Building the Capacity of Service Providers to Deliver Effective and Sustainable Enterprise Training

Presenter: Wendy Rimer

Microenterprise ConferenceBYU Program for Economic Self-

Reliance

March 14, 2003

Presentation Overview

• Overview of Making Cents

• Business Development Services Model

• Case study: FNGPF

• Case Study: Peace Corps Senegal

• Lessons Learned

• Trends: Looking Ahead

What is Making Cents?

• Small woman-owned consulting firm established in 1998 and based in Washington, DC.

• Specializes in increasing the capacity of

financial and business service providers to

better deliver services to micro, small and

medium-sized entrepreneurs worldwide

through:– the provision of innovative

experiential methodology training materials, and

– training of trainer courses.

What is Making Cents?

• Making Cents has 13 training curricula that fall within 3 categories:

– Business skills training for entrepreneurs;

– Entrepreneurship education for youth; and

– Microfinance Institution Loan Assessor Training

• Curricula are available in 15 languages (including Spanish and Portuguese) and have been used in 24 countries.

BDS Model

Second-tier provider Organizations that provide finance, tech. assistance (e.g. Making Cents)

Direct service provider Local NGOs

Consulting firms

Entrepreneurs

Donor USAID

ILO

Trainers trained:

•Local consulting firms

•Individual consultants

•Business associations

•Microfinance institutions

•NGOs

•Schools

•Training centers

•Government agencies

Trainees

• Urban and peri-urban low-income women

• National traders’ credit union

• Micro and small entrepreneurs operating manufacturing and service businesses

• Technical colleges and skills training programs

• Vocational training programs

• Unemployed youth and adults

• Peace Corps volunteers and Community Partners

Service Providers and their Beneficiaries

Supply effective curriculum

•Experiential methodology

•Minimal adaptation

•Effective approach

•Straightforward to facilitate

Training of Trainer course

•Facilitation

•Adaptation

•Integration

Capacity Building of Service Providers

Methodology

Service Providers/ Trainers

Making Cents Trainer

Training of Trainers course

Entrepreneurs

Fédération Nationale des Groupements de

Promotion Féminine (FNGPF)

Network of Associations for Women’s Development

Source: Interviews conducted with program directors Sept. - Oct. 2002

Case Study

Capacity Building of Service Providers

DynaEnterprises $ (75% support)

Service Provider

Making Cents

(technical assistance)

Case Study

Case Study: FNGPFFNGPF Overview

• Mission: Expansion of Senegalese women’s social and economic empowerment through varied programs.

• Include economic and social promotion through income generating activities– expanding management abilities & access to

credit

• 54 Savings and credit groups (called GECs)– Support collective or individual enterprises

• 2 million + members in network

• 7,000 women’s groups

• Serve all regions of Senegal

Case Study: FNGPF

Challenge/Problem FNGPF is trying to address:As economic activities move from buying and selling to transformation and production (e.g. turning raw material into products for sale)

• Problems in the areas of organization, management, financial planning and control. (Lack of basic business skills)

• Creates a threat that entrepreneurs will not be able to reimburse GECs or default on loan.

FNGPF’s Response

Increase members’ knowledge of enterprise management skills and ability to implement them.

• Management training as a requirement for loan in areas with regular training sessions

Case Study: FNGPF

Strategy• Develop internal capacity to deliver mgmt

training to clients:– 8 FNGPF agents and 17 GEC managers

trained.• Pilot training in Dakar, adapt for local use.• If successful, offer courses at different levels

of implementation by region.• Stimulate demand for training based on

quality, relevance, and affordability.• Generate Additional revenue through sale of

training services to other organizations.• Trainers paid at a commission as an incentive for

delivering training.

Case Study: FNGPF

30%

10%

20%

40%

Facilitator Fee

Supplies

Trainingfacilities

Cooperativecapital

TRAININGEntrepreneurs pay a training fee of 5,000 CFA (USD 8)

• Facilitator 1,500 FCFA

• Supplies 500 FCFA

• Rent training facilities 1,000 FCFA

• Contribution to GEC’s capital 2,000 FCFA

Case Study: FNGPF

Fees and Costs Kept Low by: • Organizing training sessions locally

• Holding sessions after lunch

• Recycling some of the supplies (pencils, erasers, etc.)

