportunities and threats. It has three sub-components: SME Facilitation, Business Development Support for SMEs and Access to Finance for SMEs.
D. Activity 4: Targeted SMEs have received technical advisory services and have received financial assistance from program or financial institutions
i) Conduct Provincial Situational Analysis Study for Component B of the Project
Provincial Situational Analysis (PSA) study shall provide policy recommendations aligned with the mandate of AREDP to guide its interventions at districts and communities level. The PSA will enable the program to deliver demand-driven support to those SMEs that best add value to the development of the provincial economy. In 2013 SIMSPA; the consultancy firm contracted to carry out Kandahar PSA. Some of the major constraints faced by rural communities were (i) lack of infrastructure, (ii) lesser integration of women in the provincial economy (iii) limited security(iv) lack of knowledge (v) limited capacity and access to updated technology and economic information(vi) wide environmental degradation(vii) lack of economic information and access to credit among businesses especially rural communities(viii) lack of government support to rural livelihoods, and (ix) poor access to the market. The information collected through the study will be used by REDKAN as a baseline to compare with future analytical results and the outcomes of the program.
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ii) Provision of Simple Technology to EGs and SMEs
During the 2012 Mid-term Review process, the World Bank informed AREDP that the Partial Risk Guarantee (PRG) would be removed from AREDPs scope of activities. The World Bank and AREDP discussed that instead of removing the funds altogether, both parties would collaborate to come up with an alternative means of using the allocated funds to provide support to SMEs. In addition to a number of cash based support approaches that are currently under discussion, AREDP proposed supporting SMEs with technological improvements aimed at promoting growth in their businesses.
During 2013, REDKAN finalized the need assessment regarding simple technology for all Kandahar EGs/SMEs and planned to award simple and appropriate technology to the potential EGs/SMEs. Technological support will boost the livelihood generation activities of the EGs and SMEs. It will also increase their sales and employment. AREDP procurement department processed the National Open Tendering (NOT) of simple technology for EGs/SMEs and will soon award the technology to the potential EGs/SMEs.
iii) Establishing Poultry Laboratory in Kandahar
In Afghanistan, Poultry sector is in the initial stages of development and there is great potential in this sector to overcome unemployment in Afghanistan and provide the protein for the people in an easy and less expensive way. The poultry farmers in Afghanistan face managerial, diagnostic and medication problems. The farmers should have a diagnostic laboratory in their locality, for immediate solution of their problems and on an emergency basis. The poultry diagnostic laboratory will provide comprehensive services to diagnose and help in the control of many types of endemic avian and zoonotic disease. Based on the feasibility study by international consultant, in 2012, AREDP sent 12 trainees comprising of two groups (i) 10 agriculture faculty students of Kandahar University and (ii) two government officials (Veterinary Lab Technicians) of veterinary department from Agriculture Directorate. Both the groups were sent to participate in the technical know-how training and exposure visit on poultry diagnostic laboratory in Delhi, India from 18 Nov- 03 Dec, 2013. The training improved the knowledge and skills of the respected participants. This was a training/exposure visits program with emphasis on learning by seeing and doing, exchanging their views, interactive sessions, practical work on different aspects of poultry lab and observational & field visits. The program covered various aspects of poultry sector, with more focus on poultry laboratory. It included theoretical sessions on poultry diseases, field visits to modern feed mills, high profile
Figure 2 Trainees during poultry lab theoretical session
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laboratory and undertaking practical work, field visits to modern farms with breeds such as broiler and layer. The participants gained knowledge on overall poultry diseases, diagnosing the diseases and their treatment. Meanwhile, AREDP procurement department is also in final stages of procuring the poultry lab equipments for the poultry lab in Kandahar.
iv) SMEs Exposure Visit and Training for enhancing their Business Capacity During 2013, REDKAN provided various SMEs with exposure visits and trainings to build their capacities. In May and December 2013, two poultry trainings/exposure visits for 12 poultry SMEs from Kandahar were organized. During trainings/exposure visits Poultry SMEs trained on poultry farm management and marketing, breeding systems/methods, classification of chicken, breeding management and other important components of poultry farming.
