Artisan Connect

OXFAM: Enterprise Development Programme

Date : 2012-10-09 15:31:17

Descriptioniness l. Bus sua s unu a mme. Oxfam’s E rogra evelopment P nter prise D Oxfam presents a very unusual opportunity to support commercial ventures with real potential in the developing world. “Oxfam is developing a blueprint for promoting and investing in small and medium enterprises in the most marginalised parts of the world.” Vincenzo Morelli EDP Board Member The Enterprise Development Programme gives you the chance to help thousands of people work their way out of poverty. Introducing EDP EDP adopts a private equity approach to building sustainable businesses, by strengthening them and helping them to grow. We invest where others don’t go and where the potential for social impact is highest. With your support, Oxfam provides an intelligent mix of loans and grants to small and medium enterprises throughout the developing world, helping people to work their way out of poverty. Photo: Crispin Hughes/Oxfam But it’s not just about providing capital. It’s about identifying business opportunities and helping entrepreneurs develop and implement viable business plans. It’s a pioneering, business-based approach to development. With support from EDP beekeepers in Zembaba, , Ethiopia will be able to manufacture beehives to increase their honey sales. EDP is unique, and it works. It combines Oxfam’s international presence and experience with your financial support and expertise. It creates wealth and drives change in poor communities. Crucially, it helps many thousands of people – especially women – to work their way out of poverty. Focusing on business The aim of EDP is to support poor people so they can make the most of real commercial opportunities for their businesses. With this in mind, EDP supports its constituent enterprises in a number of ways, including: • roviding loans, grants and bank guarantees for P investment in capital equipment and working capital • llocating a local mentor to help with A day-to-day business disciplines • dvising on improvements to the quality A of inputs, cultivation methods, production processes and product quality assurance • dvising on the development of an effective sales strategy A (for example, developing sustainable trading relationships across the value chain and improving negotiation skills) W • orking with the management to create opportunities for vulnerable groups, especially women • sing Oxfam’s networks to influence local, regional U and national institutions and businesses • roviding technical assistance to enable P diversification into more profitable product areas B • uilding capacity in marketing (for example, brand development and packaging). “EDP develops people’s business skills, helps communities to access markets, and ultimately enables businesses to become sustainable.” Penny Lawrence, Director, EDP EDP is supporting a women’s dairy network in northern Sri Lanka with business training and technical support. Women are now increasing the production and distribution of milk and other dairy products. The EDP approach Agriculture – where potential is highest The majority of poor people still live in rural, remote areas and depend on farming to survive. Studies have shown that investing in small-scale agriculture delivers more – in terms of reducing poverty – than other sectors. At the same time, food and agriculture sectors offer high growth opportunities. We are also exploring other sectors with high economic and social potential – especially in rural areas – such as renewable energy. Women – maximising impact Women in rural areas don’t get the same opportunities as men, even though they are business-savvy, and do most of the work on the farm and in the home. Women tend to have responsibility for family welfare, which means they’re more likely to spend their income on family priorities such as health, education and food. Photo: Annie Bungeroth/Oxfam Small and medium enterprises (SMEs) – the missing middle Whilst microfinance offers a great opportunity to develop a first business activity for many, evidence suggests that it is not the most effective way to reduce poverty and drive economic growth in the long run. EDP helps promising businesses to reach SME size, so they can more easily ensure market access for thousands of farmers while also achieving economies of scale. Oxfam is helping farmer co-operatives to improve processes, increase production and diversify into new product areas. How EDP works From the Board to smallholder producers, and through local mentors and rural enterprises, EDP adopts a rigorous, private equity approach to create sustainable businesses that deliver tangible social