CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) June 2011 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) FOREWORD Development of a vibrant economy depends on how entrepreneurial the people are, and though some believe that entrepreneurs are born but the fact is that entrepreneurs are made. A strategic thinking is how to consistently develop the capacity of making entrepreneurs. Business development is about seeing opportunities and developing the best ways of tapping those opportunities to ones advantage. Tanzania is blessed to have quite a number of natural resources that are worthless until when they are exploited and transformed into other consumable products to be marketable. The Government supports initiatives to develop capacities to effect the transformation. The way the existing and potential entrepreneurs react to these efforts demonstrates how receptive the community is to business development initiatives. Active involvement of all stakeholders is key to gradual and consistent business growth and development. The current development thrust is to consolidate the already established operational capacity, efficiency, productivity and better services to clients and promote further active involvement of the private sector in the sub sector development. The government has already put in place good operational environment for SME development and growth. It fully supports strategies, programmes and projects aimed at contributing to the development of the sub sector. Initiatives that are being advocated and implemented by SIDO to develop the sub sector have the blessing of the Ministry of Industry and Trade, which makes the Government contribution in that respect felt. It is my sincere belief that active participation of all stakeholders in this noble development course will increase the pace of business creation, chances of survival and success, create jobs, increase income and contribute to the improvement of general people’s well being. Hon. Dr. Cyril Chami (MP) Minister of Industry and Trade i CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) PREFACE This Corporate Strategic Plan provides guidance on how the challenges facing the Small and Medium Enterprises (SME) sector are going to be addressed. It concentrates on exposing different routes to be used in order to ensure increased efficiency and productivity in SIDO services’ delivery to SMEs. It explains clearly services and interventions planned by the organization and its capability to implement them. It gives assurance to stakeholders and entrepreneurs of the financial and non financial services, which will create enabling environment for SME development. The interventions to be implemented will stimulate involvement and participation of entrepreneurs towards increasing the number of enterprises, employment and wealth creation. In the coming three years we intend to capitalise on the relationships we have been building with entrepreneurs and organisations that have an interest in SME development and we will find more ways to secure the expert advice of many in our projects and our decision-making. The hard work of delivering this strategy can only succeed with the involvement of the widest possible coalition. Therefore its continued commitment to and interaction with different stakeholders to sustain their goodwill and support will be enhanced. We would like to thank all of the stakeholders who took part in our consultation and offered us their insights, evidence, experience and ideas. Their contributions have been invaluable in providing a range of different perspectives and experiences that have enabled us to present a clear picture of the challenges we face over the next three years and the approaches required to address them for sustained growth of the sector. It is our hope that SIDO will continue to provide efficient, effective and economic services and will ensure that all corporate assets, resources and actions are directed at and controlled in the achievement of its established corporate objectives. Japhet S. Mlagala Chairman, SIDO Board of Directors ii CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) TABLE OF CONTENTS i.Foreword i ii. Prefaceii iii. Table of contentsiii iv. Acronymsiv CHAPTER ONE 1.0Introduction 1.1 Purpose of the plan 1.2 Background of SIDO 1.2.1 Establishment of SIDO 1.2.2 The mandate 1.2.3 Role of SIDO 1.2.4 Layout of the plan CHAPTER TWO 2.0 2.1 2.2 2.2.1 2.2.2 2.2.2.1 2.2.2.2 2.2.2.3 2.2.2.4 2.2.2.5 2.2.2.6 2.2.2.7 2.3 2.5 1 2 2 2 3 3 4 Situation analysis Assessment of external environment Assessment of internal environment Development and Operational challenges Specific SME Challenges Entrepreneurship and Business Skills development Market and information Access to financial services Regulatory environment Technology Assessment and acquisition Linkage and sub-contracting Infrastructure Performance review SWOC Analysis 5 5 8 9 9 10 10 10 11 11 11 11 16 CHAPTER THREE 3.0 3.1 3.2 3.3 3.4 iii Vision, Mission and Development objectives Vision Mission Development objective Core values 18 18 18 18 18 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) CHAPTER FOUR 4.0 Objectives, Strategies and targets, 20 4.1 To enhance technology development, transfer and provide technical services 20 4.2 To improve training, consultancy and extension services 34 4.3 To develop and improve marketing and information technology programmes 46 4.4 To improve and expand financial advisory and credit services 51 4.5 To enhance capacity building of the organization 53 4.6 The market 59 4.7 Transformation cost 60 4.7.1 Budget 60 4.7.2 Sources and uses of funds 61 CHAPTER FIVE 5.0 Bridges to successful implementation 63 Annex Annex I:Implementation matrix64 Annex II: Organizational chart73 ACRONYMS BDS: Business Development Services CCM: Chama Cha Mapinduzi CBO: Community Based Organisation COMFAR: Computer Model for Feasibility Analysis and Reporting CPP: Company Project Profile CSO: Civil Society Organisation CSP: Corporate Strategic Plan GDP: Gross Domestic Product HIPC: Highly Indebted Poor Countries Initiative HIV/AIDS: Human Immunodeficiency Virus/Acquired Immune Deficiency Syndrome ICT: Information Communication Technology KOICA: Korea International Cooperation Agency iv CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) LCD: LGA: M&E: MIS: MKUKUTA: MSME: MUVI: NEDF: NMB: NGO: ODOP: R&D: RSMEAC: RRF: SHO: SIDP: SIDO: SME: SS GATE: TAFOPA: TASISO: TATC: TDCs: TFSR: TIB: TNA: TOT: TPC: TUICO: VIBINDO: v Liquid Crystal Display Local Government Authority Monitoring and Evaluation Management Information System Mkakati wa Kukuza Uchumi na Kupunguza Umaskini Tanzania Micro, Small and Medium Enterprises Muunganisho Ujasiriamali Vijijini National Entrepreneurship Development Fund National Micro Finance Bank Non Governmental Organization One District One Product Research and Development Regional Small and Medium Advisory Committee Regional Revolving Fund Self Help Organization Sustainable Industrial Development Policy Small Industries Development Organization Small and Medium Enterprises South South Global Asset and Technology Exchange Tanzania Food Processors Association Tanzania Small Industries Society Tanzania Automotive Technology Centre Technology Development Centers Tools For Self Reliance Tanzania Investment Bank Training Needs Assessment Training of Trainers Training Cum Production Center Trade Union for Industrial and Commercial Organizations Vikundi vya Biashara Ndogo Ndogo CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) CHAPTER ONE 1.0Introduction The need to develop the Fourth Corporate Strategic Plan (CSP) for the Small Industries Development Organization (SIDO) follows the expiration of the previous plan to exhibit relevance of the organization’s services to public, the government and other stakeholders. It provides opportunity to stakeholders to continue supporting the organization in the development and promotion of Small and Medium Enterprises. The plan considers experience, challenges faced, successful implementation of the previous plans and related business opportunities. This was done through documenting information, comments and lessons learned during the implementation of previous plans. Collection of information involved all key stakeholders and SIDO staff members at regional and departmental level. A team of nine professionals from different fields of competence was appointed and given a task of consolidating views, proposals and facts to develop a draft of Corporate Strategic Plan for the next three years (2011/12 – 2013/14). Thereafter, the draft plan was submitted to management for discussion. A refined document of fourth Corporate Strategic Plan was then submitted to the Board of Directors for discussion and approval. The plan considers all the requirements which will enhance the contribution of the small and medium enterprises sector to economic growth and poverty reduction and therefore realisation of the National Development Vision 2025. During the previous plan, more efforts were advanced to address the challenges facing the sub sector and therefore holding down the envisaged progress. The interventions in the current plan will ensure consistent increased investment and involvement in areas which supports SMEs’ capacity development particularly through providing for industrial and business infrastructure, market and technological information, products quality assurance, entrepreneurship development, promotion of innovative culture and improvement of technologies. The efforts will re-energise the industrial sector, facilitate informal businesses to formalise, contribute to reduction of youth unemployment and ultimately contribute to poverty reduction. 1 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) Implementation of the plan will be done within the framework of the National Five Year Development Plan taking advantage of the improving business environment, enhancing knowledge and skills development at the same time recognising the importance and adaptation of technological innovation. The initiative will enhance chances of building a firm entrepreneurship development base. 1.1 Purpose of the plan The fourth Corporate Strategic Plan focuses at increased efficiency and productivity of SIDO’s services to Small and Medium Enterprises (SMEs) through harmonization of current achievements and new opportunities that will strengthen organizational capacity to provide better and sustainable services. The document explains clearly services and interventions planned by the organization and its capability to implement. It gives indication to stakeholder’s expectations from planned services in the next three years. Focusing on developing financial and non financial services that create enabling environment for SMEs development, the plan is expected to stimulate involvement and participation of entrepreneurs towards increasing the number of enterprises, employment and wealth creation. Moreover, the plan will ensure the growth of public private sector partnership and possess a strong linkage with other sectors in using Research and Development (R&D) results. It will create sustainable base for SMEs development and capacity improvement. The plan will address the challenges of increasing the contribution of SMEs sub – sector to Gross Domestic Product (GDP) and meet local services and market requirements for SMEs goods and services both in terms of quantity and quality. Furthermore, it will improve capacity and utilization of existing and new established industries as well as increase rate of enterprises growth and value addition. 1.2 Background of SIDO 1.2.1 Establishment of SIDO Small Industries Development Organization (SIDO) is a parastatal organization which was established under the Act of Parliament No. 28 of 1973. The organization is mandated to plan, coordinate, promote and offer every form of services to SMEs. The responsibility of the organization includes entrepreneurship development and extension services, technology development and technical services, marketing, information and financial services. 2 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 1.2.2 The Mandate of SIDO In carrying out its mandate, SIDO has a number of functions that are core to its activities and are geared towards ensuring the fulfilment of its mission and the achievement of its vision. The core functions of the organization include: a. Promote development of small and medium industries, b. Plan and co-ordinate activities of small industries, c. Carry out market research in goods manufactured by small industries, d. Advise the Government on all matters relating to development of small and medium industries, e. Carry out research in development of small industries and marketing of products standard and quality, f. Facilitate orderly and balanced development of small industries in regions, g. Provide technical assistance to persons engaged in small industries, h. Provide and promote training facilities for persons engaged in or employed or to be employed in small industries and to assist and co- ordinate the activities of other institutions engaged in such training and i. Provide management and consultancy services to small industries, 1.2.3 The Role of SIDO In line with Industrial Development Policy, SMEs Development Policy, Empowerment Policy and other National strategies, SIDO roles have been redefined to respond to political, socio – economic and environmental changes to promote sustainable industrial development. Based on its functions, SIDO has the following roles: • Provide entrepreneurship, business management skills development and extension services, • Enhance SMEs capability to develop and access markets, • Promote/enhance rural industrialization, 3 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) • Develop and provide technology and technical assistance to SMEs, • Develop physical infrastructure and workplaces, • Improve SMEs access to finance and financial services. • Empower SMEs with Information and Communication Technology (ICT) skills. 