4.1 Methodologies of Service Delivery

This section assesses three methodologies of service delivery: the use of partnerships, the use of mixed service models and incorporating volunteers into service provision. The programmes to be reviewed are Self Employment Development Initiatives (SEDI), Institute for Social and Economic Development (ISED), Women Venture (WV) and SCORE, the Service Corps of Retired Executives. Methodologies are included as good practices because of their strong influence on many of the performance criteria. While the quality of the programmes reaching clients is central to good practice, how they are delivered also is important. The programmes reviewed in this section will suggest some methods that can complement quality programme content in the achievement of good practice.

4.1.1 Self-employment Development Initiative (SEDI)

(see bibliography on Self Employment Development Initiative)

Established in 1993, SEDI operates in Toronto, Canada and is funded by Human Resources Development Canada. The goal of its Self-employment Assistance Programme (SEA) is to provide income support, business skills development and business counselling services to unemployed people in Toronto, helping them to start businesses and become self-sufficient. SEDI's role is not in direct service provision. It is a coordinator, subcontracting out service provision to community-based delivery agents. It utilizes a partnership model of service delivery, allowing local providers, trusted by community members, to carry out the work. SEDI's role as coordinator of services includes: establishing a framework for delivery procedures; contracting with delivery agents; ensuring the quality of delivery through monitoring; collecting and recording statistics on participant characteristics and outcomes; maintaining budgetary and fiscal control; facilitating cooperation among programme providers, and encouraging and supporting programme innovations. The services provided to clients by local agents follow four phases. The first is registration and orientation, with the orientation serving as a first screening tool where clients are selected for movement on to phase two. The second phase is self-assessment and selection where clients judge their suitability for self-employment and assess the feasibility of their business idea. This phase involves counselling and seminars, and selection for phase three is competitive. Phase three starts the SEA programme and involves self-employment development by means of practical skills-based instruction in groups and individually. Network building and seminars also are part of phase three. The end result is the client's business plan, completion of which allows graduation to phase four. The final phase provides technical support and follow-up business counselling during start-up and business development. This phase lasts ten months.

Figure 6 gives data on SEDI's operations for the four-year cumulative period for which data are available, plus for its fourth year of operation. Outreach appears to be good due to the partnership model, with SEDI reaching a substantial number of clients over its first four years of operation. The average clients per year is 518, with about 43 per cent of them women. Outreach to women is slowly improving, with women composing 45 per cent of clients in the fourth year. Even more impressive is the high percentage of clients starting businesses. This can serve as one indicator of effectiveness as the goal of the programme was to move unemployed people into self-employment.

Figure 6: SEDI Outcomes 1993-97 and 1996-97

	# clients assisted	# completing plans	# startups	Grossrevenues	Gross rev/client	Gross rev/startup	Women's participation	Program costs	Costs/client
1993-97	2074	2016 (97%)	1800 (87%)	$36.4 million	17,530	20,200	873 (43%)	$10.6 million	5,109
1996-97	668	647 (98%)	588 (88%)	$13 million	19, 440	22,160	301 (45%)	$3.3 million	4,967

The information on start-ups and completions of business plans does not disaggregate clients by sex. This shows a lack of gender sensitivity in monitoring outcomes. Survival rates would be an additional indicator of effectiveness and MSE sustainability. However they are not available. The high rates of start-up reflect the competitive process of entry into the programme, ensuring that only those serious about starting a business and having the required skills are accepted. Average gross revenues per client, generated in businesses started by programme graduates, were $17,530 and the per capita cost of the programme was $5,109. Neither of these numbers is disaggregated by client group. SEDI reported that programme costs came in under their budget, implying that SEDI is institutionally sustainable in so far as it is able to meet programme costs with a diverse base of funds. This does not mean it is independent of donor funds.

SEDI compared its performance in year four to its previous three-year averages (these averages are not given). Data for year four show improvement in equity participation with a five per cent increase over the three-year average participation rate by women, and a two per cent increase over the four-year average given in Figure 6. Demand for SEDI's services in year four increased by 24.6 per cent over year three numbers, with 668 participants involved in year four. Programme costs per client decreased 4 per cent over the three-year average, while average revenues per client and average revenues per start-up increased 17 and 15 per cent respectively.

