Afghanistan Rural Enterprise Development Program MINISTRY OF RURAL REHABILITATIONS AND DEVELOPMENT

AFGHANISTAN RURAL ENTERPRISE DEVELOPMENT PROGRAM (AREDP) is a national government-led multi-donor funded, program that facilitates private sector growth in rural Afghanistan. The program strengthens the private sector through integrated, value chain, top to bottom knowledge based interventions, bottom to top community enterprise development and by addressing credit and capital needs on all levels and in all locations.

AREDP COVERAGE Herat Bamyan Balkh Parwan Nangarhar Hilmand Kandahar

AREDP OVERALL OBJECTIVE IMPROVE EMPLOYMENT OPPORTUNITIES AND INCOME OF RURAL MEN AND WOMEN; AND SUSTAINABILITY OF TARGETED LOCAL ENTERPRISES.

COMPONENT 1: COMMUNITY- BASED ENTERPRISE DEVELOPMENT PROGRAM (CED)

Community Facilitation - mobilizing community, forming & nurturing Saving Groups: Enterprise development – Establishing and supporting Enterprise Groups Access to Finance – establishing and nurturing Village Loan and Savings Association

WHAT IS SG? EG? VSLA? Savings Group – A group of people come together at community level, receive training in financial services and start common savings and inter-lending activities; Enterprise Groups – A group of 5-15 members come together to form common enterprise activity (entrepreneurs who produce similar products, or are in the same value chain); Village Savings and Loan Associations are formed from a minimum number of 7-10 SGs to administer the savings of the Savings Groups once they are beyond a threshold level and the group has had a certain period of internal lending.

NEW INITIATIVES WITHIN CED Enterprise development for Koochies – Koochies are the nomadic tribes in Afghanistan who are historically engaged in animal rearing and carpet weaving activities. AREDP initiated business incubation support to Persons with Disabilities or Differently Abled People. Business Development Service Providers- transitioning officers to consultants to cater for rural service demands

PROGRESS AS OF AUGUST 2014 DETAILSFACTS No. Province covered6 No. of district27 No of villages covered893 No. of SGs established7,735 Female SGs established3,757 Male SGs established3978 No. of SGs members86,935 Total amount of savings in SGs180,765,376 Total no. of borrowers17,155 Total no. of loans20,736 Amount of loan disbursed135,199,945 Amount of loan recovered109,058,131

PROGRESS CED AS OF AUGUEST 2014 DETAILSFACTS No. of EGs established1798 No. of Female EGs983 No. of Male EGs 815 Increase in EG sales 27% Increase in employment 18% Total No. of VF 928 No. of VSLA449 No. of VSLAs registered with MRRD 84 No. of VSLA with bank account opened 144 No. of VSLAs received matching grant 33 Total no. of SGs associated/members of VSLAs 3,693 Total savings with VSLA 61,052,136 Amount of loan Disbursed by VSLA 73,158,387 Loan amount recovered 37,698,804 Loan amount outstanding 35,459,583 Borrowers 3,014 No. of Loans given through VSLA 3,310 Seed Capital for VSLA135

SUCCESS STORY Nasima, 25 years old from Hirat province; No education due to family economical situations; Learned embroidery work at home; Borrowed loan from SG Established embroidery shop Now makes 2,500 per month to support her old parents. Created job for two of her cousins from the same family condition;

SUCCESS STORY Mohammad Ali, 45 years old from Balkh province Worked as construction labor; Selected as leader of SGs; Borrowed loan from SGs; Through AREDP support established bakery; Income increased from 2,000 Afs per month to 6000 Afs per day (selling 700 bread per day) Established shop to sell flour and created job for 6 more people from his village;

COMPONENT 2: SMALL AND MEDIUM ENTERPRISE DEVELOPMENT (SME)

COMPONENT 2: SMALL AND MEDIUM ENTERPRISE DEVELOPMENT SME Facilitation- mobilizing potential enterprises at the district and provincial level Business Development Support for EDUs- provide capacity building exposure visits to potential SMEs and to create linkages to market Appropriate technologies- provision of technology for effective management of SMEs

PROGRESS OF SME AS OF AUGUST 2014 DETAILSFACTS Application received 1,632 TF & EV studies completed 587 SME shortlisted for BP development 505 No. of Business Plans developed 807 LOU signed 440 No of SME Trainees 564 No. of SME's Received Training/ Exposure Visit 367 SMEs Supported more than one time 133 % of increased in directly employment 38% % in sales reported by SMEs 29%

SUCCESS STORY Zahira, 30 years old from Hilmand; Zahira has tailoring business in Lashkargah, the capital of Hilmand; AREDP provided exposure visit to Pakistan and Zahira learned how to use internet to select design; Now she has expanded her business and recruited 50 people to work in her shop.

CROSS CUTTING THEMES Gender- mainstreamed at all level of programming: Out of a total 7,735 SGs that were established, 3757 are women (49%). Out of the total 1,798 EGs that were established 983 are women (55%).

CROSS CUTTING THEMES Environment - AREDP established Environment and Social Safeguard Unit to oversee environment impact that its interventions potentially could create. Awareness raising trainings for SGs, EGs, VSLA etc Environmental Impact Assessment Grievance Redressed System created that registers and keep track of complains from AREDP beneficiaries..

Training and Capacity Building: Training and Capacity Building for all SGs, EGs, VSLA, PEF etc on soft skill and technical skill that help them run enterprises effectively. 42,785 EGs, SGs, VSLA, PEF were trained training conducted in the following areas:  Community mobilization  SG Promotion  Islamic Banking  Enterprise Development  Awareness on Environment and Safeguard  Marketing  Book keeping  Credit Investment  Accounting CROSS CUTTING THEMES

LESSONS LEARNT/CHALLENGES AREDP has been a pioneer in converting limited qualified human resources and difficult bureaucratic procedures into strengths for enterprise development. With roots in the communities, it has helped to reach out to different target groups, improved employment opportunities, increased and generated incomes leading towards self reliance. AREDPs process of self realization is catalyzing its evolution as an organization which understands the impact of enterprise development on sustainable livelihood. New initiatives like Business Development Service Providers, involvement with partner organizations is proof of this fact. The program has developed capacities through transfer of knowledge and skills. However, there is limited transfer of technology and not on time.

VISION FOR AREDP II AREDP II will function an apex organization and facilitate partner organizations or implementing partners to provide qualitative, effective and efficient services. A system of public private partnership or implementation through partner organization is envisioning in AREDP II Strengthening Business Development Service Providers – At the local level these BDSPs will be the skilled human resources for communities and organizations.

Women and men (potential and existing entrepreneurs) Koochies Persons with Disabilities Youth Farmers TARGET GROUPS

Thank you very much Together Towards a Competitive Afghanistan