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GB.271/TC/3
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Committee on Technical Cooperation |
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THIRD ITEM ON THE AGENDA
Impact assessment/evaluation paper on ILO technical cooperation:
Projects and programmes on the development of micro-
enterprises, including cooperatives
Contents
II. Enhancing the potential growth of small and micro-enterprises: Strategies
1. Group-based self-reliance schemes
2. Institutional frameworks for targeted support
3. Building networks and alliances
III. Evidence of impact: The lessons learned
1. Access to credit and other financial support schemes
2. Training adapted to specific situations
3. Responding to the needs of women entrepreneurs
4. The enabling environment
Appendices
1. The theme of this paper was selected by the Officers of the Committee. The paper synthesizes the ILO's work in technical cooperation and assesses some policy orientations used in supporting small and micro-enterprise development.
2. Given the complexity of the issues involved and the wealth of information available on the subject, it has only been possible in this paper to examine a small, but nevertheless very relevant part of the ILO's experience of micro-enterprise development in the informal sector. The analysis focuses on the strategies that have been applied in the context of the creation of group-based self-help schemes, the strengthening of institutional frameworks for targeted support services, and the development of alliances, which pave the way for dialogue and negotiation between policy-makers and organizations of micro-entrepreneurs. It is hoped that the lessons learned from the evaluation of projects utilizing these strategies will be beneficial in defining the direction of future related activities.
3. All the technical cooperation projects reviewed in this paper are concerned with the development of small and micro-enterprises focusing on building self-reliance schemes and enhancing the growth potential of informal sector activities. A list of the projects is included in Appendix I. The choice of projects was based on a search of evaluation reports and indexed in the Evaluation Unit's database. Out of a preliminary list of ILO projects, 21 were retained for the review, the final sample included ten national projects and three regional projects in Africa, two national projects and one regional project in Asia, three national projects and one regional project in Central and South America, and one interregional project. The target population of these projects comprised micro-enterprises, small producers, artisans and the staff of national support programmes and institutions. The complete list of the reports examined is included in Appendix II.
II.
Enhancing the potential growth of small and
micro-enterprises: Strategies
4. The predominant approach in the ILO's work is to unleash the latent potential of small enterprises to provide income and create jobs. Obstacles commonly cited are lack of capital, management skills and technology, unequal access to factor and product markets, and restrictive regulatory frameworks. Targeted support strategies have focused on the areas of credit, technology, training and marketing in order to strengthen the productive capacity of micro-entrepreneurs, small producers and artisans. Another approach has focused on building and strengthening alliances and networks among grass-roots organizations of small producers and micro-entrepreneurs at the national and regional levels, and national programmes at the regional level.
1. Group-based self-reliance schemes
5. One form of action that has been developed since the early 1980s, mainly in projects in West Africa (Rwanda, Mali, Togo, Benin, Burkina Faso),(1) focuses on small producers' needs for financial and production services. It facilitates the creation of organization-based self-help schemes through a participatory approach consisting of the following elements:
(a) the gradual mobilization of participants' own financial, technical and human resources to encourage autonomy;
(b) animation aimed at stimulating participants' desire for improvement and to affirm their social identity;
(c) building and strengthening organizations of small producers, artisans and micro-entrepreneurs;
(d) institutional recognition and representation of participants, enabling them to negotiate, assert their rights and act on constraints inherent in their unfavourable economic and institutional environment.(2)
Independent associations and federations of small producers and micro-entrepreneurs created with the support of the projects are now set to become new social partners.
6. Financial services are organized primarily through the formation of mutual savings and loan associations and through group guarantee funds. In several projects in West Africa, group-managed savings and credit services emerged as the most feasible alternative where banking services had collapsed or were undergoing severe restructuring, and where financial institutions were reticent to provide services to low-income clientele. Moreover, the existence of a strong tradition of rotating savings and credit associations provided a natural basis for the organization of mutual savings and loan associations.
7. Low productivity and poor production technology are addressed primarily by setting up common facility workshops which make machines, tools and small portable equipment available to producers for a fee. They also provide other support services, such as assistance in designing new products and developing prototypes, documentation for technological innovation and self-training, storage space for raw materials and supplies (which associations purchase at prices slightly below those in the wholesale market), and sales and display areas for products. The workshops also play the role of intermediary in seeking contracts (which cannot be undertaken by individuals) providing the premises for meetings and training courses, and distributing information on relevant laws and regulations. The equipment is bought with external assistance, while the target beneficiaries build the physical structures. The beneficiaries, who are often organized into a savings and loan association, manage their common facility workshops through an elected administrative body in cooperation with the project team during a transitional period.
