BUSINESS DEVELOPMENT SERVICES:

A Framework for Analysis

Lara Goldmark

Unidad de Microempresa
Departamento de Programas Sociales y Desarrollo Sostenible
Banco Interamericano de Desarrollo
BUSINESS DEVELOPMENT SERVICES:

A Frame Work for Analysis

Working Paper

Lara Goldmark

Washington, D.C.
Diciembre de 1996 - No. MIC-101
Lara Goldmark is a consultant at the Inter-American Development Bank. Ms. Goldmark has
experience working with NGOs in Central America and Brazil, developing youth
entrepreneurship and education programs. In the microenterprise field, she has worked for the
Inter-American Development Bank, ACCION Internacional and Internationale Projekt Consult
(IPC) a German consulting firm which specializes in microenterprise development. The author
is grateful to Antonia Bowring and Hideki Kogahashi of Women's World Banking, for their
generous collaboration in the information-gathering and interviewing process. She would also
like to acknowledge the contributions of the SEE Working Group on Non-Financial Sevices.

The views and opinions expressed herein are those of the author and do not necessarily
represent the official position of the Inter-American Development Bank.
 Foreword

Business development services (BDS) were highlighted as an area

for future work in the Inter-American Development Bank=s micro-
enterprise development strategy paper, MICRO 2001, which was
presented at the Promoting Growth With Equity Conference in
November 1995. Since the Bank=s experience in this area is lim-
ited, the Microenterprise Unit undertook in January 1996 to
investigate current practices in the provision of BDS to small and
microentrepreneurs in developing countries around the world.
Business Development Services: A Framework for Analysis pres-
ents the preliminary results of the research, in the form of a matrix
which categorizes current BDS initiatives by targeted business
activities and service delivery mechanisms.

The examples used in the framework were gathered from a variety

of sources, including project proposals, reports, and evaluations;
studies of a related nature, and interviews with practitioners.
Rather than Abest practices,@ the BDS initiatives described here are
intended to reflect the current state of affairs in the field. The
examples used here represent only a fraction of those collected
during the course of the research. The Microenterprise Unit will
be compiling one-page profiles of BDS programs in Latin America
and the Caribbean. This information will constitute a database
available to Bank staff and possibly to outside institutions through
an internet connection.

Further research will focus on unearthing examples that reflect

local, self-sustaining approaches to BDS, as well as donor-sup-
ported projects that use innovative cost-recovery mechanisms.
Several programs will be used as case studies, which would form
the basis for a discussion of cost-recovery and long-term sust-
ainability in BDS.

Information concerning recent BDS initiatives would be appreci-

ated and may be sent to:

, Attn: BDS
Microenterprise Unit, B600
Inter-American Development Bank
Washington, DC 20577
tel: 202-623-3034; fax: 202-623-2307
 Contents

Introduction 1
Purpose and Scope
Sustainability and Success
Categorization of BDS Programs
Training
Lessons from the Matrix
Alternative Subsidy Mechanisms
Next Steps

Matrices 4a
Table 1: BDS Matrix
Table 1 (Continued)
Table 2: Training Matrix

Targeted Business Activities and Service Delivery Mechanisms:

Working Definitions 5
Business Activities
Service Delivery Mechanisms
Types of Training

Project Descriptions:
Examples From the Matrix 7
Networks
Subcontracting and Franchising
Technology Transfer
Counseling/Advice
Consultancies
Business Incubator
Referral Center
Training
 Introduction

PURPOSE AND SCOPE There are several reasons for this increasing focus
on cost-recovery in BDS programs. First, there is
The purpose of this study is to provide an over- the growing scarcity of donor resources. Second,
view of current practices in the provision of busi- there is a natural reaction to the success achieved
ness development services (BDS) to small and in the microfinance field (i.e., if it=s been done
microentrepreneurs in developing countries. The with financial services, why can=t it be done with
document is meant to serve as a resource for Bank non-financial services?) Most practitioners would
staff and other development practitioners who agree that even if it is not possible to reach 100%
play a role in evaluating proposals and designing, cost-recovery with BDS programs, the advances
implementing, and evaluating projects which tar- made in microfinance show that adapting cost-
get the microenterprise sector. efficient methodologies and business principles
can make a substantial difference in the proportion
By business development services, we mean ser- of costs recovered.
vices such as training, technology transfer, mar-
keting assistance, business advice, mentoring, and There is no accepted definition of success for BDS
information, which are aimed at helping small and programs, due to the difficulty of measuring im-
microentrepreneurs improve the performance of pact, to the wide range of services provided, and
their businesses. Business development services to differences in the environments in which the
have traditionally been called non-financial ser- programs operate. Without a definition of suc-
vices, and are sometimes offered in conjunction cess, no consensus can be formed on which BDS
with credit and other financial services. programs embody Abest practice@ in the field.