In terms of gender sensitivity, this programme does not appear to make a special effort to ensure services are delivered by the subcontractors in a manner meeting women's needs, nor are outcomes disaggregated by sex. However, some concern about reaching women is evident, with a priority for year five being higher participation by minority groups, as well as by women. Some of the methods used match those preferred by women, including adult learning methods and follow-up training. There is no mention of the sex of trainers, and the competitive selection process may exclude some women whose business ideas do not match the 'norm' and thus are not understood by the service providers. However, SEDI has started a new programme focused on capacity building for organizations working in the area of self-employment for low-income women and the training of women for enterprise development. The organization of the client training is not very different from that in the SEA programme, but it is delivered by women in women's organizations. This could increase the comfort level of women clients and consequently the amount they learn from the programme. Organizations involved in the project, approximately four each year over three years, receive two months of training prior to starting a training programme for clients. Their training includes organizational development/diversity training, business development skills, mentoring and money management. While client training is in process, the organizations attend monthly support meetings covering topics relevant to their stage in the client programme. In recognition of the more structural issues influencing the participation in such programmes by women and women's organizations, policy work is also a part of the overall programme designed by SEDI. This shows some awareness of both the practical and strategic levels at which gender constraints work, at least in the context on MSE development.

The main reason for selecting this programme was its partnership model of service delivery, though its new women-specific programme is also interesting. The delivery strategy has played a large role in SEDI's ability to reach a large number of clients and to maintain costs at a reasonable level. In terms of outreach, cost efficiency and institutional sustainability, it has made a successful start in its first four years. Given the rate of business start-ups, one can also say that the programme has been effective, though no information is available on the needs of the participants. Demand has increased over time, giving evidence of client support for the programme. Impact appears good, based on the average gross revenues generated by the clients in their new businesses. Some of this impact can be directly related to the programme, while some will be related to individual capabilities. Overall, the method of service delivery is replicable in other contexts, as long as quality local service providers are available and the over-seeing agency has time and personnel to select, train and monitor these groups. The costs of using this strategy will be much higher if a lot of time and money have to be invested in capacity building for service providers. This is being done for the women-focused programme, but no data are available to compare its costs to the SEA programme.

Lessons Learned from SEDI: · Partnership models of service delivery have potential to reach large numbers with good impact and effectiveness. · Success and cost efficiency of partnership models depend on availability of quality local service providers. · Over-seeing agencies have great responsibility in selecting, training and monitoring local level providers. Attention must be given to gender disaggregated reporting and monitoring the provider's gender sensitivity. · Competitive selection processes may exclude women whose business ideas do not match the 'norm', or who do not have the 'standard' persona of an entrepreneur. · Partnership models are applicable to women-specific programmes, such as SEDI's new Developing Enterprising Women's Initiatives (DEWI) project. Its capacity building component is important for supporting agencies targeting women's entrepreneurship.

4.1.2 Institute for Social and Economic Development (ISED)

(see bibliographical references on ISED; Edgcomb, Klein et al. 1996; Severens and Kays 1997)

ISED was established in 1988 and serves clients in the state of Iowa in the United States. Its target population is low-income people, welfare recipients and economically distressed communities in Iowa; women business owners are also a specific target group. Its objectives are to create new jobs by supporting the growth and expansion of microenterprises and to help low-income Iowans to achieve self-sufficiency through self-employment. ISED was selected for its mixed service approach and its strong partnership with local banks. Its loan guarantee programme also will be mentioned.

ISED offers a range of services including training and technical assistance, access to credit, rural business development and community business networks. All programme clients take part in the training and technical assistance programmes and it is in this area that the mixed service model comes into play. ISED offers both intensive, long-term assistance to those needing the most help, and a minimalist, short-term form of assistance to more 'advanced' entrepreneurs. This dual model was started in 1992-93. It allows for greater outreach at lower costs, without jeopardizing the impact of the intensive training. Outcomes from a review often years of ISED's operation (1988-98) are given in Figure 7. Figure 8 gives results for 1992, 1993 and 1994.

