Thursday
June 30
2011

Michael Stulman

Building a Network to Scale Up Technical Assistance

(Editor’s note: This article originally appeared in Ashoka’s Changemakers blog, Idea Exchange).

Small and medium sized enterprises (SMEs) provide 90 percent of African business operations, and contribute to over 50 percent of African employment and GDP. A large segment of these SMEs are also high impact businesses-SMEs founded and managed with a specific social purpose in mind-providing sustainable economic opportunities to farmers, artisans, and microentrepreneurs, or affordable basic services to people at the base of the pyramid.

Access to capital is one of the greatest challenges these companies face; however, many high impact businesses also require additional value-added services, including financial management assistance and marketing or operational expertise that cannot be easily sourced or financed with short-term microfinance loans or existing sources of commercial capital. In addition, qualified, skilled human capital is scarce in low- and middle-income countries.

Fortunately, there are budding networks where high impact businesses are coming together to develop tools, strategies, and best practices that can be applied to a wide variety of contexts across the developing world.

Last month, the Grassroots Business Fund (GBF), an impact investing organization, hosted a two-day management training workshop in Nairobi, Kenya. The workshop included more than a dozen representatives from nine GBF investees – Barefoot Power, BrazAfric Enterprises, Pwani Feeds,Mobile Transactions Zambia, Movirtu, Honeycare Tanzania, Juhudi Kilimo, SELFINA, and Geolicrafts. Titled “Building Blocks for Sustainable Growth”, the goals of the workshop were to help existing GBF clients gain tangible management skills that would help to improve their businesses and to provide a venue for collaboration and networking between clients, local Kenya practitioners, and potential investors. The agenda spanned a wide variety of management topics, including setting company goals, financial management, and corporate governance.

The workshop facilitators held conference calls with all attendees prior to the workshop. The purpose of the pre-workshop calls was to assess the clients’ current capacity and determine their interest in each proposed content area. The feedback from these calls shaped the overall training agenda to be more focused on financial management, while also providing clients with context on what to prepare in advance of the training.

Ultimately, the workshop sessions provided opportunities for participants to discuss and problem solve with other clients. During breaks between sessions, several clients discussed potential future collaborations between their respective businesses. For example, BrazAfric Enterprises, which imports and distributes coffee equipment from Brazil to East Africa, and Juhudi Kilimo, which finances productive assets for smallholder farmers and enterprises in rural Kenya, have already begun working together. As part of their partnership, BrazAfric is already showing Juhudi’s borrowers how using more reliable, efficient, and environmentally friendly machines could increase output, lower their operating costs, and allow them to produce higher quality products.

GBF has held similar workshops in Latin America and India. As a result, discussions are already in place for other clients to collaborate and strengthen their social impact and financial sustainability. For high impact businesses around the world, such workshops are an effective way for companies to share challenges and identify common solutions, creating a robust network of support.

For GBF, the workshops provide a means to scale technical assistance. They provide a forum where GBF can continue to deliver flexible, tangible management training to a large group of clients through partnership with a local consultancy, while identifying distinct business needs within each client organization.

Workshop grant funding was provided by Oesterreichische Entwicklungsbank AG (OeEB), the Development Bank of Austria, while an additional $3,000 was contributed by the participants themselves.

By providing its portfolio businesses with technical consultants, significant one-on-one staff time, and partial financial support in areas such as financial management, corporate governance and human resource development, GBF has worked with its investees to deliver an estimated $15 million in value to over 1 million people living at the Base of the Pyramid (BoP) and has indirectly improved the lives of an additional 4.3 million family members.

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Categories
Entrepreneurship
Tags
small and medium enterprises, technical assistance