8. The success of mutual savings and loan associations established by projects in Mali, Togo, Rwanda and Benin is linked to a combination of the quality of services, the return on members' savings, and the control of costs. In most cases, members were initially concerned about the security of their savings and were reluctant to support loans, even if they brought in higher earnings. Furthermore, the presence of a strong "tontine" tradition was not a sufficient basis for creating solidarity and trust. The confidence and the loyalty of members to the organization, the supervision of borrowers by members, and measures to prevent the wrongful payments or the misuse of funds -- guarantee funds to minimize default risks, credit conditional on length of membership, personal contribution to savings and securities -- were found to be the most important factors contributing to success. Time and experience were also necessary to build solidarity and trust, a positive attitude towards credit, and active vigilance. Projects had, therefore, to make a significant financial investment in strengthening organizational and managerial skills.
9. In the long term, in order to consolidate and sustain the institutional position of mutual associations, relations with the formal financial system, where it operates properly, have to be established. As demonstrated by the project in Burkina Faso, members' savings may be used as collateral (rather than as loans) in order to obtain access to resources from the formal financial system. However, banks are generally reluctant to lend to low-income borrowers, even when the latter are organized. Banking systems need to adapt their services to the demands and circumstances of small poor borrowers to rectify this problem.
10. The projects in Rwanda, Mali and Togo demonstrated the relevance and effectiveness of group-based self-reliance schemes. First, through their organizations, small producers and artisans became socially active and visible to the government and other institutions. They were able to negotiate with local authorities for recognition, as in Kigali, where local authorities granted small producers work cards which gave them right of residence and other benefits, such as access to bank loans, local tax reductions, and the right to occupy public land. They provided various services to members, managed workshops, explored new markets, organized trade fairs, allocated large job orders and managed technical and apprenticeship training. Secondly, visible underemployment was reduced as new markets generated new activities that increased working hours. As a result, more apprentices were hired and existing jobs were made secure as the means of production and investment capital sources were less precarious than before. Considerable increases in the earnings of the majority of craftsmen were observed, even where credit had not been extended.
11. In Benin, the projects improved methods of work and thus working conditions, increased investment levels, improved the quality of products, increased the range of products being produced, and diversified the customer base. However, the devaluation of the CFA franc in the first half of the 1990s caused heavy damage: common facility workshops experienced declines in earnings as the price of raw materials and other inputs rose; savings with mutual savings and loan associations shrunk as members' earnings and purchasing power declined; and women's revolving funds were no longer sufficient to strengthen their investment capacity.
12. In the Burkina Faso project, the common support base visibly increased information exchanges between the producers, and encouraged the discussion of issues such as apprenticeship contracts. With the information at its disposal, the common facility workshop helped increase the number of associations that sought and obtained legal status.
13. A crucial element in assessing the impact of a project is the extent to which the target group has been reached. The projects in Rwanda, Mali, Togo, Benin and Burkina Faso all targeted assistance at small producers, who are the most disadvantaged in terms of equipment, technical expertise and income. Intended beneficiaries were identified as the self-employed working alone or with family members or apprentices, micro-enterprises employing one to four workers on a casual or permanent basis, and small cooperatives. However, although it is not explicitly stated, all workers in a unit or an enterprise -- proprietor, wage earner, apprentice, and unpaid family workers -- were expected to be assisted. Assistance was also directed at those whose activities had growth potential.
14. Sustainability is another important aspect of impact assessment. The participatory organizational approach adopted by the projects contributes to sustainability because the producers and craftsmen are trained to undertake and manage development initiatives by themselves. Thus, the level of self-management capability possessed by producers' organizations is a major factor determining their institutional sustainability. In the projects reviewed, small producers' organizations showed an increasing ability to sustain credit schemes and common facility workshops and to negotiate with entities that had the potential to respond to their needs. Another factor affecting the sustainability of grass-roots organizations is their legal and institutional status. For example, practically all associations organized in the informal sector projects in Rwanda, Mali, Togo, Benin and Burkina Faso were savings and loan associations. In the Burkina Faso project, associations were helped to obtain legal status.
15. The likelihood that a project's results will be sustained after it is completed also depends on the commitment of national governments or national institutions to continue the work. Even self-reliant organizations need some form of external support from governmental or non-governmental institutions. Moreover, the reinforcement of the self-management capabilities of associations, replication of associations and consolidation of the formation of higher-level coordinating bodies to manage associations' common funds and resources, require the sustained presence of extension and promotional mechanisms similar to those provided during the pilot projects. Training programmes, technology improvements and product development, supported by the common facility workshops, need continuous inputs from external training and technological institutions, mainly government agencies.