Secondly, in order to build the capacity of BDSOs and PEFs; AREDP arranged two tailor-made trainings for 20 participants (10 BDSOs+ 10 PEFs) from Kandahar. During trainings BDSOs and PEFs learned about the concept of value chains and the process of analysis to develop improvements; the potential role of BDSOs in these chains and stimulating chain actors, supporters and influencers with inclusive approaches for value chain development.
In May 2013, AREDP arranged for a 10 day exposure visit/know how training for 12 participants of cotton seed processing SMEs including 3 facilitators from REDKAN office; which was a combination of both informative class room sessions and practical field visits besides some sightseeing activities which proved to be thoroughly beneficial for the participants.
Additionally, In July and December AREDP arranged 2 technical trainings and exposure visits for 8 dairy SMEs in India. The objective of the training was to enhance the knowledge of SMEs in diagnosing diseases, select proper feed, appropriate feeding methods, reduce death rate in cows and calves, control ventilation system and heat stress management. Lastly REDKAN arranged Handicraft know how training in October and mosaic technical training/ exposure in December for SMEs working in their respective sectors. The 9 SMEs from Kandahar received technical trainings and exposure visits in their related fields.
Figure 3 Cotton seed processing SME's during know‐how visit to India
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Poultry Farm34%
Dairy Farm31%
Cotton & oil seeds10%
Handicraft 16%
Marble7%
National Exhibitions
2%
REDKAN supported SMEs
REDKAN Registered and Supported SMEs.
* The first figure represents 95 registered SMEs and the 2nd figure is the sectoral representation of the 58 supported SME’s.
Out of 95 registered SMEs including 9 run by women; so far 58 SMEs (9 female SMEs) have been provided with REDKAN support. The support provided was in terms of exposure visits and technical trainings to improve business management, market linkages, productivity and increased profits for SMEs. To assess the impact of trainings, a comprehensive survey was conducted by Kandahar BDSOs. The impact assessment showed that SMEs recorded a significant increase in sales and employment after the trainings. The employment increased by 50 %, while sales increased by 31% (Including 4% by women) of REDKAN supported SMEs.
Poultry Farm43%
Dairy Farm33%
Cotton & Oil seeds
8%
Handicraft 5%
Marble5%
Women SME3%
Jam1%
Fishery1%
Confectionary1%
REDKAN registered SMES
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Graph 5 Employment and Sales figures of SMEs after REDKAN support
E. Activity 5: SMEs who have demonstrated innovative business models have received the SME innovation prize
Awarding and recognizing innovation is one of the generally accepted best practices to promote innovative ideas and their implementation in enterprise development. The Innovation Award is both an incentive for entrepreneurs to stay confident and a way of recognizing their innovations. The “Innovation Award” is relevant with the Project Development Objective of the REDKAN as it will foster the interest of the enterprise to be more functional and business oriented, identifying the innovative ideas for business development. It would also lead to an increase of rural income generation and employment opportunities, especially for women, which is one of the major objectives of REDKAN. The innovation award for SMEs is an initiative for developing SMEs in Kandahar and identifying, supporting and promoting innovative enterprises. In 2013, AREDP finalized the mechanism for awarding innovation prize to the potential SMEs; however the activity was delayed because the World Bank issued the No Objection Letter (NOL) on the working mechanism in last quarter of 2013. As some of the provinces covered by AREDP are funded by the World Bank, AREDP tries to maintain a common policy for all, which essentially includes REDKAN.
F. Activity 6: project Monitoring and learning system established
During 2013, M&E department of AREDP developed new tools to monitor the programme’s progress and achievements based on the revised results framework for REDKAN. Following are the new tools developed by AREDP.
