AREDP Afghanistan Rural Enterprise Development Program MINISTRY OF RURAL REHABILITATION AND DEVELOPMENT QUARTERLY REPORT April-June 2014 QUARTERLY REPORT January - March 2015 TOGETHER TOWARDS A COMPETATIVE AFGHANISTAN ACRONYMS: AREDP Afghanistan Rural Enterprise Development Program BDSO Business Development Service Officers BDSP Business Development Support Provider CDCs Community Development Councils EGs Enterprise Groups EOI Expression of Interest ESMF Environment and Social Management Framework FSG Female Saving Group IGAs Income Generating Activities M&E Monitoring and Evaluation MAIL Ministry of Agriculture, Irrigation & Livestock MFIs Microfinance Institutions MoF Ministry of Finance MOU Memorandum of Understanding MRRD Ministry of Rural Rehabilitation and Development MTs Master Trainers NGO Non-Governmental Organization NSP National Solidarity Program PEFs Provincial Enterprise Facilitators PMO Program Management Office PO Provincial Office SGs Saving Groups SME Small and Medium-Sized Enterprises ToT Training of Trainers USD United States Dollars VFs Village Facilitators VSLAs Village Saving and Loan Associations WB World Bank AREDP OVERVIEW Afghanistan Rural Enterprise Development Program Afghanistan Rural Enterprise Development Programme (AREDP) is a national government-led multi-donor funded, program that jump-starts and facilitates private sector growth in rural Afghanistan. The program strengthens the private sector through integrated, value chain, top to bottom knowledge based interventions, bottom to top community enterprise development and by addressing credit and capital needs on all levels and in all locations. The program operates under the Ministry of Rural Rehabilitation and Development through the Program Management Office (PMO) in Kabul. The key principals of the AREDP Development Objectives include supporting market orientation, sustainable businesses, improving coordination, building partnerships, facilitating client decisions, sharing best practices and vertical integration. AREDP has two Program components and one functional and support component. The two Program components are Community-based Enterprise Development which provides knowledge-based and financial services to community-based rural enterprises, and SME Development which provides business advisory and financial services to rural SMEs. The management component consists of Program management functions, the development of two units that handle policy issues for rural enterprises, plus research and technical support services. Monitoring and Evaluation and Gender work across all program components. AREDP is national in scope and operation and builds on other development initiatives of the GIRoA, donors, private sector MFIs, national and international stakeholders. TABLE OF CONTENTS COMPONENT A: COMMUNITY-BASED ENTERPRISE DEVELOPMENT 2 2 2 3 3 COMMUNITY FACILITATION Community Mobilization Saving group formation Enhance micro saving Improved opportunties to access micro loan 5 5 6 6 7 8 9 ENTERPRISE DEVELOPMENT Enterprise Groups Business Incubation for PWDs Business Incubation Enterprise Development for Koochies Success Story ACCESS TO FINANCE COMPONENT B: ENTERPRISE DEVELOPMENT 10 10 10 11 12 13 13 SME FACILITATION SME Mobilization BUSINESS DEVELOPMENT SUPPORT FOR SMES Capacity Building for SMEs Providing Appropriate Technologies Innovation Award Success Story CROSS-CUTTING THEMES 15 15 16 16 16 Gender Mainstreaming Environmental and Social Safeguards Training and capacity building Research, Monitoring and Evaluation Management Information System Component A: Community-based Enterprise Development QUARTERLY REPORT JAN - MAR 2015 1 COMPONENT A: COMMUNITY - BASED ENTERPRISE DEVELOPMENT COMPONENT A: COMMUNITY- BASED ENTERPRISE DEVELOPMENT The Community-Based Enterprise Development Unit (CED) supports community-based rural enterprise development by organizing rural men and women to come together to establish Saving Groups (SG) to save and cpacitalise resources and gradually establish community- basedEnterprise Groups (EG). CED also mobilizing SGs to integrate themselves into village level organizations called Village Savings and Loans Associations (VSLA) that combine savings of of SGs to providelarger and affordale loan for the communtiy member. A: COMMUNITY MOBILIZATION AREDP enters to the village and mobilization mobilise communities to come together and creates platform for bringing resouces together . This is a very critical stage of AREDP interventions and facilitates communities to establish and promote community- based micro savings. (a). Community Facilitation During the reporting quarter, AREDP continued to mobilize communities to