Small and Medium Enterprise Development

Project Description

Introduction

The importance of small and medium-sized enterprises (SMEs) for development in Africa is acknowledged worldwide. De Sousa dos Santos reports in the 2015 World Economic Forum that the strong growth of many economies in Africa can be attributed to the boom in small and medium-sized enterprises (SMEs). Furthermore, SMEs are well-suited to the informal and rural sectors and require lower time and financial resources than large businesses. There may also be lower risks involved in SME ownership, where business failure is likely to have a smaller impact on income and savings than more formal and significant business commitments. These features of SMEs make them an ideal mechanism for women’s empowerment, as they reduce the very same burdens that women face namely; resources, capital, time and financial risks.

Given this, that the NEPAD Spanish Fund (NSF) supported forty-one projects that promoted the engagement of women entrepreneurs in small and medium-sized enterprises to the benefit of more than 40,000 African women.

These projects, amongst others, facilitated training for women in entrepreneurial skills and business plan development, sponsored workshops on establishing small and micro enterprises, and invested in infrastructure that assisted women to develop small and micro enterprises. Many of the projects improved the success rate of these SMEs by providing technical and financial support, assisting with access to microfinance at low interest rates, and creating linkages between formal lending institutions and women involved in the informal trade.

The Good Practice Approach and Success Stories

The following two NSF-funded projects outline the success that was achieved through projects targeting small and medium enterprises.

IEFP (Instituto de Emprego e Formação Profissionalde Cabo Verde): Young Women Entrepreneurship Support Project

The Employment and Vocational Training Institute (IEFP), provided skills training and business support to young women from The Republic of Cabo Verde. The primary beneficiaries of the project were unemployed, young women graduates who aspired to build upon their existing capacities but lacked proper access to training, technical assistance and financing. The project started with the IEFP holding a training of trainer’s workshop in order to develop the institutional capacity of the IEFP. Business and vocational skills training was then provided to 75 young women.

This training successfully followed the International Labour Organisations (ILO) GERME methodology, which focuses on developing small businesses within emerging market economies. Sixty graduates received assistance with creating/developing small business enterprises and 22 of the graduates who submitted business plans received funding by the IEFP and the Cabo Verde Women’s Association (OMCV) credit fund to establish their own businesses. Furthermore, the IEFP facilitated the establishment of a business incubator in São Vicente, which provided technical assistance and other support services for start-ups run by young women.

CARA (Instituto para Pesquisa, Advocacia e Cidadania): Economic Empowerment of Rural Women in the Jangamo, Iharrimme and Zavala districts of Mozambique

The Institute for Research, Advocacy and Citizenship (CARA), embarked on an economic development project to empower women living in rural Mozambique. The economic investment in the Jangamo, Inharrime and Zavala districts of Southern Mozambique improved the income generating capacity of 2197 women as well as improved the living standards of their dependents.

To attain the aforementioned objectives, the project devised an implementation strategy which included a combination of actions, namely the intensification of production of selected crops, support of the development of SMEs for value addition through processing, conservation, storage and commercialisation of surpluses. In addition to this, the project organised a capacity building training course for 78 women in small business management/development. The training targeted the commercialisation of surpluses and the identification of markets allowing for the maximisation of SME growth in the communities.

Key Lessons Learned from the Small and Medium Enterprise Development Sector Projects

Ensure community support as well as the backing of community leaders for SME projects

The Women of Uganda Network (WOUGNET) project learnt that community buy-in and support for SME projects for women, along with the backing of community leaders, provided greater assurance of a positive outcome of the project. Involving the community was especially beneficial in the planning of project activities as it developed a sense of ownership and allowed the members of the community to understand and support the SME project. The Jewels of Faith Academy (JOFA) further realised that it is vital to establish the needs of the target community prior to the SME project’s commencement to ensure that the women of the community are empowered, and their livelihoods improved.

Obtain continues feedback from participants and partners during SME advocacy and consultative forums to improve similar interventions in future

The Centre for African Women Economic Empowerment (CAWEE) found that the feedback given by participants and partners during the advocacy and consultative forums they convened to address the challenges that Ethiopian women entrepreneurs faced, would help to improve similar interventions in future. An example that was cited was that, through feedback, CAWEE learned to better mobilise keynote speakers, guests of honour, moderators and the participants.

If SME development includes the production of goods, make sure that there is a market for the produce and that marketing initiatives are undertaken to stimulate demand for the produce

Feasibility studies should be done before the commencement of an SME project to see whether there is a market for the goods that the SME will produce. For example, The Gambian Women’s Bureau found that it was important to formulate and initiate a marketing plan to support the increased production of vegetables that arose from the funding of 31 female run vegetable gardens. They suggest that any such project should research and use opportunities that already exist in the country. For example, in the Republic of Gambia, there is a potential demand from hotels that need fresh vegetables. They further found it valuable to explore possibilities of linking up with other agro-processing companies either for direct processing or for exporting purposes.

Address cultural and religious dynamics with respect to financing SME projects for women

The Women’s Rights Awareness Program (WRAP) found it pertinent to address cultural and religious dynamics with respect to issues of loan savings and bank interest in Kenya. For example, WRAP held question and answer sessions to address concerns that Muslim communities had, as they believed that ‘earning savings’ from interest was an unjust earning.