Figure 7: ISED Outcomes, 1988-1998

	Aggregrated numbers	Low income client group	Welfare recipients	Female client group	Minorities
1. Clients trained	4,830	3,663 (76%)	1,714 (35%)	3,069 (64%)	811 (19%)
2. Businesses started or expanded	1,018	874 (86%)	430 (67%)	685 (67%)	156 (15%)
3. Clients starting or expanding business	1,116	-	456 (41%)	704 (63%)	167 (15%)
4. Clients starting bus.	793 (71%)	-	388 (49%)	517 (65%)	125 (16%)
5. Clients expanding bus.	201 (18%)	-	54 (27%)	116 (58%)	36 (18%)
6. Clients strengthening businesses	122 (11%)	-	14 (11%)	71 (58%)	6 (5%)

Figure 8: ISED Outcomes 1992,1993,1994

Outcome (all costs in US dollars)	1992	1993	1994
Total costs	787,598	876,246	822,834
Number of clients	535	1,131	978
Number of clients with existing businesses	29	59	66
Number of clients starting business	111	175	237
Cost/business	5,626	3,745	2,716
Cost/client	1,472	775	841
Earned income/operating expenses	0.125	0.114	0.068
Public sector funds/total operating budget	0.885	0.898	0.929

Over the ten-year period, ISED served on average 483 clients per year with its training programme. Smaller numbers of clients went on to start, expand or strengthen a business each year (row 3). The total number of clients doing so is disaggregated by the action taken, in rows four through six. ISED's training outreach figure is good in light of the programme's ability to reach low-income and female clients who generally require more intensive services. Over half of the clients were female and over three-quarters were low-income. This illustrates ISED's effectiveness in meeting its objective of serving female and low-income community members.

The aggregated figures in Figure 7 obscure the increase in clients served after the introduction of the mixed service model in 1992-93. This increase is visible in Figure 8 where the number of clients increased substantially from 1992 to 1993. There was a decrease from 1993 to 1994, though the figure remains well above the numbers prior to the introduction of the mixed service model. Thus, in terms of outreach and scale, the mixed service delivery strategy has had positive results. There is no data available indicating specific numbers of females served over this time period. However, women composed 65 per cent of clients served in 1996. This is similar to the figures for the ten-year period from 1988-98.

Cost efficiency also appears positively affected by the mixed strategy, with ISED's cost per participant and per business decreasing after introducing the mixed model. This is because more clients and businesses are served with a less expensive minimalist type of service. Cost per client increased slightly from 1993 to 1994, though it remained well below 1992 levels. ISED's self-sustainability is poor, as evidenced by its lack of effort to cover its costs through programme income. It is very dependent on public funds. This dependence is not necessary for a mixed service model. Often the more 'advanced' microentrepreneurs are able to cover the costs of the minimalist services provided, making this aspect of the programme independent of subsidies. The agency appears to have strong relations with local and national donors. This implies that its institutional sustainability in terms of continuing services based on a diverse funding base is strong.

ISED's intensive business development programme appears to be effective in terms of start-ups and survival rates, though its outreach is low. Start-ups by various categories are given in Figure 7 and show that 71 per cent of clients served started businesses and 18 per cent expanded. Women made up well over half of these numbers, implying an ability to serve their needs successfully. The survival rate of all businesses assisted by ISED since 1988 is 63 per cent, while for low-income entrepreneurs the rate is 61 per cent. These numbers are quite high, particularly for the low-income group which tends to require more intensive assistance.

ISED also offers an access to capital programme which does not directly provide credit, but develops partnerships within the formal credit community, giving clients direct access to banks. This decreases the costs involved in running the programme. The programme has a three-level approach to ensuring access to capital. First, it develops strong relations with commercial banks in Iowa, establishing arrangements whereby the banks will set aside micro loan funds (approximately $50,000-100,000) for ISED clients, and will give priority to credit requests from ISED clients with an ISED-approved business plan. Second, ISED works closely with locally and nationally sponsored loan programmes to ensure that its clients have access to the funds. Third, ISED has developed a loan guarantee programme to reduce the high risk often associated with lending to microentrepreneurs. It secures up to 50 per cent of a loan in cases when additional security is necessary for a bank to grant the loan, with a maximum security value of $10,000. In all cases ISED works with clients to develop a business plan, assisting them through the process of applying for a loan. These preparation costs are the only costs involved in its access to credit programme. They must be covered by donor funds or other sources of income as there is no loan portfolio out of which to generate income to cover programme costs. Outcomes of this programme for 1992, 1993 and 1994 are given in Figure 9; they are not disaggregated by sex.

