The vision of Oxfam's Enterprise Development Programme (EDP) is to develop a model for supporting and investing in small (bigger than micro-) rural enterprises in places financial institutions do not reach.
EDP is one component of our wider livelihoods programme work, which seeks to more widely promote gender-equitable value chains and market systems.
Oxfam has set up this programme with the financial support of individuals and organisations who also provide direct support and business advice to the projects supported, and help Oxfam shape overall strategy.
The EDP Approach
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 high growth opportunities.
We are also exploring other sectors with high economic and social potential - especially in rural areas - such as renewable energy. Oxfam selects sectors that have high market growth, and 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 a recent 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 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.
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).
Achievements and next steps
Since its launch in the year 2008 EDP has supported 17 enterprises in 15 countries and in markets as diverse as dairy, vanilla, microfinance, food edible oils, sisal and vegetables. These enterprises achieved an increase in sales averaging 15 per cent in 2009/10 and 40 per cent in 2010/11.
The New Farm Company, a trading company set up by small cooperatives in the Occupied Palestinian Territories has almost doubled its sales in one year and is now sourcing from 13 co-operatives where women constitute 76 per cent of the membership.
In Benishangul Gumuz, Ethiopia, Oxfam has helped local seed farmers set up one of the first edible oil factories in the country. In various countries, such as Tanzania and Colombia, enterprises supported by Oxfam reached important agreements with buyers to source from poor farmers.
Looking forward, we have so far raised £3.5million towards the £6 million target that will allow us to make betwen 25 and 30 investments by 2014.
Enterprise Development Programme Annual Review 2012
Business as Unusual: Oxfam's Enterprise Development Programme (PDF - 1MB)