From self-employment to small businesses ACTED and CEFENET in Sri - - PowerPoint PPT Presentation

From self-employment to small businesses

ACTED and CEFENET in Sri Lanka

Livelihoods Asia Summit 7 December 2016 New Delhi

Introduction

Project title

Community-driven development and pro-poor economic growth for conflict-affected population in Northern and Eastern Sri Lanka

Period

From 2012 to 2014

Donor

• ACTED
• Competency-based Economies

through Formation of Enterprise (CEFE-NET)

• Centre for Poverty Analysis (CEPA)

Partners

European Union

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Self-employment and beyond

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Supporting self-employed individuals in rural Sri Lanka to become micro, small and medium enterprises (MSMEs).

Objective

• Increase of income through improvement of

products and marketing

• Creation of employment opportunities for youth

in rural parts of Sri Lanka reduction of poverty.

Achievements

Background

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• 90 % all businesses in Sri Lanka are MSMEs
• Essential source of employment opportunities:

contribute about 35% of employment

• Create opportunities to use local resources
• Galvanise the development of the rural

economy

• Contribute to social integration in the country

MSMEs in Sri Lanka

Methodology/Action plan

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1. Market study to understand the competent value chains for upgrading in target areas 2. Identification and selection of the self-employed individuals to become MSMEs. 3. Diagnostic study to understand the gaps for further improvement of self-employed entrepreneurs 4. Business planning workshops to develop individual business plans for upgrading to MSMEs 5. Counseling in business plan implementation

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6. Capacity-building: development of entrepreneurial, technical and business management capacities 7. Provision of assets + technology transfers for better and improved production 8. Marketing support: linking rural entrepreneurs with major city markets; buyer-seller meetings; trade fairs at local and national level; linkage with national level exporters for MSMEs with products suitable for exportation.

Methodology/Action plan (cont.)

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Comprehensive market study to understand the competent value chains in target areas.

Step 1: Market study

Step 2: Identification of self- employed individuals

• A. Development of criteria for

identification and selection of suitable self-employed individuals to be supported. Examples of criteria:

• already self-employed,
• potential for value additions,
• market demand,
• beneficiary’s contribution

towards investment,

• utilization of local raw material

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Step 2 (cont.)

B. Call for expression of interest from interested self- employed individuals in the target sectors

• C. Selection of

beneficiaries: competitive process, with Local Chamber

• f Commerce,

CEFENET Sri Lanka and ACTED as jury

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Step 3: Diagnostic study

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• Gaps in marketing, production, management, human

resources and finance

• Issues in investment for expansion of operations, business

registration, environment pollution , labour laws and regulations

• Potential for further development of the operation
• Requirements in technical training and management

training

• Requirements in infrastructure facilities such as tools,

machinery and equipment

• Business counseling needs for MSMEs to grow

Purpose

Understanding the needs and potential for further improvement of selected beneficiaries.

Examples

Steps 4/5: Business planning/Business plan implementation

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• Workshop to develop a business plan.
• The business plan serves to:
• Identify potential areas of investment
• Identify and select assets
• Content of a business plan:
• Marketing plan
• Production or technical plan
• Organization and Management plan
• Financial plan

Step 6: Capacity building

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• Training and counseling on:
• entrepreneurship,
• marketing,
• finance,
• management,
• product development,
• brand development,
• packaging and labeling,
• quality assurance,
• cleaner production,
• equal employment opportunities,
• risk assessment and management.
• Participation in

buyer-seller forums + trade fairs.

• Development of

linkages with BDS, financial institutions, buyers and suppliers.

Step 7: Conditional provision of assets and technology transfer

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Based on the needs identified, beneficiaries were provided with:

• required assets for improved and cleaner production;
• necessary technology transfers.

But under the following conditions:

• Creation of at least one employment opportunity for

each 300,000 LKR worth of assistance provided;

• Ensure the capability of MSMEs to manage the assets;
• Beneficiary’s contribution of 15% for investment in new

assets.

Step 8: Marketing support for MSMEs

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Marketing interventions to support the MSMEs in marketing their products and services. Examples:

• Linking rural entrepreneurs with

major city markets.

• Organizing buyer-seller

meetings, and encouraging participation in local and national level trade fairs.

• Linking MSMEs selling products

suitable for export with national level exporters.

Similar interventions in Sri Lanka

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Among others, UNDP, GIZ, UNIDO and OXFAM implemented projects to encourage self-employed individuals to become MSMEs.

• Creating an enabling environment for self-employed

individuals to become MSMEs – Development of a MSME policy for government approval.

• Development of the BDS capacity in the regions in order

to ensure the sustainability of BDS delivery.

• Training of Trainers and business counselors in MSME

development for government, private and some NGOs working in the field of MSME development.

• Introducing entrepreneurship to vocational and technical

Training institutes

• Revolving fund for micro and small enterprises’ financial

needs

Development of female-owned MSMEs

In 2010-2014, the Government

• f

Sri Lanka implemented a special MSME development programme for women entrepreneurs in the country.

• Special loan scheme for women entrepreneurs

up to 250,000 LKR without interest, to be paid back within 5 years;

• Women-only

financials schemes available through state banks at reduced rate of interest

• f 4% per annum, for loans up to 0.5 million.

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SME policy

To create an enabling environment, a SME policy was drafted by GIZ/NEDA/Business Chambers, with support from CEFENET; and presented to the government for approval. The policy addresses:

• individual entrepreneurial capacity;
• access to technology;
• access to finance;
• access to BDS at regional level;
• business counseling services.

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Thank you!