INTERVENTION PLAN 5 TECHNICAL AND BUSINESS TRAINING PROVIDER VALUE INITIATIVE PROGRAM Stage of Intervention: Entry.

INTERVENTION PLAN 5

TECHNICAL AND BUSINESS TRAINING PROVIDER

VALUE INITIATIVE PROGRAM

Stage of Intervention: Entry

INTERVENTION RATIONAL

Provision of technical and business skills to

microprocessors will contribute to increased output of quality juice,

increased sales and profits These will contribute to positive enterprise level

change, VCD change and social change

.

MICROPROCESSORS/VENDORS ACCESS TECHNICAL AND BUSINESS SKILLS

SOCIAL

CHANGE

ENTERPRISE LEVEL CHANGE

VCD

CHANGE

TECHNICAL AND BUSINESS TRAINING FOR MICROPROCESSORS/VENDORS

INCREASE IN OUTPUT OF QUALITY JUICE AND SALES

• Passion fruit is a very popular fruit in the domestic market either used as fresh fruit or for processing into juices.

• Demand in East African markets for fresh and processed fruit products such as passion fruit juice is growing at more than 10% per annum. In Kenya, domestic demand is increasing and current supply is unable to fill the demand.

 • The leading passion fruit processors in Kenya include

Kevian Ltd, Milly processors and FIPS Ltd, Ruaraka.

MARKET ANALYSIS

• Extensive juice extraction is also carried out at household and cottage industries. Passion, orange, mango, papaya are the major processed and utilized fruit juices.

• At micro-value add level, processing is done

manually or by use of juice blenders bought from local supermarkets.

• Value addition of passion fruits through micro processing presents an excellent opportunity to create new investment and employment for the poor Ampath clients in urban and peri-urban settings

MARKET ANALYSIS

o VIP Ampath has identified the following as among the key constraints facing micro-value add enterprise development:

o Inadequate processing skillso Poor quality and hygiene maintenanceo Poor business performance due to lack of management and

financial skills

o VIP Ampath through Fintrac has recently launched a detailed market research initiative on the passion fruit value chain to among others study potential markets for Technical and Business training services for SMEs in the value chain. (See attached market study plan)

o Some preliminary research on the markets reveals the following …………..

MARKET ANALYSIS

Supply of Technical and Business Training for Microprocessors

TA Supply is at two main levels:-

(1) Public Sector/Governmento Ministry of Agricultureo Kenya Agricultural Research Institute-KARI o Kenya Industrial Research Development Institute -

KIRDIo Universitieso Kenya Bureau of Standards (KeBs)

MARKET ANALYSIS

Supply of Technical and Business Training for Microprocessors

Continued………….

(2) Private and Voluntary Sector Organizationso NGOs, Faith Based and Community Based

Organizations are promoting agribusiness through value addition including of Passion fruit

o Private consulting agencies.

MARKET ANALYSIS

MARKET ANALYSIS

TA SUPPLY CONSTRAINTS

o Inadequate extension services at close proximity to households

o Extension staff lack adequate resources and appropriate tools to do their jobs.

o Coverage very limited and targets enterprises that generate quick results

o Lack of critical number of properly qualified extension professionals with the right knowledge, skills and attitude

MARKET ANALYSIS

TA SUPPLY CONSTRAINTS

o Lack of good information databases and/or sharing networks posing a serious challenge to agricultural extension service providers who are required to broker agricultural knowledge and information for poor subsistence farmers.

o Poor linkages between research and extension, hence technologies generated by the research system not widely taken up by farmers

o Gender discrepancies in access to TA- most information is passed to men who don’t transfer it to women who are the main producers

Demand for Technical and Business Training

Demand for the services is at two levels:-

(1) Able and willing SMEso Once exposed to suitable and affordable technical and

business training services they are willing to pay for it due to anticipated benefits to their investment

(2) Resource poor and vulnerable Ampath clients in urban settings;o These are the very poor and vulnerable AMPATH clients.o They are new micro-processing business and VIP Ampath

will assist them to graduate to micro-processing via a stepped –up approach (see graduation sequence next slide).

