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Enterprise Development Programme (MFS II)

Quick Facts MFS II

Countries Burundi, Kosovo, OPT, Rwanda, Liberia
Financed by NLMFA (MFS II)
Overall budget € 21,347,600
Spent in 2014 € 4,494,536
Objective To contribute to sustainable economic development of FCAS through promoting entrepreneurship and job creation
Partners BiD Network as partner in the United Entrepreneurship Coalition (UEC), MDF, Enclude, NABC, MSM
Entrepreneurs trained 6,832 (3,600)*
Jobs created [1] 1,032 (1,730)*
SMEs created 266 (160)*
SMEs grown 505 (160)*
Loans facilitated [2] 55
Average loan size €6,819.18
Asset preservation rate 77.4%
Successful matchmaking sessions 341 (95)*
Percentage of entrepreneurs from vulnerable groups trained 80% (76%)*
*result (target)

Project Description and Goal

By promoting entrepreneurship and job creation, this programme aims to contribute to sustainable economic development in five FCAS. It supports a range of private-sector development projects and activities that are carried out by the UEC’s local partner organisations, which include BSCs, business associations, chambers of commerce, education and finance institutions. This may happen through technical assistance, through focusing on specific sectors and innovations or through direct financing. Special attention is paid to vulnerable groups such as women, youth and marginalised people or people in neglected regions.

The programme rests on three tracks:

  1. Capacity building of local institutions by strengthening local partners
    SPARK offers and facilitates training and coaching by internationally renowned institutions to local partners to improve their (financial) management and their range and quality of services, university curricula or other capacities-benefitting potential and existing entrepreneurs;
  2. Direct poverty alleviation through job creation by promoting and supporting entrepreneurship through local partners
    SPARK works with local partners by financing and supporting them to provide services to entrepreneurs and businesses, organising awareness-raising activities and Business Plan Competitions oriented towards potential and existing entrepreneurs, and setting up networking sessions in the private sector to facilitate matchmaking between businesses. Additionally, SPARK offers finance solutions to start-ups and existing businesses that received training by SPARK and its partners. SPARK also manages loans facilitated with partial- or full-collateral guarantee tools and the IGNITE Fund, facilitating loans to high-potential start-ups from the Business Plan Competitions, and offering equity financing to small growing businesses (SGBs);
  3. Removing business barriers through policy making and advocacy, creating an enabling environment for private-sector development
    SPARK works with local lobby and advocacy partners by supporting and financing them in drafting policy strategy documents and organising round-table sessions with stakeholders.

BiD Network, SPARK’s coalition partner in this programme, also aims to stimulate entrepreneurship in emerging markets. Within the MFSII collaboration with SPARK, BiD focuses on the bigger SMEs supported by the consortium, and also uses web-based tools in doing so. BiD helps entrepreneurs in preparing to absorb external financing. In addition, BiD facilitates financing through its matchmaking programme, which includes connections to local business angel networks for competition winners.

MFSII-Target results-p.43

In addition to working closely together and with local partners, SPARK and BiD Network cooperate with organisations that contribute to building the capacity of local partners involved in the programme. These partners, including MDF, Enclude, NABC and MSM, provide training in a wide variety of topics, as mentioned above in strategy (1), as well as organising a trade mission for Dutch SMEs in the target countries.

Outcomes 2014

The results of these activities have been positive in terms of the number of businesses started and existing businesses grown. The number of jobs that have been created by these businesses, however, is lower than originally expected.

All SPARK country teams undertook similar activities to promote the starting of new businesses and to improve the development of existing ones, as described by the three tenets above. Each country team has implemented the activities within these tenets in context-specific ways. Moreover, these activities also show that there is increasing interest in SPARK’s entrepreneurship development activities. This may happen through technical assistance, through focusing on specific sectors and innovations or through direct financing.

Burundi

In Burundi, SPARK completed a project with the Association des Femmes d’Affaires du Burundi (Business Women’s Association of Burundi; AFAB) and their associated microfinance organisation, WISE, to provide loans for businesswomen who were victims of the fire at the central market in Bujumbura – which was not rebuilt – and help them set up their businesses again. The women were also provided with training on how to manage their loans and how to run their businesses effectively. This was received well and repayment rates of the loans are high.

