Feed AFRICA N°1 - Rural Entrepreneurship

CAPITALIZATION NOTES OF THE FIDAfrique - IFADAfrica NETwOrk N°01 - October 2011
©IFAD/Nana Kofi Acquah

Rural entrepreneurship

SOMMAIRE
1. Editorial 3

2. Introduction to FIDAfrique 4

3. Rural micro and small enterprises: When risk- 5
sharing guarantees sustainable access to credit

4. Business development service: How to improve the 9
performance of micro and small rural enterprises

7. Equipment grant support to graduate apprentices:
An effective scheme for business start-up and em-
14
ployment of rural youths in Ghana

8. District exhibitions and trade shows:
A market access tool for rural MSE 18

9. Managing Business Development Challenges in
Rural Ghana: Through decentralized Business 20
Advisory Centres and Rural Technology Facilities. Appreciation
of
nk the co-ordinators
10. Boubacar Keita, traditional baker: An example of 25 We would like to tha for the
REP 2 projects
economic and social empowerment the PROMER 2 and in the
contributions of their respective teams
29 y firs t issue of « Feed
11. Resources publication of this ver
n also goes to all the
AFRI CA ». Our appreciatio ent
r Knowledge Managem
Communication and/o the FIDAfrique
rtners of
experts who are pa
network .

D).
d for Agricultural Development (IFA
nt N°.1035 of the International Fun
This pub lication was realized thanks to Gra ssarily reflect the opin ion of IFAD.
bility of the authors and do not nece
Its contents are the sole responsi
ork. – Dakar, October 2010.
s of the FIDAfrique/IFADAfrica netw
Feed AFRICA, capitalization note

Editorial
The policy of the Feed AFRICA
Coordination: Board is to ensure that cont ents of this issue
Abdou FALL , only the
are as exact as possible. However
Editorial Board: authors are responsible for the content of
Hadj ers to pho-
Abdou FALL, Foly AKOUSSAN, El each article. We encourage read
KASSE, Anthony YOUDEO WEI, Mohamed tocopy and freely dist ribute the articles, but
should be
KEBBEH the authors and sources thereof
mentioned. CONTACT
Graphic design & Printing:
Imprimerie Graphi-Plus Copyright FRAO 2011 WARF, FIDAfrique-IFADAfrica
Tél. (221) 33 869 10 16 General Coordination

Dakar - Senegal N° 10075, Sacre Cœur III VDN,
CP 13 Dakar Fann – Sénégal
Cover photo:
ices Tel. (221) 33 865 00 60
Young people attend the Apprent
Training Program me at the Ghana National Fax (221) 33 860 66 89
ion, Sefwi Email: contact@fidafrique.net
Tailors and Dressmakers Associat
Bekwai Branch (©IFAD/Susan Beccio)
Site web: www.fidafrique.net

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

EDITORIAL
Dear members and partners of the FIDAfrique network,

It is a great pleasure for us to share sale of products; the putting in place
with you the very first issue of ‘Feed of a conducive environment for the
AFRICA’, a thematic newsletter of the establishment of a business council
IFADAfrica network. centre and equipment manufacturing
The present publication is an added workshops; sustainable access to loan
support to the dissemination of capita- facilities through an innovative risk
lization products of network members, distribution system.
essentially IFAD financed projects in Still, as part of the drive to promote
West and Central Africa. This first issue rural enterprises, this premier issue of
is devoted to promoting rural micro ‘Feed AFRICA’ describes the itinerary
and small enterprises, a sector which of Boubacar Keïta, who, thanks to his
represents an important leverage for entrepreneurial spirit and support from
the fight against poverty and which has PROMER 2 and its partners, especially
enormous potentials for job creation the State technical departments, was
and for infusing economic dynamism able to modernize his traditional
in the rural areas. In effect, successful bakery business and in so doing
rural micro and small enterprises can multiply his turnover eightfold
contribute towards improving agricultu- within ten years only.
ral productivity and to enhancing agri- We hope you will enjoy rea-
cultural products through processing. ding this newsletter and we
Through a total of six articles, the ca- can’t wait to receive your
pitalization notes focuses on the expe- comments and contribu-
rience of two projects geared towards tions.
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
Abdou Fall,
subsidy served as a leverage to the Programme Officer at WARF
development of rural micro and small FIDAfrique WCA Co-ordinator
enterprises; the organization of trade Email : contact@fidafrique.net
fairs to facilitate market access and Dakar, Senegal.

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

Introducing FIDAfrique

FIDAfrique is a network linking indi- concentrates on the whole of Sub- responsible for the general co-ordi-
viduals, organizations and networks Saharan Africa. It has three technical nation of the Sub-Saharan network as
and its objective is to promote learn- components: capacity building and well as the co-ordination of the West
ing, sharing of experiences and inno- training; support for knowledge gath- and Central programme. The African
vations in order to reduce rural pov- ering and sharing and communication Rural and Agricultural Credit Associa-
erty in sub-Saharan Africa. and support for consultations on pub- tion (AFRACA), which is headquatered
In its current format, FIDAfrique is a lic policies. in Nairobi, co-ordinates the Eastern
programme funded by the Internation- It essentially aims at enhancing the and Southern Africa programme.
al Fund for Agricultural Development efficacy of projects/programmes and The FIDAfrique-IFADAfrica Steering
(IFAD) and its activities are co-ordi- policy consultations by identifying Committee, which is the main gover-
nated by the West Africa Rural Foun- innovative learning and sharing pro- nance organ of the network, brings to-
dation (WARF). The first two phases of cesses. In so doing, it incorporates the gether mainly farmer associations and
the programme (1999-2007) centered vision of WARF and that of IFAD to platforms, but also government repre-
exclusively on West and Central Af- strengthen themselves as knowledge- sentatives and international partners
rica whilst the third phase, known as based organizations and to use that such IFAD, the International Develop-
FIDAfrique-IFADAfrica, was launched knowledge for more efficiency in im- ment Research Center (IDRC) and the
in April 2009 in Nairobi. This phase plementing development projects. Technical Center for Agricultural and
covers a period of three years and The West Africa Rural Foundation is Rural Cooperation (CTA).