This study attempts to take a first step toward

SUSTAINABILITY AND SUCCESS identifying indicators of success, examples of best
practices, and lessons learned in the field of BDS.
It is now widely recognized that the provision of A necessary first step in this process is to clearly
credit to microentrepreneurs is a sustainable activ- define and categorize the different types of BDS
ity since microfinance institutions can cover their programs that currently exist.
operating costs through the interest rates they
charge to their clients. The methodologies used in
sustainable microlending were developed over a CATEGORIZATION
period of years, based on several well-known suc- OF BDS PROGRAMS
cessful models. The provision of business devel-
opment services, on the other hand, has not yet The goal of categorizing these programs was: to
been shown to be a sustainable activity. BDS begin to understand which types of programs
programs have not progressed beyond the subsidy could be compared to each other; to understand
stage. Some practitioners argue that BDS pro- which services are most frequently aimed at
grams, because of their nature, will never be able microenterprises, and which are aimed more at
to cover their own costs. In any case, it seems to small or medium-sized enterprises; and to look for
be a worthwhile effort to try to discover how recognizable patterns, issues, and lessons in the
many, or which, BDS programs do recover some provision of BDS.
portion of their costs.

1
The framework proposed here groups BDS
programs into categories, according to: 1) the The examples of BDS programs that are presented
delivery mechanism used; and 2) the business in Tables 1 and 2 are a small fraction of the
activity targeted by the service. Originally, an examples collected during the course of this study.
attempt was made to categorize the programs by They were selected simply because they seemed
what service they provided. This was difficult due to be the most representative of their categories.
to the large number of programs offering multiple,
or integrated services. Other problems arose when A pattern that emerged when filling in the matrix
trying to classify BDS programs based on the was that many BDS programs target more than
formation of networks of microentrepreneurs. one business activity. This proved more true for
Networks can act as a delivery mechanism for certain types of interventions than for others; for
services; they can at times be the recipients of example, the technology transfer programs tended
services, but a network in itself is not a service. to address all activities except for regulatory
Thus, it appeared more useful to think in terms of compliance. Information referral centers also
how the service is delivered to the entrepreneur, covered a range of business activities. By contrast,
and then consider how the service affects the networks seemed to deal with more specific needs,
business C i.e, improved production techniques, such as the purchase of inputs through a
greater access to markets, better management wholesaling mechanism, or shared production
skills or strategies, and increasing regulatory facilities for crafts producers.
compliance.
Another pattern that emerges from the matrix is
the relatively heavy emphasis on marketing. This
TRAINING makes sense, given that after lack of access to
financial services, lack of access to inputs or raw
The only exception to this categorization process materials and saturated markets are two of the
was training. The difficulty in categorizing most commonly cited constraints facing
training in terms of the targeted business activity microentrepreneurs.
is that there are several types of training which
target potential entrepreneurs, or communities As far as the size of business targeted, there do
where entrepreneurs live. In these cases the not seem to be any recognizable trends across
training may focus on more general skills, such as categories, especially given the limited amount of
literacy or leadership, that do not necessarily information that was collected about each
correspond to a certain business activity; or if program.
they do, the people in the training courses may not
actually be operating a business. Although One question that emerges with regard to the
entrepreneurship development training might not sustainability of BDS programs is whether it is the
fall under a strict definition of business more specialized interventions or the integrated
development services, the decision was made to interventions that have greater success in
consider all types of training targeting the recovering costs. It seems that narrowly focused
microenterprise sector, whether directed at present services are more likely to include some type of
or future entrepreneurs. The training matrix was
constructed separately from the BDS matrix in 1
order to include examples of entrepreneurship Several sources cite these as primary constraints,
including: Silcox, Stephen, Jansen, Annica, and
development and community development training
Baughan, Mark. Strategic Options Paper for Malawi
in addition to credit, management, and production-
Small Enterprise Support Institutions.
oriented training. USAID/GEMINI Report, 1994. Levitsky, Jacob, ed.
Microenterprises in Developing Countries.
International Technology Publications, London, 1989.
LESSONS FROM THE MATRIX