2. Institutional frameworks for targeted support
16. Another approach in the projects under review consists in strengthening the effectiveness of national targeted programmes for micro-enterprises and informal sector units. Unlike the strategies adopted by projects in West Africa, this modality involves action at the national level and aims at building an institutional framework for targeted support services. The ILO projects that have assisted Honduras' PASI (Programa de Apoyo al Sector Informal -- Informal sector support programme)(3) and Costa Rica's(4) PRONAMYPE (Programa Nacional de Apoyo a la Micro y Pequeña Empresa -- National programme of support for small and micro-enterprises) provide examples of how such strategies have been implemented. The technical assistance provided to PASI and PRONAMYPE involved the design of general policies and strategies for the development of the target sector, and of the programmes' operational framework, which included policies and procedures for granting credit and technical assistance and systems for credit monitoring, information and evaluation.
17. The PASI, a component of Honduras' national social compensation programme set up in 1990, seeks to improve employment and income generation in the informal sector by enhancing production and productivity. The PRONAMYPE, a component of Costa Rica's 1990-94 national development plan "Sustained Development with Social Justice (Desarrollo Sostenido con Justicia Social)", aims, inter alia, to improve the living conditions of workers in micro-enterprises, create and consolidate jobs and integrate micro-enterprises into the national legal structure. Several programme features are common to PASI and PRONAMYPE. Both have credit services and technical assistance to micro-enterprises as the major axes of support. However, by 1995 PASI had expanded its scope to entrepreneurship development as a whole.(5) One notable feature of the credit policy of PASI and PRONAMYPE is the adoption of market interest rates that cover inflation and the operational costs of the programme. This policy is meant to enhance the sustainability and financial autonomy of the programmes.
18. Both PASI and PRONAMYPE use intermediaries to provide credit and technical assistance, such as private development organizations, NGOs, cooperatives and associations of beneficiaries. In Honduras, relations between micro-enterprises and the formal banking system are weak, and micro-entrepreneurs lack experience in managing institutional credit and formulating rigorous investment plans. Hence, NGOs and similar entities with experience in implementing support programmes for micro-enterprises were identified as the best vehicles for overcoming these obstacles. The intermediaries are expected to help credit users optimize investments and to monitor loan repayments. Both PASI and PRONAMYPE provide technical assistance(6) to these institutions in order to improve their capability in this respect.
19. While these strategies have not focused on grass-roots organizations like those initiated in West Africa, a change in focus seems to be occurring in order to meet the needs of the informal sector in a more effective way. In 1995, PASI launched a new set of measures to promote the organization of informal sector participants,(7) including (1) the provision of a methodological guide and animators in organization building; (2) meetings between informal sector organizations to help build consensus on common problems and solutions, and to encourage networks and alliances between them; and (3) support to specialized NGOs that have organized "bancos comunales".(8) PASI helped in the creation of the CONAMH, a national committee of micro-enterprises in Honduras.
20. The effectiveness of national targeted programmes strongly depends on how the target group is defined and selected. PASI's criteria for lending made a distinction between micro- and small entrepreneurs (essentially, with fixed premises and hired employees) and the "vulnerable" segments. In the latter group, a minimum percentage of total loans that should go to them has been fixed. In the case of PRONAMYPE, changes were introduced into the credit regulations in order to give priority to micro-enterprises in marginal areas, which were defined by the National Planning and Economic Policy Ministry, and to improve the access to credit of micro-enterprises and low-income women.
21. The outcome of targeting reveals that more loans went to the more vulnerable segments. In the case of PRONAMYPE, the figures for 1993 show that 91 per cent went to micro-enterprises rather than to small enterprises, making up 71 per cent of the total amount loaned. About 64 per cent of the loans to micro-enterprises went to rural areas classified as poor. In the case of PASI, the figures for 1995 show that some 64 per cent of the loans went to self-employed operators.
22. Gender-based targeting is another element of targeting mechanisms. Ensuring that women in the informal sector have equal access to credit has been tackled differently by PASI and PRONAMYPE. From the start, PASI gave special attention to women, particularly female heads of families, by developing strategies that encourage women's participation in credit and vocational training services. A quota system has been adopted to increase women's participation: 30 per cent of loans are allocated to "bancos comunales" whose membership comprises a minimum of 80 per cent women; 50 per cent of all loans for micro-entrepreneurs are allocated to women. The figures for 1995 show that 78.7 per cent of total beneficiaries of PASI were women, and 87 per cent of them belonged to "bancos comunales".