©FIDAfrique


MICRO AND SMALL RURAL ENTERPRISES

When risk-sharing guarantees
sustainable access to credit
Ahmed Hady Seydi, ameth_hady@hotmail.com
Ibrahima Sory Diallo, sori02ibrahima@yahoo.fr

Joint guarantee, combined with risk-sharing, facilitates the sustainable access of ru- mark a real progress in the financing of
ral entrepreneurs to the appropriate financial services and guarantees the security micro and small rural enterprises.
of the loan portfolio that has been constituted. In the Senegalese experience of What does this risk-sharing strategy en-
PROMER’s Rural Finance Support Service (SAFIR), close to 700 rural micro-entre- tail and how does it facilitate access to
preneurs in Tambacounda and Thiénaba (region of Thiès) had access to financing credit? This article is meant to provide
worth about 58 million francs CFA. The reimbursement rate estimated at over 98%, answers to these questions in the first
attests to the solidity of the portfolio. part. It then talks about the agreements
that have been implemented with em-
In the regions of Tambacounda and to financing, thanks to a concerted phasis on the experience of traditional
Thiès, in Senegal, the micro and small financial risk-sharing. Within this fra- bakeries in the region of Tambacoun-
rural enterprises (MSRE) are known mework, the MSRE formed joint ho- da.of Finally, the positive points and
for their inadequate assets (movables, mogenous groups to guarantee their limits noted during the implementation
real property, etc.). Though assisted credibility in their contacts with DFS. of agreements are reviewed and les-
by PROMER, the Project for the Pro- The tripartite partnership – between sons drawn.
motion of Rural Entrepreneurship, they groups of MSRE, DFS and PROMER –
find it difficult to access investment resulting from it , constitutes the ba- A three-actor partnership
credit and working capital provided sis of a risk-sharing guided by the res-
Risk-sharing is a global strategy in
by financial institutions, two levers that ponsibility which each party will take
which the actor plays a decisive role.
are essential for their development. in the perspective of securing a loan.
The success of its implementation de-
These institutions consider that the ab-
Here, there are real innovations illus- pends on the definition of certain pre-
sence or scarcity of material guarantees
trated by the terms and conditions of conditions which constitute the basic
constitute high financial risks.
the participation of each of the three principles (identification of actors,
For this reason, the Rural Finance Sup- parties in the global risk, on the one constitution of the group for joint gua-
port Service (SAFIR), a PROMER com- hand, and the individual responsibi- rantees).
ponent, initiated strategies to resolve lity of MSRE in securing loans, on the
Three key actors intervene in the im-
this problem with the aim of promoting other. The notions of «joint guarantee»
plemented agreements. These are
sustainable relations, based on securi- and «risk-sharing», as stated in the si-
PROMER, DFS in partnership with SA-
ty, confidence and partnership, among gned agreements (DFS/PROMER and
FIR, and the joint guarantee group.
others. To facilitate the access of micro MSRE/DFS joint guarantee groups),
and small enterprises to financing, SA-
FIR relies on its partnership with five
decentralized financial systems (DFS) PROMER 2/
DECENTRALIZED
which benefit from a WADB billion FINANCIAL SAFIR
franc CFA line of credit. As a result of PARTNERS
their proximity and flexibility, these
Risks related Coverage of debts abandoned by
DFS − UIMCEC, URMECS, CAURIE- Decrease in interest rates, in
the Guarantee Fund SAFIR (50 to
exemptions of the observation to loans
MF, lCPS/ASACASE and MEC Dimba- period for needed 70% of debt registering more than a
membership... year’s delay in reimbursement).
lante –, are the best financial domiciles
for micro and small rural enterprises. 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).
The DFS/MSRE partnership, with PRO-
MER’s involvement, is based on a com-
mon vision in which each party advo- GUARANTEE
GROUP
cates a secured and sustainable access