2
fee to the entrepreneur, whereas the more The Voucher Program is an interesting example
integrated approaches are more difficult to charge not just in the cost-recovery area, but in the
for. For example, both in Save the Children=s mechanism used to provide the subsidy. Because
Network program in the Phillippines and in the training institutions can only redeem their
Corposol=s wholesale depot in Colombia, the vouchers after a microentrepreneur has attended
service provider recovers some or all of their 75% of their course, the unpopular courses are not
operating costs by lowering the price that the receiving a subsidy from the program. The
entrepreneur would have had to pay a middleman, courses in high demand do receive subsidies. This
and Asplitting the difference@ with the is one alternative to the traditional procedure of
entrepreneur. In this case, the lower input price development practitioners choosing which
paid by the entrepreneur is a tangible benefit, part institution to subsidize. In the Voucher Program
of which the service provider uses to sustain the the entrepreneurs decide for themselves which
operation. By contrast, broader-based BDS course is best meeting their needs, directing the
programs, such as traditional business training subsidy through their demand to support
courses or information referral centers, tend to worthwhile courses.
recover a much smaller portion of their costs. In
broad-based interventions, it is difficult to Another effect of the program has been the
measure the benefits to the entrepreneur, and creation of a competitive environment among the
therefore more difficult to either charge the training institutions who are lowering their prices
entrepreneur a fee or direct some of those benefits in order to compete for a share of the voucher
towards the sustainability of the program. market. The subsidy, then, is helping to foster
market behavior among BDS providers. The idea
of creating a competitive market by providing
ALTERNATIVE incentives for the delivery of high-quality, low-
SUBSIDY MECHANISMS cost services is one that has long been espoused
by donors as a goal. How exactly to do it,
Some training courses have been able to recover a however, is not clear.
fairly high percentage of their costs, for example,
the GAMA/IDB Voucher Training Program in More research is needed to uncover other
Paraguay. It is worth noting that within the examples of BDS programs that are on the path to
Voucher Training Program, the trend has been sustainability, and to know how far along that
towards the emergence of more narrowly focused path it is reasonable to expect a BDS program to
courses designed to transmit a specific skill in a progress. It is possible that non-financial
short period of time. In this program the interventions to promote enterprise growth will
microentrepreneurs= benefits are clear: for continue to require subsidies, but it is also
caterers, the recipe and procedure for making a possible that the percentage of a program=s
new dish, for electricians, the way to work a new operating cost which requires a subsidy can be
type of wiring system, etc. Since the reduced, by using innovative or efficient cost-
entrepreneurs can earn back the money they spent recovery, delivery, and subsidy mechanisms.
on the course by selling a new service, they are
willing to pay for at least half the price of the
course.

2 3
In informal interviews with Bank staff, some Grupo de Asesoría Multidisciplinaria (GAMA).
entrepreneurs have indicated that for certain courses, Estudio del Mercado de Capacitación
they would be willing to pay 100% of the training cost. Microempresarial y Descripción del Programa de
(Cost here refers only to operating cost.) Bonos de Capacitación. Montevideo, Uruguay, 1996.