established rural enterprise development in the new Community Development Councils (CDC). AREDP covered cumulatingto 923 villages in the 27 districts of Parwan, Bamyan, Nangarhar, Balkh and Heart provinces. Villages Covered 923 Meeting with community members 149 137 Parwan Bamyan 224 87 Nangarhar Balkh CDCs Covered by SGs during Q1 2015 140 Herat 186 Kandahar Total CumulaJve CDCs covered by SGs (b). Saving Group Formation Community members were supported by the Provincial Enterprise Facilitators (PEF) and Village Facilitators (VF) to form, foster and nurture existing and newly established SGs. During the mobilization process, eligible and interested families were identified and after extensive awareness raising, SGs were formed. CED team facilitated the SGs to elect their own leaders and develop SGs rules and regulations. The PEF and VF were instrumental to visit the newly established SGs and to conduct community meetings on a regular basis. During SG formation in remote village of Herat QUARTERLY REPORT JAN - MAR 2015 2 COMPONENT A: COMMUNITY - BASED ENTERPRISE DEVELOPMENT (c). Enhance Micro Saving No. of Saving Groups Established 8158 The field-based teams helped nurture existing and new SGs to practice core functions such as regular savings, regular weekly meetings, complying with group norms and regulations, attendance, maintaining proper records, and initiating internal lending. Availability and access to micro loans within villages has enabled SG members to initiate enterprise at the micro level. The data from the field indicated that the SGs were able to save 17.8 million Afs during this quarter and the total savings reached 191.7 million Afs cumulatively. 4214 3944 2097 1897 536 451 987 516 556 Parwan 1072 Bamyan Female SGs (d). Improved opportunities to access micro loan 1067 830 Male SGs 828 561 267 Nangarhar 1277 1272 825 676 601 0 Balkh Herat Total No. of SGs for the Quarter Kandahar Total CumulaJve No of SGs from the beginning Amoung of Savings Mobilized During the Quarter The SGs across provinces have made loan easier to access within villages. Loans enabled members to either start a new or improving an existing small business. The data collected from the field shows that women SGs are issuing more number of loans than the male counterparts. 17.8 11.5 3.3 2 1.3 3.5 2.1 1.4 Parwan Bamyan The SGs across provinces cumulatively extended 3,311 loans resulting in a cumulative loan amount of 27.1 million AFs at the first quarter, 2015. 2.2 2.7 0.5 2.3 Nangarhar 3.3 1 2.7 2.2 0 0 0 Balkh Female SG 6.3 4.9 Male SG Herat Kandahar Total Total SG Per Quarter No. of Loans Issued During the Quarter (Afs) Amount of Loans Issued During the Quarter (Afs) 3311 19.8 10.5 9.3 10.2 6.9 2.3 1.5 0.8 1.4 0.8 0.6 Parwan Bamyan 3.3 Nangarhar 3.3 3.1 0.2 2.6 2 0.6 0 0 0 Balkh Herat Kandahar Total 1077 437 333 104 490 235 255 Parwan Bamyan 456 621 1911 1400 829 678 151 478 209 269 Balkh Herat Nangarhar 0 0 0 Kandahar Total amount of loan issued during the quarter Total amount of loan issued for Female SGs Total No. of loan issued during the quarter Total No. of loan issued for Female SGs Total amount of loan issued for Male SGs Total No. of loan issued for Male SGs 3 QUARTERLY REPORT Total JAN - MAR 2015 SUCCESS STORY FROM VILLAGE TAILOR TO SUCCESSFUL BUSINESS WOMAN Tahera is a 28-year old woman who lives with her husband and two young sons in Razi village, Karokh district of Herat province. Tahira is a tailor and currently she is the only breadwinner in her family. Four years ago Tahera’s husband retired and it was hard for them to survive with her husband’s pension. Two years ago Tahera joined SG that was established through AREDP and received a series of trainings on how to start and establishe business, finance managment and marketing. As a result of these trainings she initiatived her tailoring business and gradually expended it by taking loan from the SG. Now Tahera has two people working for her and she is giving them 7,000 Afghani per month. Six months ago, Tahera got 40,000 Afs from VSLA to purchase necessary tailoring equipment and hired five more women to work in her tailoring shop. With addition to the new equipment and bringing new human resources, Tahera was able to return the loan on time and earned 82, 000 Afs net profit. Tahira said: “A few years ago I thought I could never work to support my family, now I own a business and my family is helping me to run it. “I thank AREDP for such an opportunity given to me. AREDP is giving hope and opportunities for the community members to work in spite the fact that many of us do not even have education”. AREDP is mandated to support people in the rural areas of targeted provinces