23. As regards PRONAMYPE, no specific measures for women were adopted at the start of implementation. Steps to put into operation a Guarantee Fund for female entrepreneurs who did not possess any of the required securities were taken in 1993. At that time, women accounted for 32 per cent of credit beneficiaries and obtained only 25.6 per cent of the total amount loaned. The average loan per woman was about one-quarter lower than the average loan per man. The participation of women in PRONAMYPE was traced mainly to the efforts of one NGO which dealt exclusively with women in urban areas. NGOs operating in rural areas registered a much lower percentage of women's participation.
24. On the whole, project evaluations and special studies observed tangible improvements in incomes, productivity and employment of PASI and PRONAMYPE beneficiaries. Around 80 per cent of PASI beneficiaries declared an increase in profits and incomes and sales increased by 10 to 50 per cent among the self-employed. The number of hours worked per week increased, and interruptions in production due to lack of capital strongly declined, pointing to a general consolidation and stabilization of jobs. Furthermore, investments in fixed assets increased in 12 per cent of cases. About 13,000 entrepreneurs, especially own-account workers, became members of organizations.
25. As regards PRONAMYPE, a survey of 33 per cent of the beneficiary micro-enterprises observed positive economic changes. It revealed 80 per cent increases in the number of clients of micro-enterprises; 81 per cent increases in incomes for micro-enterprises; increases in production volume, ranging from 83 to 100 per cent for micro-enterprises; and increases in the number of working hours of 13 per cent, indicating better capacity utilization of workshops and resources. It also showed the acquisition of new equipment by 44 per cent of micro-enterprises. Improvements in premises, the majority of which were residences, was low, occurring in only 15 per cent of the enterprises surveyed. More investments in better working premises would have improved living conditions as well. Observed increases in sales, markets and incomes resulted in enhanced capacity of families to meet nutrition, health, clothing and housing needs.
26. The effectiveness of the strategies in building the institutional support structure for national targeted programmes also has to be assessed at the level of the concerned institutions. These are the national body or agency responsible for managing and overseeing the national programme; and the intermediary institutions dealing direct with the intended beneficiaries. Available evidence suggests that PASI intermediary institutions experienced some improvements in their technical capacity and performance because the target group coverage increased considerably among 80 per cent of the intermediaries, and some ten intermediaries obtained external funds for the execution of other projects. On the whole, however, existing data on institutional changes are inadequate: evaluations of PASI and PRONAMYPE assessed the quality of specific outputs (e.g. regulations, manuals and equipment) of ILO assistance for programme management, rather than the ensuing changes in performance by the counterpart institutions. Project evaluations have concentrated on employment and income effects at the level of the target group. While these effects may be used as indirect indicators of the effectiveness of the assistance extended to the institutions, the impact at target group level cannot be wholly attributed to an improvement in institutional capacity, and would not reflect all changes at the institutional level.
27. Like most social compensatory programmes, the PASI and PRONAMYPE were envisioned to become instruments that would promote long-term national policies in favour of micro-enterprises and other informal sector units, which would lead to permanent access to institutional credit. Two institutional factors would facilitate the policy reform process: alliances of micro- and small entrepreneurs at the national and regional level, which would enhance their capacity to negotiate with policy-makers; and the institutionalization of the programmes, which started as temporary social programmes.
3. Building networks and alliances
28. Yet another approach applied in ILO activities focuses on setting up and developing networks or alliances among informal sector producers and workers, and among governmental and non-governmental institutions concerned with the informal sector. These strategies have arisen in response to three conditions: (1) the evolution and expansion of grass-roots organizations and their increasing need to consolidate; (2) the multiplicity of programmes, institutions and NGOs, and an increasing need for coordination; (3) the acquisition of experience and increasing demand for technical assistance in the development of strategies and methodologies. Several ILO projects provide examples of national and regional networking among organizations within the target population, government agencies and NGOs. The primary functions of such networks are often the exchange and dissemination of information, the consolidation of experience, the harmonization of concepts, strategies and methodologies, and the coordination of action.
29. An example of this modality can be found in PROMICRO,(9) a subregional programme in Central America. One of the components of PROMICRO is the formation of a network of national and regional committees of organizations of micro-entrepreneurs and a regional forum for national programmes. PROMICRO played an active role in the creation of the national committees of micro-entrepreneurs of Belize, Costa Rica, El Salvador, Honduras, Nicaragua and Panama. The project was also instrumental in establishing the Committee of Micro-entrepreneurs of Central America (COCEMI) in October 1993, which represents the six national committees of micro-entrepreneurs. It has also provided a forum for national programmes and projects, specifically by organizing conferences and symposia. Another example is provided by the subregional project to assist women homeworkers in Asia which supported the formation of a national organization of homeworkers in the Philippines,(10) and a network of homeworkers in Chiangmai, Thailand.(11)
30. There are many other efforts which encourage inter-country exchanges. Within the context of ILO informal sector projects in Rwanda, Mali and Togo in the 1980s, subregional and regional seminars and workshops were organized in Africa to encourage exchanges of experience and knowledge generated both within the ILO projects and outside.(12) An interregional programme to support urban self-help organizations (PUSH -- formerly programme of support to the urban informal sector, PROSUIS) also supports regional fora. As a result of these inter-country exchanges, a regional network of producers' associations of ten countries in West Africa is emerging. The network aims to reinforce producers' organizations and improve the delivery of business and social services to their members.
