|Micro Credit Systems for Small Enterprises in Developing Countries - Practical Guide|
This practical guide is based on the "Kabwe Enterprise Support Project" (KESP) in Zambia. KESP was started as a pilot project in January 1996. The pilot phase ended in February 1999. It was running under the umbrella of "Young Women's Christian Association" (YWCA) Council of Zambia in Partnership with "Protestant Association for Cooperation in Development" (EZE - Evangelische Zentralstelle fuer Entwicklungshilfe) and "German Development Service" (ded - Deutscher Entwicklungsdienst) Germany.
In the 3 years pilot phase it has been shown, that a micro enterprise support project can be successful in such a poor developing country like Zambia, despite extreme economic, social and political problems. KESP empowered micro enterprises to improve, diversify or develop sustainable income generating activities among some of the most vulnerable groups in Zambian society, mainly women and youth. The project assisted in re-establishing, developing and sustaining the economic situation of socially disadvantaged groups. All this was being done through business management training, business consultancy and by providing loans for businesses. In the 3 years pilot phase nearly 200 small scale businesses were assisted. Two thirds of them have improved their businesses and their standards of living significantly. For example a lot of them have been able to send a child to school and to improve the quality of their diet. The beneficiaries learned about business management and have stabilised, expanded and diversified their businesses. The loan repayment was highly efficient; for example in 1997 all of the participating groups in the urban and suburb areas paid their loans completely back including interest and administration fee. At the same period the loan repayment in rural areas was over 70 %. The expansion of businesses, the improvement in standards of living and the repayment of loans were more than satisfying.
The clients were micro entrepreneurs involved in petty production, trading and service activities. The target groups belonged to the vulnerable people of the society. For these groups the informal sector activities were among the main sources of income. A lot of micro enterprises did not have fixed business premises, instead they operated from homes or in the streets. Most of these businesses were operated by one person and only a few of them employed additional paid staff. The following lists show examples of supported micro enterprises:
· Fruits and vegetables
· Second hand clothes and shoes
· All goods typically sold in a grocery shop
· Material for sewing
· Service with:
· Hair salon
· Shoe repair
· Bicycle or car repair
· Offer of training for: Running a business, chicken rearing, ornament making etc.
· Pot maker
· Seed and small fruit trees
· Brick maker
· Tailor (Traditional clothes, school clothes, repair of clothes etc.)
· Chicken, pig or cattle rearing
· Knitting and crocheting
· Tye and dye
· Making flower pots and growing of flowers
· Basket and mat maker
· Ornament maker
· Oil maker
· Cotton processor
This reader is a guide to support similar projects in other development countries. It shall give suggestions and tested tools for the implementation of such projects. Of course, every project is somehow unique and there are special situations in the various countries, traditional circumstances, economy, culture, society and mentalities have to be taken into consideration. It is not possible to transfer exactly the same system from one country to the other. Each project has to be seen in a dynamic and flexible way.
The reader will probably realise that in this booklet only the masculine form has been used. This was done only for reasons of practicability. Obviously, entrepreneurs and staff members can be female and male in any position.