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
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COMMUNITY FACILITATION
Community Mobilization
Saving group formation
Enhance micro saving
Improved opportunties to access micro loan
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ENTERPRISE DEVELOPMENT
Enterprise Groups
Business Incubation for PWDs
Business Incubation
Enterprise Development for Koochies
Success Story
ACCESS TO FINANCE
COMPONENT B: ENTERPRISE DEVELOPMENT
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SME FACILITATION
SME Mobilization
BUSINESS DEVELOPMENT SUPPORT FOR SMES
Capacity Building for SMEs
Providing Appropriate Technologies
Innovation Award
Success Story
CROSS-CUTTING THEMES
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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.
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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
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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
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Component B:
Small and Medium Enterprise
Development
QUARTERLY REPORT
JAN - MAR 2015
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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
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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
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QUARTERLY REPORT
JAN - MAR 2015
CROSS-CUTTING THEMES
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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
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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
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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]