3
 NEXT STEPS Caribbean is currently being built. The program
will be accessible to all Bank staff and could be
The information on the projects used as examples hooked up to an internet connection if other
in this study is too limited to provide lessons institutions demonstrated interest in accessing the
about what works and what does not work in the information.
field of BDS. Instead, the study should be
regarded as a tour guide which maps out the Research is also underway for the writing of case
supply of BDS. In order to come up with viable studies on three BDS programs in Latin America
indicators of success, it is necessary to analyze and the Caribbean. The studies will focus on the
further the relationship between the demand and cost-recovery mechanisms used and the levels of
supply of BDS services, to better understand what sustainability reached by the programs.
impact BDS programs have on their clients, and to Sustainability in this context refers to the
define what are reasonable expectations for the percentage of costs covered, but also the
sustainability of BDS programs. implications for institutional and BDS market
structures. A concluding chapter, published with
The next steps to be taken by the Microenterprise the case studies, will aim to provide a reasonable
Unit of the IDB will address the issues raised set of benchmarks against which BDS program
above. A database comprised of short profiles of sustainability can be measured.
BDS programs in Latin America and the

4
 Targeted Business Activities
and Service Delivery Mechanisms

Working Definitions

BUSINESS ACTIVITIES adjusting business practices in order to comply

with local safety, health, or environmental
In this study, services were considered in terms of standards.
the direct effect they have on the business, in four
areas: production, marketing, management, and
regulatory compliance. For example, BDS DELIVERY MECHANISMS
programs designed to improve production
techniques would be classified under production, The term Delivery Mechanism, in this context,
programs designed to assist microentrepreneurs in refers to the way in which business development
their marketing efforts would fall under services are transmitted to microentrepreneurs.
marketing, etc. Following are specific definitions For example, information about markets can be
of business activities as they apply to microenter- transmitted through an information referral center,
prise. an individual counseling session, or through
networks.
Marketing means business activities related to the
design, pricing, sale and distribution of products, Networks are associations of entrepreneurs which
advertising or promotional activities, and provide a source of mutual support, as well as the
acquiring access to raw materials, inputs, and potential to form cooperative linkages and
equipment. Acquiring access to foreign markets perform advocacy functions. Networks are often
and/or suppliers (exporting or importing) is formed at the community level; in other cases
considered a marketing activity. entrepreneurs are brought together by NGOs or
donor institutions.
Production can mean the actual production of
agricultural, manufactured, or artisan goods, as Subcontracting and Franchising: The former
well as the rendering of services that involve refers to an arrangement whereby larger
production, such as bicycle or automobile repair, enterprises contract out a portion of their work to
food preparation, tailoring, shoemaking, etc. small and microentrepreneurs; the latter refers to
an agreement between a supplier of a standardized
Management refers to tasks which include product or service and small businesses who agree
financial planning and record-keeping, hiring, to act as distributors or deliverers of the good or
training, and firing employees, and long and short- service. In a subcontracting arrangement, the
term business planning. small businessperson has a guaranteed customer
who will buy the output he is producing; in a
Regulatory Compliance refers to paying taxes, franchising agreement this is not necessarily true.
obtaining licenses and permits to operate, or

5
Technology Transfer refers specifically to services to which the entrepreneur is referred are
helping entrepreneurs access and use new inputs, available on-site. For example, the INSOTEC
equipment, or production processes which can Centers in Ecuador offer, on-site: credit, training,
increase their efficiency, scale, and returns. This technical assistance, equipment rental and sales,
service is often delivered to microentrepreneurs as and supply of raw materials.
part of an integrated series of interventions, using
the sub-sectoral approach. TYPES OF TRAINING

Counseling (or business advice, or mentoring) is Entrepreneurship Development refers to train-

usually delivered through one-on-one interaction. ing which targets potential entrepreneurs,
It includes a range of services, such as: assistance encouraging them to start up a business by
in developing business plans, loan applications, developing the personal, organizational, and
legal advice, assistance with licensing and administrative skills needed. Entrepreneurship
registration procedures, audits, feasibility studies, development courses also transfer specific
and insurance advice. production-related skills. A subset of
entrepreneurship development training is worker
Consultancies refer to technical assistance retraining, directed at former employees of
given by a consultant or team of consultants with privatized or downsized companies, that
business experience. They conduct on-site encourages some workers to start their own
diagnostic analyses and recommend solutions to enterprise.
increase the entrepreneur=s returns. Consultancies
are often related to the accomplishment of a Credit Orientation refers to training, often man-
specific task or the making of a specific decision, datory, that accompanies the granting of loans to
as opposed to counseling which is of a more small and microentrepreneurs. Borrowers are told
general nature. how to apply for a loan, how to manage credit, and
what expectations are for repayment.
Business Incubator refers to a system where
newly established firms share a building site, with Management Oriented Training refers to the
individual offices and/or workshops for the transfer of financial and administrative skills, and
entrepreneur, as well as common space for shared can include marketing techniques as well.
services such as: secretarial support, meeting
rooms, and access to hardware or machinery. At Production Oriented Training focuses on
the core of the business incubator system is the technical skills which are needed to produce goods
availability of mentoring services and technical, and services.
financial, design, and managerial training support.
Community Business Development Training
Referral Centers direct entrepreneurs to credit or focuses on transferring skills which are beneficial
technical assistance providers, communicate to the functioning of the community as a whole,
prices, design trends, production standards, rather than just to the entrepreneur in running
appropriate technology information, or assist his/her business. Examples include leadership
entrepreneurs in joining or forming a network or training or efforts to encourage the creation of
cooperative. A common practice for making associations.
market information available is the use of an
electronic information system. A One-stop shop
refers to an information center where most of the

