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close this book Development of enterprises
View the document PREFACE
View the document ACKNOWLEDGMENTS
View the document AUTHOR'S REMARKS
View the document INTRODUCTION: Using the example of development of enterprises by SWISSCONTACT in Costa Rica
Open this folder and view contents CHAPTER I: Basic Concept of Development of Enterprises and Organizational Structure
Open this folder and view contents CHAPTER II: Stages of project planning and of organization
Open this folder and view contents CHAPTER III Putting a development of enterprises project into practice
Open this folder and view contents CHAPTER IV: Practical advice for small-scale enterprises and self-help groups
View the document SUMMARY
View the document ANNEX: CHECKLISTS

INTRODUCTION: Using the example of development of enterprises by SWISSCONTACT in Costa Rica

As an introduction we present SWISSCONTACT's development of enterprises in Costa Rica. This may help the reader to better understand the manual and get him acquainted right from the start with the practice-near method.

By forming qualified middle-class professionals, since its foundation in 1959, SWISSCONTACT is promoting self-reliant development in the third world, this above all through trade schools. The following principles are important in this connection:

- aid by self-help in the technical sphere

- close co-operation with local partners

- technical training, later also industrial management training (transfer of know-how).

In addition, Swisscontact was looking for ways and means already in the 1970's to help graduates of vocational schools to build up their own enterprises.

How a vocational school graduate gives rise to the development of enterprises

Eliomar R., a former student of SWISSCONTACT's agro-mechanics school in San Jose had set himself up as an independent business man. He had to work, however, in a dilapidated ramshackle building which he had leased. In the evening, he had to carry home all his tools, because he could not lock them in at the workplace. Thanks to his training and with ten years of practical experience, Eliomar R.'s technical knowledge was good, but he lacked commercial training. Moreover, the work organization in his small enterprise with two to three workmen seemed to cause him trouble.

Eliomar R. knew collegues who were in the same situation. Thus, SWISSCONTACT was facing a group of well-trained, experienced and motivated small businessmen who were willing to set up together a development of enterprises program.

Two persons were of special importance for the development of the program in question:

- the Swisscontact project leader R. Zbinden who had acted as an instructor for the setting up of the agro-mechanics school in San Jose and therefore enjoys the confidence of the graduates, and

- the management consultant W.R. Keller, an engineer, but who also can and will lend a hand himself and who knows about the problems of a small enterprise from personal experience.

At the beginning, the project was only for the benefit of the graduates of INA (Instituto Nacional de Aprendizaje) by granting small credits and by standing security. In the course of a five years long learning process, the original idea was altered, adapted and made into a tangible concept.

Today, the small businessmen are grouped into the self-help organization APTAMAI (Asociación proprietarios talleres de mantenimiento industrial; i.e. association of proprietors of technical maintenance workshops) where also practical men without INA formation have access. Today, this association comprises the following occupational groups:

- mechanics (agro-, car-, truck-, maintenance- and electro-mechanics)

- blacksmiths (welders, steel construction)

- mechanics for refrigerators and air conditioners (SWISSCONTACT has been setting up the department "refrigeration" at the INA)

- electricians, electronic professionals.

Learning steps require: learn from what happened up to the present

Looking back, the learning steps which were mastered appear considerably more simple than what they actually were; therefore, let us look at the different periods once more:

1981: first studies and proposals regarding the development of enterprises. Disillusioning observation that also well-equipped enterprises are yielding low profits.

1982: Eliomar R. is given financial help for a first modernization of his workshop (weatherproof and under lock and key). Eliomar R. has at his disposal neither inventory, balance sheet, profit and loss statement, nor property which could be taken as security. Therefore, he has no credit standing with the banks. For this reason, SWISSCONTACT builds up a small credit fund. At the end of 1982, two credits of together US$ 3'000 are ripe for decision, of which one goes to Eliomar R. for the improvement of his workshop.

1983: start of training courses in cost accounting and business administration. End of 1983, already 25 workshop owners are members of the newly established self-help organization APTAMAI; the SWISSCONTACT project leader is president. Until the end of the year, roughly US$ 7'500 have been granted as credits.

1984: The emphasis of the development of enterprises lies above all in the individual advising of the workshop owners in technical, administrative and organizational matters. Credit extension loses its former importance; until the end of the year, only US$ 3'800 new credits are granted.

1985: On the basis of experiences made and as the results were considered by SWISSCONTACT to be rather modest, the work concept was revised, in co-operation with the project team. Targets and target groups remain the same, but the ways and means were better adapted to requirements:

- segmentation of the members by professional groups and areas,

- organization of self-help groups, and election of local representatives,

- extension of training activities to groups,

- co-operation with the local trade associations of the members, according to professions and areas.

As a result, the members of APTAMAI are closely involved in the development process of their organization. By the end of 1985 APTAMAI has more than 70 members and has secured more than US$ 10'000 of new credits.

1986: SWISSCONTACT's project leader, Roland Zbinden, is being replaced as president of APTAMAI by Mr. Alvarado, a craftsman from San Jose. APTAMAI now has eight experts at its disposal, of whom four work part-time. In addition, there are two part-time collaborators taking care of local self-help groups.

At the end of the year, 276 owners of small scale enterprises are members of APTAMAI, belonging especially to maintenance and repair shops of the metal-working branch. Today, APTAMAI is offering the following services:

- individual advice in the technical and administrative field,

- foundation and development of regional self-help groups,

- preferential treatment (purchasing rebates, sales promotion),

- accounting (under development),

- co-ordination of training activities (exchange of information between the self-help groups, provides experts and training advisers, organization of meetings, etc.)

- negotiation and partly granting of small scale credits, respectively standing security (check on credit worthiness and follow-up after granting of credits),

- representation of the members with private and public institutions,

- planned are offers of services in co-operation with other institutions (legal advice, insurance etc.)

- monthly information bulletin.

Until the end of 1986 additional credits of about US$ 42'000 were granted. Since the beginning some 52 credits averaging US$ 1'200 have been authorized.

And nevertheless: New important problems are still unsolved

In the future also larger enterprises with 20 - 30 workers ought to be included. They could also be production enterprises. Furthermore, we plan to lay more emphasis upon the new feature called Institution Building. Our aim is to ensure in this way that APTAMAI, as well as similar organizations, will be in a position to accomplish their mission independently from SWISSCONTACT, both financially and operationally.

We hope that, with the support from Swiss trade circles and from other institutions, but also from Costa Rica itself, we shall be able to master the tasks which lie ahead.


Peter Lutz