1.2.4 Layout of the plan The plan is presented in six chapters. Chapter one gives an introduction of SIDO by narrating the purpose of plan, provides background that outlines the establishment, mandate and roles performed by the organization as well as layout of the plan. Chapter two describes the situation analysis of implemented activities from previous plan, general overview of development, operational and SME challenges. Moreover, it describes the performance review and unfolding opportunities and challenges leading to strategic issues. The vision, mission and strategic objectives to be pursued by SIDO are stated in chapter three while chapter four describes the strategies and interventions to be implemented in the plan. Chapter five portrays review process in Monitoring and Evaluation (M&E) and finally, chapter six deals with bridges to successful implementation of the plan. 4 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) CHAPTER TWO 2.0 Situation Analysis 2.1 I. Assessment of External Environment Cooperation and collaboration with international initiatives SIDO has been collaborating and will continue networking with the external development partners including: South Africa Enterprises Development Agency (SEDA) – SMEs knowledge sharing; Technonet Africa / South South Global Asset and Technology Exchange (SS-GATE) – Asset and technology exchange; SADC through DFRC – Capacity building of human resources; NSIC India – Technology, Marketing and Investment; EADB – Entrepreneurship development; FBME – SMEs credit opportunities; JICA, KOICA, ILO Coop Africa and UNIDO – Capacity building. II. East Africa Common Market Protocol The objective of the East Africa Common Market Protocol on the Promotion of Micro Small and Medium Enterprises in the East African region is to raise alternative strategies for facilitating promotion of MSME sector so as to increase the survival and growth rate of the enterprises. The protocol deliberates and propounds solutions to MSME sector challenges regarding Policy Environment, Access to Financial Services, Business Development Services, Access to Markets, Subcontracting Services, Technology, Infrastructure and Cross – Cutting Constraints. III. National Development Vision 2025 States that “ Tanzania should have created a strong, diversified, resilient and competitive economy, which can effectively cope with challenges of development and which can also easily and confidently adapt to the changing market and technological conditions in the regional and global economy” by 2025. The vision seeks to actively 5 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) mobilise the people and other resources towards the achievement of shared goals. IV. Sustainable Industrial Development Policy (SIDP) 1996 – 2020 States that, “ the Government recognises the role of the private sector as the principal vehicle in carrying out direct investments in the industry “ SIDP further places specific emphasis on promotion of small and medium industries, encouraging informal sector businesses to grow and formalise, and on measures to enable indigenous entrepreneurs, women, youth and people with disabilities to take part in economic activities. On empowering the indigenous private sector, SIDP notes that “the Government will initiate affirmative-action measures, which will be designed to promote special programmes for indigenous entrepreneurs”. V. Small and Medium Enterprises (SME) Development Policy 2003 The specific policy objective is “to foster job creation and income generation through promoting the creation of new SMEs and improving the performance and competitiveness of existing SMEs to increase their participation in the Tanzanian economy, thereby enhancing their contributions to economic growth, income and employment generation and reduction of poverty”. The aim of the policy is to create the conditions to encourage informal micro and small enterprises to move into formal sector, thereby creating more wage employment, while measures to enable the survival and expansion of formal small and medium enterprises in Tanzania as the basis of private sector – led growth will be a major objective. VI. National Trade Policy 2003 The goal of the policy is to raise efficiency and widen linkages in domestic production and build a diversified competitive export sector as the means of stimulating higher rates of growth and development. It provides room for SMEs to develop higher performance and capacity to withstand intensifying competition within the domestic market. It also stimulates and encourages SMEs’ value adding activities on primary exports as a means of increasing national earnings and income flows. Moreover, it stimulates SMEs’ investment flows into export oriented areas in which Tanzania has comparative advantages as a strategy for inducing the introduction 6 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) of technology and innovation into production systems as the basis for economic competitiveness. Ultimately, the policy aims at enhancing SMEs’ income generation and earning power as the key to poverty reduction. VII. National Empowerment Policy The policy objective is “to identify barriers to economic empowerment of indigenous Tanzanians and explore way for them to effectively participate in their own economic development and the national economic development in general.” The economic empowerment is a conducive and supportive macroeconomic policy environment, access to key resources that are necessary for people to engage in productive economic activities. VIII.CCM Election Manifesto 2010 – 2015 The CCM Election Manifesto 2010 – 2015 aims at enhancing the process of modernization of the economy and building a self reliant nation through application of science and technology in the production sectors, namely agriculture, fishing, livestock, and manufacturing. Modernization of the economy picks and puts emphasis on manufacturing to lead the economy. In the 2010 – 2015 Manifesto implementations, the CCM led Government will ensure that growth of the sector of industry shifts upwards from the present 9.9% to 15% in the year 2015 by laying conducive environments for onward growth of the sectors of industry, trade, and market. Through the CCM Election manifesto the ruling party makes commitments to be implemented by its Government. The outline of commitments made relating to the development and services to the SME sector is as follows: i. Extend and improve the Rural Micro, Small and Medium Enterprises Support Programme popularly known as “ MUVI” by offering consultancy, training, capital and technical services to entrepreneurs. ii. Enhance SMEs contribution to GDP from the current 33% to 40% by the year 2015. iii. Support production and distribution of technologies which add value to agro – based products using SIDO industrial 7 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) centers (Technology Development Centers) in Arusha, Iringa, Kigoma, Kilimanjaro, Lindi and Mbeya. iv. Provide training and capacity building to farmers so that they can process their produce such as honey, wine, juices, and package the same in compliance with TBS packaging technology before selling them further. v. Link SMEs to big companies ready and willing to procure from the SMEs. vi. Build the capacity of SIDO and link the Organization to sources of funds so as to enable it offer training on food processing to SMEs. vii. Review the SIDO Establishment Act so that it conforms to the current economic requirements. viii.Finally, improve further, the infrastructure pertinent to small industries and trade. IX. National Strategy for Growth and Reduction of Poverty (NSGRP) The strategy has been developed in the context of the enhanced Highly Indebted Poor Countries Initiatives (HIPC). The Government has decided to confine its financial interventions mostly to social and economic sectors; education, health, agriculture, roads, water, judiciary and HIV/AIDS. In all these sectors, the Government has decided to promote private sector including micro, small and medium enterprises and civil society participation. It has emphasized the importance of private sector development as a means of overcoming income poverty while providing efficient and effective delivery of services. 2.2 Assessment of Internal Environment 2.2.1 Development and Operational Challenges Capacity creation among small and medium enterprises in both urban and rural areas is a key to economic development, growth and poverty reduction. To fight against poverty, Tanzania should create a strong, diversified, resilient and competitive economy that can effectively cope with the challenges of development easily and confidently adapting to the changing markets and technological conditions in the regional and global economy. 8 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) Small and Medium Enterprises (SMEs) play an ever increasing role in creating income and employment. However, their roles have not yet been tapped due to the existence of development and operational challenges that include capital, technology and management. Other factors include: complex, bureaucratic and costly legal, regulatory and administrative environment where SMEs are at a greater disadvantage than their counterparts that are larger in size. To overcome these challenges the government puts emphasis and commitment towards continued improvement of enabling environment for SMEs development through SMEs Development Policy of 2003. Likewise, SIDO is actively implementing the existing intervention to address SMEs development and operational challenges through technology and business incubation and innovative business clustering. Further interventions include rural development, communication and value chain management under Rural Micro Small and Medium Enterprises popularly known as MUVI as well as One District One Product (ODOP) programmes. These interventions and programmes are geared to SMEs’ capacity development. To complement initiatives to support growth oriented SMEs, SIDO collaborates with financial institutions such as NMB and TIB to provide the required financing. The move will facilitate the process of enabling SMEs to graduate through stages – from Micro to Small and to Medium size. To address issues related to advocacy, accessibility to market and information, raw materials, packaging and credit services, SIDO in collaboration with other stakeholders supported establishment of SMEs associations such as Tanzania Small Industries Society (TASISO), Tanzania Food Processors Association (TAFOPA), Vikundi vya Biashara Ndogo Ndogo (VIBINDO), Tanzania Women Chamber of Commerce (TWCC), Tanzania Handicraft Association (TANCRAFT), Handproducts of Tanzania (HOT) and Business Club under Business Development Gateway (BDG) initiatives. 2.2.2 Specific SME Challenges 2.2.2.1 Entrepreneurship and Business Skills Development Inadequate indigenous entrepreneurial culture is one of notable challenges to SMEs growth and competitiveness. Also, lack of firm base for SMEs skills upgrading and capacity development lead to unsuccessful activities towards achieving the desired growth of micro-enterprises graduating to small, medium and large enterprises. 9 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) Strategic programmes, which will address deficiencies and promote entrepreneurship development amongst existing and potential indigenous entrepreneurs, need to be improved and implemented. 2.2.2.2 Market and Information Sustainability of a firm depends largely on its performance in the market and marketing information. Considering the level of development and understanding, SMEs are at a disadvantage to put up competitive businesses in a globalised business environment. Information is a prime mover of all economic undertakings and an important determinant of business success. SMEs have limited access to national and international information such as accessibility of appropriate inputs, possible market for products and technologies which are cost effective. SMEs face market problems due to poor quality of products, poor packaging, inadequate marketing skills and stiff competition. In general inadequate marketing services have been prohibiting SMEs to become competitive in local and international market. 2.2.2.3 Access to Financial Services SMEs face a major challenge in accessing finance and financial services for initiating and developing their businesses. While the need for finance is unlimited and lack of it is said to be a major scare to businesses development, yet SMEs are limited in obtaining funds. Several challenges face SMEs in accessing financial services; these include inadequate bankable project proposals, high interest rates, ability to fulfill the collateral requirements, inadequate mechanisms to provide information on creditworthiness and failure of SMEs to utilize available bank facilities to develop their trustworthy with particular banks. Supportive programmes like the SMEs Credit Guarantee Scheme though operationalised, has a very limited outreach to bring about the desired impact. Strategies have to be developed and pursued to ensure increased access to available financial resources for development as well as operational ambitions of the sub – sector. 2.2.2.4 Regulatory Environment Non conducive regulatory environment, particularly location related factors, registration, licensing and reporting requirements have contributed to high transaction costs in small enterprises. This has prevented some micro and small enterprises from formalizing and hence missing some opportunities such as access to credit available in the formal sector. Initiatives to minimize or eliminate regulations which discourage business development need to be taken. 10 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 2.2.2.5 Technology Search, Acquisition and Dissemination Technology advancement and transfer are important aspects for SMEs development. SMEs have limited access to technology partly because they lack the relevant information. The problem is further compounded by the existence of internal industrial support institutions which are generally weak and do operate in isolation without focusing on the actual requirements of the SME sub – sector. Furthermore, available technologies are minimally disseminated to the potential clients. In addition, SMEs cannot afford the services like chemical analysis and research costs provided by the relevant institutions. As a result of the above, SMEs continue to hold on crude and obsolete technologies. 2.2.2.6 Linkage and Sub-contracting There are benefits for SMEs to engage in business linkages, partnerships and sub-contracting with large industries. Currently, such linkages are weak and consequently growth and development of SMEs is limited. Linkages and subcontracting are not well practised in Tanzania and barriers need to be identified, for example the need for sub-contracted firms to upgrade their technologies and produce according to market requirements, legal and regulatory framework to support the system. The challenge in this respect is how to facilitate SMEs’ consistent growth through stages of enterprise development from small to medium and then to large, but also how to make large enterprises support development and growth of small enterprises. 2.2.2.7Infrastructure The development of the SMEs in Tanzania is adversely affected by poor infrastructure facilities such as working premises, roads, cold rooms, warehouses, communication and utilities. Even where these services are available, the supply is unreliable and costly. Serviced land or business premises are in short supply in most of the cities and towns, especially for industrial use. The impact of poor infrastructure on SMEs is manifested through limited production and markets. The challenge is how to promote increased public-private partnership in developing basic infrastructure required for enterprise development. 2.3 Performance review The performance review of CSP III shows that there was an increase in the realization of the impact as a result of SIDO services. The CSP III contributed much to the realization of SIDO vision, mission and objectives, compared to previous plans. The higher impact obtained from CSP III was due to increase in 11 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) awareness of SIDO services, good working relationship and support from Central and Local Government as well as private sector. The contribution in enterprise creation in the area of manufacturing and agro processing increased from 7,600 to 12,516 (65%) and 9,289 to 18,357 (98%) respectively compared to that in CSP II. Also there was a shift of emphasis of enterprise creation from urban to rural from 28,714(68%) and 13,513 (32%) in CSP II to 48,546 (58%) and 35,045 (42%) respectively. The trend reveals the fact that, in urban areas the rate of enterprise creation was increasing at a decreasing rate while in rural areas it was increasing at an increasing rate (refer figure 1-7). As stated, SIDO main goal is to contribute to poverty reduction and enterprise creation through development and promotion of activities, which create employment and generate income. Thus, the 2008/09 – 2010/2011 Corporate Strategic Plan was developed to address issues, complement efforts made in CSP I and CSP II which focused on the greatest contribution to the realization of enterprises and employment creation hence income generation. The trend analysis for the three CSP performed are highlighted for further improvement of CSP IV as indicated below. Overall impact: A combination of services led to creation of 83,441 enterprises allover the country in different sectors/fields, creating 208,602 direct employment opportunities. This makes an average of three (3) jobs per enterprise created. The performance trend shows that there is an increase on enterprises creations from 22,780 CSP I to 83,441 CSP III. Figure 1: Source: SIDO MIS Reports 12 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) Figure 2: Source: SIDO MIS Reports I. Income generation: In respect to employment created, the additional income generated to the community to the tune of estimated Tshs. 12 billion, considering minimum average income of Tshs. 60,000/= per head per month. The effect of SIDO services delivery shows a positive contribution to income generation by increasing from 2,800 (80%) (CSP I to II) to 5,700 (90%) (CSP II to III). Figure 3: Source: SIDO MIS Reports II.Outreach: Overreaching effect reached to at least 3,129,030 people, considering family members of those employed by these enterprises, suppliers of materials and other services and those who depend on those SMEs’ products as their main source of merchandise for sale. Each new unit established contributes to the welfare of at least 23 people on average. 