EDP seeks to promote a different, more business-like approach to international development, more ambitious than conventional livelihoods initiatives and underpinned by robust commercial disciplines. It is, in effect, a social venture capital fund that identifies, nurtures, and invests in small and growing businesses throughout the developing world - providing a mix of finance, training and advice.
There are three key elements to the EDP approach:
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 growth opportunities and are integral to mitigating the impact of climate change amongst the most vulnerable.
We are also exploring other sectors with economic and social potential - especially in rural areas - such as renewable energy, and fair-trade handicrafts. Preference is given to sectors that have potential for promoting women's leadership and participation
Women in rural areas often 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. Our enterprises ensure that significant opportunities are created for women, from production to marketing, and from the farm to the enterprise management.
Read more about making enterprise development work for women in an article for the Gender & Development journal.
3. Small and medium enterprises (SMEs)
Whilst microfinance offers great opportunities, evidence suggests that it is not the most effective way to reduce poverty and drive economic growth in the long term. EDP helps promising businesses to develop long term relationships with the formal financial sector, ensuring their long term viability. The success of EDP SMEs will facilitate market access for thousands of smallholder farmers.
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:
- Providing loans, grants and bank guarantees for investment in capital equipment and working capital. Oxfam will usually partner with a local financial intermediary which will manage the lending relationship with the enterprise.
- Allocating a local mentor, and technical partners to help with day-to-day business disciplines
- Advising on improvements to the quality of inputs, cultivation methods, production processes and product quality assurance
- Advising on the development of an effective sales strategy (for example, developing sustainable trading relationships across the value chain and improving negotiation skills)
- Working with the management to create opportunities for vulnerable groups, especially women
- Using Oxfam's networks to influence local, regional and national institutions and businesses
- Providing technical assistance to enable diversification into more profitable product areas
- Building capacity in marketing (for example, brand development and packaging)