4
UNIDO, Project Stories: Small and Medium
Enterprise Program. UNIDO, Vienna, Austria, 1994.

6
 Project Descriptions:
Examples from the Matrix

NETWORKS Alliance of Home-based Retaso Workers in

Metro Manila. In 1994, Save the Children
Shared Production Facilities. The Association organized a network of home-based workers
for Craft Producers, an NGO in Nepal, provides recycling fabric remnants into industrial rags and
production facilities to a network of 1,000 women other products, called Partners for Subsector
artisans. Products include weaving, renting, block Development. The ILO-Danida supported the
printing, paper crafts, ceramics, and carpentry. program, which provides business services to its
ACP also facilitates access to foreign markets member microentrepreneurs, particularly bulk-
through Alternative Trade Organisations (ATOs). buying raw materials and negotiating for orders
from companies.
Wholesale Depot for APulperías.@ Actuar
Bogota in Colombia (now Corposol) provides
small grocers with access to goods at low prices SUBCONTRACTING
through a wholesale depot. The depot consistently AND FRANCHISING
recovers costs and is listed as an asset in
Corposol=s financial statements. The Swazi Business Growth Trust (SBGT).
This BDS provider, supported by USAID, began
Bolivia Marketing Program. Mennonite as a credit institutions and diversified. SBGT
Economic Development Associates (MEDA) promoted business linkages between small and
created a for-profit marketing company, co-owned larger firms in four subsectors: construction,
with members of ASOPROF, the national transport, agro-industry, and trading. When fees
association of bean producers. The company charged for linkage deals proved insufficient to
showed a profit in its first year of operations and cover costs, the institution moved on to
broke even the second. ASOMEX has built links Government tender workshops, Acard swap@
with Brazilian export markets, and also with events, and finally franchising. Each service has
clients in Colombia and Japan. its own business plan, complete with revenue and
expenditure targets, so that they can be managed
for sustainability and risk minimization.

5
Rhyne, Elisabeth and Rotblatt, Linda, What
7
Makes Them Tick? Exploring the Anatomy of Major Save the Children, Program Description. Mimeo,
Microenterprise Finance Institutions. ACCION Westport CT, 1996.
International, Cambridge, MA, 1994.
8
Development Alternatives, Inc (DAI). Final
6
Mennonite Economic Development Associates Report on the Swazi Business Development Project
(MEDA). Program Profile: Bolivia Marketing which Created: The Swazi Business Growth Trust.
Program. (Mimeo) MEDA, 1996. DAI, Bethesda, MD, 1995.

7
Government Procurement Programs Senegal. A financial management system was
Favoring Small Enterprise Development. developed to fit the needs of producers in this sub-
The state government of Ceara, Brazil, has sector. Through training seminars and follow-up
enacted policies that favor small enterprise work with bakery representatives, project staff
growth, by facilitating their access to government identified supply and technological constraints,
procurement contracts (without guaranteeing a and then worked to address these by encouraging
specific quota of business to any sector or firm). the formation of an association and accessing US
The program incudes a technical assistance suppliers, respectively.
component.