• Using “in-house” facilitators

Training Provided from December 2001-March 2002• 158 women trained in GEC cooperative in Thiès • 4-5 day sessions

Case Study: FNGPF

Feedback from Entrepreneurs

Content• Relevant and applicable learning

• planning• book keeping• negotiation• marketing• pricing and costing• quality

Methodology

•Appreciated hands-on = interesting, easy to learn, not intimidating

• Initial skepticism of value of training, changed with experience

Impact• Increased enterprise revenues• Improved household budgeting• Understand the big picture•Worthwhile use of time•Worth paying for• Additional training desired•Skepticism of value of training changed by personal experience

Case Study: FNGPF

Case Study: FNGPF

Results

•Increase in membership base

•Increase in savings level

•Increase in portfolio outstanding

Some of the results of this strategy on the cooperative in Thiès:

28%

102%

73%

Peace Corps Senegal

Building capacity of service providers/ entrepreneurs to provide sustainable

business skills courses

Challenge:How to make fee-for-service training affordable

Case Study

OverviewMaking Cents provided Training-of-Trainers for 8 Peace Corps volunteers and 8 local Senagalese in April 2002.

Case Study: Peace Corps Senegal

Objective• To train Senagalese with the business and

facilitation skills to develop and run their own micro-entrepreneurs training service.

• Volunteers would serve as “consultants” to the local Senagalese.

Results• Example of one local Senagalese, Mr. Samb,

who started own consulting business to provide business skills training.

• Clients include: Youth associations and women’s associations of more than 3,000 members.

Case Study: Peace Corps Senegal

Strategies for achieving sustainability

• Provided training for 20 youth. Charged 2.000 FCFA (=US $3.50) to participate in training.

• Members of women’s association are now required to receive the business skills training provided by Mr. Samb prior to receiving financing. (Financing provided through a grant to the Association from the Minister of Family and Children.)

Case Study: Peace Corps Senegal

“One woman and member of a youth association who received training from Mr. Samb said that after 3 years of attending trainings, nothing was as helpful as the training in Game Plan (Esprit d’Entreprise) that helped to clarify exactly what it takes to start a business.”

Jennifer Hawkins, Peace Corps volunteer

Case Study: Peace Corps Senegal

Feedback on Entrepreneurs

Building the Capacity of Service Providers

• Develop the capacity of local suppliers to deliver training.– This helps to keep costs low which makes trainers’

services affordable to micro-entrepreneurs.– Local service providers have access to market

because they live in the same communities.

• Important to build trainers’ business planning skills in order to develop a business plan to offer training in a sustainable manner.

• Helpful if management training compliments existing services

Lessons Learned

Building the Capacity of Service Providers

• Need a relevant training tool and the ability to facilitate learning using this tool. – Increases their capacity as an entrepreneur to

offer a valuable service.– Having a training tool provides a young trainer

with a skill and increases credibility, especially with peers.

• Training sessions can be offered internally at very low cost if the right strategies are developed

• Training materials must: have relevant content, interest participants, be easy to use, be low maintenance.

Lessons Learned

Building the Capacity of Service Providers

Trainers• Trainers motivated by financial incentive

– Assists with quality and marketing

• Capacity issues:– Use of cooperative managers (GEC) as facilitators

became a problem due to their workload. – Solution was to find better educated (board)

members not involved in management.

? Training Materials must be easy to implement with little or no on-going costs.

? With expansion, outsourcing may be necessary

Lessons Learned

For Service Providers to Offer Sustainable Management Training

Fees• Participants’ enthusiasm for training

increases their willingness to pay fees• “Hook” entrepreneurs with a “taste”• Important to reduce training costs to

keep fees affordable to entrepreneurs• Fees can be modest and still profitable

– rural areas

Lessons Learned

For Service Providers to Offer Sustainable Management Training

Market• Very broad

– Great demand for training materials to provide business skills to the poor, who often can't read or write

• Different trainers suited to different clients

Lessons Learned

Lessons Learned

Entrepreneurs

• Willing to pay for training of quality and impact

• Require “proof” that training is worthwhile

Trends: Looking Ahead

Internal• Continued and increased charging of fees• Increased reach• Greater outsourcing• Using internal trainers as external service providers• Continued product innovation and expansion

Trends with Service Providers Offering Management Training

Trends: Looking Ahead

Trends with Service Providers Offering Management Training

External

• Delivery of training to entrepreneurs where delivery paid by funders (why turn your back on the cash cow?)• Growth of contracting directly with entrepreneurs• Increased revenues from this area of training•Increased specialization

External

• Delivery of training to entrepreneurs where delivery paid by funders (why turn your back on the cash cow?)• Growth of contracting directly with entrepreneurs• Increased revenues from this area of training•Increased specialization