Rural Economic Transformation (4/5)
Sub-componenent B-2 : Rural Enterprise Development
(USD 1.77 million)
Output. Financially viable and sustainable
small and micro enterprises are operating in Umutara Province.
Strategic Framework. The implementation
of the sub-component would be carried out in conjunction with
PPPMER, a national IFAD-financed project to support the promotion
of small and micro enterprise development. UCRIDP would provide
the funding, the oversight and would ensure coordination with
other Programme components. PPPMER would provide day-to-day
management of enterprise development activities in line with
the approach used and modalities of project implementation
in the other areas of the country. The only difference between
the operation of the PPPMER activities in Umutara from those
in other provinces would be a greater emphasis on agriculturally-based
enterprises. This would allow for considerable synergies with
UCRIDP and the support that the Programme provides for agricultural,
livestock and forestry development. A memorandum of understanding
would be drafted detailing the mutual responsibilities of
each project. It would spell out operating modalities, funding
and flow of fund provisions, and decision making, reporting
and financial management responsibilities.
Sub-component
Description
The sub-component would be implemented through
four main activities: (i) promotion and support for
rural enterprise development; (ii) support for rural
small and micro entrepreneurs; (iii) access to financial
services; and (iv) management support.
Promotion and Support for Rural Enterprise
Development. The expected output for this activity is:
potential and existing rural entrepreneurs and their associations
aware of support available and apex SME organizations and
solidarity groups strengthened and better able to support
their members. Sensitisation and mobilisation activities will
be developed during the second phase to familiarise the province
population, local authorities and potential technical partners
with regard to the support available under the sub-component
for establishment and management of rural enterprises and
the prerequisites to qualify for support. As part of this
process, the Programme would carry out an assessment of the
existing small and micro enterprises currently operating in
the province and through interaction with the PPPMER programmes
in other provinces, new potentially viable enterprises suitable
for implementation in the province would be identified.
Different types of support will be provided
to promote a favourable environment for SME development, including:
(i) functional literacy training, (ii) gender-focused
analysis and initiatives; (iii) strengthening of SME
associations and federations so that they can defend their
members' interests, negotiate with potential partners and
ultimately take over programme's responsibilities with regard
to providing support to their members; (iv) strengthening
of solidarity groups to facilitate access of the micro-enterprises
to financial services; and (v) capacity-building of district-based
Rural Enterprise Advisers (to be funded during the second
phase by the Programme, see below under Management Support).
Support for Rural Small and Micro Entrepreneurs.
The expected output for this activity is: rural small and
micro entrepreneurs have improved their income and performance,
through better technical skills, increased management capacities
and improved marketing. The activities will include: (i) technical
and management training (covering basic management and accounting,
project preparation, credit management, entrepreneurship,
technical fields…); (ii) apprenticeship programmes, (iii) marketing
support (covering organisation of producers, training, construction
of district and province showrooms, market research…). In
addition, the programme will promote transfer of competences
with regard to simple and innovative technologies.
Access to Financial Services. The
expected output for this activity is: small and medium enterprises
(SMEs) have sustainable access to financial services in the
province. The sub-component will support, though a line of
credit, three types of financing: (i) small credit (FRw 15 000
to 200 000) for individuals and solidarity groups; (ii) ‘ordinary’
credit (FRw 150 000 to 1.5 million) for the purchase
of equipment, constitution of stocks, or financing of revolving
funds; and (iii) investment credit (over FRw 1.5
million) for larger enterprises, which either necessitate
high-cost investment (such as carpentry or certain types of
agricultural transformation) or would involve operations on
a regional scale. The UCRIDP PCU would house and be accountable
for the line of credit and be responsible for disbursement
to partner financial service institutions – expected to be
predominantly micro-finance institutions (MFIs). The credit
line would be available for use by clients of both the rural
enterprise sub-component and the rural finance sub-component
(see below).
Under this activity, the programme will
also provide support to participating financial institutions
that extend financial services to the Programme’s SMEs. Support
would include, inter alia: technical assistance (audits,
procedures, software…) and marketing/product development assistance.
Financial institutions are expected to include:
· MFIs – for small credit.
· Union des Banques Populaires du Rwanda (UBPR) and major
MFIs – for ‘ordinary’ credit.
· Banque Rwandaise de Developpement (BRD) and commercial
banks – for investment credit.
Management Support. The expected
output for this activity is: a centre, ‘antenne’,
for the promotion of SMEs established and operating in Nyagatare.
The programme will finance a centre/antenne for promotion
of rural enterprise activities in the province. The centre
would be similar to those that have been established in other
provinces by PPPMER. Its staffing will include: a SME/microfinance
specialist, a planning/M&E specialist, and eight rural
enterprise advisers.
Sub-Component
Investments.
Financing would be provided for the sub-component as follows:
· Promotion and support for rural enterprise
development (USD 215 700), including sensitisation,
functional literacy training, strengthening organisational
structures and salaries and expenses for Rural Enterprise
Advisers.
· Support for rural small and micro entrepreneurs
(USD 1.07 million), including management training, technical
training, marketing support and salaries and expenses for
enterprise trainers.
· Access to financial services (USD 175 100),
including Institutional support for MFIs and Centres financiers
de proximité.
· Management support (USD 230,000), including staffing,
equipment and operational cost of provincial unit; contribution
to district operational cost.
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