• M&E framework developed which serves as a comprehensive strategy for monitoring in AREDP.
• Monitoring Checklists for SGs, VSLAs, EGs, and SMEs developed.
• Guidelines for monitoring checklists developed.
• Training materials for the new M&E system developed.
• Follow-up and Feedback Mechanism Launched
• M&E Web-based Database developed and tested.
• Monthly M&E Reporting Formats developed and implemented.
50%
31%
0
0.1
0.2
0.3
0.4
0.5
0.6
Employement increased Sales increased
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EXPENSES FOR THE YEAR
During 2013, USD 3,692,746 was spent for this project. For more details, please see Annex 2.
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Table 3 REDKAN components overall progress 2013
2013 BASELINE 2013 ANNUAL TARGETS 2013 ACTUAL COMMENTS
1) 1621 Saving groups created Establish 479 new groups Established 479 new groups 2) 88 Enterprise Groups promoted
Established 362 Enterprise Groups Established 362 new Enterprise Groups
3) 20 VSLAs established Establish 163new VSLAs Established 163 VSLAs 4) 0 Number of seed capital injected to SGs
Injected Seed Capital to 500 SGs and providing matching grant to 150 VSLAs
Injected seed capital to 154 SGs The target was delayed due to finalization of the seed capital and matching grant mechanism
5) 9Producer’s Association established
Creation of 6 PAs Created 6 PAs)
6) One PSA conducted in Kandahar
One more PSA study conducted One more PSA study conducted
7) 79 SMEs identified their TF & EV study conducted and 61 Business Plans developed in Kandahar
100 SMEs identified, 100 TF & EV study conducted and business Plans developed
98 SMEs identified, 98 TF & EV study conducted and business Plans developed
8) 0 Innovation Awards distributed to the most potential SMEs
36 Innovation Awards distributed to the potential SMEs
0 Innovation Awards distributed to the potential SMEs
The activity was delayed because the mechanism for the Innovation award was approved late by the World Bank during 2013
9)Five exposure visits provided and participated by 18 SMEs
Exposure visits provided and participated by 50 SMEs
Exposure visits provided and participated by 58 SMEs
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IV. GENDER SPECIFIC RESULTS
REDKAN provided the opportunities of literacy for 1650 female SG members in Dand district, Kandahar. The program of Literacy for women is conducted by AREDP in cooperation with NLD. NLD and AREDP have aimed to provide women with literacy courses through a joint program, known as the “Literacy for improvement of rural enterprises” in six provinces including Kandahar. Moreover, a workshop on Gender awareness was arranged by HQ MRRD/AREDP in Kandahar; in order to enhance the knowledge of women on essential issues, which was attended by several programme` representatives and members of women department in Kandahar. Furthermore, Gender equality is followed in the HR policies of AREDP. During 2013, REDKAN hired a female BDSO and M&E officer. These officers supervise female SMEs, women led enterprise groups and female literacy courses on regular basis in Kandahar.
In the year 2013, 165 female SGs and 118 female EGs were established. The project has a total of 828 female SGs and 132 female EGs. In the 23 technical trainings and exposure visits conducted by REDKAN, the total number women participants was 116 (Total 216 participants). The trainings mainly focussed on book keeping, Islamic banking, management , domestic animals rearing, food processing, environment management and enterprise development to name a few. 624 women received loans through inter-lending among SGs in the reporting year in order to promote their businesses.
V. PARTNERSHIPS
REDKAN through AREDP collaborates with NSP (National Solidarity program) CDCs as entry point into communities. REDKAN also works with Ministry of Labour and Social affairs to improve the businesses of people with disabilities in selected provinces including Kandahar. REDKAN established partnerships with various organizations in order to share the mutual experiences and lessons learned. REDKAN in cooperation with NLD is conducting program of literacy for women in Dand district, Kandahar. REDKAN also seeks partnership with Ministry of Agriculture. To establish a poultry lab in Kandahar, REDKAN has provided training opportunities for students of Agricultural faculty and employees of agricultural department in Kandahar. This particular exposure visit was arranged in India and the intent was to train the participants in poultry diagnostic laboratory. As a result the agricultural department of Kandahar and the University of Kandahar has shown their appraisal and appreciation for these types of activities.