MARKET ANALYSIS

juice processing technology,

hygiene/quality, Biz

Management

FACILITATIONKBS

certification, municipal biz

permit, credit & savings, public

health certification

OUTPUT

1 glass ready to drink is KES 40 (200ml) or KES 200/liter; aim for

revenue of KES 4, 000 /day.

Approximately KES 2, 000 /day.

Experienced, rents a room or buys cool

box,

savings requirement

.

Increased production capacity,

Increased income

Graduation to a microprocessor and

business service markets

.

Stage 1Very poor and

Vulnerable

TRAINING

GraduationStage 2

Vulnerable

Sequencing for Graduation to Micro-processing for the Poor Ampath Clients in Urban and Peri-urban Areas

General Strategy

Have equipment supplier embed TA into trading relationship with

microprocessors

INTERVENTION

KIRDI-TECHNOLOGY

DEVELOPER

& TRAINER

MICROPROCESSORS/JUICE VENDORS

FINANCIAL INSTITUTIONS: ROOT SOURCES OF FINANCE

Equipment developer provides TA to microprocessors/vendors on embedded terms

BUSINESS MODEL FOR TECHNICAL AND BUSINESS TRAINING

Equipment +Tech &

Business Training

Microprocessors

Financial

Package

Loan

rep

aym

ent

Increase ME participation & Increase market output

Increase income for Juice vendors/MPs; increase supply of passion juice

Vendors/MPs access and use equipments

VIP INITIAL INTERVENTION ACTIVITIESIndentify geographic area

Conduct stakeholder meetings to share information on and to discuss the concept.Identify and assess target participants – TA provider /Technology developer , juice vendors, microprocessors

and MFIs interested in partnershipFacilitate introductions and relationship building between TA provider /Technology developer and MFIs

Facilitate introductions and relationship building between TA provider /Technology developer and vendors/microprocessors

Establish baseline data and assess impact

% increase in # of MEs participating in value chain;% increase in market output

% increase in monthly sales volume/value per vendor/MP

# of vendors/MPs accessing Technical and business training

INDICATORS

Equipment developer provides technical and

business training to microprocessors/

vendors on embedded terms

CAUSAL CHAIN FOR TECHNCAL AND BUSINESS TRAINING FOR MICROPROCESSORS/VENDORS – PILOT PHASE

% increase in monthly output of quality Juice

BUSINESS MODEL

Microprocessors/Vendors

TA provider/ Technology developer

MFIEquipment and TA packageTA (+ Equipment)

Loan repayment

Increase ME participation & Increase market output

Increase income for Juice vendors/MPs; increase supply of passion juice

Many Vendors/MPs access and use equipments

% increase in # of MEs participating in value chain;% increase in market output

% increase in monthly sales volume/value per vendor/MP

# of vendors/MPs accessing Technical and business training

INDICATORS

Equipment developer provides technical and

business training to microprocessors/

vendors on embedded terms

CAUSAL CHAIN FOR TECHNCAL AND BUSINESS TRAINING FOR MICROPROCESSORS/VENDORS – MARKET UPTAKE PHASE

% increase in monthly output of quality Juice

BUSINESS MODEL

Many Microprocessors/ Vendors

TA provider/ Technology developer

Many MFIsEquipment and TA packageTA (+ Equipment)

Loan repayment

MARKET ENTRY

• Pinpoint geographic area for the pilot• Assess demand and supply of

Technical and business training• Conduct stakeholder sensitization

workshops• Identify and assess participants-

Trainer/Technology developer , microprocessors /vendors and MFIs

• Monitoring and Evaluation

INITIAL OUTREACH STEPS

MARKET ENTRY- PROGRESS

• 5 pilot areas i.e. Eldoret, Mosoriot, Chulaimbo, Kitale and Webuye have been identified

• Negotiations with Equity bank on suitable financial products on-going

• Baseline established for 14 Ampath target sites

• First meeting with technology provider/trainer being initiated

INITIAL OUTREACH STEPS

What is the messages?