With its different components, its non- The joint guarantee group draws up a member, within the framework of
financial service providers and its tech- a MSRE membership charter, defines joint guarantee, is the moral responsi-
nical and financial partners, PROMER the terms and conditions of joint gua- bility of the entire group that exerts
provides beneficiaries with capacity rantees and mobilises a guarantee fund social pressure on the beneficiary of
building support. It set up a guarantee meant to cover part of the portfolio’s the loan. However, to be efficient,
fund in charge of covering 50 to 75% bad debts (the level of coverage will joint guarantee entails the possibility
of bad debts (loans registering more be defined in the agreement which of fines in case of failure to reimburse
than a year’s delay in reimbursement) binds the group to the DFS). loans. It is the raison d’être of the gua-
from the portfolio constituted through rantee fund set up by members. As
the WADB line of credit. Security and guarantee a way of sharing the risks incurred by
The DFS, partners of PROMER – cur- the joint guarantee group, it is meant
Joint guarantee has facilitated the di-
rently UIMCEC and URMECS –, re- to cover part of the bad debts.
sadvantaged populations’ access to
ceive financial support thanks to the financial services all over the world. While the guarantee funds are often
line of credit. They are the financial In the experiences of Tambacounda considered as demobilising cash re-
domiciles of the joint guarantee group and Thies, the joint guarantee group serves – examples of dilapidation of
with which they sign a partnership is based on the principle of joint gua- these funds are commonplace −, it
agreement. They process the finan- rantee which is a response to the non is admitted that for them to function
cing application, grant loans and en- existence of real estates to offer as properly, they are required to be in
sure follow-up. They also manage the guarantee, transaction costs for the line with an agreement which calls for
funds kept in their accounts. Moreo- provision of financing and the high consistent, transparent and collective
ver, within the framework of risk-sha- risks of loans, three key factors that management. The funds thus kept in a
ring, the DFS grant derogations to joint explain the exclusion of the poor from term account will be mobilised accor-
guarantee group on certain provisions the financing market. ding to the terms and conditions de-
which block access to loans: the man- fined in the agreement which moreo-
Indeed, the financial institutions have
datory waiting period, the interest rate, ver fixes the interest rate and types of
always considered that the financing
the collateral process, etc. loans that will be backed by it.
of the poor was incompatible with
As the third actor, the joint guarantee their viability requirement. Based on
group is composed of micro and small the principle of solidarity and mutual
Securitizing Instrument
rural enterprises that are PROMER assistance, joint guarantee brought fi- In South-Eastern Senegal, the risk-
beneficiaries. They are clients of de- nancial institutions closer to their poor sharing strategy, initiated by the joint
centralised financial systems working clients. It was an alternative to the ab- guarantee group of members of the
in partnership with the project. The sence of real estates to serve as a gua- professional organisation of traditional
joint guarantee group whose condi- rantee to secure financing. In a way, it bakers of the region of Tambacounda,
tions of creation are defined below, is a method adopted by micro-finance was a response to the crisis which
will provide a guarantee to the debtor to establish confidence between them opposed it to a financial institution,
MSRE. It is represented by an office and their poor clients. UIMCEC. Following the negative out-
that is a signatory of the agreement come of a collective financing granted
Joint guarantee is underpinned by a
with the DFS. The office approves in August 2007, the relations between
homogenous and organized group.
the financing request issued by the the institution and the professional or-
In this nucleus, the personal and reci-
MSRE and supports the DFS to recover ganisation deteriorated seriously: The
procal acquaintance of members is a
outstanding debts. 7 million CFA francs used to finance
key element. The debts incurred by
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
©PROMER 2

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.


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

©PROMER 2
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- In the region of Tambacounda, the fi-
request for financing, in the form of a
rantee group. The funding will thus nancing of traditional bakers has be-
letter of credit. This is a very impor-
be done within the framework of an come a reality. The President of the
tant stage and represents an innova-
agreement signed between the finan- professional organisation, Bouba-
tion as the first level of control of the
cial institution and the joint guarantee car Keïta, was pleased with the glo-
relevance of the request. It is also the
group. This agreement defines the spe- bally fruitful results of the first finan-
first milestone of a participation in se-
cific provisions for the provision and cing cycle of close to 8 000 000 CFA
curing the loan and sharing risks. It is
management of the loan. francs. The group’s satisfaction was
thus tantamount to the caution that the
Beyond the conditions linked to the group provides to the member MSRE, particularly due to the possibility it has
notion of joint guarantee on which it is in accordance with the terms and to directly negotiate its members’ ac-
based, the formation of the joint gua- conditions of the joint guarantee. cess to financial services. Three other
rantee group of bakers of the Tamba agreements are being finalized (two
After the approval of the loan appli-
region complied with specific provi- in Thiénaba and one in Tambacoun-
cation by the Loan Committee of the
sions. The group opened a collective da). This triggered enthusiasm among
DFS, the micro enterprise receives the
account at UIMCEC and urged mem- MSRE benefitting from PROMER, as
information and goes to the counter
ber MSRE to do so as well. A guarantee well as the adherence of financial ins-
of the financial institution, signs an
fund to which each MSRE contributed, titutions to this approach.
individual loan contract and pays the
was kept there. The guarantee fund Thanks to this approach, access to
application fee. The loan amount will
will be mobilised in compliance with financing was facilitated for close to
be paid into his account to ensure the
the provisions defined in the agree- 693 people. They received a total of
traceability of the funds and the indivi-
ment signed by the two sides, and ac- 58 200 000 CFA francs. The interest of
dual accountability of the MSRE. The
cording to the level of commitment of the approach also lies in the fact that
latter is fully responsible for reimbur-
the MSRE. The group provides the de- the most vulnerable populations may
sements and will not receive any gua-
btors with moral support. The « joint have access to financing. For example,
rantee except in cases where failure to
guarantee group/DFS » agreement 93% of MSRE regrouped into joint
pay is established. Then the guarantee
which incorporates the «Refinancing/ guarantee groups and benefiting from
fund is mobilised according to the pro-
Guarantee Fund» links PROMER to the loans are women. In addition to the
visions stipulated in the agreement (co-
financial institution. amount provided, the quality of the
verage of part of the loans registering
The joint guarantee group will have a delay of between 3 to 12 months). portfolio is an important reason for sa-
access to financing under a certain tisfaction. On the whole, the declared
number of conditions. To be eligible 98% reimbursement rate reimbursement rate is over 98% for a
for a loan, member MSRE should, be- portfolio with close to zero risk for
forehand, be PROMER partners and The strategy consisting in facilitating more than 90 days.
members of the decentralised finan- MSRE’s access to credit through their
joint guarantee groups has become From the viewpoint of the group’s or-
cial system and have an account there. ganisation, the participation of the dif-
increasingly relevant judging by the
They should moreover benefit from results obtained. At this stage of the ferent actors in the risks incurred when
prior support (pre-diagnosis and dia- implementation of PROMER’s pro- the loans are put in place enhance the
gnosis) and be a member of the joint gramme dubbed «Access to finan- establishment of confidence. The indi-
guarantee group according to the cial services», three agreements have vidual accountability of debtor MSRE
conditions defined. Besides, their been jointly signed between guarantee which agree to share the risk promotes
requests for financing should be va- groups and DFS partners of the pro- the sustainability of the arrangement
lid and their financial needs justified. ject (one in Tambacounda, one in Kao- and the securing of financing.
The bureau of the group validates the lack and one in Thiénaba).