and so far thousand of women have been benefiting from the program. COMPONENT A: COMMUNITY - BASED ENTERPRISE DEVELOPMENT B: ENTERPRISE DEVELOPMENT AREDP continued establishing Enterprise Group from the SGs and were provided support through various technical and none-technical training opportunities. AREDP encourages rural micro entrepreneurs who are members of different savings groups, but are engaged in similar enterprises or value chains to organize themselves into an EG. The members of these EGs are mainly engaged in production, processing and or marketing of dairy products, bakery, dry fruits, vegetables, pickles, jam, pottery, cheese, carpentry, carpet weaving, tailoring, honey bee, poultry, embroidery, handicrafts, livestock, precious stones, and gemstones etc. Recent assessments indicate that all EGs across the provinces show preference for businesses related to the maintenance of fruit orchards, tailoring, dairy product processing, handicraft production, poultry and carpet weaving. Newly established EG processing vegetable AREDP constantly assessing overall employment and sales rate of the EGs and the data collected in the third quarter indicates that there is an increase of employment by 6% in the EGs during the reporting period. 6 6 6 6 6 6 6 6 6 6 Male Employees Female Employees Total Employees In order to identify effectiveness of its program, AREDP also keeps track of sale increased in each of the EGs. The MIS data suggests that there is an increase by 12% in sales within EGs during the third quarter. 30 27 25 20 15 12 10 5 5 -‐ QUARTERLY REPORT Male EG Sales JAN - MAR 2015 Female EG Sales 5 Total Sales COMPONENT A: COMMUNITY - BASED ENTERPRISE DEVELOPMENT (b). Business Incubation for PWDs AREDP has been supporting people with Disibilities for the last two years. The program gives equal opportunity to all segment of populatins and in paricular PWDs have been very vulnerable. During the quarter, AREDP provided regular handholding, mentoring and on job training on book keeping, marketing and selling, product promotion for 130 PWDs from Parwan and Balkh province. The project completed this quarter and significant change has been notices in the life of the PWDs. In particular the PWDs are contributing to the household economy. Appart from increasing income the PWDs have been increasing self confidence and are being accepted socially. People with disabilities have not been exposed to various skill development opportunities and have limited access to getting job and generate income. Through this program, the 130 potential people with physical disabilities were selected and included them in the incubation process. They were given proper support in terms of capacity building and they initiated business under Business Development Support Officers supervision. Man with disability in his shop LIFE HAS CHANGED FOR ABDUL BASIR AND BARYALAI Abdul Bashir is one of the recipients of the program who has physical disability. Abdul Bashir comes from Big Mohammad Khil village in Bagram district of Parwan and he is the breadwinner of the family comprising of eight people. At the outset, Abdul Bashir had hard time to find a job where he can fit and earn income until he was selected as a member of SG in his village. Abdul Bashir was provided with training opportunity and given exposure to business skills and markets. He was also provided with support to establish his own grocery shop. Now Baser is earning 700-1000 Afghani perday. Similar is the story of Baryalay, a koochi from Bagram district, Parwan province. He lost one of his legs in explosion while he was farming on his small land holding, two years ago. Baryalay could not work anymore; he was very frustrated and lost all hope to live. Through the AREDP support, Baryalay was exposed to a number of Enterprise Development training and this was a turning point in his life. Inspired by what he learnt through the training, Baryalay along with his cousin, borrowed money from the SG and from a friend and established shop for vehicle spare parts in Qarabagh village. They bring spare parts from the bordering areas of Pakistan and sell them in Bagram market. Baryalay now makes almost 1500 Afghani per day. His face was shining when he said ‘I make enough to send my children to school and I even bought a motorbike to go home everyday to see my children’. AREDP has brought hopes in the lives of other 65 PWDs in Afghanistan. The pilot project started in March 2013 with 20 PWDs and after its successful implementation, it was replicated in other target areas of AREDP. AREDP will continue expanding such interventions for sustainable livelihoods of women and women in the rural areas. 