• VIP, objectives, approaches, facilitative role

• Passion fruit value chain, constraints and sustainable solutions

• ‘Why value addition -market opportunities, high urban demand, income generation opportunity for the micro value add enterprises

• The existing demand for TA by micro-processors :- business opportunity

What forums/media?

• Workshops, Stakeholder meetings

• Agricultural exhibitions

• Informal discussions• VIP fliers

What’s on offer?

•MFIs: expanded client base• Vendors/MPs : improved access to technical and business training, increased sales and income• Trainer /Technology provider : increased equipment sales and profits

Marketing Strategy

PILOT PHASE

Business Model to be tested

Equipment developer provides TA to microprocessors/vendors on

embedded terms

Who will be involved?

Core partners: VIP consortium, microprocessors/vendors, technology developer (KIRDI) and MFIs

Other development agencies in the piloting areas (e.g. HCDA, FPEAK, KEPHIS, KARI, MOA, NGOs) will be involved in supporting the initiative.

ABOUT THE KENYA INDUSTRIAL RESEARCH AND DEVELOPMENT INSTITUTE (KIRDI)

KIRDI is a parastatal established under the Science and Technology Act, Cap 250, 1979 of the laws of Kenya.

oIts mandate is to undertake research and development in industrial and allied technologies.

oAmong its institutional objective is to contribute to the creation of national wealth through development of technologies that are appropriate and accessible to micro and small enterprises in Kenya

KIRDI’s activities include :

oDevelopment/reverse engineering of agro-processing machinery and equipment and disseminating the same to small and medium scale food processors in accordance with vision 2030. Examples of equipment already developed and being piloted by KIRDI include: Fruit pulper, Pasteurizer, Blender and Electric drier o Process and product developmento Establishment of pilot plantso Training, capacity building and consultancy serviceso Business incubation service

Proposed Roles for KIRDI in VIP Partnership

1. To develop and provide micro-processing equipment directly to the SMES or via existing supermarket chains

2. Training and capacity development of microprocessors

3. Business incubation services to microprocessors4. Future promotion of the business models

NB: KIRDI is well established to undertake the above roles now and in future. Ampath is set to initiate dialogue with KIRDI

PILOT PHASE: Developing the Service

o Assess KIRDIs training package and facilitate upgrading as necessary to include:o Adult learning principles and practices/training

methodologies o Overcoming language/communication barriero Overcoming ethnic and class issueso Mainstreaming Environment, Gender and HIV

o Assess KIRDI other capacities e.g. # of trainers and requisite skills and support capacity development if necessary

PILOT PHASE: Stimulating Demand Demand for services during the pilot will be stimulated

as follows:• Direct intervention by VIP partners:

oFPI/ AMPATH will document the business modeloEPC will disseminate the model in workshops,

seminars, trade shows and mediaoFintrac will facilitate establishment of market

linkages:- microprocessors/vendors – MFIs – Training &Technology provider (KIRDI)

• KIRDI and MFI will market own services

PILOT PHASE: Target Outreach

• Service Providers

o TA & Technology Provider : 1 ( VIP will work with KIRDIo MFI:-1 [Equity bank]

• SEs (Microprocessors/vendors): 30 per pilot region x 5 regions = 150• Pilot regions: Eldoret, Mosoriot, Chulaimbo, Kitale and Webuye

Determining Pilot Success

Key determinant of pilot success will include:

oAbility to graduate the very poor urban dwellers and vulnerable from dependency to self reliance

• If the outcomes of the pilot tests on TA function will be positive:

o VIP Ampath will strike a deal with KIRDI to continue carrying out the TA provider function on wide scale commercial basis .

o VIP Ampath will document the business models for promotion by KIRDI

MARKET UPTAKE – Stimulating Demand

Continued………

o VIP will/might provide initial subsidy to KIRDI to market the business development services to other microprocessors/vendors and banks through media campaigns, seminars and marketing materials

o VIP will phase out any direct subsidies to enable the partner to operate commercially.