13 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) Figure 4: Source: SIDO MIS Reports III. Sectoral effect: The effect of SIDO services was most felt in the contribution of the following five main sectors; Trading, Manufacturing, agro based enterprises and services. Specific sub-sectors in which the services excelled are agro based processing, metal works, textile, wood works and handicrafts. The contribution of SIDO services on the enterprises creation at agro processing and manufacturing at CSP III increased by 98% and 65% respectively compared to CSP II. Figure 5: Source: SIDO MIS Report IV. Locational balance: On rural – urban imbalance, 58% of SMEs 14 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) promoted were based in urban areas and the distribution is quite even regional wise. On the other hand the SIDO services went to rural areas and its contributions on enterprises establishment was 42%. The limited human, financial and capital resources are the main constraints to provision of adequate services to the rural areas. Figure 6: Source: SIDO MIS Reports The creation of enterprises in rural areas is gradually increasing while decreasing in the urban setting as viewed above. V. Development trend: The services provided stimulated development enthusiasm, which led to creation of 48,546 new enterprises in urban and 35,045 in rural areas. The organization intends to maintain the trend. Figure 7: Source: SIDO MIS Reports 15 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 2.5 2.5 SWOC Analysis SWOC Analysis TheThe general evaluation ofofoperational andSIDO’s SIDO’s intent capacity general evaluation operational environment environment and intent andand capacity to to cope and cope identifies identifies the the following following set set ofofstrengths, strengths, weaknesses, weaknesses, opportunities opportunities and challenges: challenges: STRENGTHS WEAKNESSES 1. Majority of staff are well qualified, skilled and experienced. 1. Inadequate Funds for development and operational activities. 2. Wide operating network with 2. Inadequate extension services in rural extension offices in 21 regions of areas due to capacity limitations. Tanzania Mainland. 3. Inadequate integrated management 3. Long experience (since 1973) working Information system. with Micro, Small and Medium 4. Inadequate capacities with respect to Enterprises. various activities for example Project 4. SIDO has already developed and is planning and management, training and operating SME development programs. data management 5. SIDO is the largest and in most regions the only service provider offering a package of business development and financial services. 6. SIDO’s credibility has won confidence of local and international collaborators and therefore attracting other stakeholders into activities of development and promotion of SMEs. OPPORTUNITIES CHALLENGES (THREATS) 1. Government policies, strategies and 1. Global investment and business dynamism necessitates service providers directives recognize the importance and in the area to conform and adhere to therefore support the development of the pace of operational transformation. SME sector. 2. Growing economy creates prospects for 2. Inadequate SME capacity to cope with the rate of current technological SME sector to prosper. advancement due to lack of R & D 3. Government, development partners are capacity at SME level. interested and committed to support 3. Provision of SIDO services is influenced the SME sector through SIDO. by the national, regional and global 4. Environment creates a ready market 14 16 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) especially in the rural areas, poverty, youth, and school/college graduates. 5. The majority of population appreciates the role of SIDO. 6. Expanding local, regional and global market for SME’s products and services creates prospects for SIDO services to grow. 7. Stable and environment. supportive economic changes. 4. The socio – economic HIV/AIDS pandemic. effect of 5. Ability to effectively respond to natural calamities and external shocks timely. political CHAPTER THREE 3.0 Vision, Mission and Development objectives 3.1 Vision A leading business support organization in Tanzania, providing efficiently and effectively in a business-like manner quality services that unlock potentials for growth and competitiveness of SMEs in rural as well as in urban areas. 3.2 Mission Create and sustain indigenous entrepreneurial base through the promotion and support to development of SMEs by providing them with business development services and specific credit services on demand particularly to productive economic sectors that contribute to wealth creation. 3.3 Development Objective To contribute to poverty reduction and enterprise development thereby contributing to economic development through provision of demand driven services that will create employment and generate income to the service user. 3.4 Core Values In achieving its vision and fulfilling its mission, SIDO shall operate on the following core values: 3.4.1 Relevance Provide services for which there is a market. However, SIDO shall in its development role stimulate and create markets for the Business Development Services products. 3.4.2 Sustainability SIDO shall position itself to achieve the highest possible level of self-financing and attract sponsorship for the balance in line with best practices. 15 17 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) CHAPTER THREE 3.0 Vision, Mission and Development objectives 3.1Vision A leading business support organization in Tanzania, providing efficiently and effectively in a business-like manner quality services that unlock potentials for growth and competitiveness of SMEs in rural as well as in urban areas. 3.2Mission Create and sustain indigenous entrepreneurial base through the promotion and support to development of SMEs by providing them with business development services and specific credit services on demand particularly to productive economic sectors that contribute to wealth creation. 3.3 Development Objective To contribute to poverty reduction and enterprise development thereby contributing to economic development through provision of demand driven services that will create employment and generate income to the service user. 3.4 Core Values In achieving its vision and fulfilling its mission, SIDO shall operate on the following core values: 3.4.1 Relevance Provide services for which there is a market. However, SIDO shall in its development role stimulate and create markets for the Business Development Services products. 3.4.2 Sustainability SIDO shall position itself to achieve the highest possible level of self-financing and attract sponsorship for the balance in line with best practices. 18 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 3.4.3 High outreach: SIDO will also use intermediaries in delivering some of the services to ensure high outreach. 3.4.4 Impact creation: SIDO will put more emphasis on services and service areas that are likely to bring high impact to the economy and peoples way of life. 19 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) CHAPTER FOUR 4.0 OBJECTIVES, STRATEGIES AND TARGETS The fourth Corporate Strategic Plan for the period 2011/2012 – 2013/2014 is expected to produce results that will substantiate relevance and extent of services being provided and making the organization comprehend its mission effectively and in a sustainable manner. The plan provides well defined objectives, strategies and performance targets to support SMEs development by exposing physical, financial and human resources required. The objectives and strategies narrate technology and technical support services, entrepreneurship, business and managerial skills, market development, promotion and rural enterprise development are strategies to enhance growth and competitiveness of SMEs. It identifies the following core objectives and therefore the route through which SME development initiatives are to be provided:- OBJECTIVE 1: 4.1 TO ENHANCE TECHNOLOGY INNOVATION, TRANSFER AND PROVIDE TECHNICAL SERVICES Output 1 4.1.1 Enterprise productive capacity, productivity and product quality increased. The demand and need for technology innovation and inputs in development of SME activities is quite enormous and therefore much has to be done to cope with the development temple. There is a need to establish and strengthen capacities of SMEs to produce and create income in innovative and sustainable ways. Initiatives have been taken to identify, acquire and disseminate technologies. Value addition and support to innovative SMEs products have been extended through programs such as incubation, clusters, recycling, new technologies sourcing and dissemination. Provision of technical advisory services such as choice of technology, plant layout, machine installations and testing, repair 20 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) and maintenance, contribute to SMEs technological development and their competitiveness. Increase in enterprises productive capacity, productivity and product quality will be realized through: 4.1.1.1 Source of new Technologies Technology sourcing means identification, acquisition and making it available for use by SMEs. It enables SMEs to improve their skills improve productivity and efficiency in utilizing unique resources available in their locality for speedy development of urban and rural economies. Information on technologies is obtained through different channels such as information centers and international collaborative initiatives like SS – GATE. In order to complement efforts of development and promotion of district specific products, 536 technology leads were identified and obtained from different sources during the previous plan. These include milk pasteurizing, peanut butter processing, cashew nut processing, pineapple juice processing, honey processing, banana products processing, avocado oil extraction, and textiles, leather processing, mining and metal work. During this plan period, choice of technology will take into account various factors such as the size of the potential market, optimal development of natural resources, appropriate scales of production, the desirability of geographyical dispersal, the impact on environmental and technical efficiency in terms of material and human resources requirements. The scope and potential of such factors have been specifically elaborated in the ODOP and MUVI programmes. Target 1: Identify 80 types of new technologies based on agro processing, farm implements, textiles, leather, sugar (khandasari sugar), building materials and energy saving environment in line with ODOP strategy and MUVI value chain commodities by the end of June 2014 Target 2: Prepare 55 technical profiles to support Techno-Economic Profile based on ODOP products and MUVI value chain commodities by the end of June 2014. 4.1.1.2 Technology development and innovation Technology innovation and diffusion will continue to spearhead establishment of small industries in rural and urban areas especially in utilization of abundant resources. Technologies to be developed and/or innovated will be geared 21 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) towards solving specific production problems and therefore add value to the end products. The application of technologies will be situational depending on their appropriateness, affordability and demand of the target beneficiaries. During the plan period, surveys to identify appropriate technologies required by SMEs will be carried out and products that are particular to the application of the technologies will be developed. TDCs and SMEs will be encouraged to innovate, and empowered to develop and disseminate the required technologies to the focused target group based in areas specific potentials under One District One Product strategy. Target 1: Conduct 3 Technology needs assessments by the end of June 2014 Target 2: Develop 22 New technologies for SMEs by the end of June 2014. Target 3: Disseminate 15 types of new technologies to SMEs by the end of June 2014 Target 4: Support 11 technology innovations by SMEs by the end of June 2014. 4.1.1.3 Commercialization of Technology Commercialization is the process of acquiring the technology and produces products and provides services based on the acquired technology on commercial scale. It is the process of off-loading the research results to the market for commercial production. This process facilitates uploading proven technologies from local R & D and ISOs to enterprises capable of producing them in big quantities and ensuring their availability to end users. Commercialization of appropriate technologies from outside the country will be pursued through franchising and joint ventures with technologies owners. During the previous plan, popularization and commercialization of 23 technologies namely bio gas, charcoal stove, cassava chipping and grating, milk processing, honey processing and compressed bricks were made. The technologies were demonstrated in specific events of SMEs’ products exhibitions and trade fairs. In this plan SIDO aims at supporting SMEs and TDCs to acquire and develop technologies and use them to produce goods and services for marketing. Due to its importance, the service of commercializing proven technologies will be provided. This will involve both existing and new technologies in order to expose 22 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) and create more opportunity for SMEs in rural and urban areas to adopt. Target 1: Initiate collaborative networks with 6 technology developers by the end of June 2014 Target 2: Commercialize 36 technologies by the end of June 2014 Target 3: Facilitate transfer of five technologies through joint ventures and franchising under SS- Gate initiative by the end of June 2014 4.1.1.4 Support development of agro processing industries Tanzania is endowed with various agricultural products that are suitable for industrial processing. Initiatives to develop local capacity to add value to agro products at different levels is inevitable. SIDO aims at supporting development of agro processing industries in order to add value to agricultural products, utilize raw materials, increase shelf life, commercialize and popularize traditional foods, reduce post harvest losses and create wealth and employment. It will provide supportive services such as technology sourcing and transfer to agro based SMEs, upgrading product packaging, working premises improvement and product certification to agro processing industries. SIDO will provide support on the development/improvement, processing, packaging, labeling, certification and commercialization of traditional food products for marketing through direct interaction with entrepreneurs and through development of food processing industrial parks. Target1: Conduct 252 courses in food processing techniques and packaging to entrepreneurs by the end of June 2014. Target 2: Provide technical assistance to 73 agro industrial units by the end of June 2014. Target 3: Support availability of 36 new food processing technologies by the end of 2014 Target 4: Promote development and commercialization and popularization of 6 traditional food products by the end of June 2014. Target 5: Facilitate 87 training events to be conducted in the agro processing by the end of June 2014. Target 6: Transfer 6 new agro processing technologies developed by TDCs and SMEs by the end of June 2014. Target 7: Support innovation in 12 food processing products by the end 23 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) of June 2014 Target 8: Establish one food processing industrial park by end of June 2014 4.1.1.5 Strengthen Capacities of Technology Development Centers (TDCs) Technology Development Centers (TDCs) are general engineering facilities established within SIDO industrial estates. They were established purposely to study the environment and establish technology needs; develop and/or adapt the already developed technologies to suit local operational requirements; assist technology commercialization to SMEs; produce machinery products and spare parts to support establishment and sustainable running of industrial enterprises in both urban and rural area; and provide general engineering services to industrial units within the estates and those in the neighborhood. The status of their machinery and equipment has deteriorated over the years due to aging. The centers will be up-graded to be models of excellence for development and innovation of new products and services. During the previous plan, 1,439 various machines and equipment were produced by the centers. Focus was on cashew nuts shelling, cassava processing, chalk making, sugarcane crushers, edible oil extraction, wood works, honey processing, milk processing, farm implements, palm processing as well as building materials manufacturing machines. The centers will in this plan focus on developing innovative machinery and provide services to support ODOP strategy, MUVI and other sub sectors on demand. Due to the increasing needs of rural industries, the centers will spearhead the development, popularization and dissemination of small appropriate machineries to support artisans in the rural areas. New capacities will be developed in Morogoro, Singida and Dar es salaam and existing centers will be upgraded. Target 1: Support extension services to 1092 enterprises by the end of June 2014 Target 2: Develop 1,529 machines by the end of June 2014 Target 3: Demonstrate 30 types of technologies suitable for SMEs requirements by the end of June 2014 Target 4: Upgrade the capacity of 7 TDCs by the end of June 2014 Target 5: Establish 3 new TDCs by the end of June 2014. 