Business Development Strategy:Promoting Linkages for Sustainable Development
Peace Corps/Africa Region
Programming and Training
Business Development Strategy:
Promoting Linkages for Sustainable Development
A. Background
Peace Corps/Africa has been programming in the Business Development Sector for a decade. Volunteers assigned to government and PVO/NGO business assistance programs have taught important business management skills such as bookkeeping, business planning, and market surveying and planning. In addition, many of these Volunteers provided direct business consulting services directly to individuals or to groups of entrepreneurs. They rendered these services quite competently and their services were appreciated by their host agencies and organizations. Volunteers and staff are to be complimented for their hard work and the quality of their contributions.
B. Lessons Learned
The Business Sector project evaluations, consultant missions, project plan reviews, and PSRs conducted in 1994 and 1995 produced a body of data that served as a "needs assessment" for the Business Development sector in Africa. The principal findings were significant.
1. We regularly reported on Volunteer inputs (number of workshops conducted, number of participants, number of business plans prepared, etc.). We rarely reported on the business people themselves and on any increased profitability of their businesses that resulted from our assistance. While transferring "internal" business management skills (bookkeeping, business planning, etc.) was very valuable to businesses that were already functioning and viable, the transfer of such skills did not necessarily result in increased profitability, and therefore sustainability, of businesses.
2. Those few reports and anecdotes that focused on specific businesses confirmed the thesis that "external" business skills - establishing and maintaining linkages with other businesses in both the supply and demand side of the marketplace - are critical to business profitability. By 1995, a number of posts were already in various stages of shifting their emphasis. They were beginning to sequence the transfer of "external" skills before the transfer of internal management skills.
3. As government and donor resources shrink, those who support autonomous and sustainable development are increasingly looking to the local private sector - both voluntary and commercial - for solutions. There are great opportunities for cross-sectoral programming linkages that will allow the Business Development Sector to support the sustainability of efforts other sectors. "Bamako Initiative" local primary health programs; ecotourism; agriculture; urban and rural water supply; waste collection, disposal, and/or recycling; woodless construction; tree nurseries; fingerling production, etc. are but a few of the areas where Peace Corps is programming in Africa that require business input in order to insure success. Collaboration with the Business Sector does not need to dilute or transform the social or environmental purpose of these projects.
4. There has been a great proliferation of interest and involvement in Business Development not only by U.S. PVOs, international organizations and NGOs. There has also been growth in the number of local NGOs with a vocation for economic development and of trade associations. Possible linkages with trade associations have been of particular interest because they are owned by business people and are driven by their desires for services.
5. In addition to providing non-financial services to businesses, there has been an increased interest in programming in the area of financial services (village banks, credit unions, revolving funds, etc.). Access to financial services, especially savings facilities and micro and small loans, has been extremely important to the populations with which Volunteers have worked. Peace Corps has a very positive track record in the financial services area (in Latin America, the Caribbean, Cameroon, etc.) dating back to the 1960s. There are also risks involved in programming in this area due to the "fungibility of funds" issue, i.e. the easy convertibility and therefore the mobility of the commodity: money. APCDs and Volunteers require information and guidance in order to successfully program in this area.
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C. Strategy Statement: Promoting Linkages for Sustainable Development
Peace Corps business development projects in Africa are fulfilling our commitment to sustainable development by emphasizing business linkages and focusing on business profitability.
Peace Corps Business Development projects in Africa will continue to:
1. sequence the transfer of skills in the area of "external business linkages" first without abandoning the teaching of "internal" management skills;
2. establish cross-sectoral programming linkages and collaborate with APCDs, Volunteers, and host country counterpart organizations in other sectors;
3. establish programming linkages with local NGOs and trade associations that provide services to small businesses; and
4. collaborate with institutions that provide financial services to unserved or underserved populations by conducting training, by providing consultant services in organization development, and by supporting public and member/client education.
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D. Implementation of "Linkages" Programming in 1996-1998
Business Sector programming in the Africa Region benefited from important support from the Micro-Enterprise Development Program (MEDP) PASA with USAID that is administered by OTAPS/BD. The MEDP PASA funds workshops, training, feasibility studies, evaluations, and pilot activities in the area of business development.
1. In late February and early March 1996, a joint Africa Region and OTAPS/BD APCD Workshop on "Building Linkages for Sustainable Development" was held in Accra, Ghana. Participants included Business Development APCDs, several APCDs from other sectors, and four Peace Corps/Ghana Business Development Volunteers. The participants discussed the four areas of "linkages" programming in the context of the Region's commitment to programming for sustainable development. APCDs shared their experiences with various linkages activities and went on a field trip to observe the activities of Ghana Business Development Volunteers. APCDs discussed appropriate assignments and guidelines for participation in financial services projects. APCDs began action planning for implementation of linkages programming in Business Development projects and for business input to projects in other sectors.
2. Following the Accra workshop, OTAPS and the Africa Region undertook a number of activities to support the transition to "linkages" programming. OTAPS/BD conducted a project review in Togo and a feasibility study in Côte d'Ivoire. Peace Corps/Côte d'Ivoire is implementing a recommendation to provide cross-sectoral Business Sector support to the Water and Sanitation, Health Education, and Urban Environmental Management projects, with a possible Business Development project at a later date.
3. Africa Region and OTAPS/BD convened a second workshop on "Building Linkages for Sustainable Development" for the Sub-Regional Programming and Training Coordinators (SRPTC) in Abidjan, Côte d'Ivoire in November 1996.
The purpose of the workshop was to enhance the SRPTCs' capacity to carry out their current duties and responsibilities as they relate to business development programming. Specifically, it enhanced the SRPTCs' abilities to perform their coordination and information dissemination roles. SRPTCs became familiar with the four kinds of linkages that OTAPS and Africa Region have identified as critically important to successful Business Development projects and successful Business Development sector support of projects in other sectors.
APCDs who were unable to attend the Accra workshop or who were not in their present assignments at that time also participated in the SRPTC workshop. Top
E. Peace Corps/Africa "Linkages" Programming
Microcredit has been the focus of NGOs, PVOs, international organizations, and bi-lateral aid agencies that are among the major international players in micro and small enterprise development. Among those institutions, many that provide financial services have accepted the fact they must be financially and institutionally sustainable without long-term external financing. They are at various stages of adopting the market practices that permit them to be cost-recovering and even profitable. They are moving "beyond credit" in their growing understanding of the importance of savings mobilization as a valued service to clients interested in safekeeping and capital accumulation and as a source of loanable funds.
These business development practitioners are also learning that financial services alone are not sufficient to make enterprises successful. Non-financial services are also highly important to the success of enterprises. The institutions that support enterprise development are taking up the challenge to go "beyond credit" by finding ways to provide non-financial services in a cost-recovering and even a profitable way. While the transfer of internal business skills, such as bookkeeping and business planning, is part of many institutions' repertoires, the cases of successful promotion of external business linkages leading to profitable and sustainable enterprises is attracting a great deal of interest.
There is increasing recognition of the legitimate and natural linkages between enterprise development and social and environmental goals. International PVO/NGOs are important players in the provision of non-financial services to enterprises, but so also are the growing number of local NGOs and membership-based trade associations and cooperatives.
Peace Corps/Africa's commitment to promoting external business linkages, cross-sectoral collaboration linkages, linkages with local NGOs and trade associations, and supporting microfinance places us on the "cutting-edge" of current micro and small enterprise development practice. As more of the practitioners in the business development field adopt these practices, we can look forward to greater understanding and mutual support.