6 QUARTERLY REPORT JAN - MAR 2015 COMPONENT A: COMMUNITY - BASED ENTERPRISE DEVELOPMENT (d). Enterprise Development for Koochies In 2014, AREDP began working with Koochi and PwDs populations who have been deprived from many social development opportunities and have limited exposure to economical and income generating activities. AREDP carried out a number of research to understand the culture of Koochies particularly their entrepreneurship nature. it was found out that there is a huge potetntial within koochies that have not been harnessed. Based on FGD findings AREDP intervened and selected Roving Facilitator (RF) among Koochies to facilitate community-based interventions. After the orientation period, RFs selected 60 Koochies to participate in the project. The RF carried out orientation meetings where 60 Koochies and eventually 30 Koochies were selected to participate in the project. BDS training for Koochies in Parwan The selected Koochies went through a comprehensive, robust six-day training course on Enterprise Development. By the end of the workshop, RFs assisted the participants in developing a business plan for potential businesses. During the reporting period, the selected Koochies were provided with constant support with regular visits, trainings and exposure visits. The RV has been instrumental in mobilizing koochies to provide them necessary support. By the end of reporting period the majority of the supported Koochies have well-established businesses, which provide a steady and sustainable income. During the reporting period, AREDP also identified a number of koochies who have been doing well in business and will be provided with technoligy to enhance business. The technology handover will take place in the next quarter. Baryalay talking with his clients Facilitation meeting with Koochies 7 QUARTERLY REPORT JAN - MAR 2015 C: ACCESS TO FINANCE The major activities of Access to Finance involve identifying matured SGs and promote them to Village Savings and Loan Associations (VSLA). The program supports VSLA by providing them with books of records, internal lending technique, technical support and necessary guidance for providing better service to access financing. Furthermore, AREDP facilitates the process of VSLAs registration with MRRD/AREDP and injects seed capital grants to matured and eligible VSLAs, and SGs, identify commercial banks and MFIs to provide VSLAs with bigger capital on Islamic mode of financing. During the reporting period, 40 new VSLAs were established, making the total VSLA 588 cumulatively since the beginning of the program. Moreover, 94 VSLAs were registered with MRRD cumulatively reaching up to 368 VSLAs in total. Out of the total VSLA registered with MRRD/AREDP, 247 have received certificates. AREDP provided support to VSLA in terms of setting up book keeping and record keeping system and simultaneously carried out assessment of VSLAs maturity. During the reporting period 60 VSLA were selected to receive seed capital to top up available funding and enable access to a large amount of loan. Documentations for seed capital have been processed and were presented for approval to relevant department within MRRD. Since the beginning of the program, AREDP provided seed capital to 123 VSLAs with the value worth of 1.2 million Afs. This funding supported enterprises to access loan within Islamic Sharia law to further improve and expand business. QUARTERLY REPORT JAN - MAR 2015 8 Component B: Small and Medium Enterprise Development QUARTERLY REPORT JAN - MAR 2015 9 COMPONENT B: SMALL AND MEDIUM ENTERPRISE DEVELOPMENT COMPONENT B: SMALL AND MEDIUM ENTERPRISE DEVELOPMENT The Small and Medium Enterprise Unit (SME) been established to address hinder in enterprise development at the rural level. Through this initiative, AREDP supports newly emerged or existing SMES to benefit the program. The support includes building technical and non-technical skills, providing appropriate technology as well as to provide access to easy finances. For the last few years AREDP has been nurturing 450 SMEs across the program areas and creating access to market locally, nationally and internationally. A: SME FACILITATION: The SME section facilitates AREDP’s support to rural enterprises that are selected on the basis of their potential and ability to contribute to SME sector growth. Training for SMEs on business plan develoment process Creating Linkages At the beginning of this quarter, the SME unit arranged a three days national exhibition on the New Year’s day for 31 SMEs of Balkh, Parwan, Nangarhar, Bamyan and Herat provinces, the objective of this exhibition was to create linkages to national market to promote local products