24 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) Target 6: Innovate 20 new machines / processes by June 2014 4.1.1.6 Promote Subcontracting between SMEs and Large Enterprises Cooperation between large and small enterprises can be in the form where large enterprises support small enterprises to meet specification of subcontracted works. Another form is by supporting SMEs to produce components of large enterprises’ products. During the previous plan, 205 entrepreneurs were supported to cooperate and produce spares and provide services to large enterprises. The subcontracting services were provided to fish industry, engineering products, oil milling, fruits processing, honey processing and cassava products. Large enterprise will be sensitized to build a culture of subcontracting SMEs to supply them products and/or services in win win situation in order to nurture the growth of SMEs’ businesses. Large enterprises will give specifications and standard levels of components and services to be provided by SMEs, but on the other hand will invest in their capacity development for the purpose. The intervention aims at stimulating the growth and sustainability of the market of SMEs products and services. Target 1: Promote 291 subcontracting between SMEs and large enterprises by the end of June 2014. 4.1.1.7 Revive foundry industry in the country to catalyze SMEs growth Foundry is an important industry in supporting industrial development in the country. Using appropriate foundry technology products with intricate shapes, like engine blocks, gears and pulleys sprockets which are important in supporting the industrial production such as agro- processing, leather and mining can be produced at lower costs. Currently the country’s foundry industrial capacity has declined leaving the manufacturing sector to depend on micro foundries incapable of producing adequate and quality spare parts and a few corporate units like TATC, Mzinga and TAZARA which are not easily accessible to the business community as they have their own priority and sometimes operate not in a business-like manner hence failing to address the demand generated by SMEs as and when required. During the plan period, it is envisaged to facilitate establishment of foundries 25 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) to support TDCs in their respective zones and encourage SMEs to improve and start new micro cupola foundries with capacities of melting metal up to 2 tons and employing up to 15 people to serve the sector in small jobs requirements in production of simple spare parts. The establishments will also have heat treatment facilities. Target 1: Construct 3 foundries to be linked by TDC by the end of June 2014 Target 2: Assist SMEs to start and run 20 cupola foundries by the end of June 2014. 4.1.1.8 Provide Technical Advisory Services Effective utilization of technologies needs follow-up of technical support services to enterprises. The intervention assists SMEs to face challenges of a dynamic business environment and technological advancement. During the previous plan, SIDO provided guidance through 18,459 consultations to SMEs on choice of technology, plant layout, machine installations, repair and maintenance. The organization will carry out industrial diagnosis in order to identify weak points or bottlenecks that reduce production yield or product quality that hinder industrial growth and competitiveness. Target 1: Carry out 218 industrial diagnostic studies by the end of June 2014. Target 2: Provide 22,492 technical consultations by the end of June 2014 Target 3: Provide 33 technical skills events to upgrade product quality by the end of June 2014. Output 2 4.1.2 Basic infrastructural development for SMEs provided The development of basic infrastructure is important for development of the SME sub – sector. They are needed to support SMEs by providing common facilities such as workplaces, mini foundries and information centers to enable entrepreneurs access relevant market information and technical facilities to enhance their businesses. Initiatives to develop clusters and construction of working premises will provide conducive environment for producing quality products. 26 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 4.1.2.1 Industrial Cluster development A Cluster is defined as a configuration of SMEs grouped in a predetermined area around a profession or trade. Cluster member units share a common source of information, qualifications, socio-business relationships and infrastructure in a given sector. Operating units belonging to the cluster are inter-linked by trading relationships, common customers or partners in their operating environment. The kind of relationship produces synergies that are vital to individual units’ efficiency and clusters’ general performance. During the previous plan, SIDO established infrastructure for an agro processing cluster in Rombo district and improved palm based innovative industrial cluster in Kigoma. The clusters will be promoted and linked with local resources in line with commodities products identified with ODOP strategy and MUVI programme in selected growth poles and development centers. The organization will work in close engagement with the local government to set aside land for SME development. In collaboration with local government SIDO will strive to create an SME land bank, and encourage local governments to make work places for SME development a priority in their development planning agenda. Target 1: Establish 3 new industrial clusters by the end of June 2014. Target 2: Sensitize establishment of 21 innovative clusters by the end of June 2014 Target 3: Set aside 102 plots for development of SMEs workplaces as part of SME land bank by the end of June 2014. 4.1.2.2 Establish and develop industrial estates Industrial Estate is an area allocated and utilized for establishing SMEs industrial working premises for production of goods and services. During the previous plan, SIDO facilitated establishment of SMEs’ operational base by rehabilitating existing buildings, and partnering with the private sector under (BOT – PPP) to build new ones. These efforts enabled 205 working structures with the capacity of holding up to 540 entrepreneurs to be developed. Development of the estates in the regions is based on the fact that SMEs need infrastructure in the establishment for industrial purposes. It is being envisaged that four such estates will be developed in Pwani, Manyara, Morogoro and Dodoma regions. 27 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) Target 1: Develop 4 industrial estates by the end of June 2014. Target 2: Ensure effective utilization of 157 buildings within the industrial estates by the end of June 2014. Target 3: Facilitate development of undeveloped land in existing 10 estates by the end of June 2014. Output 3 4.1.3 Artisans support services provided Artisans or Craftsmen are skilled manual workers who use tools and machinery in a particular craft like blacksmithery, tinsmithery, carpentry, handicrafts, weaving and motor vehicle mechanics. Artisans play a big role in addressing specific tastes and requirements of the communities. They are important to serve urban and rural communities as the only group available despite of the infrastructure problems. The group also serves specific demands like farm implements, home appliances and decoration equipment. 4.1.3.1 Provide artisan support services It has been realized that artisans’ production capacity is low, working spaces are inadequate and products are of low quality. This makes their products serve markets in their proximity and uncompetitive to the market far beyond their reach. During the previous plan, 417 types of technologies were disseminated, 400 tool kits were distributed and different support services were provided to 1389 artisans mostly in the rural areas. The organization will continue to support artisans to increase their production capacities and improve quality of their products. Efforts will be concentrated to develop and strengthen capacities of blacksmiths, tinsmiths, carpenters, handicraftsmen and weavers. The intervention will be in the form of skills upgrading aimed at quality improvement, provision of working tools/machines and working spaces. Target 1: Involve 1500 artisans groups in skills upgrading training by the end of June 2014. Target 2: Support 1200 artisans groups with working tools and BDS services by the end of June 2014. Target 3: Introduce 15 new artisan products to artisan by the end of June 2014. 28 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) Output 4 4.1.4 Technology Incubation Program enhanced Technology incubation is the process of nurturing and supporting development of ideas into physical marketable products and services. It aims at supporting entrepreneurs who have innovative and creative technological or industrial ideas for commercial undertakings. It increases the chance of establishment, growth and survival rate of enterprises. SIDO has been and will continue to encourage innovation of new products and services through incubation provide modular work premises with common facilities, managerial support and back up services to products developers. During the previous plan, eight industrial sheds were renovated and converted to create working space for incubation activities in Tanga, Arusha and Rukwa regions and a completely new structure was constructed in Mwanza region. Efforts to link incubate with technology development institutions such as Universities and other BDS providers will continue. The process starts at concept development, starting product development or improvement to a stage when the product reaches a marketable stage. The whole incubation period ranges between six months and three years. Initiative taken so far includes establishment of incubation units to provide support environment for innovative ideas. Post incubates will continue to be supported in collaboration with other stake holders following out of the wall methodology. 4.1.4.1 Convert Industrial Estate Structures to become Incubation Facilities Strategically, SIDO aims at converting industrial estate structures in ten (10) regions into incubation facilities. These buildings will be renovated to suit specific requirements of the type of products to be developed. Target 1: Convert 10 industrial estate structures at Dar es salaam, Singida Mwanza, Kigoma, Ruvuma, Iringa, Shinyanga and Mara to become incubation facilities by the end of June 2014. 4.1.4.2 Operationalization of Incubation Facilities In areas where the premises have been developed already, facilitation of the whole incubation process, from identification, recruitment and provision of support services will be done. SIDO will ensure effective utilization of the building structures already converted for the purpose. The operationalization will also 29 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) involve the converted industrial estate structures in Dar es salaam, Singida, Mwanza, Kigoma, Ruvuma, Iringa, Shinyanga and Mara regions. Target 1: Incubate 84 products ideas by the end of June 2014. Target 2: Provide advisory services to 124 Incubates by the end of June 2014. Target 3: 25 successful ideas will graduate and form new businesses by the end of June 2014. Output 5 4.1.5 Leather sector development programme enhanced SIDO considers leather sector as one of the priority areas to the development of SMEs in both rural and urban areas. Activities in the sub sector enhance the effort to contribute to value addition to agricultural and livestock raw produce. It addresses the challenges encountered while promoting leather tanning technologies and leather goods manufacturing applicable at micro leather processing level. Such constraints relate to better work environment in terms of working premises and facilities, working capital and after service supportive services. As a national strategy, SIDO program will operate in all regions, targeting groups of college graduates, school leavers and cobblers. The implementation approach during this plan will be through shared resource center, technological base support, and skills development training. 4.1.5.1 Establish Shared Resource Center Shared Resource Center for leather products is the center that has all common facilities required to cover for the whole process of leather products manufacturing which include designing, cutting, manufacturing and finishing section. The facility will be used to train and assist leather products manufacturers with innovative solutions through incubation process that will provide specific needs of the industry. Target 1: Establish 4 leather products manufacturing shared resource centers in collaborations with LGAs by the end of June 2014 Target 2: Equip 4 leather products manufacturing shared resource centers with working tools in collaborations with LGAs by the end of June 2014. 30 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) Target 3: Conduct 6 technological training courses through established centers by the end of June 2014. 4.1.5.2 Conduct leather skills development The competitive ability of leather products in the market is determined by the quality of the final product. Specific skills development is required in developing SMEs’ capacities to attain the specified quality and standard of their products. So far, a total of 396 entrepreneurs have acquired skills of tanning leather and manufacturing different leather products in 17 regions and enabled establishment of 63 leather based enterprises, which created 272 direct jobs. SIDO will continue to conduct skills development interventions so as to enhance the capacity of producing high quality and competitive leather and leather products. Target 1: Conduct 90 courses on leather tanning by the of June 2014. Target 2: Conduct 46 courses on leather products manufacturing by the of June 2014. Target 3: Conduct 2 TOT course on leather products manufacturing by the end of June 2014. 4.1.5.3 Provide technical support to SMEs Development and growth of leather and leather products is constrained by inadequate support and production guidance from experts. The technical support involves provision of machinery and equipment for the purpose of encouraging firms to invest and employ state of the art technology on leather. The intervention seeks to support small firms to acquire technology, machines and equipment. The facilitation aims at supporting SMEs to increase efficiency, quality and productivity. The facilitation will be done through the resettlement fund to be established purposely to speed up the implementation process. Target 1: Establish a fund to be used to assist leather enterprises by the end of June 2012 Target 2: Provide support to 153 enterprises to access working facilities by end of June 2014. 