31. The presence of interlocutors from the informal sector at the same level as policy and decision-makers (i.e. national and regional) paves the way for dialogue and negotiation between the two. For example, the national organization of homeworkers in the Philippines (PATAMABA) has been involved by the Philippine Government in consultative mechanisms on policy issues concerning or affecting homeworkers (e.g. social security). The homeworkers' network in Chiang Mai (HOMENET) channelled business, technical and financial services from formal institutions to homeworkers' groups in a more systematic way. The COCEMI and six national committees of micro-entrepreneurs in Central America have contributed to the recognition by the Government and the formal private sector of micro-entrepreneurs as a social actor.
32. With more dynamic cross-fertilization of ideas and experiences, facilitated by networks and inter-country exchanges, it is expected that strategies and policies for the informal sector will become more effective and sustainable. For example, in response to a request by the Emergency Social Fund of Panama, the ILO, through PROMICRO, undertook a series of studies and formulated a proposal for a national programme to support micro-enterprises (PRODEMI, "Programa de promoción y desarrollo de la microempresa"), drawing on the PASI experience. Research has identified new economic opportunities for micro-enterprises in solid waste collection and recycling and in the delivery of municipal public services. These new sectoral activities are being considered in potential entrepreneurship development project areas in Africa and Latin America.
III. Evidence of impact: The lessons learned
33. The huge potential for productive employment that exists in small and micro-enterprises justifies the special attention they are paid. The various evaluation reports studied show the need for measures to be taken in some sectors, particularly in the craft industry, to encourage the autonomous organization of artisans and, in general, to increase support to informal sector enterprises.
1. Access to credit and other financial support schemes
34. Various projects studied come to the same conclusion -- difficulties in access to credit sometimes prove an insurmountable obstacle for small producers, making it difficult or even impossible to carry out any sort of economic activity. In most cases, the fact is that isolated small producers cannot find financial institutions which are responsive to their concerns. As part of the programme of support to Burkina Faso, the project sought to establish associations of small producers and to strengthen their ability to submit valid projects to credit institutions able to satisfy their needs:
- by collecting information from the financial partners on the conditions of credit and how to achieve them;
- by encouraging the opening of individual and collective accounts;
- by helping to put dossiers together and to perform administrative formalities;
- by providing management and accounting training, as well as accounting follow-up, as supportive measures to accompany the credit.
35. The lack of financial guarantees is another problem facing artisans who have to rely on outside financing for their equipment. In order to overcome this difficulty the project chose a strategy based on an initial effort by the small producers consisting of setting up a guarantee fund themselves to facilitate their access to credit.
36. These are the most propitious ways of helping small producers to overcome financing problems. In spite of these initiatives intended to improve access to credit, a certain number of problems remain: the sums granted are small, the procedures long, the loan reimbursement times too short and the costs for the evaluation of dossiers too high. These obstacles can slow down or even block the development of small and micro-enterprises.
37. Access to credit should therefore be facilitated, particularly in institutions that are already established, that are in a position to take the size of the borrower into account and to offer more flexible conditions in terms of repayments, guarantees and interest rates.(13) As recommended in the Burkina Faso project, improving financing conditions involves discussions at the institutional level between lenders and borrowers on the appropriateness of amending certain financial products to facilitate their access to artisans, by looking at:
- local and foreign experience, forms of credit specific to artisans;
- artisans' needs and the types of financial products (credit, guarantees) which would be the most beneficial and accessible to them in the long term.
2. Training adapted to specific situations
38. Training activities, together with credit, constitute the keystone of assistance programmes for small producers. The survival of enterprises depends on the ability of their managers to manage them well. In most cases cited in the evaluated projects, the shortage of technical and technological knowledge is often included among the major obstacles to the development of small and micro-enterprises.
39. The recommended solutions involve two stages. The first is to encourage the autonomous organization of artisans and small producers, the second to help them to gain as much technical knowledge as possible in order to make them sufficiently independent. However, the principal lesson to be learned from the projects evaluated is that the training of small producers necessitates a variety of skills and should ideally be adapted to their specific needs.