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-

©PROMER 2
ferent levels of technical capacities.
Thus, the partnership is not managed
with the same level of appreciation.

Providing services to a neglected
clientele mobilising funds at least cost (interest BIBLIOGRAPHY:
Risk-sharing as a tool to facilitate ac- rate of 2 to 3%), steady savings which
PROMER II Strategic and Operational
cess to credit by PROMER beneficiary enables the counter to practice sustai-
Guide
MSREs needs to be replicated in IFAD nable financing».
(International Fund for agricultural Partnership Agreement Professional
Beyond access to credit and the se-
Development) projects’ intervention Organisation of Bakers and UIMCEC
curity of granted loans, risk-sharing
areas. However, its success entails its guarantees the durability of relations Partnership Agreement Cashew Nuts
implementation through joint gua- between the DFS and the MSRE. In- Women Processsors of Thiènéba/
rantee groups. Seen from this angle, deed, as was said by Ibrahima Sory URMECS
it represents real prospects for pro- Diallo, provider in charge of financial «Refinancing/Guarantee Fund »
fessional organisations that constitute support to the Tambacounda Ope- Agreement, PROMER/UIMCEC
naturally homogeneous and organised rational Unit, « if it is effectively ma-
groups. naged, the guarantee fund set up by
The approach is all the more credible joint guarantee groups will outlive
since in addition to access to finan- PROMER which is a fixed duration
cing, the securing of funds is at play. project. As long as this fund exists, the
relationship with the financial institu-
This is the real issue perceived by DFS, Visit
tion will continue ».
which consider this process as a way www.fidafrique.net/?lang=en
of serving an abandoned clientele. The joint guarantee group, which de-
Moreover, the concerted action for the pends on professional organisations
definition of the terms and conditions are important stages in the establish-
of risk-sharing and the validation of ment of surety companies which will
MRSE applications were a real innova- be coordinated by inter-sector consul-
tion in the management of their needs tation frameworks. There is need to
in financial services. explore this axis to ensure an effective
El Hadji Moussa Diongue, URMECS and appropriate financing of operators
Director, said he was pleased with the of the sectors.
agreement signed with women active
in the processing of cashew nuts in ABBREVIATIONS ANDS
Thiénaba, adding: « In initiating this ACRONYMS:
approach, SAFIR did well since it is
SAFIR: Service d’Appui à la Finance
a way of securing loans. By partici-
Rurale/Rural Finance Support Service
pating in the group’s guarantee fund,
each debtor feels responsible for the BOAD /WADB: West African Deve-
reimbursement of the loans. By pre- lopment Bank
serving their guarantee fund which DFS: Decentralized Financial System
should cover 15% of loans registering
MSRE: Micro and Small Rural Enter-
repayment delays of three to twelve
prises
months, they ensure the security of
PROMER’s guarantee fund which is PO: Professional Organisations
mobilised to cover loans with over a IFAD: International Fund for Agricul-
year’s reimbursement delay. Further- tural Development
more, the guarantee fund (15% of the
loan amount) is an efficient way of


BUSINESS DEVELOPMENT SERVICE

How to improve the performance of
micro and small rural enterprises
Fatoumata Sané Guissé, atoumata.sane@promer-sn.org
Ousseynou Ndiaye, osendiaye@yahoo.fr
Hawa Diarra, masagne58@yahoo.fr

A quality business development service guarantees the performance and competi- These advisers were selected on the
tiveness of micro and small rural enterprises (MSRE). The experience of business basis of a call for candidatures and in-
development service markets launched within the Project for the promotion of rural terviews.
entrepreneurship of Senegal (PROMER) shows that the availability of service pro-
viders with established skills, methodological tools and the appropriate standards The lessons learnt from this expe-
can bring about an increase in MSRE productivity and jobs. It also improves the rience, at the end of PROMER I, led
quality of products, facilitates access to local markets and provides opportunities in the project to externalize this function
national and regional markets. 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
©PROMER 2

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
Prior to the implementation of the first (MSRE), emerged with the advent
services. The approach consists in
phase of the Project for the promotion of PROMER. During its first phase,
of rural micro-enterprises (PROMER), identifying, selecting and strengthe-
PROMER had a pool of 24 internal
the business development service was ning local providers to enable them
business advisers disseminated in as
practically non-existent. The few of- to offer quality services, accessible to
many Proximity Business Advisory
fers available in this sector came from MSRE. These services translated into
Service Zones (ZAEP). They were
urban centres to the rural areas. There an improvement of productivity in the
responsible for sensitization and pro-
was a real problem to match the sup- various sub-sectors in which PROMER
viding guidance about the opportu-
ply and the demand and this impeded intervenes (best turnover and job crea-
nities, opening of current and savings
the productivity and competitiveness tion) and competitiveness of products
accounts, identification of proponents
of rural enterprises. of concerned businesses (availability
of business initiatives, providing them
The business development service, and access to local, regional and na-
with support to prepare project docu-
for micro and small rural enterprises tional markets).
ments and their monitoring-assistance.