benefits. EDP mentor EDP Board EDP Investment Committee EDP Manager Enterprise Co-operatives Oxfam local staff Partners Enterprise Oxfam advisers Local partners The EDP Board provides both direction and financial oversight, shaping EDP’s long-term strategy and making informed decisions concerning specific businesses. Board members also support fundraising activity on an ongoing basis. The EDP Investment Committee (IC) of experts analyses potential new EDP investments, assesses the risk and return of each proposal, and makes considered recommendations to the Board. For enterprises that join the programme, the IC monitors performance and risk, whilst supporting their development in order to ensure ongoing commercial viability and sustainability. The EDP Manager manages the programme and portfolio of investments on a day-today basis, and is supported by specialist advisers and country-based staff. Oxfam advisers. All EDP enterprises benefit from the support of specialist global and regional staff, covering issues such as climate change and gender equality, as well as monitoring and evaluation. Oxfam local staff on the ground identify opportunities, maintain weekly contact with the enterprises and manage relationships with all other local partners. Each enterprise is allocated a wellconnected local business person to act as their EDP mentor. This person provides regular critical and objective advice to the enterprise’s leadership team to support the development of a sustainable and autonomous business. In every country, Oxfam works with local partner organisations which provide business support and agricultural advice to farmers and enterprises. In particular, Oxfam works closely with local financial intermediaries, encouraging them to provide loan finance and helping EDP enterprises to develop a positive track record with key local institutions. Each Enterprise is led by an Enterprise Manager who is supported by specialised staff working on marketing, production, finance and other industry-specific key areas. The manager reports to an enterprise board which, as most EDP enterprises are formed by co-operatives, usually consists of farmers or producers. Producer Powered by people At the core of our work is a team of highly skilled, highly experienced people. Development experts, business consultants, local entrepreneurs. People from all walks of life who are transforming lives. “The project has had a positive impact by providing me with a job and basic farming tools which have made farming easier and more profitable. I now own and farm one acre of land and intend to use the money to further my education.” Jerrious Z Zleh Co-operative member / smallholder farmer Grand Gedeh, Liberia “I have more than 25 years of experience in agricultural commodities marketing. I am proud to be a mentor for this company and will share my experience, skills and competencies with the company so that they will make a business out of it which will ultimately have a positive change in improving the livelihoods of the farmers.” Mergia Bekele Managing Director of YONAD Business & Investment Promotion PLC and EDP mentor to Assosa, Ethiopia “Any profits we make return to the owners who include all of the participating co-operatives. We source from 11 co-operatives at present. Soon, I hope, we will have double that number.” “The people behind these enterprises have proved their commitment in the toughest circumstances. Through EDP , Oxfam is finding the best way to support them.” Daoud Istanbuli Hugo Sintes Enterprise Principal The New Farm Company, OPT EDP Manager, Oxfam “Oxfam’s role is to develop EDP as a model, underpinned by evidence, of how to facilitate a relevant mix of finance (for example loans and grants) to early-stage rural enterprises in order to generate high economic and social returns.” Penny Lawrence EDP Director, Oxfam “We estimate that EDP will economically and socially transform the lives of more than 1,050 women and men in rural Nepal.” Heema Khadka Local Oxfam Programme Co-ordinator, Nepal “EDP provides a very unusual opportunity to combine commercial disciplines with Oxfam’s unrivalled experience of the world’s most challenging locations. I was particularly excited by the opportunity to use my management experience to help shape the direction of EDP in its early years.” Sandy Arbuthnot EDP Board Member “Because of Oxfam’s global reach, and because of the deep relationships that the organisation has with social and other entrepreneurs, the pipeline of potential EDP enterprises continues to be extremely strong.” David Pitt-Watson EDP Investment Committee Member, and Chair Hermes Focus Asset Management Photo: FotoosVanRobin/flickr The products Moringa The