COUNSELING/ADVICE
TECHNOLOGY TRANSFER
Women=s Network for Entrepreneurial
Alpaca Fiber Processing Factory in the High- Training (WNET), was created to link successful
lands of Bolivia. Appropriate Technology women business owners with women
International (ATI), a US non-profit, has entrepreneurs ready for business expansion.
introduced Bolivian alpaca farmers to new Through an ongoing mentoring relationship,
methods of wool processing, which has led to WNET offers protegees the expertise of
higher returns on their product. A subsector established women business owners who have
analysis was performed in order to develop a volunteered to share their skills, ideas, and
series of integrated interventions which address inspiration.
each step of the production process, as defined by
ATI=s Avalue chain.@ Individual Counseling for Further
Specialization. Institute for Social and Economic
Hand Press for Oilseed Processing. ATI development (ISED), Iowa, offers individual coun
developed a hand press which produces high- seling as one of four different training options,
quality palm oil, where previously producers were offered to clients who have already started up their
forced to sell all of their unprocessed seeds to business. ISED began as a credit institution and
middlemen for export. Palm oil is now available now specializes exclusively in training/business
in the regions where the seed is produced, and development services. The institution refers
microbusinesses have sprung up around the clients to credit sources, and in some cases
distribution and use of the hand press, as well as collaborates with banks by partially guaranteeing
the sale of the oil. loans to ISED clients.

Sahel Regional Financial Management 12

Project. Action Consulting Associates (ACA), Lusby, Frank. The Subsector/Trade Group
was contracted by USAID to perform a subsector Method: A Demand-Driven Approach to Non-
analysis of the bread production industry in Financial Assistance for Micro and Small Enterprises.
GEMINI Working Paper No. 55, Bethesda, MD,
1995.
9
Tendler, Judith, Small Firms and Their Helpers:
13
Lessons of Demand, (forthcoming World Small Business Administration of the United
Development) Massachusetts Institute of Technology, States Government (SBA), Mentor Program. Mimeo,
1996. Washington, D.C., 1993.
10 14
Interview with Valeria Budinich, ATI. Clark, Peggy. Training and Technical
Assistance in US Microenterprise Development
11
Interview with Jeanne Downing, ATI. Programs. The Aspen Institute, forthcoming, 1996.

8
 CONSULTANCIES

Quality Control for Small Spice Producers in

Madagascar. Abt Associates, a private US
consulting firm, provides technical assistance to
small producers in Madagascar who have joined
together to form an exporting network. Abt sends
samples out for lab testing to insure that the
products are of high enough quality to conform to
US regulations. Abt conducts training seminars
for entrepreneurs on appropriate production
techniques.

Business Development Center in Colombia.

The IDB has funded an effort to establish a
network of Business Development Centers in
Colombia. Center staff hire diagnostic service
firms to assess the competitiveness of small firms
and help them to improve their performance by
undertaking specific projects. Fee rates for the
services have been set so as to cover an increasing
portion of their cost (i.e., 20% during the first year
of the center=s operation, 50% the second year,
etc.), with the goal of covering 100% of costs by
the end of the project=s fourth year.

Export Audits and Risk Assessments. The

Center for the Promotion of Imports from
Developing Countries (CBI), an Agency of the
Netherlands Government, supports consultancies
by businessmen with expertise in specific
industries to small businesses in developing
countries. One subset of services offered, (the
export audits, company audits, risk assessments)
is intended to assist management in making
strategic decisions.

15
Interview with Charlie Stathacos, Abt
Associates, Bethesda, MD.

16
IDB Project Document MIF/AT-37. Colombia.
Nonreimbursable Funding for a Program to Establish
Business Development Centers. IDB, 1995.