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

©PROMER 2
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
Evaluation of service providers by a BIT trainer focusing on quality and PROMER environment or, more
generally, to strengthen their capaci-
This article is intended to show how based on objective criteria. The pro- ties.
PROMER provided its support and vider of non-financial service provider The training of providers and micro
guidance to put in place an offer adap- (NFSP) is an independent professional and small rural enterprises is a key
ted to the MSRE development service consultant or a group of consultants component in the PROMER strategy.
in order to draw the necessary lessons (research consultancy, firm, associa- It includes several aspects: business
for possible replication. The in-depth tion, training structure) specialized in management, capacitation of profes-
analysis of the SDE/PROMER issue as a providing business advice services (in- sional organisations, pre-diagnosis
tool likely to boost the development of formation, diagnosis, assistance, mo- and diagnosis techniques… Moreover,
micro rural enterprises will then lead nitoring.), training services (technical, PROMER II rapidly understood that in
to the review of the quality offer, the management, literacy) and specific addition to strengthening the capacity
improvement of MSRE performance, support services (commercial innova- of providers, there was need –to make
the competitiveness and sustainability tion, commercial promotion, technical them more operational- to increase
prospects. and technological innovation). their level of equipment. For this rea-
The process begins with the identifica- son, these providers are assisted to
Training of Trainers tion of non-financial service providers. access credit. Thierno Ibrahima Dial-
The development of micro-enterprises Applicants fill an information form on lo, a non-financial service provider in
in the rural areas is a wonderful op- their profile (firm, specialized training Kaolack thus obtained a credit of 1
portunity for poverty reduction in the institution, independent consultant, 755 000 CFAF which he used to buy a
Senegalese countryside. It can pro- corporate name, address, contacts, motorcycle, computers (desk top and
mote the emergence of proximity ser- legal form, trade registration number, portable) and office furniture.
vices and facilitate access to inputs. human resources, physical resources,
experience, references). A technical Meeting the needs of rural
PROMER I helped to develop and
adapt methodological tools in support commission then selects applicants on populations
of rural micro enterprises (RME) es- the basis of criteria listed in a grid. The
The actors participating in this initia-
sentially based on communication and final selection is done by a committee
tive – PROMER, non-financial service
guidance, the identification of propo- comprising representatives of ILO (In-
providers, micro and small rural en-
nents of business initiatives, pre-dia- ternational Labour Office) and PRO-
terprises, professional organisations
gnosis, diagnosis, monitoring and sup- MER, with the help of a guide. The
– contributed to the success and pro-
port counselling. The second phase selection criteria are based on the le-
gress registered.
is meant to consolidate the accom- vel of education, experience in mana-
gement and setting up a business, the PROMER informs and sensitizes mi-
plishments of the pilot experience by
understanding of the stages of business cro and small rural enterprises about
implementing the « getting something
creation and management, training ac- the importance of the business de-
done» strategy. By organizing the
tivities performed, motivation, availa- velopment service. It also identi-
supply and secured demand, this ap-
bility and ability to take initiatives. fies the providers with whom it has
proach brought about the emergence
contract-based links to meet the sup-
and consolidation of services offered The selected providers undergo a se-
port needs of enterprises. To that end,
to micro and small rural enterprises ries of training. The training of trainers
it strengthens their capacity before
(MSRE) to ensure their sustenance. prepares them to assist proponents
entrusting them with pre-diagnosis,
Thus, a system of service providers of business initiatives and micro and
diagnosis, support in the definition
was set up using a selection process small rural enterprises in the pursuing
of financing and training plans. After