SPARK also worked with the Burundi Business Incubation Network (BBIN), who in term worked closely with the winners of an earlier Business Plan Competition to provide access to finance, training and coaching. The conditions in Burundi are still rather difficult, and it is sometimes hard for businesses to achieve pre-agreed results. But BBIN effectively supports the entrepreneurs in their efforts. SPARK increased its effort to further build BBIN’s capacity, enabling it to help businesses to grow and create employment.

Kosovo

In Kosovo, SPARK focused on increasing collaboration between the various business communities and sector associations from different ethnic backgrounds, while still implementing its core activities in order to support local businesses and increase their growth potential. Since one of the major constraints of doing business in Kosovo is the community divide between Albanians and Serbians, SPARK and its local partners organised several events where businesses and sector associations from different communities jointly discussed business and trends and also explored networking possibilities for increased collaboration. One of these events, a tourism fair in Novi Sad, witnessed the first joint presence of Serbian and Albanian businesses and associations since the war. The second event was the first combined Serbian-Albanian business conference organised in North Mitrovica since 1999.

Liberia

In Liberia, SPARK focused on maintaining its support of entrepreneurs during the Ebola outbreak. Although most institutions were forced or decided to suspend their operations, SPARK did the opposite and expanded its range of activities for entrepreneurs to decrease the potential impact or even to create a positive impact in Ebola-struck communities through entrepreneurs. For more details, please consult the specific chapter dedicated to Liberia (4.3).

Occupied Palestinian Territories

In addition to its regular activities in the Occupied Palestinian Territories (OPT), SPARK began work on specific business start-up generation to encourage innovations in the water, sanitation and resource-management sectors in the West Bank. Together with our existing partners at BirZeit University and CEWAS, a Swiss sector-specific NGO, a pilot group of entrepreneurs has been supported in the generation of business ideas and prototypes, two of which have already begun operations.

The Israeli strikes on Gaza have also had an impact on SPARK’s activities with our local partner, Business and Technology Incubator (BTI). Not only was the incubator damaged, but the entrepreneurs were also unable to implement their business plans and had to postpone business enquiries coming from the market. Nevertheless, when the Israeli strikes ended, the BTI was quickly reconstructed with SPARK’s support and was able to continue supporting the businesses, with relatively good results despite the disruption.

Rwanda

SPARK has piloted new programmes and partners in Rwanda this year. An authentic learning-by-doing experience was established on how to start and manage a business practically rather than through classroom-based training. Five students from the Tourism Business University started a snack business using their university restaurant kitchen. The business has kicked off, giving members the chance to build skills for their lifetime. This “Youth Enterprise” SPARK Solution is being refined for further rollout in 2015.

SPARK started supporting Association des Etudiants et Éleves Rescapés du Genocide (Association of Student Survivors of Genocide in Rwanda; AERG), to assist young survivors with their reintegration into society, restoring their faith after the tragedy of genocide and assisting them to design a better future through entrepreneurship. As a committed new partner, AERG brought about several successes, including helping young people to access finance and grow their businesses.

Furthermore, a loan-guarantee scheme has been established in collaboration with the Kenyan Commercial Bank. Mr Bwanalege Patrick, a resident of the Nyagatare District and winner of the local SPARK Business Plan Competition, received 5 million Rwandan francs through this fund. This enabled him to start a bakery business, where he currently employs eight people.

Lessons Learned

As part of MFS II, Local Advisory Councils (LAC) and Programme Advisory Councils (PAC) are hosted annually to gather direct feedback on SPARK’s relationships with its local partners and the direction of programming for each programme country. As it was the fourth year of the MFS II programme, this year’s meetings focused on advancing implementation power, better collaboration among local partners and improving the organisational and financial sustainability strategies of local partners. An important discussion point at the PAC meeting was the issue of post-MFS II sustainability for our local partners. Two notable and illustrative action points from the discussions were:

  • Exploring way in which to work on joint fundraising opportunities;
  • Working more collaboratively with other local partners so as to avoid fragmented efforts toward the same objectives and thus be more efficient and effective.

Events

As part of MFS II – and funded with MFS II resources – SPARK organised the second edition of its IGNITE! Conference and a series of expert meetings on various aspects of entrepreneurship development in FCAS.

IGNITE! Conference 2014

The second IGNITE! Conference took place on 19 November 2014 and successfully built on the format of the first edition. Under the theme “Entrepreneurship Development for Stability in Fragile and Conflict Affected States”, 256 participants – almost twice as many as in the first edition – gathered in the Beurs van Berlage in Amsterdam to discuss how to best create economic opportunities for marginalised people in FCAS. The participants, ranging from entrepreneurs to NGO professionals, from policy makers to academic researchers as well as university students, contributed to an intense day of discussions, workshops and presentations.