31 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) Output 6 4.1.6 Energy efficient and environmental friendly technologies provided Energy and environment are equally vital elements for SME’s development. Inefficient use of energy resources results into higher production costs and trigger more environmental degradation due to increasing efforts in search for energy to satisfy increased demand. Therefore while SIDO encourages SME’s development, it will implement initiatives which ensure environmental requirements are observed. Such initiatives are like advocating for efficient energy uses and promotion of increased use of environmentally friendly energy sources among its stakeholders, especially renewable energy resources. Renewable energy resources are naturally existing or self replenishing type of energy resources including Solar, Wind and Biomass. On the other side, strengthen the capacity of SME’s to use recycled or recyclable raw materials is inevitable; this is to ensure sustainable use of resources and maintaining the quality of environment by decreased waste and decreased raw material demand. The Organization will continue to support SMEs and TDCs to develop and improve energy efficient technologies such as solar, wind, bio-energy and hydro power. The intervention will be in the form of skill upgrading, provision of working spaces. 4.1.6.1. Disseminate energy efficient technologies to SMEs Consumption of energy is proportionally increasing with the level of development requirements. Since the fossil fuel which is non replenish able is highly used so there is need to use renewable and energy saving technologies to prolong the use of the same. During the previous plan, the Organization identified and disseminated 63 technologies in biomass, briquettes, energy saving equipment and solar energy aimed at reducing dependency and consumption of firewood and charcoal. The Organization will add up to a list of technologies to be disseminated to include solar, wind, bio fuel and bio gas during the plan period. Target 1: Transfer 7 new energy efficient technologies to SMEs by the end of June 2014. Target 2: Involve 1000 SMEs in skill upgrading on energy efficient technology by the end June 2014. 32 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 4.1.6.2. Promote waste management Waste generation from industries, public and institutional activities has a negative environmental effect and impact to the society. The minimization of negative impact of waste can be done through reducing waste generation, recycling and installing waste consuming industries. During the previous plan, SIDO facilitated SMEs to engage themselves in activities of waste management; 132 groups of waste collectors were organized, given proper training and thereafter provided with simple working tools used in the collection, sorting, grading solid waste materials and supplied them to recycling units. Concentration of recycling activities was on paper, plastic, saw dust and waste fish. The organization will contribute to waste management through disseminating waste consuming and recycling technologies. Target 1: Transfer skills on waste management to 945 SMEs by the end of June 2014. Output 7 4.1.7 Research Services provided Logically, healthy organizations are derived from well researched information and data. It is through research that the organization can have accurate and relevant information in updating and enhancing improvement of its services. Research explores the required need of the society; it helps to address the real demanded services to the potential and existing clients. Results of the researches will be used to develop interventions focusing on specific SMEs requirements. Specific focus will be placed on research for use of scientific result to improve the competitiveness of SMEs. 4.1.7.1 Conduct Research In the planning period, the organization will conduct research on services offered to SMEs, agro processing development and metal works and establishing their impact to the community. The research results will be used as a catalyst in planning new and improvement of existing initiatives that support SMEs development. Target 1: Conduct 3 researches by the end of June 2014. Target 2: Disseminate research findings from 3 researches to stakeholders by the end of June 2014. 33 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) Target 3: Develop 2 programs resulting from research findings by the end of June 2014. OBJECTIVE 2 4.2 TO IMPROVE TRAINING, CONSULTING AND EXTENSION SERVICES Output 1 4.2.1 Training Programmes for SMEs Implemented The organization will continue to upgrade skills, knowledge and attitude to its clientele Small and Medium Enterprises (pre starters, starters, existing, growth oriented enterprises and at Maturity stage enterprises), one of critical factors that hinder creation and growth of enterprises is the lack of entrepreneurship and business skills that would enable them to overcome some of the obstacles they face or plan strategically to grow in spite of them. This limits SMEs potential from the stage of opportunity identification, through business planning, implementation and management, diversification to accessing new markets and growth. However SIDO will in addition provide technical skills development and ICT and other specialised trainings including Training cum Production Centers (TPCs) that will help to stimulate economic development in rural areas. This intervention will result into establishment, growth and sustainability of enterprises in various sectors. Moreover, the intervention will address National Strategies especially One District One Product (ODOP), “Kilimo Kwanza” and MKUKUTA in areas of value addition to agricultural products, increase shelf life of processed food products, reduce post harvest losses, and create more job opportunities, increase income of the target beneficiaries. In three years period, SIDO plans to strengthen training programs by increasing the number of courses and participants through collaborations with other development partners through: 4.2.2.1. Conduct Training Needs Assessments (TNA) for SMEs and Training Providers The analysis identifies training gaps on SIDO clientele (Pre starters, Starters, Existing, Growth oriented and mature Enterprises at Micro, Small and Medium levels) and sectors in focus through entrepreneur’s own assessment of the problems and potential solutions. SIDO will further conduct training needs 34 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) assessment of its own staff and those of other BDS providers. During the previous plan, 533 training needs assessments were conducted. The assessment result will ultimately lead to developing training programmes that will address knowledge gaps identified. Target 1: Conduct 1973 TNAs in 21 regions by the end of June, 2014. 4.2.1.2. Develop/Improve Innovative Training Products / Programmes / Services for SMEs The knowledge, opportunities and skills gaps identified will lead to development of new and or in improving existing training programme for SMEs, staff and other business development service providers. During the previous plan, 87 existing modules were improved. Training programmes to be designed or improved will aim at responding to specific training needs to be identified and ensure efficient delivery of training programmes to maximize their impact. There is evidence that well designed training programmes and continuous improvements to learning mechanisms in SMEs have a substantial impact on productivity and added value. Target 1: 12 training programs designed/developed at SIDO Head Office by June, 2014 Target 2: 96 training programs designed/ improved by June, 2014. 4.2.1.3 Conduct training for SMEs SIDO has the responsibility to organize, conduct, monitor and evaluate the implementation of training programmes for SMEs. During the previous plan, training in the following main areas was conducted: 374 Courses in entrepreneurship skills development; 725 Courses in Business Management Skills development; 347 courses in Technical skills and 284 in ICT basic requirements and use. The training will address requirements of specific groups like pre starters, starters, existing and growth oriented SMEs. The programmes will cover all categories of skills such as entrepreneurship, business management, ICT and technical skills. Target 1: 720 Entrepreneurship and Business management courses conducted resulting into 18,000 participants trained by June 2014. Target 2: 300 Food processing courses conducted resulting into 7,500 participants trained by June 2014. 35 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) Target 3: 450 Technical courses conducted resulting into 11,250 participants trained by June 2014. Target 4: 252 Organizational skills courses conducted resulting into 6,300 participants trained by June 2014 4.2.1.4 Support services to Training Cum Production Centers (TPCs) TPCs help to stimulate economic development in rural areas by providing opportunities for employment and poverty reduction through enabling the potential trainees to acquire skills in technology, production and marketing. The TPCs are currently Food Processing Training Cum Incubation Centers (DSM and Morogoro), Njombe TPC, Dodoma Leather Centre, DSM Bamboo craft, Usangi and Mwanza Sewing School. These will continue to be strengthened in order to bring more impact to both rural and urban population. Target 1: Conduct 488 skills development courses to 12,200 SMEs by the end of June 2014 Target 2: 6 TOT courses conducted resulting into 150 participants trained by June 2014. Output 2 4.2.2 Business Consulting Services Provided to SMEs SMEs should not be left alone in their fight for survival after motivating and training to start new business, they need to be facilitated to grow, multiply and replicate into a sufficient (critical) mass across industries and sectors. In the process, the level of competitiveness and dynamism of domestic enterprises and, by implication, of the economy as a whole will be greatly enhanced through delivery of business information or advice to SMEs at their places of business. The problems to be addressed include lack of business information, technical and business skills among SMEs. According to past initiative enterprises were provided with business advisory services. During the planning period, the organization is committed to strengthen the services through: 36 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 4.2.2.1 Provide Management Advisory Services Business advisory services are pieces of information provided by SIDO extension officers to guide SMEs to establish, operate, monitor and make corrective measures to their businesses. The services are provided in office, on site and by using ICT. During the previous plan, 19,655 entrepreneurs were provided with advisory services in different business aspects. In terms of numbers, this is the activity with the overall highest number of clients. Normally, starters need to identify business opportunities and those in business need to improve productivity and profitability and sustainability. The organization will ensure the capacity to appropriately guide them is in place. Target 1: Provision of advisory services to 75,599 enterprises by the end of June 2014. 4.2.2.2 Conduct business diagnostic Studies Business diagnosis is the process of checking the status of an ongoing business to uncover the inherent weaknesses and challenges. Many SMEs don’t operate well and the need for this service is potentially high. However the service offered has to be paid for as it is resource and professionally very demanding. During the previous plan, operational status of 583 operational enterprises was established and proper guidance provided. The intervention will be continued during the plan period with the aim of identifying operational and managerial gaps then facilitate prescribing solutions to the businesses prosperity, growth and sustainability. Target 1: Conducting 255 enterprises’ diagnostics studies (health checks) by the end of June 2014. 4.2.2.3 Carry out Area Development Surveys (ADS) An area development survey is a study which explores the potential resources/ opportunities available in a location for utilization in investment decision making. During the previous plan, 131 surveys were conducted in different districts. The survey results are used as inputs for investment undertaking and establishment of project feasibilities. Target 1: Conducting 255 Area Development Surveys by the end of June 2014. 37 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 4.2.2.4 Prepare Techno Economic Profiles (TEPs) A techno economic profile is a document containing technical, market, financial, social and environmental analyses used as a guide for an investment opportunity. SIDO uses Computer Model for Feasibility Analysis and Reporting (COMFAR) and Company Project Profile (CPP) software as analytical tools to establish viability of business opportunities and enable potential investors to undertake further analysis for investment decision. Target 1: Prepare 255 techno economic profiles by the end of June 2014. 4.2.2.5 Provide Counseling/Coaching services to SMEs Counseling is a guided process of self discovery, which could also be described as ‘coaching’. The counselor helps a client to identify challenges, opportunities and resources, define options and select a course of action. However, small business owners cannot afford to access commercial expertise. Besides own staff, SIDO will use experienced entrepreneurs by way of knowledge, skills and attitude transfer to continuously guide young businesses for success and stability. Targets 1: Conduct counseling and coaching to 2,257 SMEs by the end of June 2014. Output 3 4.2.3 SME Industrial Cooperatives, Associations & Self Help Organizations (SHOs) Strengthened. SMEs including special groups/ associations like women, youth, disabled and retirees are facing common business enterprises problems such as lack of group formation skills, savings mobilization skills, management skills for savings and credit services, entrepreneurship skills and lack of skills to formulate group constitutions. These challenges have been pulling back the SME efforts to grow. According to past initiatives, SIDO supported formation of SME cooperatives / associations and 478 were strengthened. SIDO also facilitated 591 SMEs access to other business / financial services. During the plan period, the organization will continue with its supportive efforts on formation and strengthening SME cooperatives / associations as follows: 38 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 4.2.3.1 Facilitate formation of SMEs cooperatives/associations/ SHOs SMEs cooperatives/associations are voluntary groups or associations of individuals and/or individual businesses who share and jointly pursue a common interest. They have all come into being as a result of an original and genuine act of collective self help. SIDO realizes that with its limited means it will not be able to reach a majority of enterprises and provide them with all required services. It is therefore building on initiatives within the sector for the mutual provision of services of entrepreneurs to each other, in particular by forming selfhelp organizations for the mutual provision of services by members to each other. Target 1: Facilitate formation of 306 SME cooperatives, associations and SHOs by the end of June 2014. 4.2.3.2 Facilitate Strengthening of SMEs cooperatives, associations and SHOs Strengthening in this case means improvising capacities in terms of management of the cooperatives/associations. SIDO will provide capacity strengthening services to SME associations, in the areas of leadership skills development, constitution making, savings mobilization, credit provision, administration and general business management. Target 1: Support strengthening of 502 SME cooperatives, associations and SHOs by the end of June 2014. 4.2.3.3 Access to SME business service providers SIDO supports Cooperatives and SME association to have easy access to financial resources, business development services, and organizational skills through network of differentiated services. Target 1: Facilitate 1565 SME cooperatives, associations and SHOs to access business services by the end of June 2014. Target 2: Facilitate 764 SME cooperatives, associations and SHOs to access financial services by the end of June 2014. 