40. Training is the focus of a project in Zimbabwe(14) to develop small enterprises, targeting women in particular. The particular characteristic of this project is its use of local technical skills to identify needs and determine the content of the training programme. The evaluation mission notes that the training programme was original and was adapted to the local and specific needs of the various target groups, although further improvements are still necessary to make it more accessible.
41. On a general note, training activities for small enterprises should seek to ensure continuity and to encourage new initiatives. The solutions proposed to overcome the problems encountered can be applied in other countries, for instance:
- introducing methods adapted to the various target groups: this is a matter of responding to the specific training needs of each case;
- taking into account the training needs of the employees and apprentices in small and micro-enterprises. An analysis of their needs allows priorities to be established;
- drawing up the training programme bearing in mind both existing employment prospects and the qualifications sought by potential promoters. This approach has the advantage of better aligning the offer (terms, method, teaching skills) and the demand for training.
42. In Burkina Faso the project focused on the training of apprentices by artisans with, as its basis, the official apprenticeship contract, proposing terms concerning, for instance, the age to begin an apprenticeship, its length, the obligations of the apprentice and the employer, the cost. However, most employers acknowledged that they were unable to provide anything other than practical training to their apprentices even though that was insufficient.
3. Responding to the needs of women entrepreneurs
43. The promotion of small and micro-enterprises necessarily involves the improved monitoring of the activities of small producers and, more particularly, of the activities performed by women. In most countries where the evaluated programmes were implemented, women largely contribute to the production of national wealth; a lack of financial support and illiteracy are among the obstacles they face. Some projects took these factors into account in their programmes, thus allowing women to strengthen their abilities in the economic activities in which they are involved.
44. The activities to support women should enable those targeted to have easier access to the services and resources they need to exercise their activities in an autonomous fashion. Thought should systematically be given to the activities offering the best income prospects.
45. The project in Egypt to support women's small and micro-enterprises, notably in dressmaking and handicrafts, provided marketing training which enabled these women to increase their revenue. In Tunisia,(15) in the framework of another regional project, a special training programme for disadvantaged young girls, although somewhat delayed, responded to their specific need for training in order to be able to exercise an independent activity.
46. The evaluation report of the project carried out in Zimbabwe identifies the various obstacles facing women workers in rural areas:
- lack of capital;
- lack of effective equipment and material;
- credit costs that are often prohibitive;
- difficulties with the supply and stocking of raw materials;
- lack of means of transport or high transportation costs;
- impossibility of paying the social contributions of the workforce.
In addition they face insufficiencies due to lack of training and to the absence of information on products, markets, etc.
47. As a rule, support to women's organizations to encourage the autonomous organization of small and micro-enterprises should be made a priority. Cooperation between women's associations promotes the exchange and comparison of experiences. Nevertheless, any project aimed at supporting women's activities can only be sustainable if the beneficiary organizations have legal status.
48. In a number of developing countries over half of all small and micro-enterprises belong to the informal sector. The framework of action of enterprises in this sector is important in many different ways. In Burkina Faso, for example, the legal and institutional framework was not adapted to small and micro-enterprises. Thus the project recommended reviewing the various codes of trade, customs, taxation, labour, public markets, etc., and proposed enterprise statutes more adapted to local conditions.
49. Group-based, self-help strategies for the provision of financial, training, technological and marketing services, such as those developed in Benin, Mali, Togo, and Rwanda, have demonstrated their effectiveness in bringing about improvements in one or several areas of productive activity (e.g. productivity, regularity of working hours and production, volume of production, sales, market outlets, product design, etc.). These strategies were found to be appropriate and relevant in situations where formal institutions that normally provide productive and economic services were weak, non-existent, or simply unprepared and unwilling to deal with producers in the urban informal sector.
50. While recognizing the relevance and effectiveness of group-based, self-help strategies, a few qualifications must be made. First, effectiveness is the end result of a host of factors, both internal and external to projects. The organizational processes which build up group solidarity and self-management capability are critical, and require time and investment. At the same time, the political and economic environment affects the organizational processes and the groups' productive activities in both positive and negative ways. Secondly, there are limits to what self-help schemes can achieve on their own. Links with external institutions need to be established to enable small producers and micro-entrepreneurs to expand resources and assets, obtain new or better technologies, secure access to services, etc. Moreover, self-help schemes are hardly ever self-reliant when the projects end. They hence require further support from institutions within the local and national community. An assessment of group-based self-help strategies must include their potential for creating more active, socially aware and relatively independent groups and alliances within the community and the urban informal sector. From the standpoint of strengthening civil society, this is a valuable contribution. Clearly, the employers' and workers' organizations in the countries concerned could build upon these encouraging results in providing support for their further development.