moringa leaf has many health benefits, and there is a growing demand for its use as an ingredient in meals, as a herbal medicine and as a dietary supplement. Working closely with a major supplier of plant-based pharmaceutical products, our investee business is seeking to exploit this growing demand. You can support all kinds of small businesses which are growing, selling, processing and marketing a whole range of products. Vanilla beans EDP is supporting a group of vanilla farmers and a marketing enterprise in Papua, Indonesia. Indonesia produces 20 per cent of the world’s vanilla, but its production is not widespread in Papua, despite suitable climatic conditions. Seeds In Nepal, the production of vegetable seeds makes the best possible use of the limited cultivable land. Seeds also produce higher financial returns than cereal crops, and require less water and fertiliser than vegetables. Dairy products Dairy is a popular sector for EDP – we’re supporting dairy producers across Colombia, Haiti, Pakistan and Sri Lanka. We’re helping them to access markets, and diversify with products such as ghee, toffee, yoghurt and ice cream. Sisal bags Natural foods Photo: acfou/flickr Rice We are working with rice farmers in south-east Liberia. Decades of violent conflict, sparked by the rice riots of 1979, have devastated Liberia. The country is now heavily reliant on imports of rice. EDP plans to help farmers to improve irrigation and increase yields. In the Occupied Palestinian Territories, EDP is helping The New Farm Company to process and market natural foods such as olive oil, grape molasses and dried tomatoes. The products are distributed through supermarkets in the West Bank, and exported to Saudi Arabia and Jordan. Sisal is suited to dry climatic conditions and has a growing market. Despite the global recession, EDP-supported co-operatives in Tanzania have increased output and improved their profit margins. Mushrooms A growing demand for mushrooms has been identified by an EDP-supported enterprise in Rwanda. Mushrooms are suitable to local climatic conditions, and can be cultivated near homes, throughout the year, with little land or labour. Sesame oil Honey Vegetable oils are an essential part of local diets in Ethiopia and seed-based oils – such as sesame – are especially valued. The enterprise that EDP supports in Ethiopia has identified an opportunity to start processing seeds into oil for sale in both the food and cosmetics markets.. Beekeeping is an important economic activity in Ethiopia, employing up to two million people. However, the yield and quality of the honey is low, as people use out-of-date methods. EDP will help beekeepers to update their beehives and processes. Fruit and vegetables EDP is supporting fruit and vegetable growers in Honduras. We’re helping them to improve quality and increase production yields of vegetables such as broccoli, potato, cabbage, carrot and cauliflower. 930 EDP in numbers Average number of farmers per enterprise. EDP funding committed by region Latin America 19% Europe & Middle East 22% East Asia 9% Africa 33% EDP funding committed by market sector Domestic market 24% Processed food Export market South Asia 17% 22% Dairy 18% Fruit & vegetables £6m Target 6% Grains 6% Non-food 10% Fibres or other 9% Honey 5% Spices £3.1m Capital raised to date Photo: Dairy farmers from the Kamathenu Livestock Co-operative in Sri Lanka, pictured holding certificates awarded to them after a training session on cattle management. Pabitra Co-operative Nepal Seeds The EDP investment portfolio The New Farm Company Palestine Natural foods Oxfam’s broad global footprint presents EDP with unparalleled opportunities to support a diverse range of small and medium enterprises and markets across the world. Forus Bank Russia Mircrocredit services Libas Co-operative Philippines Moringa Belle Vue Co-operative St Lucia Fruit and vegetables Pacomen Indonesia Vanilla Lèt Agogo / Veterimed Haiti Dairy products Chenab Pakistan Dairy products Aproalce Honduras Vegetables Assosa Ethiopia Food oil AMENU Co-operative Liberia Rice Zembaba Ethiopia Honey Enterprise alliance Colombia Dairy products Key Existing projects New projects 2010 15 processing firms Tanzania Sisal BN Producers Rwanda Mushrooms Vavuniya Co-operative Societies Sri Lanka Dairy products Get involved Associate In addition to the in-depth progress reports received by Associates, EDP Partners can expect to be offered the opportunity to use their commercial expertise to advise a specific enterprise. They are also offered the chance to visit an EDP enterprise, and can attend Board and Investment Committee meetings as observers. In addition to the benefits enjoyed by Associates and