39 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) Output 4 4.2.4 Regional Offices Service Delivery Capacity Strengthened Regional Offices are the main actors of SIDO and as such improving their performance is at the heart of the Organization. Higher efficiency results from increased knowledge and skills of the staff, more and better working tools and equipment constant monitoring and evaluation which results into better feedback for prudent and quick decision making. Regional offices are the hub of extension services and as such proper and frequent networking with SME stakeholders is necessary. During the plan, monitoring of Regional Offices’ meetings, supervision implementation of business plans, networking and collaboration with partners and stakeholders will be adopted and implemented:- 4.2.4.1 Train Extension Staff and BDS Providers With respect to Extension Staff training, there are still gaps between the SME demands and the services provided by SIDO. Staff skills at all levels have been developed in order to create harmony and ensure smooth implementation of strategies in the Corporate Strategic Plan. Additional resources will be needed to upgrade/develop skills of staff on new products and systems at HQ’s and RO’s. Preference is given to group approach so that each professional staff undergoes at least one training (basic or upgrading) in a year. There are a number of public and private institutions supporting development of SME, through provision of business development services. The challenge is how these institutions can be mobilized and coordinated so that not only they apply best practices in supporting SME development but also address their constraints to have far reaching consequences in terms of impact and outreach. Target 1: 15 staff group training by June 2014. Target 2: 10 group training for BDS providers conducted by June 2014. 4.2.4.2 Supervise implementation of the Regional Offices’ Business Plans It is an ongoing good practice that every year Regional Offices prepare business plans which are being discussed and agreed upon by the Management for implementation. These plans are usually subsets for the Board approved Corporate Strategic Plan. Through the MIS, the Head Office is in a better position to supervise implementation. 40 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) Target 1: Supervise preparation of 96 Business Plans by the end of June 2014. Target 2: Monitor implementation of 252 Business Plans by the end of June 2014. 4.2.4.3 Strengthen Networking and Collaboration with Stakeholders SIDO alone cannot satisfy SMEs’ requirements of capital, technical and capacity building services hence the importance to build synergies with other stakeholders in order to address SMEs’ needs. During the previous plan, 577 contacts were made with stakeholders aimed at discussing, supporting and exchanging experiences for the benefit of the SMEs in their particular areas. Concerted efforts were made to enable clients to access services from different providers such as loans, tenders, markets and financial assistance. The organization will continue to play its role in developing capacities of SMEs’ support organizations to network between themselves and others. These efforts will be up scaled during the plan. Target 1: Number of meetings with 1260 stakeholders by the end of June 2014. Target 2: Facilitate implementation of 510 joint interventions by the end of June, 2014. 4.2.4.4 Organize Regional Offices’ meetings There is an operating Management Information System for easy information dissemination. It is statutory for the Regional Offices to hold monthly management meetings and quarterly meetings of the RSMEAC as tools of activities monitoring and evaluation. Reports and minutes are being submitted to the head office for information, advice and decision making if need be. Smooth implementation enables the head office at any time to know what is happening in the regions and to take remedial measures where needed. It is however important to stress the fact that most of the decision making has been decentralized to the regions. Target 1: Organize 567 Regional Offices’ meetings by the end of June 2014. 41 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) Output 5: Rural Industrialization and Value Addition Strategies and Programmes Implemented 4.2.5.1 One District One Product Strategy (ODOP) Implemented The One District One Product (ODOP) is a rural industrialization strategy emulated from the One Village One Product (OVOP) of Japan, where products are developed based on resources and features unique to particular villages. Due to scarce resources in Tanzania and our level of development, the ODOP strategy is being implemented at district level. The strategy focuses on achieving equitable rural economic development and reduction of constant rural urban migration through promotion and development of district specific products and services. The same is done by capacity building of interventions of communities/enterprises and value addition to local resources through processing and marketing. The ODOP approach encourages farmers or firms to develop a product or service unique to their district and develop it into a nationally and a globally recognizable product. Furthermore, it intends to identify unexposed unique products in a district by considering local resources and skills available based on comparative and competitive advantages. The Government is in full support of this strategy and has already committed some funds to the tune of Tshs. 303 million for the development and operations during the previous plan period. In implementing this strategy SIDO is partnering with LGAs and the private sector through TCCIA under TPSF. The outreach to SMEs is done through provision of credit, capacity building and advisory services. The responsibility of selection of products lies on the LGAs and the private sector. The challenges in implementing the strategy are inadequate funding and inadequate working facilities. The success so far are reflected in the number of SMEs served about 16% of enterprises receiving SIDO services. 4.2.5.1.1 Promote ODOP Strategy In order to make ODOP Strategy better known to stakeholders SIDO will continue to promote the strategy country wide at all levels from village, districts, regional and at national level. The objective is to ensure that stakeholders integrate the strategy into their own plans. Promotion strategies will include sensitization and awareness creation workshops, radio programmes, publicity materials, exchange visits, organized exhibitions and other marketing programmes, Target 1: 42 66 awareness workshops conducted in the Regions and at HQs. CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 4.2.5.1.2 Provide services to selected district products The strategy is being implemented through development technical economic profiles for selected products, facilitate business plans preparations for enterprises, and provide business development and financial services to primary producers and processors. During the previous plan, support services through the program were provided in 120 districts covering 40 products, facilitating establishment of 1077 small industries, which in turn created 5089 jobs. Target 1: 1,875 New industries established by June 2014. Target 2: 7,688 Existing industries supported by June 2014 Target 3: 9,377 Jobs created by the industries by June 2014 4.2.5.1.3 Establish working relationships with Local Government Authorities (LGAs) In order to ensure the success and sustainability of ODOP program country wide, SIDO in collaboration with the Ministry responsible for LGAs will develop joint memorandum of understandings (MoUs) which will spell out how the program activities will be mainstreamed and integrated into district plans. Target 1: MoU signed with Ministry of Regional Administration and Local Government (RALG) by June 2014. 4.2.5.2 Rural Micro, Small and Medium Enterprises programme - “MUVI” Supported The Rural Micro, Small and Medium Enterprises (RMSMEs) program popularly known as MUVI was developed to support Rural Micro, Small and Medium Enterprises through selected value chains, to deliver sustainable margins to producers in order to increase their income and reduce poverty. MUVI targets rural poor entrepreneurs with means and motivation to enter the market. The programme operates in six regions of Pwani, Tanga, Manyara, Mwanza, Iringa, and Ruvuma. Implementation of the project is done through, Communication in Rural Business, Rural Business Support Services and Institutional Strengthening components. 43 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 4.2.5.2.1 Facilitate provision of communication in Rural Businesses The aim is to enable value chain stakeholders to communicate and improve their awareness of market opportunities and how to exploit them. So far, the Media Implementing Partner (MIP) has been contracted with the main task of preparing the communication strategy and coordinating its implementation. The Media Implementing Partner has prepared and delivered a communication strategy, which was approved thereafter. RMSMEs themes or issues to be addressed by Media outlets include, among others; markets, technology, credit or finance; entrepreneurship, policies and regulations. The implementation base has been developed through MUVI branding (Log design, tag-line vision statement music jingle), stakeholders corporate sponsors meetings, MUVI web-site establishment, selection of partner radio stations, news paper stations adds, fliers, posters, books etc. as well as capacity building of programme / SIDO staff and Radio staff. On the other hand, communication will facilitate knowledge management to improve development effectiveness. Knowledge sharing and innovation systems will be an integral part of the program implementation framework including use of IFADAFRICA Network and other thematic networks to share experiences. Target 1: Number of listeners of MUVI Programme increase by 20% by June 2014 Target 2: Training bids awarded and workshops implemented by June 2014 Target 3: Printed materials distributed and radio broadcasts scheduled as per listening groups activities 4.2.5.2.2 Facilitate provision of Rural Business Support Services The rural business support services are activities which enhance development and strengthen the selected value chains. These include tendering process; rural business strengthening; rural business brokerage and development services. The actual provision of support services are being done by Value Chain Implementing Partners (VCIPs) who were contracted to do the diagnosis and whose results led to selection of 12 value chains in the six participating regions. The selected Value Chains are Sunflower (in Mwanza, Manyara, Tanga, and Iringa); Cassava (in Ruvuma, Mwanza and Pwani); Livestock (in Manyara); Fruits (in Pwani, Tanga); and Tomato (Iringa). 44 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) The Value Chain development and implementation is in progress. The VCIPs have established their operational offices, identified and linked with other value chain actors (farmers groups, transporters, producers, processors, input suppliers etc). They also have formed the value chain development facilitation teams, established pilot districts, developed final participatory investment plans and validated them. Target 1: Increase in number and membership (male and female) of producer and trade organizations 50% by June 2014 Target 2: Increase of people in formal associations including SACCOS/ SACCAs registered increase 150% by June 2014 Target 3: Increase in number of business plans completed 175% by June 2014 Target 4: Number of brokers/BDS introduced to potential clients 4.2.5.2.3 Facilitate institutional strengthening The programme aims at facilitating provision of skills and strengthening capacities of public and private sector bodies involved in value chain implementation to ensure efficient and effective support to rural RMSMEs in target regions. These include MITM, SIDO, regional and district local government authorities and private sector service providers. The skills development are in areas of project accounting, tendering, procurement, knowledge learning and sharing through exchange visits, Customer Care, and Contract Management. Also, the need for an effective, operational Environmental Impact Assessment process will be addressed. During the previous plan, capacities of the offices to be actively used by the program’s operations were enhanced by procuring and putting in place all the necessary working systems and facilities such as monitoring and evaluation framework, motor vehicles, office equipment, furniture and fixtures. Target 1: Number of TA contracted by 2014 Target 2: At least 15 study tours completed for District level personnel by 2014 Target 3: At least 15 study tours completed for Regional level personnel by 2014 Target 4: At least 30 person courses for Regional staff in specific technical issues completed 45 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) Target 5: At least 25 person courses for District staff in specific technical issues completed OBJECTIVE 3 4.3 TO DEVELOP AND IMPROVE MARKETING AND INFORMATION TECHNOLOGY PROGRAMMES SIDO will strengthen strategic marketing and information communication technology programmes so as to assist and increase meaningful participation of SMEs in local and global economy. Moreover, SIDO will continue to increase the pace of promoting and creating awareness on its services and activities locally and internationally. Output 1 4.3.1 SMEs Ability to Access Local and International Market Increased Small and Medium Enterprises’ access to local and international markets is a tool to spearhead creation and growth of enterprises. It opens up their minds, make them take businesses into a wider perspective and produce goods and services acceptable to customers. SMEs’ businesses are being conducted in challenging and dynamic environment. Furthermore most of SMEs are operating with limited business knowledge and skills. Recent initiatives taken include, organizing zonal exhibitions and trade fairs, carrying out market surveys, developing/ improving marketing tools, sourcing market opportunities and availing them to SMEs. Strategically, SIDO aims at increasing SMEs ability to access local and international markets through: 4.3.1.1. Develop and Improve Marketing Tools Marketing tool is a method that gives the opportunity to quickly promote a business to a prospective customer. During the two years of CSP III, the organization developed 3 different marketing products. SIDO continues to explore, develop and improve different marketing tools in response to changing market requirements like brochures, postcards, newsletters, websites, exhibitions, marketing campaigns, mails and advertising. Target 1: 46 Develop/improve 15 marketing tools by the end of June 2014. CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 4.3.1.2. Conduct Periodic Market Surveys Market survey is the process that embraces market opportunities and requirements through promotional campaign, consumer market research and assimilation of market feedback. The result of market surveys will provide management with relevant, accurate, reliable, valid and current information for proper decision making regarding planning, implementation and control of marketing programme. During the two years of CSP III, 128 market surveys were carried out to establish the current real taste and demand of customers. As a result marketing programmes were developed to respond to specific market requirements. SIDO sees the need to explore and guide SMEs to capture market opportunities for development and growth that cover full range of the market performance. SIDO will carry out market surveys in order to establish facts on existing and potential markets for SMEs products and enhance its capacity to provide well informed market interventions. SIDO sensitizes, mobilizes and facilitates SMEs to understand the regional and global market requirements in order to become competitive in the markets. Target 1: Conduct 291 periodic market surveys by the end of June 2014. Target 2: Identify 1500 new market opportunities including market related services by the end of June 2014. Target 3: Expand and strengthen export promotion activities for SMEs in 135 export driven events by the end of June 2014. 