The Dutch Minister of Foreign Trade and Development Cooperation, Lilianne Ploumen, opened the conference. After her, speakers from UNDP Rural Entrepreneurship Project Burundi, International Labour Organization (ILO), Silatech, Heineken/Brarudi, International Finance Corporation (IFC), Conflict Affected States in Africa (CASA), Clingendael Institute, The Hague Institute, UN Global Compact, Fairphone, Cordaid, SpringFactor, XSML Capital, Netherlands African Business Council (NABC), and PUM Netherlands Senior Experts used the platform to discuss how job creation can contribute to a sustainable economic and politically stable environment.

As part of the IGNITE! Conference, SPARK organised its first research competition. Roxana and Bogdan Romanica authored the winning proposal on “Personal Social Networks Management for Business Development in Conflict-Affected States”. Their research will focus on the importance and stimulation of personal social capital of entrepreneurs. It will be conducted in Kosovo and entail ten case studies of small business started during or after the conflict. The researchers received €5,000 in funding from SPARK and will be coached by the Amsterdam Business School, University of Amsterdam. SPARK is already looking forward to the third IGNITE! Conference in 2015, when Roxana and Bogdan will present their findings.

For more information about the IGNITE! Conference, a detailed report, recordings of the keynotes and all workshop presentations, visit the conference page. For more information about the research competition visit: www.spark-online.org/get-involved/research-competition

SPARK Expert Meetings 2014

Over the course of 2014 and 2015, SPARK is organising eight expert meetings with a wide spectrum of international partners. SPARK believes that the impact of programmes in these challenging environments can be increased only through multi-stakeholder cooperation. The meetings have been designed to deepen understanding of the role of entrepreneurship in the development of stability in FCAS, to develop concrete tools with key partners and to place entrepreneurship development higher on the international policy agenda. In 2014, three of these expert meetings took place.

The first meeting, in The Hague, focused on the role of advocacy for improving the business environment. The second meeting took place during The Hague Conference on Business and Human Security in collaboration with The Hague Institute for Global Justice and focused on challenges for businesses in promoting human security and justice in fragile settings. The third meeting in New York City was organised in collaboration with UNDP and focused on the sustainability and quality of jobs created in (post-)crisis contexts. All expert meetings provided valuable insights and strengthened the cooperation of participating organisations.

Lessons Learned

A key lesson drawn from the meeting in The Hague on the role of advocacy in PSD was that entrepreneurship advocacy can indeed lead to a better business environment and thus increased job creation. Moreover, the necessity of political support for a multi-pronged approach to business advocacy was discussed, as was the need for advocacy efforts to incorporate as a targeted objective increased inclusiveness in respective labour markets. The New York meeting with UNDP centred on creating jobs though local entrepreneurship in crisis-affected environments, with a special focus on innovative approaches to doing this and on how to best measure results from such approaches. Practitioners debated vital questions for PSD in fragile states. What is a (sustainable) job? How do practitioners define a job? Can there be one, universal definition in our sector? It was argued that the importance of knowing how to categorically define such key indicators is fundamental to guaranteeing quality M&E practices across the sector. Similarly, how to measure the impact NGOs have (or do not have) on job creation, the reduction of violence and increased sense of security and stability in fragile states was debated.

More about the programme: www.spark-online.org/projects/entrepreneurship-development-programme-mfs-ii

Notes

[1] The target for job creation was surpassed in the period 2011-2013. During this period there was a greater focus on the support of start-ups, next to the support of existing SMEs. Through SPARK’s 2013 tracer study it became apparent that support of existing businesses rather than start-ups would be a more effective focus for SPARK’s MFSII activities. Start-ups primarily generate jobs on the short term, part of which recedes as some start-ups go bankrupt or terminate operations.Based on these findings, the programme’s strategy was refocused in 2014 towards supporting scale-up and growth of existing businesses in order to accelerate job creation. The programme’s strategic refocus is expected to lead to limited or no job creation in the short run due to efficiency improvements in the existing businesses’ operations. But the strategy refocus is expected to result in greater and more sustainable job creation in the long run. Further research is being conducted to understand the underlying process better.

[2] There were 55 active facilitated loans in 2014. Overall, SPARK has facilitated 249 loans since the beginning of the loan facilitation.

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