Partners, EDP Board Members are given the opportunity to influence and shape EDP’s strategy by attending the bi-annual Board meetings. Board Members will help to decide which prospective enterprises join the portfolio and the conditions under which they are accepted. EDP Associates are encouraged to form a private or corporate syndicate to achieve the level of Partner. Whilst your financial support is a philanthropic donation, all repaid loans are fully re-invested across the EDP portfolio. Watch EDP’s investment grow into something special – real change in the lives of people living in poverty. Hugo Sintes, Manager, EDP £200,000pa for three years. EDP Associates are allocated a dedicated EDP contact who provides regular progress updates on enterprise performance and social impact, including the official EDP Annual Review and interim six-monthly reports. As an EDP supporter, you will receive full, up-to-date reports, as well as the opportunity to mentor and visit an EDP enterprise. “I feel we’re on to something big. The passion I see in all the countries I visit keeps me hugely motivated.” £50,000pa for three years. For a higher-rate tax-payer this could cost as little as £500pcm. EDP is already generating wealth and changing lives. We’re helping poor people to create profitable and sustainable businesses so they can work their way out of poverty. And we want to do more. We can’t do that without the ongoing support of companies, charitable trusts and private individuals. Board Member £10,000pa for three years. Join EDP today and make this ambitious and innovative investment programme a commercial reality and blueprint for others to follow. Partner Photo: EDP Manager Hugo Sintes discusses input procurement with AMENU co-operative members in Liberia. EDP offers the opportunity to meet with producers and business leaders, and to see an EDP enterprise in action. Partners are encouraged to form a private or corporate syndicate to achieve the level of Board Member and place a representative on the EDP Board. Join us today EDP Board For further information contact: Hugo Sintes, EDP Manager 01865 472 221 or hsintes@oxfam.org.uk Kyle Johnson, EDP contact 01865 473 915 or kjohnson@oxfam.org.uk Annie Lewis, EDP contact in Scotland 0141 285 8873 or alewis@oxfam.org.uk www.oxfam.org.uk/edp Oxfam has longstanding experience of markets and business-based solutions to poverty, going back to the establishment of Fairtrade in the 1960s. We operate in more than 60 of the poorest countries in the world, and have extensive local networks of contacts in both private and public sectors. With our local knowledge, strategic input from industry experts and your financial support, we can help make each business a success. “Oxfam’s global reach ensures a strong pipeline of enterprises seeking EDP support. I have been paticularly impressed with the range of ideas and the sophistication of the applications.” David Gait Maitri Trust, and EDP Board Member Investment Committee Penny Lawrence EDP Director, International Director, Oxfam Chris West Shell Foundation Joss Saunders EDP Chair, Legal Counsel and Company Secretary, Oxfam Vincenzo Morelli TPG Capital, founder Board Member David Gait Maitri Trust, founder Board Member Andrew Nicholson Virgin London Marathon David Irwin Irwin Grayson Associates David Pitt-Watson Hermes Focus Asset Management David Bright Global Markets and Enterprise Adviser, Oxfam Nicholas Colloff Director, Strategy & Innovation, Oxfam Hugo Sintes EDP Manager, Oxfam Jo Barnett Virgin London Marathon Sandy Arbuthnot Private supporter Gita Patel Stargate Capital Investment Group Oxfam is a registered charity in England and Wales (no 202918) and Scotland (SC039042). Oxfam GB is a member of Oxfam International. Inhouse 4605 Oxfam’s Enterprise Development Programme uses a private equity approach to support small and medium enterprises in the developing world. Through strategic investments in sustainable businesses, EDP presents you with the chance to help thousands of people work their way out of poverty. www.oxfam.org.uk/edp Oxfam EDP , Oxfam House, John Smith Drive, Oxford OX4 2JY www.oxfam.org.uk/edp Oxfam House, John Smith Drive, Oxford OX4 2JY. Oxfam is a registered charity in England and Wales When you have finished with this brochure please recycle it This brochure is printed on 100% recycled paper (202918) and Scotland (SC039042).Oxfam GB is a member of Oxfam International. Inhouse No. 4605

http://www.oxfam.org.uk/get-involved/philanthropy/enterprise-development-programme

Name of InstitutionOXFAM: Enterprise Development Programme

Author(s) NameGiulia Macola

Added/Updated byGiulia Macola



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