Figure 9: ISED credit programme outcomes 1992, 1993, 1994

Outcome	1992	1993	1994
# of loans made	22	35	41
Dollar value of loans made	113,151	326,777	303,603
Cost/loan	4,227	2,922	2,577
Operational costs/$ lent	0.82	0.30	0.20
Average loan size	5,143	9,336	7,404

ISED's credit programme is quite small in terms of numbers served. The average size of loans is rather large, compared to other programmes serving MSEs. Costs per loan and operation costs per dollar lent decreased substantially, though there is no information given to explain this. Overall, ISED has helped borrowers access over $5,700,000 in financing in the ten-year period of its operation, with the amount of its loan guarantee fund obligated totaling $195,803.

ISED appears to have some level of gender-awareness in that women are a distinct target group and it is involved in operating the Iowa Women's Enterprise Center, a state representative of the Small Business Administration's (SBA) Office of Women's Business Ownership (OWBO). These centres offer business assistance to women entrepreneurs (see section 3.4.6). ISED also focuses on self-esteem building, often a necessity for women in their transition to entrepreneurship. However, it does not always disaggregate data by sex, or offer childcare or other support services, provision of which would illustrate a recognition of some of the practical constraints influencing women and their participation in entrepreneurship promotion programmes.

For agencies in developing countries, the mixed service model and partnership programme in accessing credit are replicable. They are particularly important to agencies interested in cost efficiency, outreach and programme sustainability. Servicing a mix of low-income and moderate income women can help the service provider reach a wider target group at a lower cost per client, while maintaining impact for the lower income group. The lower costs per participant may make sustainability more achievable, particularly sustainability defined as ability to offer services long-term supported by a mix of funding sources. The level of outside funds required would be reduced due to lower costs per participant and the ability of moderate income clients to pay for services. Interactions between the clients also could help both groups, providing role models for low-income women and potential sources of employees for moderate income business owners. Replication of the financing programme at ISED also could help women entrepreneurs graduate to the formal banking system. This is often a goal of microcredit programmes in developing countries, but success in achieving it has been limited. The success of the loan programme's replication would be limited by the willingness of banks to set aside funds for micro loans to women. A loan guarantee programme could assist with this, but attention must be given to the problems of deadweight and displacement effects which often affect loan guarantee programmes.

Lessons learned from ISED: · A mixed service model can help agencies reach larger numbers of clients from different target groups. This can help women entrepreneurs from different backgrounds to establish wider networks. · This model involves offering both minimalist, low cost services to one group and more intense, high cost services to another group. Offering both levels of services means impact can be maintained for more needy target groups, including women. · Programme costs per client and per business decreased substantially with the introduction of a mixed service model. · Partnership programmes with local banks, coupled with a loan guarantee programme can help microentrepreneurs graduate to the formal financial sector.

4.1.3 Women Venture (WV)

(see bibliographical references Edgcomb, Klein et al. 1996; Severens and Kays 1997)

Women Venture was started in 1984 in St. Paul, Minnesota and incorporates entrepreneurship promotion programmes within wider strategies supporting women's employment and economic development. Its mission is to foster entrepreneurial spirit and support economic self-sufficiency through the growth of self-employment opportunities in northeastern Minnesota. It targets low-income and minority women, though WV will serve anyone interested, including men and clients from a range of income groups. Women are the primary clients, composing 85 per cent of the clients served in 1995.

Women Venture was selected as a best practice due to its introduction of a mixed service strategy in 1993. Through this strategy WV offers two tracks of services, one with intensive training, technical assistance and individual lending, and one with minimalist services including short courses in specific subject areas. As in the case of ISED, this mixed strategy influences outreach, cost efficiency, impact and sustainability. The mixed method allows WV to achieve both outreach and impact, with the minimalist services increasing the number of clients reached and the intensive services keeping impact high for those needing more assistance.