and create linkages to the bigger markets. The SMEs participating in this exhibition learnt from other SMEs of the same sector and they shared their experiences and opinions at a Lessons Learnt Workshop arranged on the last day of the exhibition. As a result, the SMEs earned 678,200 AFs in sales. This exhibition has provided the opportunity to learn the market at the national level as well as interact with other SMEs in the same value chain. As a result a few SMEs have found enterprises that were looking for suppliers of raw ma-terial from the rural areas. Training for SMEs on management and accounting . Branding and marketing on job training Accounting training for SMEs QUARTERLY REPORT JAN - MAR 2015 10 COMPONENT B: SMALL AND MEDIUM ENTERPRISE DEVELOPMENT (a). Partnership The unit’s support for the SMEs extend furthermore by their renewed partnerships and Memorandums of Understanding (MOUs) with relevant agencies in providing services for rural SMEs. The memorandums of understandings were signed with Ministry of Commerce and industries (MoCI), Federation of Afghan Crafters and Traders (FACT), and Swedish Committee for Afghanistan (SCA). The main objective of the partnership with the stakeholders are to avoid duplication of activities, to facilitate the BDSP availability for the rural enterprises, and to formalize the rural enterprises with the private sector. The negotiation is ongoing to establish partnership with Afghanistan Chamber of Commerce and Industry (ACCI) and the Afghanistan National Standard Authority (ANSA) in the coming months. The SME unit as a pilot phase, conducted a one day seminar together with the representatives of FACT in Parwan province. In the seminar, the service benefits of FACT was discussed with the 40 participants (SME owners/ representatives) to encourage them to register their businesses with FACT. As a result, 15 SME owners were registered with FACT while others have also shown interest in becoming a member. It is worth mentioning that FACT, in order to encourage the local SMEs reduced its registration fee up to 50 % for those SMEs who are introduced by AREDP. ALGHOCHAK CHIPS MAKING ENTERPRISE IN BAMYAN Bamyan is a province with a very hard geographical condition and has very limited employment opportunities. Mainly people are engaged in agricultural sector and the product produced in Bamyan has high market value within and outsid the province. Bamyan potato is very famous within Afghanistan and has market in other provinces within the country. Alghochak Chips production enterprise was established in 2010 and since then it has been producing potato chips and selling in the local market but business was not going as steady because they have been using traditional method of preparing chips. In 2011, Alghochak Chips was selected for support by AREDP and it was assessed for business feasibility and economical viability by technical team from AREDP. Alghochak was provided a number of trainings and exposure visit in Pakistan where they have learned various business management methods as well as chips making technique. Now Alghochak is supplier for 11 schools in Bamyan and has created around 20 job opportunities. Chips making process 11 QUARTERLY REPORT JAN - MAR 2015 CROSS-CUTTING THEMES 12 QUARTERLY REPORT JAN - MAR 2015 COMPONENT C: CROSS-CUTTING THEME (a). Gender Mainstreaming During the reporting period, significant progress was made to mainstream gender into the programming. SME Unit organized exhibitions for SMEs where 50% of SME were women-led. These women have been brought from the rural areas to exhibit their product at the national level. These exhibitions have been helping these women to get connected with market at the national level and as a result a few women found clients for their products to be exported to Kabul from Herat. Ms. Fatima Ahmadi one of the entrepreneurs from Bamyan province participating in this exhibition . According to her this exhibitions helps her show authentic product in the market and during the this exhibition she was able to sell plenty of local made items. In additions, I got order from new client from a different province. SME from Parwan producing food products The CED Unit encourages women participation in the SGs. During the quarter 554 SGs were established out of which 324 were females SGs (58%). At the end of the quarter, the total number of SGs reached 7,881,out of which 3,846 were female SGs (48%). During the reporting period in total 294 EGs were established, out of which 200 are women led EGs (94%). (b). Environmental and Social Safeguards Safeguards Implementation Unit (SIU) has been able to provide Environmental and Social safeguard