undergoing the appropriate training, sufficiently equipped to offer quality, The effects of this project support
these providers may also provide trai- accessible and permanent services to are perceptible among entrepreneurs
ning and management support. micro and small rural enterprises. through their familiarity with instru-
At the technical level, non-financial In fact, the quality approach, which ments and processes used to process
service providers assist proponents underpins this innovative approach, and preserve products. The informa-
of business initiatives and micro and partly contributed to the performance tion deriving from the monitoring-as-
small rural enterprises. The assistance of PROMER-backed MSREs, marked sistance of 48 % of MSRE reveal the
ranges from diagnosing their follow- by an increase in their productivity creation of 427 new rural jobs and
up activities to training and support- and turnover. This situation is illustra- the consolidation of 1977 others, and
counselling. The providers are located ted by the quantitative, qualitative and a 26% increase in the turnover of en-
in 6 regions, 12 concentration zones impact analysis of PROMER’s techni- trepreneurs between September 2009
and 33 rural communities. cal achievements report for 2010. A and September 2010. The accumu-
network of 71 non-financial service lated turnover rose from 1 030 787
Micro and small rural enterprises are
providers formed since the commen- 969 FCFA to 1 298 939596 CFAF, an
the receptacle of all the support pro- cement of the project (including 47 increase of 268 151 627 CFAF in ab-
vided by PROMER through its opera- operational NFSP) contributed to solute terms.
tional partners. The MSRE include pro- achieving the following results.
ponents of business initiatives, income Despite the innovations and advan-
generating activities, rural micro enter- At the quantitative level, 352 MSRE out tages introduced by this approach
prises) and small rural enterprises. The of an initial target of 405 were set up which promotes the emergence and
MSREs deliver a service as well as and consolidated in 2010, i.e. an 87 % availability of a local quality service of-
products of quality to meet the needs accomplishment rate which brings the fer leading to enhanced performance,
of the rural populations. They seek to global portfolio of supported MSRE a few social and economic difficulties
perpetuate the offer by satisfying the (setting up and consolidation) to 1101 are observed. Illiteracy is still very high
demand. MSRE out of the project’s global target and there are real difficulties to access
of 1330, i.e. a 83 % accomplishment investment financing.
The actors also include professional rate two years away from the end of
organisations, a regrouping of people the project. At the qualitative level, Increase in competitiveness
or rural micro enterprises around the the use of non-financial support in Here, the competitiveness of MSRE
same chain. The professional organisa- technical training, management and corresponds to their capacity to satisfy
tion or PO is a platform for the capa- apprenticeship, promoted the deve- the local and national market both in
city building of its members. It is also lopment of a strong MSRE network, quality and in quantity. Actually, the
a credible point of contact for political the structuring of short distribution implementation of PROMER I, like its
authorities and development partners, chains in the intervention areas as well second phase, helped create favou-
in the defence of the interest of its as the emergence of local professional rable conditions which enabled mi-
members. organisations and the effectiveness of cro and small rural enterprises to take
Within the framework of a partnership frameworks for sub and inter-sector advantage of all market opportunities.
agreement, the International Labour consultations. The RME shop, in the first phase and
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 jobs
The 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
©PROMER 2

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


then the commercial/chain infrastruc- food products and the preparation of representing an increase of over 45%.
ture, in the second phase, falls within guides for good practices stepped up This qualitative leap is due to the qua-
this framework. the competitiveness of MSRE products lity assistance given to MSREs by non-
The actions taken generated noticeable at both local and regional levels, as il- financial service providers, which mo-
results in terms of improving the com- lustrated in the cases referred to. At the nitor them regularly.
petitiveness of MSRE. For example, national and sub-regional levels, trade
in the region of Kolda, the analysis of fairs and professional meetings are MSREs ready to pay for services
reports on the monitoring-assistance important barometers to measure the
The sustainability of the supply and
of local milk processing units shows competitiveness of MSRE products.
demand is measured through the MS-
that the support received from PRO- The participation of PROMER-backed RE’s contribution to the costs of ser-
MER for the acquisition of equipment MSRE in the twelve editions of the vices and the providers’ access to the
and financing, but especially for com- FIARA ( International Fair for Agri- market. The evaluation of the situation
mercial support (packaging, develop- culture and Animal Resources ), a shows an insignificant participation of
ment of a logo and event concept to showcase for the promotion of MSRE MSREs to the costs of services. Prior to
launch new products) helped increase products at national and sub-regional PROMER’s mid-course review, no mo-
their annual earnings by about 30 % in level, attests to PROMER’s commit- nitoring-assistance activity had been
2010. The annual turnover estimated at ment to promote these products. The undertaken by the project because
7 300 000 CFA F reached 9 490 000 last two FIARA editions, in 2010 and in the MSREs had to pay up to 33% of
with daily earnings of 30 000 to 35 2011, registered an increase in turno- costs during the first year, 66% during
000. Today, thanks to PROMER’s com- ver. The turnover of MSREs during the the second year and 100% in the third
mercial support, quality improvement, 2010 FIARA was 2 776 875 CFAF and year. The activity was able to kick-off
the financing of microbiological tests several contacts were established. In only after the IFAD mission decided to
to obtain authorisation to fabricate 2011, it rose to about 3 900 000 CFAF, provide monitoring-assistance free of

TRAINING FOR PERFORMANCE

The training of providers and micro fessional organisations to better as- niques. The MSRE diagnosis mission
and small rural enterprises is a key sume their roles and responsibilities consists in an objective evaluation
component in the PROMER strategy. as platforms of services for micro and of the characteristics and functions
It includes several aspects: business small enterprises in the rural areas. It of enterprises which results in an
management, empowerment of pro- is a reference tool for the Ministry of operational and realistic plan. It is
fessional organisations, pre-diagnosis Agriculture and Rural Development, intended to conduct an in-depth ana-
and diagnosis techniques…. the International Fund for Agricultu- lysis of the enterprise by examining
Better Manage your Business. This ral Development (IFAD) and the ILO all its functions (supply, production,
training addressed to both poten- sub-regional Office for the Sahel in human resource management, finan-
tial entrepreneurs and those already Dakar, which strives to provide sup- cing, marketing) and its environment
in activity, seeks to sustainably im- port in training with a view to equip- (market, competition). The obstacles
prove MSRE performance. The to- ping professional organisations with and solutionsshould be identified and
ols used, according to a participatory tools and documents to help them analysed in a participatory manner.
approach, are simple, practical and carry out training activities for their The purpose of the exercise is to
adapted to reality. There is a comple- members. give a sense of responsibility to MSRE
mentary tool based on the corporate Today, the PACTE is implemented in and autonomy to carry out activities
game. In order to adapt the tools to more than nine countries. Its metho- at all levels with minimum outside in-
PROMER targets, GERME level 1 dology is based on a three-phase tervention. They should be made to
(training in business management triangular approach: learn to know us feel responsible for its successes and
adapted to entrepreneurs with low better ; reflect together on solutions failures, and this encourages them
literacy skills) was initiated. It consists to our problems ; act to progress to- to undergo training in order to make
in a set of modules addressed to tar- gether. This triangular approach, fun- progress with regard to its results.
gets with low literacy skills engaged damentally participatory with a view The MSRE’s autonomy is also reflec-
in income-generating type (IGA) mi- to creating a collective dynamics, ted in the financing of activities if,
cro-activities and intending to mi- should be fully understood by PACTE from the onset, financial or mate-
grate towards an enterprise. trainer advisers and be taken into ac- rial support is necessary to launch
Partnership for concerted actions count in the development of the to- the activities. Monitoring leads the
through transfers and exchanges ols. Training, based on the demand, MSRE to enhance the support by in-
(PACTE). PACTE is a training meant is done using a package of modules. creasing profits in order to be able
to strengthen the capacities of pro- Pre diagnosis and diagnosis tech- to reinvest in the activities.