Figure 10: WV outcomes 1992,1993,1994

Outcome (all costs in US dollars)	1992	1993	1994
Total costs	514,635	472,649	470,697
Number of clients, intensive	161	477	246
Number of clients, minimalist	0	999	1,035
Number of intensive clients starting business	52	50	52
Cost/business	10,091	4,873	4,903
Cost/client	3,196	991	1,913
Earned income/operating expenses	0.075	0.131	0.184
Public sector funds/total operating budget	0.67	0.59	0.71

With the establishment of the dual tracks, total programme costs decreased from $514,635 in 1992 to $470,697 in 1994. A decrease is costs is also evident in the costs per client and per assisted business in 1992-1993. These figures illustrate how larger numbers can be served at a lower cost with a mixed service strategy. WV increased outreach from 1992 to 1993 due to increases in the intensive programme clients and the start of the minimalist programme. Client numbers in the minimalist programme increased in 1994, though those entering the intensive programme decreased. The number entering the latter programme was again smaller (113) in 1996. Client numbers in the intensive programme decreased, while costs per client and per business increased from 1993 to 1994 due to a new requirement placed on WV by its principal state funder. This requirement necessitated that more intensive services be offered, limiting the numbers that could be reached due to the higher costs involved.

WV has made strides towards sustainability, with earned income accounting for 18.4 per cent of operating costs. This compares favourably to six other programmes reviewed by the Self-Employment Learning Project (Edgcomb, Klein at al 1996), where this figure for 1994 ranged from 6.8 per cent to 43.2 per cent. The average figure was 18 per cent, and with the one extreme figure of 43.2 per cent removed (it is based on an organization generating large sums from consulting services), the average figure is 13.7 per cent. Part of WV's good performance is due to charging fees for services. While most programmes are free to low-income clients, those able to pay were charged $225 for training in 1996, and a sliding amount ranging from $15-60 for consulting assistance. Thus, noncredit-programme contributions to earned income amounted to 56.6 per cent in 1994.

Evaluating effectiveness and impact is harder to do. The available data show that out of the 2,917 total clients assisted from 1992-94, all received technical assistance. Only 154 clients started businesses and 51 expanded. Assuming that the minimalist clients already had MSEs, this means that of the 884 intensive clients, 17.4 per cent started businesses and 5.8 per cent expanded. Overall the number of start-ups appears low; perhaps the clients enter the programme with little knowledge of what starting a business entails. Providing more information about entrepreneurship at the start of the programme may help to decrease the number of clients who take the programme and end up not starting enterprises. The numbers receiving technical assistance through the minimalist strategy are high, and they started high. This implies that a need is being met through the short courses. Reports on client evaluations of the short courses would increase our understanding of the minimalist programme's impact.

WV's focus on women relevant support services for women leads it to have a stronger gender-awareness. This is illustrated by the childcare and transport assistance offered by the agency. Self-esteem building and peer support groups are also part of the services provided. However, there is not enough information about the training programme content or learning process to determine if they incorporate women's needs.

This method of service delivery is replicable as long as there are women from various income groups and stages of business development demanding support services, and willing to make a payment for the services received. It is important to recognize that many of the constraints on women's entrepreneurship affect women across income groups. Thus, promoting women's entrepreneurship does not mean only focusing on poor women. Short-term growth and employment potential may be greater for businesses developed by non-poor women. If these businesses hire poor women, the focus on a diverse client group could pay off through their increased ability to offer poor women employment opportunities (which many poor women would prefer to self-employment). The components of the programmes included in a mixed strategy can vary, meeting the needs of context and clients. This makes it a flexible approach to women's MSE support.

Lessons Learned from WV: · Lower cost service delivery is possible through a mixed service model. Cost per client and cost per business served both decreased with the introduction of the mixed service model, supporting the ISED evidence. · Offering short courses to more 'advanced' entrepreneurs seemed to meet a need in the female entrepreneur community. Large numbers were willing to pay for the services from the start of the programme. · WV's stronger gender focus resulted in more non-business services being offered, including transport and childcare. · Donor requirements can directly affect outreach and costs. Whether this is positive or negative will depend on context and how well the requirements match clients needs.