MARKET UPTAKE – Stimulating Demand

2. VIP will facilitate traders, lead farmers, agrovets and nurseries to establish networks through which information/knowledge would be transferred.

3. Traders, nurseries, agrovets and lead farmers assisted in the pilot will market themselves to other farmers

4. VIP will collaborate with Government supported agencies and not-for profit organizations to spread awareness on the business modelo For example :- KARI-Agriculture information Centre,

Export Promotion Council, NGOs

MARKET UPTAKE – Stimulating Demand

Continued………..

2. Ampath will facilitate microprocessors/Vendors to establish networks through which information/knowledge would be transferred.

3. KIRDI will market itself to microprocessors/vendors

4. Ampath will collaborate with Equity bank, Government supported agencies and not-for profit organizations to spread awareness on the business modelo For example :- KARI-Agriculture information Centre,

Export Promotion Council, NGOs

MARKET UPTAKE – Stimulating Demand

• High target outreach due to successful pilot and effective uptake strategies:

o Micro-processors/vendors (including graduated Ampath clients = 100 per district x 14 districts = 1400

o Distributors = 2 per district x 8 districts = 80o Employees = 500o Sensitized community members = 1000

• TOTAL = 2,980 households equivalent to about 14,900 individuals

MARKET UPTAKE – Target Outreach

EXIT PHASE

• Since the TA intervention will have been geared towards sustainably, the only remaining functions of VIP at exit will be:

oMonitoring of marketoEstimating the impact of the interventionoEvaluating the intervention to gather

lessons learned relevant to the next program intervention.

INTERACTION WITH OTHER INTERVENTIONS

• Successful TA will be dependent on microprocessors/ vendors having access to financial services and quality control services. Hence….

* Technical and Business Training provider, Quality control system,; and Tailored Financial Service

products interventions will as a package

TENTATIVE WORKPLANSTEP/ACTIVITY TIMEFRAME LEAD PARTNER-SHADOW PARTNERS

A. ENTRY1. Pinpoint geographic area for the pilot2. Assess demand and supply of technical and business training for Mps/vendors3. Conduct stakeholder workshops4. Identify and assess pilot partners- MFI, Training provider and microprocessors5. M & E

Y2 Q1-Yr2Q2

1. AMPATH-Fintrac/EPC2. FINTRAC-AMPATH/EPC3. AMPATH-Fintrac 4. FINTRAC-AMPATH/EPC5. AMPATH-Fintrac/EPC

B. PILOT1. Establish partnerships with the TA provider and MFI2. Establish baseline3. Strengthen the service providers/pilot partners:-, mentoring, advising, and

troubleshooting4. Work with equity bank to develop financial products 5. Document business models6. Disseminate the models 7. Facilitate market linkages 8. M & Impact assessment

Y2Q3-Y2Q4

1. AMPATH-Fintrac/EPC2. AMPATH-Fintrac/EPC3. FINTRAC-AMPATH/EPC4. AMPATH-Fintrac/EPC5. AMPATH-Fintrac/EPC6. EPC-AMPATH/Fintrac7. FINTRAC-AMPATH/EPC8. AMPATH-Fintrac/EPC

C. MARKET UPTAKE1. Facilitate microprocessors/vendors to establish networks2.  M & E

Y3 Q1-Y3Q21. AMPATH/EPC-Fintrac 2. AMPATH -Fintrac/EPC

D. EXIT1. Follow up with TA provider and MFI , assess market sustainability 2. M & E

Y3Q21. AMPATH -Fintrac/EPC2. AMPATH -Fintrac/EPC