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VI. ISSUES
Lack of qualified business development services providers:
The lack of availability of potential business training providers has resulted in AREDP not being able to provide the training needs identified by the BDSOs for SMEs. As an alternative strategy, AREDP arranged for consultants to provide basic and advanced training to Kandahar SMEs. Non-availability of Islamic Banking Products:
Most of the SMEs in Kandahar are religiously sensitive and demand for Islamic banking Products or Sharia Compliant Products. Therefore, the SMEs and EGs seem reluctant in applying for conventional loan. AREDP worked with MISFA and other financial institutions and developed Islamic products for rural SMEs of seven AREDP covered provinces particularly Kandahar. Limited basic SME infrastructure:
SME infrastructure such as basic systems and services, such as transport and power supplies, that SME uses in order to work effectively are limited. It affects the production and turnover of the rural enterprises and SME businesses. In order to reduce the impact of this limited SME infrastructure; AREDP is collaborating with external bodies like the Ministry of Commerce and Industries to accelerate the development and expansion of infrastructure. Limited participation of women in the Project:
The limited participation of women in SGs and EGs is a major issue in achieving project objectives. To overcome this issue, AREDP has hired female staff that can easily access female groups and encourage them to form women led SGs and EGs. Lack of advance technology:
It is difficult to promote SMEs without modern technology. During the last thirty years, the Kandahar businessmen have not received any concrete support from the Government of Afghanistan or donor agencies to improve their production processes. Therefore, AREDP decided to provide better machinery and equipment to EG’s and SMEs as a form of technological advancement to qualified groups and now is in the final stages of giving it to the people.
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VII. RISKS
Illiteracy:
High level of illiteracy in Kandahar has resulted in little understanding of the long-term benefits of a project. The REDKAN team frequently travels to targeted districts to communicate to the communities which don’t have access to radio and cannot read AREDP published pamphlets and brochures. Security:
Overall security situation in Afghanistan is worsening, especially districts like Dand, Arghandab and Daman. Target killings of community elders and prominent persons are affecting the overall situation. Despite all this, the program implementation in these districts has been successful. Also, program is being expanded to remote areas, with more security threats and vulnerable law and order problems. Due to security concerns, it is not easy for the staff to visit these areas. However, REDKAN has been very successful in Kandahar due to its acceptance by the community Lack of Access to Finance:
Different groups that are part of the program will be successful only if they have access to larger amount of capital. This access is mandatory so that they can invest in their activities. EGs and SMEs wouldn’t be able to expand their business without having access to larger amounts of financial resources. REDKAN has ensured reliable and transparent mechanisms of distribution of grants. AREDP has issued seed capital to SGs of Kandahar.
VIII. LESSONS LEARNED
AREDP is providing support to SMEs in Seven provinces of Afghanistan. As a lessons learned mechanism from internal exposure visits; REDKAN also arranged internal exposure visits for the SMEs working in the same cluster (Poultry, dairy, handicraft etc.). Internal visits improved coordination among SMEs from various provinces as they gained knowledge from mutual and shared experiences.