17
Centre for the Promotion of Imports from
Developing Countries (CBI). CBI News Bulletin,
November 1994.

9
Kenya Export Development Support (KEDS). Research is linked to agribusinesses and
In this USAID-funded project, strategic industrial activity in the region.
consultancies are designed to assist businesses
ranging in size from micro to large, with
concentration in the small and medium ranges. REFERRAL CENTER
Some consultancies revolve around assistance in
filling a specific (export) order, producing a Small Business Support Project for the West
specific document (such as a promotional Bank and Gaza Strip. USAID project offers fee-
brochure) or developing a specific set of contacts. based business services with an emphasis on
Others provide more general assistance in areas marketing and improved production, information
such as financial management, advertising, quality regarding credit, and an electronic Market Access
control, or strategic planning. Network. Examples of specific services include
product testing, establishing new distributor
Assistance with Licensing and Registration. networks, analyzing a product=s cost
A private consultant in Nicaragua has set up a fee- competitiveness, and identifying alternative, lower
based service center which offers microe- cost inputs.
ntrepreneurs assistance in completing various
types of paperwork with which they are Subcontracting and Partnerships Exchanges
unfamiliar: loan applications, licensing and (SPX) were created by UNIDO at the national
registration forms, business plans, etc. level in 14 Latin American countries. In 1990,
UNIDO undertook to create a regional network
SPX C linking together the 14 countries in an
BUSINESS INCUBATOR Aindustrial web.@ Subcontracting Exhibitions,
Training Seminars, and mechanisms for
Incubators for Technology-based Enterpri- transmitting subcontracting requests are key
ses in Poland. The Poznan Technical Centre, components of the SPX network.
completed in 1991 by the Poznan Technical
University, is a work space of 1500 meters that One-stop Shop for Small Business Owners.
houses businesses working in environmental Nacional Financiera, S.A. of Mexico (NAFIN),
technologies and computer software. has set up a support center for entrepreneurs
wishing to start a business or for recently
Encouraging Graduate Students to established businesses. Everything the
Commercialize their Results. The Tashkent entrepreneur could think of is offered at the center,
State Technical University in Uzbekistan has set which is set up like a shopping mall.
up a technology incubator to encourage students Representatives from BDS providers, credit
and faculty at Tashkent and other universities to
develop technical products and market them.

20
Ibid.

18 21
Development Alternatives, Inc. KEDS Project Development Alternatives, Inc. (DAI) First
Quarterly Report. DAI, Bethesda, MD, 1996. Semiannual Progress Report: Small Business Support
Project for the West Bank and Gaza Strip. DAI,
19 Bethesda, MD, 1995.
Lalkaka, Rustam, AIncubating Small
Entrepreneurial Businesses in Economies in
22
Transition.@ Small Enterprise Development Journal, UNIDO, Project Stories: Small and Medium
Vol 5 No.3, 1994. Enterprise Program. Vienna, Austria, 1994.

10
institutions, regulatory agencies, suppliers, etc., skills to rural women to encourage them to design
rent space in the center. income-generating projects.

Integrated Approach to Business Entrepreneurship Workshop Package.

Development C Centros De Servicios Management Systems International (MSI) has
Empresariales. The Instituto de Investigaciones designed a workshop based on research which
Socio-económicas y Tecnológicas (INSOTEC), resulted in the definition of ten personal
operates several Business Development Service entrepreneurial characteristics (PECs) and thirty
Centers, which provide credit, training, technical behavioral indicators. The workshop is designed
assistance, marketing advice, input supply for to help potential entrepreneurs recognize,
certain industries, management and regulatory strengthen, and apply these behaviors to their
advice. lives. MSI uses an extensive screening process to
select trainees.

TRAINING Crédito Orientado. Centro de Apoiio aos Pe-

quenos Empreendimentos (CEAPE), a Brazilian
Entrepreneurship Development NGO based in Rio Grande do Sul, administers
credit to microentrepreneurs through solidarity
Developing Potential Entrepreneurs. The group and a training course called the Technology
Entrepreneurship Development Institute of India of Guided Credit. Courses include Time
(EDII) has been running entrepreneurship training Management, Businesslike Behavior, Accounting,
courses since the 1970s. An important part of the Administration and Buying Inputs, Commercial
success of the program is the selection of trainees Costs, and Production Costs.
that takes place before the course begins. Courses
then focus on how to set up a small venture, how High Levels of Training to Support the Group
to manage it, and how to make profits out of it. Lending and Underwriting Process. The Good
Today, more than 600 organizations in India and Faith Fund, a US-based microenterprise
in several other developing countries are following development program, offers a mandatory training
this model. program to its borrowers, the goal of which is the
completion of a business plan. A component of
Promoting the Entrepreneurial Mind Set C this training is aimed specifically at reducing
Training Young Women in Tunisia. delinquency rates through clarifying lending
Competency-Based Economics Through requirements and expectations.
Formation of Entrepreneurs (CEFE), a GTZ
initiative which currently operates in several SBA Loan Demonstration Program. Micro
countries, is planning to begin training of trainers Industry Rural Credits Organization (MICRO), a
(TOT) in Tunisia at ACentres for Young Rural
Women.@ These trainers will then pass on their 26
Ibid.