4.3.1.3 Promote Business Linkages between SMEs and Large Enterprises Exposure of SMEs’ products to a wider market including large business enterprises like hotels and super markets, Government and non governmental institutions is a way of enhancing SMEs business growth. Most business enterprises supply products and provide its services to markets within their reach. Though they are aware of potentials of a wider market, but due to their limited operational capacities they don’t explore how their businesses could be expanded to reach that far. The fact denies them the advantages of economies of scale and of serving different market segments. The organization will sensitize SMEs to establish business cooperation, alliances with large enterprises and between themselves. The arrangement will take a 47 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) form of working as and through agents. The intervention aims at stimulating the growth and sustainability of SMEs products and services in a wider market. Target 1: Promote 291 business linkages between SMEs and large enterprises by the end of June 2014. 4.3.1.4 Facilitate Tendering for SMEs SMEs fail to participate and win tenders from various institutions including Government Authorities due to inadequate access to information. Moreover, lack of confidence and inadequacy of knowledge on tendering procedures are the major challenges to SMEs in participating in the tendering exercise. In the two years of CSP III, 123 SMEs were assisted to sell their products through tendering system. Most of tenders were obtained from local government. SIDO will facilitate SMEs to acquire various techniques which will increase their involvement in tendering. SMEs will be coached on how to effectively participate to win tenders. Target 1: Facilitate 273 SMEs to participate in tendering by the end of June 2014. 4.3.1.5 Promote SMEs’ Business through Exhibitions and Trade Fairs Products and services exhibition is a specific event to display and demonstrate products and services made by SMEs. Products exhibitions and trade fair events expose SMEs’ goods and services to potential customers, and give them opportunity to share experiences, learn from each other, enhance their chances to enter into new market and sharpen their competitive edge. During the two years of CSP III, the Organization organized 17 zonal exhibitions and facilitated SMEs to participate in DITF, Nanenane, Africa Industrialization day and Women day. The events attracted 3104 exhibitors from different corners of the country. As a result, exhibitors made sales of products and services worth Tshs 2.605 billion. SIDO will stimulate and facilitate active participation of SMEs to local and international products’ exhibition events organized by both SIDO and others. On the other hand, more emphasis will be placed on exposing machines, equipment and tools to be manufactured by SMEs for developing of production and service provision capacities of other business entities and final consumers. 48 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) Target 1: Organize 26 SMEs’ products exhibitions by the end of June 2014. Target 2: Facilitate SMEs’ participation to 55 trade fairs by the end of June 2014. Output 2 4.3.2 SIDO Services Awareness and Accessibility Increased The response of stakeholders towards SIDO services is determined by their level of awareness and how the services are packaged and presented to them. The demand for business development and financial services is quite high, but SIDO is serving just a fraction of it. This is due to inadequacy of SMEs’ awareness to SIDO services. Therefore, there is dire need of creating further awareness to a bigger clientele to enable them to utilize the services. In the previous plan the customers accessed information on SIDO services through promotional events and SIDO website. In this plan, the Organization will enhance its services and develop marketing strategy to promote and create awareness for the public to use the same effectively. 4.3.2.1 Promote SIDO Services To ensure SIDO services are being consumed by intended customers, the Organization will continue to develop and avail various promotional programmes through SIDO website, audio – visual, print media and promotional events. During the two years of CSP III, 412 events covering the Organization activities appeared in different television programs and articles in different newspapers at regional and national level. The services were carried out during the SIDO zonal exhibitions, special visits made to promote SIDO services and use of SIDO website. Target 1: Develop the SIDO services marketing strategy by the end of June 2012 Target 2: Promote SIDO services through 255 television broadcasts by the end of June 2014. Target 3: Promote SIDO services through 302 articles in print media by the end of June 2014. Target 4: Promote SIDO services through 313 radio Programmes by the end of June 2014. 49 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) Target 5: Promote SIDO services through participating in 138 promotional events by the end of June 2014 Target 6: Promote SIDO services through website, 564 postings to SIDO website by the end of June 2014. 4.3.2.2 Develop Promotional Materials A Promotional material is one of the tools which enable both SIDO and SMEs to market their services to customers. SIDO has a responsibility of developing the promotional tool for marketing its services as well as SMEs’ products. During the two years of CSP III, 411 promotional materials were prepared and distributed to the public. The materials produced included SIDO Habari newsletter, brochures, fliers, wall calendar, rollup banners, business cards holders, insurance cover stickers, T- shirts, caps and SMEs brochures. Target 1: Develop 76 types of promotional materials to market the Organization services by the end of June 2014 Target 2: Develop 55 types of promotional materials for SMEs by the end of June 2014 4.3.2.3 Promote Networking and Collaboration SIDO has always realized the importance of cooperating with other local and international operators in providing support to businesses and services. Thus, the Organization will continue to create and utilize all such opportunities. In the two years of CSP III, 66 Meetings were organized by SIDO and its members of staff participated in 352 meetings, seminars and conferences organized by other stakeholders. Target 1: Organize 1,095 local and international meetings by the end of June 2014 Output 3 4.3.3 Information and Communication Technology Services Provided Information and Communication Technology (ICT) is the most efficient and cost effective tool in collecting, processing, storing and disseminating information. Inadequate organizational capacity challenges the effort of providing supportive 50 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) services to SMEs. Furthermore, limited skills and access to a pool of information hinders SMEs to produce market driven products, explore market potentials, work on investment opportunities, technology sources and other related business information. In the previous plan, the organization implemented interventions that focused at improving the capacity of information and communication technology whereas information centers were established in the regions and trainings on ICT applications were conducted. In enhancing provision of ICT services, the Organization plans to: 4.3.3.1 Provide information Services through Information Centers Knowing that information is power, SIDO mechanized techniques to facilitate dissemination of business information to SMEs. Information and Display Centers are being established in all SIDO regional offices to serve the purpose. During the two years of CSP III, 15 information centers were established at SIDO Head Office, Dar es salaam Industrial estate, Dodoma , Sumbawanga, Arusha, Singida,Kigoma, Mwanza, Ruvuma, Lindi, Kagera, Tabora, Mara, Mtwara and Mbeya Industrial estate. The services of the centers attracted 1281 entrepreneurs. These Centers will provide reliable and high quality services to meet the SMEs needs. Information Centers will be used both for building ICT capacities as well as availing business information to SMEs. The initiatives will be taken to enable SMEs to access information from the centers. Target 1: Provide information services to 94,640 people through information centers by the end of June 2014. OBJECTIVE 4 4.4 IMPROVE AND EXPAND FINANCIAL SERVICES DELIVERY Output 1 51 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 4.4.1 Increase Availability of Credit Funds, Delivery and Advisory Services Limited access to finance is among constraints facing SMEs’ business development. This limits SMEs capacity to establish, survive, grow, expand their markets and eventually increase incomes. It is important to improve financial services delivery to meet increasing demand of the service by SMEs and the challenges thereafter. In the previous plan the Organization managed to expand the capital and therefore portfolio base and ensuring an efficient financial services delivery system. In this plan the Organization will continue to liaise with various financial institutions in supporting SMEs to access financial facilities. Moreover, sealing working relationship with other institutions on provision of financial services to clients will be made. Strategically the organization will focus on: 4.4.1.1 Improve performance of portfolios Managing credit portfolio is an important aspect for ensuring growth, stability, and sustainability. Apart from the virtually good looking facets, credit management has also to lead to provision of socio economic benefits to the clientele. In the two years of CSP III, 11,779 loans valued at TShs. 9.436 billion were disbursed to entrepreneurs. As a result 23,945 jobs were created and the performance of the existing portfolio was good with an average loan repayment rate of 96%. At the same time the organization will continue making further improvement on financial services delivery mechanism in order to meet increasing demand of the service by SMEs and the challenges thereon. Target 1: Disburse loans worth Tshs. 27.9 billion by the end of June 2014 Target 2: Disburse loans to 11,160 SMEs by the end of June 2014 Target 3: Increase portfolio size from 16% to 20% by the end of June 2014. Target 4: Increase the loan repayment rate to 98%. 4.4.1.2 Mobilize Credit Funds from New Sources The demand for SIDO’s financial support to SMEs is higher than the capacity of the organization to meet it. The services have been mostly relying on traditional source which is mainly capital injection from the Government. In two years of 52 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) CSP III, SIDO received Tshs. 940 million to boost the NEDF credit fund from the Government budget. Efforts will be made to expand the capital and therefore portfolio base by mobilizing credit funds from new sources which include TIB Agro Processing Fund, NMB JUHUDI managing the credit portfolio Credit Guarantee Fund. Target 1: Mobilize credit funds to Tshs 10 billion from new sources by the end of June 2014. 4.4.1.3 Provide Financial Advisory Services to SMEs Experience shows that SMEs are not only constrained by inadequate access to finance but also financial management. Financial advisory services help SMEs to address financial challenges that are encountered during establishing and operating their businesses. SIDO will continue to liaise with various financial institutions such as banks that have shown interest and willingness to collaborate in supporting SMEs. Moreover, establish a link through which SMEs could access their financial services and to ensure delivery system is working. Target 1: Search and provide information on 15 types of credit schemes by the end of June 2014. Target 2: Provide financial advisory services to 36,400 entrepreneurs by the end of June 2014. OBJECTIVE 5 4.5 TO DEVELOP AND IMPLEMENT CAPACITY BUILDING FOR THE ORGANIZATION Output 1 4.5.1 Human Resources Capacity Enhanced The organization is considered healthy if its employees are competent and capable in delivering services that cater for what are demanded by potential customers. Recruitment of appropriate personnel, ensuring continuous staff capacity building and other intrinsic and extrinsic motivators lead to increased efficiency and productivity of an organization. Business service delivery within the dynamic, challenging environment demands for continuous human resources development to cope with the changes. In the 53 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) previous plan, 180 members of staff were involved in various skills development initiatives. The imparted knowledge has had an impact on their efficiency and productivity in delivering quality services. In this plan the organization will continue to ensure appropriate recruitment, maintaining and upgrading skills of the staff, establish retention, succession and retirement schemes. Furthermore, ensure maintenance of staff health, address issues of HIV/AIDS pandemic and set up a clear internal communication system. Strengthen workers organization (TUICO) as a bridge between workers and management to sustain harmony and conducive working environment. 4.5.1.1 Recruitment of staff Recruitment of staff will be done to fill vacant posts. The recruitment will also consider the importance and requirements of succession. Target 1: June 2014. Recruit 50 professional staff to fill vacant positions by the end of 4.5.1.2 Establish Succession Plan Succession planning is a process for identifying and developing internal people with potential to fill key leadership position in the organization. It increases the availability of experienced and capable employees that are prepared to assume these roles as they become available. The Organization recognizes the importance of succession plan in improving employees’ commitment and retention, meeting the carrier development expectations of existing employees and counters the increasing difficulty and cost of recruiting externally. In doing so, the organization plans to build a database that can be used to make better staffing decisions for key positions. Target 1: Establish and implement a succession plan by the end of June 2012 Target 2: Update staff database 6 times by the end of June 2012. 4.5.1.3 Prepare Staff Development Programmes Staff development involves identification and preparation of training programmes, upgrading and promoting staff, study tours and exchange programmes to improve their performance. Employees’ performance assessments will be reviewed in line with agreed organization objectives. Proper in house and external training programmes will be put in place according to TNAs conducted. 54 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) Target 1: Implement 10 staff skills development programmes by the end of June 2014 4.5.1.4 Conduct Health Check-ups of Workers The Organization will implement health improvement and maintenance for its members of staff through HIV/AIDS intervention, conducting awareness campaigns and voluntary medical check-ups for ailments like blood pressure, diabetes, cancer etc. Target 1: Conduct 6 health check-ups of workers by the end of June 2014 Target 2: Implement HIV/AIDS work place programme by providing incentives by the end of June 2014. Output 2 4.5.2 Operational Capacity of Organization Enhanced Working facilities, tools, equipment and supportive systems are among the milestones for the quality service delivery. Provision of quality goods and services to the clientele is limited by inadequate financial resources, office infrastructure, working facilities like computers, transport facilities, training equipment as well as furniture and fixtures, operational manuals and guidelines. In the previous plan, the Organization, to some extent managed the situation through improving building structures, facilities and systems. In that regard the concerted efforts are needed to ensure availability and maintenance of good working environment for better service delivery. In this plan the following targets will be implemented: 4.5.2.1 Ensure availability of training facilities Effective delivery of training services requires appropriate space and equipment such as flip chart stands, Liquid Crystal Display (LCD) projectors, digital cameras, food processing machinery and equipment. The Organization aims at improving physical environment, comprehensive and relevant modules which are user friendly and spacious training rooms which are furnished appropriately. Target 1: Develop 8 training rooms by the end of June 2014. Target 2: Equip 8 training rooms with basic facilities by the end of June 2014. 