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IX. FUTURE PLANS
The overall planned activities will continue and the following will be the main focus of the project in the next six months:
Component A: Community Enterprise Development
Disburse seed capital to 356 SGs and matching grant to 21 VSLAs in Kandahar
Enterprise Development for 40 people with disability in target districts
Support to 10 groups producing unique product, for enhancing their business capacity under one district one product
Support to 20 Qualifying farmers to establish green houses and training on simple technology under Vertical farming component
Providing literacy courses for 6,475 female SG members in 6 provinces
Component B: Small & Medium-size Enterprise development
Conducting PSA in Kandahar
Operationalizing the Poultry lab in Kandahar
Arranging Second and third rounds of training and on-site consultancy for dairy, poultry and cotton seed SMEs
Awarding Innovation Prizes for SMEs showing innovation in their business models
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X. ANNEXES
A. Annex 1: FINANCIAL TABLE
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B. ANNEX 2: EXPENSES BY ACTIVITY
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C. ANNEX 3: ISSUE LOG
# DESCRIPTION DATE
IDENTIFIED IMPACT/PRIORITY
COUNTERMEASURE/MNGT RESPONSE OWNER STATUS
1
Lack of qualified Business development services providers
September 2011
Due to the non-availability of potential business training yet AREDP has not been able to provide the identified training needs by the BDS providers
AREDP is looking for neighboring province and at national level to find out potential consultancies for providing basic and advance training to Kandahar SMEs
Afghanistan Rural Enterprise Development Program
In progress
2 Most of the SMEs in Kandahar are
religious sensitive and demand Islamic banking products or sharia compliance products which are not available in the market
September 2011
The SME and Enterprise Groups seem to be too reluctant in applying for conventional loan in the scheme of lining these enterprise to financial institutions
AREDP is working with MISFA and other Financial institutions to develop Islamic banking products for the rural SMEs of seven AREDP covered provinces and particularly for Kandahar
Afghanistan Rural Enterprise Development Program
In progress
3 Limited Basic SME infrastructure September 2011
Effect on production and low turnover of the rural enterprises and SME business
External. Involve ACCI and MoIC
Afghanistan Rural Enterprise Development Program
In progress
4 Limited female participation in Saving Groups
September 2011
Limited reach out and services for women and their women CDC, which require female VFs and PFs to mobilize these female CDCs in creation of Saving Groups, but the non-availability of female staff and stheir limited movements to rural areas undermines the CDC efforts
Increase female staff through friendly and flexible operation procedures and AREDP/REDKAN has been able to create 228 female Saving groups
Afghanistan Rural Enterprise Development Program
In progress
5 Lack of advance technology April 2012 Difficult to promote SME without modern technology
AREDP planned to send target SME employees abroad for knowhow of modern technology
Afghanistan Rural Enterprise Development Program
In progress
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D. RISK LOG
# DESCRIPTION DATE IDENTIFI
ED
TYPE IMPACT & PROBABILITY
COUNTERMEASURES/MNGT. RESPONSE
OWNER SUBMITTED/UPDATED BY
LAST UPDATE
STATUS
1 High rate of Illiteracy amongst the female members of SGs makes FSGS dependent on male family members to keep the records of the SGs and make it difficult provide adequate training for the female members.
April 2012 Gender
Due to illiterate female SG members AREDP has not been able to keep the record of their businesses
AREDP Is starting literacy program for 6475 female SG members in 6 provinces
Afghanistan rural enterprise Development Program
REDKAN team
March 2013
In progress
2 Fragile security January 2012
Regional Access to more remote communities becomes more difficult, sometimes interrupting activities of PEFs and BDSOs. This lead to more limited monitoring and evaluation of the activities and support to SGs and EGs
The AREDP and AICB staff has built strong ties with the communities. This trust forms the basis of the security of the community workers. The staff involved in the projects has also maintained a low key profile when travelling.
Afghanistan Rural Enterprise Development Program
BDS officers and REDKAN implementing partner of community enterprise development
June 2013
In progress
3 Lack of access to finance September2012
Financial More investments are needed for SMs and EGs to expand their business, or apply the newly acquired technologies. SGs members also need access to larger sums to start micro enterprises
AREDP has now finalized the mechanism for issuing seed capital to SGs, matching grants to VSLAs and Innovation awards to SMEs
Afghanistan Rural Enterprise Development Program
AREDP and AICB staff in Kandahar
January 2013
In progress