4.1.4 Service Corps of Retired Executives- SCORE

(see bibliographical reference on SCORE)

It is a non-profit association established in 1964, made up of approximately 12,400 volunteer business counsellors throughout the United States, distributed amongst 389 chapters. It is a resource partner with the U.S. Small Business Administration. Its purpose is to support the education of entrepreneurs and the formation, growth and success of SMEs nationwide. This is accomplished through the provision of counselling, mentors, workshops and seminars at chapters located across the U.S. Decentralized service delivery allows the sessions to be well matched with needs in the local client community. Services are provided in person or via email, and are offered free of charge or at very low costs. SCORE volunteers may be retired or currently working business owners or managers. They have real world experience to bring to counselling sessions, mentoring relationships and workshops. They all receive specialized training in counselling and training to add to their business experience. Topics covered in counselling and workshops include writing business plans, cash flow management and assessing financial needs.

Throughout its history, SCORE has served almost 4 million clients with counselling. In 1998, more than one million volunteer hours were donated, more than 350,000 entrepreneurs were assisted with counselling and workshops, and more than 5,000 workshops were conducted nationwide. These numbers show the outreach potential of a decentralized programme and that there is a demand for the services offered, giving the impression that the programme is effective.

The use of volunteers can help agencies expand outreach at low cost, since a larger staff allows more services to reach a larger client group. Programmes do not have to be fully staffed by volunteers, as in the case of SCORE. A number of agencies use volunteers in some cases, and paid staff in others. Often one-on-one services are provided by volunteers, as these services can be expensive when offered by consultants. Therefore, using volunteers can increase cost efficiency as well as outreach. Institutional sustainability of a programme using volunteers may be hard to maintain as it will depend on the supply of volunteers available, and services may have to be cut if volunteers are not available. Outreach will also be constrained by the number of volunteers willing to give their time. Achieving effectiveness, impact and MSE sustainability through the use of volunteers in service provision depends on the quality of the volunteers. Just looking for large numbers of volunteers in order to achieve greater outreach may result in ineffective services with little impact on MSE sustainability and growth. Care must be taken to train volunteers and to not be afraid to turn away those who do not have the necessary skills. The service is not being provided for the volunteers, but for the agency's clients. So, the good of the clients must always be at the forefront.

The SCORE programme information has made no effort to discuss gender, whether of volunteers or clients. The numbers given are not disaggregated between women and men so there is no information about relative usage by both sexes, or the gender balance among volunteers. Workshops and seminars appear to be on general business skills, with no reference to the different needs of female and male entrepreneurs.

The replicability of the use of volunteers as service providers in developing countries will be constrained by the supply of experienced people available to provide the services, and their willingness to volunteer. This may particularly limit the supply of female volunteers, as women are more recent entrants to the business sector, and due to multiple work burdens may not have the time or energy to volunteer. In some cultures more emphasis is placed on giving than in others. In addition, in many cultures women - even retired women - play important roles in extended families, and there may be little time or energy left for volunteering. This method of service delivery will not be operational in those cultures where volunteering is not valued or practicable. However, where it is feasible it has the potential to offer female entrepreneurs individualized, quality services at low cost if interactions are well monitored and structured around women's various needs.

Lessons Learned from SCORE: · The use of volunteers can increase outreach and cost efficiency. Larger numbers of staff, composed fully or partially of volunteers, can reach more clients and to the extent volunteers are used, at a lower cost. · Impact and effectiveness of using volunteers depends on the quality of the volunteers. They must be carefully trained and interactions with clients should be monitored. Gender training should be a requisite part of the training offered. · Using quality volunteers may improve the ability of support programmes to offer individualized services. These services tend to have a greater impact and are more effective. · Finding female volunteers may be challenging. It is necessary to make the effort so female entrepreneurs are comfortable using the services offered. · Replicability will depend on availability of quality volunteers and a cultural context supporting