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

©PROMER 2
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-
charge for the first time. In any case, PROMER. There is room for hope siness management training, need to
the payment of the service, especially since, from 2007 to 2010, there has be given special attention within the
for the first time, is inherent in the qua- been a net increase in the amounts of research/development framework of
lity of the services rendered and thus providers’ benefits, as shown in the training modules meant to complete
to the provider’s capacity to develop graph below. PROMER’s support strategy.
the entrepreneur’s activity.
The interviewed MSREs said they A beneficial innovation
would gladly pay for the service if they The availability of a quality business BIBLIOGRAPHY:
matched their interests. An MSRE like development service offer in the rural 1. PROMER 2 Pre-evaluation Report (RPE)
Sira Fofana said it was ready to pay areas guarantees the emergence and
2. Operational Strategy Guide
for the service because it addressed viability of micro and small enterprises
(GUISOP)
its concerns, notably its training and that are either freshly set up or being
packaging needs through the provi- consolidated. However, to ensure that 3. Manual of Technical Operations
der assisting it. Entrepreneur Wassa the perpetuation of the service, the (MET)
Senghor of Dassilamé Socé, who is training modules should, at all times, 4. MSRE Monitoring-Assistance
engaged in the processing of cashew be adapted to the context and targets. Reports 4 (Sud- East Kolda Branch)
nuts, said he was prepared to pay for In other words, the best development
the service provided that the expertise 5. PROMER 2 Annual Report 2010
strategy is the one that adapts to the
acquired would help him develop his realities of the environment and not 6. Final External Evaluation Report
activity. Boubacar Keita, of the Tam- the one that would expect the envi- on the Impact of the Non-Financial
bacounda bakers MSRE said he too ronment to adapt to it. This is the first Service Providers’ intervention
was ready to pay for it even after the lesson that we wanted to demonstrate 7. Report of the PROMER II Mid-
project ends because « monitoring-as- and share through the PROMER expe- Course Review
sistance enables the MSRE to apply ac- rience within the context of the SDE
counting rules and hygiene and quality approach.
standards ».
According to the non-financial ser-
vice provider, Thierno Abdoul Diallo, Evolu on of amounts paid to the NFSP by PROMER 2 2007 à 2010
to ensure perpetuation of the service 35000000
even after the end of the project, 30000000
there was need to « establish a rela-
25000000
tionship of confidence by encouraging
Amount

20000000
the MSREs to consider the NFSP as Amount
15000000
advisers and not as simple providers Year
». This work can involve chairmen of 10000000
rural councils. There is also need to 50000000
reinforce/recycle the technical and 0
institutional skills of providers. The lat- 2007 2008 2009 2010
ter should also diversify their income Year
by accessing other markets outside


EqUIPMENT GRANT SUPPORT TO GRADUATE APPRENTICES

An Effective Scheme for Business
Start-up and Employment of Rural
Youths in Ghana
Cletus Kayenwee, cletuskayenwee@gmail.com
Felix Appiah Gambrah, gambeegh@gmail.com
Justice Darko, justicedarko@gmail.com

©REP2

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

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.

Since 2006, the Rural Enterprises themselves after successfully complet- equipment grant support scheme to
Project (REP) has supported graduate ing apprenticeships. The inability of the graduate apprentices is to facilitate
apprentices with basic equipment and graduate apprentices to start their own business establishment, create job op-
tools to start their businesses in rural businesses is due to the lack of start- portunities, improve standards of liv-
areas of Ghana. In rural communi- up capital, which is a consequence ing and ultimately reduce poverty in
ties of Ghana,, many young people of the relatively high poverty levels in the rural areas.
face serious challenges to establish the rural areas. The objective of the


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.