51. National targeted programmes addressing micro-enterprises or household production units, such as those in Honduras and Costa Rica, also resulted, to varying degrees, in tangible improvements in productivity, employment and incomes. Unlike group-based self-help strategies, these programmes mobilized huge amounts of local, national and external resources and harnessed existing institutions, NGOs and organizations to deliver services. One might conclude that the level of efficiency of these structures in reaching the target groups and delivering credit and technical services was critical in determining the satisfactory degree of effectiveness of the programmes.
52. Available project information does not give indicators of the efficiency of group-based self-reliant schemes or of national targeted programmes, that is, it gives no comparison of the costs and benefits of different interventions, or any comparison of the costs and benefits of ILO projects with those of other similar projects. This field of evaluation needs to be more fully developed in the ILO. As regards the assessment of effectiveness, there are significant gaps in information on the distribution of benefits and on impact within target categories of workers, for example, categories defined by gender or income level.
53. Most projects favour the integrated approach, with the aim of providing varied responses adapted to the concerns of small and micro-enterprises. The participative approach is clearly the key to success. It makes it easier to identify needs and involves all the local partners in achieving the objectives. The results are all the more conclusive and lasting given that the partners can adapt them to their needs and ensure their sustainability.
Geneva, 18 February 1998.
List of projects reviewed
1. ETH/90/MO2/FRG: Employment promotion for women fuelwood carriers through organization -- Ethiopia.
2. BRA/94/MO2/BRA: Improving working conditions and productivity in small and medium-sized enterprises (WISE-MM) -- Brazil.
3. EGY/91/MO1/DAN: Promoting employment, productivity and income of cooperative settlers in new lands -- Egypt.
4. PHI/93/MO2/AGF: Strengthening of production and marketing of traditional crafts of indigenous communities in Mandanao -- Philippines.
5. BKF/91/MO2/FRG: Appui à l'auto-organisation des petits producteurs et productrices de Ouagadougou (Support to the autonomous organization of small producers in Ouagadougou) -- Burkina Faso.
6. INT/94/MO5/DAN: Indigenous and tribal peoples poverty alleviation and democratization -- Interregional.
7. ZIM/92/MO1/NET: Action to assist rural women -- Zimbabwe.
8. RLA/93/002: Proyecto regional sobre integración del sector informal urbano al proceso de modernización (Regional project concerning the integration of the urban informal sector into the modernization process) -- Central and South America.
9. BEN/91/004: Appui à la promotion des activités informelles urbaines et d'une politique de soutien au secteur (Support for the promotion of urban informal activities and of a policy to provide support to the sector) -- Benin.
10. BEN/90/MO1/BEL: Promotion de l'emploi des femmes dans l'artisanat alimentaire (Promotion of women's employment in food-related handicrafts) -- Benin.
11. COS/91/MO1/NET: Programa nacional de apoyo a la micro y pequeña empresa (PRONAMYPE) (National programme of support to small and micro-enterprises) -- Costa Rica.
12. URT/88/007: Employment promotion in the informal sector -- United Republic of Tanzania.
13. URT/94/MO2/NET: Support to micro-enterprise development through policy reform -- United Republic of Tanzania.
14. NER/93/MO1/NET: Participation des entreprises à caractère coopératif à la sécurité alimentaire villageoise et au développement local dans le département de Zinder (Participation of cooperative enterprises in community food security and local development in the department of Zinder) -- Niger.
15. THA/93/002: Rural income opportunities programme -- Thailand.
16. RAF/94/MO8/ITA: Promotion de la micro- et petite enterprise et formation des jeunes filles défavorisées (Promotion of small and micro-enterprises and the training of underprivileged young girls) -- Regional Africa.
17. HON/95/MO1/NET: Asistencia a la formación de una política para la promoción de la micro y pequeña empresa y a su implementación (Assistance in the preparation of a policy to promote small and micro-enterprises and its implementation) -- Honduras.
18. RAF/87/MO9/FRA: Création et promotion des petites et micro-entreprises par les femmes (Creation and promotion of small and micro-enterprises by women) -- Regional Africa.
19. RWA/89/MO1/DDA: Appui au secteur nonstructuré du Rwanda (Support to the informal sector in Rwanda) -- Rwanda.
20. RAF/88/MO8/FRG: Perfectionnement des cadres de banques au financement des petites et moyennes entreprises et de l'artisanat en Afrique de l'Ouest (Skills upgrading of the managerial staff of banks in the financing of small and medium-sized enterprises and of handicrafts in West Africa) -- West Africa.