23 27
Interview with Carlos Cuevas, Microenterprise Ibid.
Specialist, World Bank.
28
Centro de Apoio aos Pequenos Empre-
24
INSOTEC, Centros de Servicios Empre- endimentos (CEAPE), Relatorio Annual de Atividades,
sariales: Del concepto a la acción...INSOTEC, Quito, CEAPE, Porto Alegre, Rio Grande do Sul, 1994.
Ecuador, 1994.
29
Clark, Peggy. Training and Technical
25
GTZ, CEFE Newsletter, ABrainstorm,@ Issue 4, Assistance in US Microenterprise Development
October 1995, Eschborn, Germany. Programs. The Aspen Institute, forthcoming, 1996.

11
US-based NGO, has developed a fast-track, or
streamlined application process and new training Courses in Cooking, Hair Care and Flor istry.
products to go with the SBA loans it disburses. Fundacion Nacional Para el Desarrollo de
The target group for these funds are more Honduras (FUNADEH), offers both
experienced business owners than MICRO=s administrative (accounting, costing, and
regular clients, since the SBA funds are linked to marketing) and technical training to
specific requirements, carrying a higher interest microentrepreneurs (baking, metalworking,
rate and a relatively short term (10 years). refrigeration, and cabinetmaking).

Courses in Production and Management. Courses in Management, Accounting, and

Centro de Fomento de Iniciativas Económicas Financial Analysis. Fundación Carvajal of
(FIE), a Bolivian NGO, takes an integrated Colombia has specialized in management training
approach to training, offering courses in both for microentrepreneurs since 1976. Courses are
management (legal, planning, financial, and tailored to fit the specific needs of the
personal components) and production (baking, entrepreneurs.
fabrics, shoes, and gold and silver working). After
participation in a mandatory course for first-time The Wemptop Program: Literacy and Pre-
borrowers, credit clients have the option to entrepreneurship Training for Women in
continue or not with training or counseling. India. Udyogin, a local NGO, has developed a
partnership with the World Bank in executing the
Voucher Training Program. A GAMA/IDB Women=s enterprise Management Outreach
program in Paraguay offers courses from a variety Training Program (WEMTOP). One of the
of institutions in both management (accounting, program=s activities is a Apreparatory@ literacy
financial analysis, etc.) and production (cooking, course for women, who then later may show
baking, sewing, electronics, crafts, etc.) interest in an entrepreneurship course. The
Entrepreneurs receive a voucher good for 50% of literacy course addresses community issues
the course tuition and are free to pick from one of relevant to the women=s lives.
46 training providers that currently participate in
the voucher program. Leadership Training for Entrepreneurs in
Colombia. Centro ACCION has initiated a new
Metalworking Courses. Fundación program, in which microentrepreneurs are trained
Swisscontact, Colombia, specializes in training to play a leadership role in their communities.
microentrepreneurs in metalworking, automotive (The leadership training is a subcomponent of a
electricity, industrial mechanics, and gasoline broader training program.)
motors. Emphasis on placed on transmitting
efficient and low-cost production techniques.
Trade & Consulting, Inc, Pennsylvania, 1996.
30
Ibid.
34
Ibid.
31
Miller, Calvin, Consultoria en Capacitación y
35
Entrenamiento para la Microempresa. Draft, Meda Ibid.
Trade & Consulting, Inc, Pennsylvania, 1996.
36
Viswanath, Vanita, World Bank Technical Paper
32
Grupo de Asesoria Multidisciplinaria (GAMA) No. 265, Building Partnerships for Poverty Reduction.
Descripcion del Programa de Bonos de Capacitacion, World Bank, 1995. Also: Interview with Jim Edgerton,
GAMA, Montevideo, Uruguay, 1996. EDI, World Bank..

33 37
Miller, Calvin, Consultoria en Capacitacion y Interview with Jaqueline Mazza, IDB/MIF.
Entrenamiento para la Microempresa. Draft, Meda

12