training and awareness programs for more than 262 SMEs, 214 EGs, 85 VSLAs, 157 VFs, and 15 new PEFs through its provincial Environmental Social Safeguard Service Providers (ESSPs/BDSP). More than 286 SMEs and 355 EGs have been assessed by ESSSPs in order to ensure that activities are in compliance with AREDP SIU strategies and frameworks. The assessment indicated that 5% enterprises were operating almost in compliance with AREDP’s Environmental and Social Management Frameworks (ESMF) at the beginning of the program and by the end of reporting period, it has reached to 25%. Rana SME from Nangarhar SMEs are using measures of safety in food processing From the outset, 4% of enterprises were fully operating in compliance with AREDP’s Environmental and Social Management Frameworks and by the end of reporting period it has reached to 30%. The assessment also suggested that 45% of AREDP supported enterprises still need further effort to comply with Environmental and Social Safeguards interventions. In additions, Environmental Management Plan (EMP) for potential sectors like brick factory, dairy, and fishery been developed and will be implemented from the next quarter. SIU also in the process of developing EMP for Cotton and Seeds, Mosaic Stone, Bee Keeping, Nurseries, and Saffron sectors and will finalized them in the next quarter. The Grievance Redress Mechanism (GRM) in AREDP reactivated in pervious quarter. So far 130 complaints have been registered, 105 complaints have been addressed, 18 complaints are under review. SMEs are using measures of safety in food processing 13 QUARTERLY REPORT JAN - MAR 2015 CROSS-CUTTING THEME (c). Training and Capacity Building The Training and Capacity Building is a very critical section within AREDP program and it focus’ on building capacity of SGs, VSLA, EG and VF in the targeted areas. During the reporting period 339 trainings were carried out for 8,699 members of VF, SGs VSLAs and EGs in five provinces and out of the total number 4,965 were female participants. Soft skill training for community members The trainings were in the areas of Orientation and Community Mobilization, accounting, Leadership, membership, credit investment, VSLA formation and book keeping, marketing and product promotion, Islamic financing and etc. After each trainings post assessment was carried by the Training unit and it indicated satisfactory feedback from participants. In a nutshell, the participants find the training resources very appropriate to their needs and context. The methodology used in the trainings was received very well and participants have learned basics skills for business development such as book keeping, marketing and accounting. (d). Research, Monitoring and Evaluation The Research and Monitoring and Evaluation Units have been integrated into one unit in order to provide better services to program in terms of tracking impact. Research, Monitoring and Evaluations Unit has been working very closely with core program and MIS unit to identify program outcome and keep track of project outcome as well as identify bottlenecks that can potentially affect program implementation. The team has been carrying out extensive field visits to the program areas to monitor and evaluate field interventions and provided recommendations to senior managment to further improve program. In the areas of reserach, the team completed Survey on EG Assessment in Bamiyan Province and the preliminary findings will be reported in the next quarter. Futhermore, the team has been the process of finalizing tools for Gender Impact Study, which is being carried out by external consultants. (e). Management Information System Management Information System (MIS) is one of the essential components within AREDP support program. It is planned to collect, process, store, analyze information related to the core program components. It is established to keep a track of the overall program direction and helps identify immediate program impact. It also serves as decision making tool for AREDP program management. Moreover, MIS developed an online database for recording and listing all the business development service providers. It keeps track all the firms and individuals who are willing to provide business development services to local enterprises. Capacity building for improving data accuracy M&E in the field QUARTERLY REPORT JAN - MAR 2015 14 AFGHANISTAN RURAL ENTERPRISE DEVELOPMENT PROGRAME MINISTRY OF RURAL REHABILIATION AND DEVELOPMENT FOR MORE INFORMATION CONTACT: NILABAGH STREET, DARULAMAN ROAD, WEBSITE: WWW.AREDP-MRRD.GOV.AF FACEBOOK: WWW.FACEBOOK.COM/AREDP.MRRD EMAIL: [email protected]
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