21. RAS/91/M14/DAN: Women workers in the new putting-out system in Thailand, Indonesia and the Philippines -- Regional Asia.
Reference documents
Appui à la promotion des activités informelles urbaines et d'une politique de soutien au secteur et promotion de l'emploi des femmes dans l'artisanat alimentaire au Bénin; rapport d'avancement et d'évaluation interne et programme d'activités, Geneva, Sep. 1994. 1 V. (BEN/91/004; BEN/90/MO1/BEL).
Apoyo al programa nacional de micro y pequeña empresa (PRONAMYPE); Informe final, Geneva, June 1996. 40 L. (COS/91/MO1/NET).
Employment promotion for women fuelwood carriers through organization; Report of the final evaluation, Addis Ababa, Dec. 1996. 1 V. (ETH/90/MO2/FRG).
Implantação da metodologia da OIT -- Maior produtividade e um melhor local de trabalho (WISE-MM); informe de autoavaliação do proyecto, Brasilia, Feb. 1996, 4 L. (BRA/94/MO2/BRA).
Participation des entreprises à caractère coopératif à la sécurité alimentaire villageoise et au développement local dans le département de Zinder; rapport de la mission d'évaluation intérimaire tripartite du projet (phase VI), Geneva, 1997. 3 V. (NER/93/MO1/NET).
Strengthening of production and marketing of traditional crafts of indigenous communities in Mindanao, Philippines; Internal evaluation report, Geneva, Aug. 1996. 39 L. (PHI/93/02A/AGF).
Promoting employment, productivity and income of cooperative settlers in new lands, Egypt; Final evaluation, Geneva, 1996. 23 P. (EGY/91/MO1/DAN).
Appui à l'auto-organisation des petits producteurs et productrices de Ouagadougou, Burkina Faso; rapport final, Geneva, 1996. 51 L. (BKF/91/MO2/FRG).
Indigenous and tribal peoples: Poverty alleviation and democratization; A self-assessment by the project staff, Manila, 1996. IV, 63 P. (INT/94/MO5/DAN).
Zimbabwe: Action to assist rural women; Evaluation report, Geneva, Feb. 1996. 1 V. (ZIM/92/MO1/NET).
Rural income opportunities; In-depth evaluation, Ottawa, AGRODEV Canada Inc., Nov. 1996. 36 P. (THA/93/002).
Promotion de la micro- et petite entreprise et formation des jeunes filles défavorisées; rapport de la mission d'évaluation du projet, Tunis, Apr. 1997. 1 V. (RAF/94/MO8/ITA).
Asistencia a la formación de una política para la promoción de la micro y pequeña empresa y a su implementación; Informe final de la consultoría realizada al PASI entre el 27 de junio y el 11 de julio de 1997, Tegucigalpa, July 1997. 1 V. (HON/95/MO1/NET).
Proyecto regional sobre integración del sector informal urbano al proceso de modernización; Informe de autoevaluación de proyecto, Lima, Apr. 1997. 5 L. (RLA/93/002).
Urban informal sector development support; Progress report, Geneva, 1996. 19 P. (INT/93/MO8/NET).
Case study on international labour standards and micro-enterprises promoted by the projects "Employment promotion in the informal sector" and "Employment generation in salt production", Geneva, 1992. 38 P. (URT/88/007).
Support to micro-enterprise development through policy reform; Draft final report, Geneva, 1996. 21 P. (URT/94/MO2/NET).
Brief on national policy for micro-enterprise and informal sector promotion, Dar es Salaam, 1995. 7 P. (URT/94/MO2/NET).
Women workers in the new putting-out system in Thailand, Indonesia and the Philippines: Phase II; Report of the mid-term evaluation, Geneva, Mar. 1994. 1 V. (RAS/91/M14/DAN).
Appui au secteur nonstructuré du Rwanda; rapport d'évaluation interne (phase III), Kigali, Sep. 1989, 19 L. (RWA/89/MO1/DDA).
Création et promotion de petites et micro-entreprises par les femmes; rapport d'evaluation, Geneva, Mar. 1992, 5 L. (RAF/87/MO9/FRA).
Perfectionnement des cadres de banques au financement des petites et moyennes entreprises et de l'artisanat en Afrique de l'Ouest; résultats du projet et recommendations en découlant, Geneva, 1990, 34 L. (RAF/88/MO8/FRG).
1. RAF/87/M09/FRA, RAF/88/M08/FRG, RWA/89/M01/DDA, BEN/91/004, BEN/90/M01/BEL, BKF/91/M02/FRG.