55 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 4.5.2.2 Improve office working facilities Office infrastructure, working facilities like computers, transport facilities, as well as furniture and fixtures, operational manuals and guidelines are indispensable in executing effective extension services to SMEs. Target 1: Purchase 18 Vehicles for transport facilities by the end of June 2014 Target 2: Provide better working facilities to 15 regional offices by the end of June 2014 Target 3: Develop and upgrade 22 operational manuals by the end of June 2014 Target 4: Construct 5 regional offices by the end of June 2014 Output 3 4.5.3 Capacity of ICT System of Organization enhanced. An efficient information system is one of the factors that facilitate the achievements of the goals set by an organization. Basing on that, SIDO will continue to enhance the ICT system through integrating various IT functionalities. The established system will organize the information resources; facilitate automation and supports interactions among users within and outside the organization. In previous plan the SIDO system has been strengthened through acquisition of domain and mail servers, obtained website software and updated mailing system. During the plan, the following will be done: 4.5.3.1 Develop an Intranet of the Organization Intranet is a computer network with restricted access, as within a company, that uses software and protocols developed for the internet. SIDO will endeavor to establish an intranet system which will organize the information resources to enable staff members share Information, facilitate assignments of tasks and schedules, share news and opinions. The main objective is to strengthen the knowledge base and ease interactions among staff members. Target 1: Develop an intranet of the Organization by the end of June 2013 Target 2: Develop Automatic Management Information System – MIS by the end of June 2012. 56 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 4.5.3.2 Improvement of SIDO Website to Portal Portal is the website that functions as an entry point to the internet by providing useful content and linking to various sites and features. Modernization of SIDO website will boost interactions among SMEs and the SIDO system. Development of Web portal will focus on expanding the features of utilization of ICT resources for SMEs such as news boards, enrichment of e-business features such as e-marketing, support of ecommerce websites etc. Target 1: Improve SIDO website to portal by the end of June 2014 Output 4 4.5.4 Organization capacity to document, monitor and evaluate SIDO services and systems developed For the Organization to track the performance of its services, proper documentation of the whole process of services provision is crucial. During the plan period, the organization envisages to establish a Monitoring and Evaluation (M&E) unit. The unit will be responsible to ensure the M & E process is effectively done. Through M&E process the organization will be in a position to understand the path of progress of the services through implementation process and put the services on the right track by recommending on corrective measures timely. 4.5.4.1 Establish a Functioning Monitoring and Evaluation Unit At anyone point in time, there are various activities going on within the organization. Feedback mechanism on the ongoing activities is imperative to the management at all levels that is at operational and supervisory levels. Monitoring helps in indicating the path of progress of the services through implementation process and puts the services on right track by facilitating the management to take corrective measures for better future implementation. For the past three CSPs, SIDO has been improving methods of gathering information with respect to its services offered to SMEs. The improvements made were not properly harmonized leading to a need to establish an effective coordinating unit which will also accommodate changes emanating from emerging National policies, strategies, directives and programmes. In implementing CSP IV the following will be done: 57 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 4.5.4.1.1 Improve Management Information System (MIS) Management Information System is a systematic procedure of collecting, compiling, transmitting and distributing information within an organization. The information should then be stored in a fashion that allows easy retrieval. MIS is a useful tool for measuring ongoing activities, quickly responding to deviations from plans and ensuring that necessary action is taken. MIS will create a flow of information between the operative, supervisory and managerial functions. Target 1: Improve the existing MIS manual by the end of June 2014 Target 2: Develop MIS software by the end of June 2014 Target 3: Develop capacity of storing information by the end of June 2014 Target 4: Improve a feedback mechanism to staff by the end of June 2014. 4.5.4.1.2 Track implementation of activities at all levels The organization will monitor implementation of its activities in order to maintain or improve its performance over time so as to ensure the targets are achieved as planned. The monitoring will be done through routine data collection, analysis, supervision, annual surveys and quarterly reports through visits, observations, and recommendations. Target 1: Prepare 306 monitoring reports by the end of June 2014. 4.5.4.1.3 Enhance evaluation of SIDO services Evaluation is a process of analyzing and interpreting data, making deductions and recommending better measures for future implementation. The main aim is to determine the relevance and fulfillment of the objectives, efficiencies, effectiveness, impact and sustainability. It allows mid-way interventions in terms of introducing required strategic changes in implementation along with providing an assessment of degree of attainment of objectives. Development and operations of the Organization will be evaluated annually, though mid year reviews could be done to track the trend and establish the direction. Target 1: Establish SIDO evaluation system by the end of December 2011. Target 2: Carry out 66 evaluation visits by the end of June 2014. 58 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 4.5.4.1.4 Strengthen internal control system Observance of established policies, procedures and limits is an integral part of the internal control system. Variation from the set benchmarks and performance indicators are captured and reported accordingly with recommendation of remedies to be taken. The internal audit is an internal control process responsible for aspects of financial and management implementation reviews of efficiency and effectiveness of the system within the organization. It ensures adherence to rules and procedures during implementation. It also facilitates identification of areas of risk and management process; provides advice about effective mechanisms to manage the resources of the existing and new activities. Target 1: Conduct 264 internal audits by the end of June 2014 4.6 THE MARKET The demand for SIDO services reveals the type of clientele the services have to be directed to. SIDO provides Business Development and financial services to its targeted market in rural and urban areas. The main clients include formal and informal sector enterprises which fall under micro, small and medium enterprises referred to as SME sector. The market segment of the SIDO services cuts across four categories of pre starters, starters, existing and growth oriented clients and service providers. The services being provided by SIDO are aimed at enabling capacity development to indigenous entrepreneurs therefore facilitate their increased participation in value addition, other income generation and job creation activities. In that case the market will include: 4.6.1 Pre-start ups This segment includes graduates from various higher learning institutions, colleges, skills development centres and school leavers as well as other residents who have not yet started any business or income generating activities. The strategy on how to serve this segment includes the following activities; how to Start Your Business (SYB), entrepreneurship skills, preparation of business plan, business enterprise development facilitation and provision of information on various available support services. The approaches that will be used include sensitization, guidance, and facilitation to establish and run their businesses sustainably. 59 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 4.6.2 Start-ups Start-ups at Micro, Small and Medium levels are entrepreneurs/ enterprises which are in the process of investing into actual production of goods and services. This segment will be provided with business development and financial services comprised of marketing and Information, business linkages, skills upgrading, working tools, credit and linkage to financial institutions; technical support and business management training. The strategies of sensitization, guidance, facilitation to establish and run their businesses sustainably will be based on both clients’ demand and SIDO’s pro-activity. 4.6.3 Existing SMEs Existing growth oriented small businesses are those already established enterprises with growth potential in terms of income generation, job creation and market expansion. Assistance will be provided on capacity strengthening services such as specific business skills, technical and management support, entrepreneurship skills, credit and financial linkages. The services will be provided on demand and SIDO’s initiatives to attend them both in office and on site with a view of assisting them to consistently grow to medium enterprises level. 4.6.4 Other Service Providers to SMEs Service Providers to SMEs refers to institutions (private or public) providing business development and financial services like LGAs, NGOs, CSOs, CBOs and other business partners. SIDO will continue to undertake capacity building measures in its areas of competence for other service providers in the SME sector. 4.7 TRANSFORMATION COST 4.7.1 Budget Financial resources to be mobilized will be channeled to facilitate implementation of the identified four strategic areas and ensuring the capacity to effect them is appropriately developed. The strategic areas to be covered are: Technology Development and technical services; entrepreneurship development and extension services; marketing and information services; Financial Advisory and Credit Services; and SIDO’s capacity development and strengthening. Annual budget allocation details are shown in table below: 60 developed. The strategic areas to be covered are: Technology Development and technical services; entrepreneurship development and extension services; marketing and information services; Financial Advisory and Credit Services; and SIDO’s capacity STRATEGIC PLAN are (2011/2012 development and strengthening. AnnualCORPORATE budget allocation details shown– 2013/2014) in table below: ESTIMATED FINANCIAL REQUIREMENT IN TSHS.’000’ ESTIMATED FINANCIAL REQUIREMENT IN TSHS.’000’ S/N SERVICE AREA 1 TO ENHANCE TECHNOLOGY DEVELOPMENT AND TRANSFER AND TECHNICAL SERVICES 2 TO IMPROVE TRAINING, CONSULTANCY AND EXTENSION SERVICES 3 TO DEVELOP AND IMPROVE MARKETING AND INFORMATION TECHNOLOGY PROGRAMMES 4 TO IMPROVE AND EXPAND FINANCIAL ADVISORY AND CREDIT SERVICES 5 TO ENHANCE CAPACITY BUILDING OF THE ORGANISATION TOTAL 2011/2012 15,524,605 2012/2013 21,992,525 2013/2014 32,331,604 TOTAL 69,848,734 15,937,943 17,728,610 14,410,087 48,076,640 764,700 1,063,608 1,443,323 3,271,631 6,302,000 9,302,200 12,302,420 27,906,620 723,300 1,085,300 1,368,655 3,177,255 39,252,548 51,172,243 61,856,089 152,280,880 4.7.2 Sources and uses of funds 4.7.2 Sources and uses of funds 4.7.2.1 Mobilize and secure more sources of income 4.7.2.1 Mobilize and secure more sources of income Financing of SIDO’s operational and service delivery activities depends mostly on government income from of assets, interest on loans and grants Financing ofsubvention, SIDO’s operational anduse service delivery activities depends mostlyfrom on government subvention, income from use of assets, interest on loans and grants 51 from other stakeholders. The available facilitation does not suffice the demand and operational coverage requirement. The Organization will work to access adequate funds by lobbying for more government budgetary allocation, pouring more funds into loans so as to realize more interest income, improve generation of income from assets and mobilize more grants from development partners. Target 1: Increase the share of internal generated income to cover 50% of the total budget by the end of June 2014. Target 2: Mobilize 5 new external sources from development partners by the end of June 2014 Target 3: Improve annual recovery of income from internal sources by 95% 4.7.3 Sources of Funds It is anticipated that financial resources for the CSP shall be secured from four sources:Internally generated funds and other sources (60%) Government subventions (40%) 61 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 4.7.3.1 Internally generated funds It is expected that some of SIDO’s activities will be financed by income from the day to day operations, particularly from consultancy services, training, technical services, interest from credit portfolio and use of assets especially industrial sheds. 4.7.3.2 Government subventions The Government will continue to finance personnel emoluments as well as development programmes. 4.7.3.3 Development Partners In implementing different strategic development initiatives, SIDO will cooperate and collaborate with different stakeholders where participation and facilitation will be mutually agreed. The specific enterprise development interventions include rural micro, small and medium enterprise development (MUVI) being co-funded by development partners and the Government, One District One Product (ODOP) with increased participation of local Government authorities and the private sector. SIDO will team up with potential partners to plan and thereafter implement the programmes. 4.7.3.4 Financial institutions SMEs will be facilitated to access financial facilities available during the coming planning period. SIDO will make arrangements with interested financial institutions to establish SME financing window and through it facilitate enterprise development and growth. 62 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) CHAPTER FIVE BRIDGES TO SUCCESSFUL IMPLEMENTATION The strategic plan implementation will be successful if environmental factors are supportive. The key success factors include: • Increasing SIDO’s capacity in advocacy, public awareness, and self determination so as to strengthen its sustainability, local and international support; • Enabling policies such as the National SME Development Policy and legal instruments are favored and being developed by appropriate government ministries; • The current positive support and political-will such as East Africa Common Market Protocol, to address SMEs issues at national and international levels will prevail; • The Government, the private sector and development partners provide concrete material and financial support in terms of longterm investment capital to SIDO and the sub sector it serves; • Socio-economic framework conditions which produce sufficient opportunities for the SME development. 63 ANNEX CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 64 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 65 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 66 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 67 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 68 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 69 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 70 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 71 CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 72 a nd Research Planning 73 p Regional Extension Services REGIONAL O FFICE Training Services Training a nd E xtension S ervices DIRECTORATE O F Legal U nit e RSMEAC n Business Technical S ervices t Credit services Development eNote: RSMEAC: Regional Small and Medium Services Enterprises Advisory Committee r v e l o E DIRECTOR A TE O F Technology D evelopment a nd Planning Technical S ervices Technology D evelopment Center Information Technology DIRECTORATE O F Marketing a nd Information Internal A udit Marketing Accounting DIRECTOR G ENERAL Accounting Credit S ervices DIRECTORATE O F Finance a nd A dministration Human R esources Development a nd Administration CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) CORPORATE STRATEGIC PLAN (2011/2012 – 2013/2014) 74
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