©REP2
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- A graduate apprentice supported by REP II at his Bicycle repairer shop in Donkorkrom
velopment and promotion.
also targeted at the families of the reci- GRATIS Foundation. The MLGRD pro-
Traditional Apprenticeship and pient graduate apprentices who would vided strategic direction in Project im-
Youth Targeting otherwise have had to find resources plementation and served on the pro-
to set up their wards in business. ject steering committee. The GRATIS
In Ghana, apprenticeship has been or-
Foundation was the key Implementing
ganized mainly through the traditional
Stakeholders and Develop- Agency for the provision of techno-
system where the youth are attached
ment Partners logy promotion and apprenticeship
to master crafts persons to acquire training.
skills through learning on the job. The The major stakeholders involved in the
duration of traditional apprenticeship Category 3 comprised the Project
equipment grant support intervention
beneficiaries, including the participa-
ranged from 2 to 3 years, with the and their roles can be grouped into
ting District Assemblies (DAs) which
costs involved usually borne by the three categorises as follows.
were the seat of Project implementa-
apprentices themselves and/or their Category 1 comprised the major fi- tion, and provided counterpart fun-
guardians or sponsors. nanciers of the Project, namely the ding; Local Business Associations
On the successful completion of the Ministry of Trade and Industry (MOTI), (LBAs) which helped to identify bene-
apprenticeship, opportunities become the International Fund for Agricultural ficiaries and Project clients who were
available for employment in existing Development (IFAD) and the African the eventual owners of the Project.
Development Bank (AfDB). MOTI
establishments or through the estab- Finally a key stakeholder was the Pro-
was the Executing Agency and Super-
lishment of their own business. How- ject management which had responsi-
vising Ministry for the Project, provi-
ever, in the rural areas where poverty bility for the overall management of
ding policy and strategic directions for
levels are relatively high, many gradu- project implementation.
Project implementation. MOTI also
ate apprentices are unable to acquire chaired the Project Steering Com- The Project specifically targeted the
the equipment to set-up their own mittee meetings (PSC). IFAD was a vulnerable rural youth who demons-
businesses. Consequently some of key development partner providing trated commitment through skills ac-
these young graduate apprentices con- development assistance funds for the quisition. A cost sharing arrangement
tinue to remain attached to their mas- Business Development Services, Rural was established between the Project
ters even for several years after gradu- Financial Services, Institutional De- and DAs for financing the grant equip-
ation, while others accept menial jobs velopment and Project Management ment awarded to beneficiary graduate
in unrelated trades or migrate to the components of REP II. AfDB was also apprentices. The beneficiaries provi-
urban centres to hassle in the hope of a key development partner which pro- ded their own working space and wor-
vided funding for the Technology Pro- king capital as an indication of their
finding some form of employment.
motion and Support to Apprenticeship readiness to benefit from the scheme.
To address these challenges, REP’s component and Business Develop- Implementing the equipment grant
intervention targeted the vulnerable ment Services for the implementation support protocol involved sensitiza-
rural traditional graduate apprentices of REP II. in some districts. tion of participating District Assem-
between the ages of 18 - 30 years who blies, assessment of equipment needs
Category 2 consisted of representatives
demonstrated potentials to use the of the Government of Ghana, from the of the graduate apprentices by the
skills obtained from training to improve Ministry of Local Government and BACs/RTFs, selection of the beneficia-
their communities. REP activities were Rural Development (MLGRD) and the ries by the District Assemblies through


©REP2
The Monitoring and Evaluation Officer of REP in a hand shake with a graduate apprentice
at his workshop at Sogakope in the Volta Region

the BACs and RTFs, procurement of ment grant support at the district level For example, many of the beneficiaries
the equipment by the Project.Distribu- generated growing interest among the of this programme are currently offe-
tion of grant equipment to beneficia- youth to undertake apprenticeship trai- ring complimentary services to people
ries, follow-up technical backstopping ning to acquire practical and manage- who are engaged in various forms of
to assist in establishing and operating ment skills and possibly to also receive agricultural activities, e.g. welders,
the businesses. support for starting up their own enter- fabricators and blacksmiths who are
prises. Some District Assemblies, for producing basic farm implements and
Equipment Grant Support for example the Mporhor Wassa East Dis- providing equipment repair services
Business Establishment and trict Assembly, had also taken up the for farmers and agro- processors. Gra-
challenge to implement this activity in duate apprentices operating as auto-
Development
their districts without Project support,. electricians and auto-mechanics in
Over the last five years of REP imple- the rural areas are providing vital re-
Business establishment: In the area of
mentation of the equipment grant sup- pair services for agricultural machinery
business establishment, an effective
port scheme substantial impact has and transport in the agricultural sector.
mechanism was created for providing
been evident on the lives of the tar- A further impact of establishment of
young people with business start-up
get groups. Impacts occurred in three businesses by supported graduate ap-
capital.. To date, 3,182 rural youth
main areas, namely (i) access to equip- prentices is the creation of jobs and
had benefited from the activity, out of
ment as grant; (ii) business establish- generation of incomes for the bene-
which, over 70% have already esta-
ment, and (iii) business development ficiaries and their employees. So far,
blished their businesses. Consequently,
and promotion. 70% of the recipients have successfully
the level of economic activities had
Access to grant equipment: As a result increased significantly in the benefi- established their own businesses. As
of easy access to equipment as grants, ciary districts. Through the increased at March 201, 2,227 direct jobs were
the equipment support activity spread economic activities, the owners of the created The businesses and jobs crea-
rapidly to 52 districts in the country. enterprises earn incomes to support ted enabled beneficiaries to generate
This spread of equipment grant sup- their families as well as contribute to incomes reduce rural-urban drift and
port contributed to an equitable dis- the overall development of the districts contribute to the GDP at the district le-
tribution of the national development through the payment of various levies vel. Besides direct or indirect employ-
programme and bridging of the gap and taxes. ment, the graduate apprentices have
between employment opportuni- also created opportunities for other
The establishment of businesses by the young people in the rural areas to un-
ties gap between the rural and urban
graduate apprentices has also resulted dergo apprenticeships
areas. Furthermore, access to equip-
in value addition to the rural economy.


Feed AFRICA N°1 - Rural Entrepreneurship

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