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Enterprise Development Programme (EDP)

Mercilien Dorvil (18). 'Let Agogo' is a beneficiary of Oxfam's Enterprise Development Programme. (Haiti, 2009)

At a glance

EDP supports and invests in small rural enterprises. Find out about supporting this work at: oxfam.org.uk/edp

Overview

Oxfam's Enterprise Development Programme (EDP) is piloting a model for investment in Small and Medium sized rural enterprises. Enterprises are selected based on their business and social impact amongst the rural community in which they work. Excluded from the formal financial sector, and considered too risky for the Impact Investment Community these enterprises look to Oxfam for help. The Enterprise Development Sector invests a package of grant, loan and practical support to help these enterprises grow into viable businesses.

EDP is one component of our wider livelihoods programme work, which seeks to more widely promote gender-equitable value chains and market systems. By demonstrating that rural enterprises can offer a return on capital and a significant social impact amongst those with the most need, EDP hopes to persuade government and the financial sector to follow our lead and increase their support of women and the rural SME sector.

Oxfam has set up this programme with the financial support of individuals and organisations. Donors also provide direct support and business advice to the project, and help shape EDP's overall strategy.

Our approach

The Enterprise Development Programme seeks to promote a different, more business-like approach to international development. This approach being 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:

1. Agriculture

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

2. Women

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.

EDP Methods

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 2008, EDP has supported 30 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. In 2015 the Programme moved into a new phase, focussing on Nepal, Bangladesh, Rwanda, Ethiopia and Honduras. Since then we have invested in 7 new enterprises, and aim to grow the portfolio by a further 28 enterprises by the end of 2020.

New investments include a honey enterprise in Honduras that buys honey directly from small women honey producers, a soy processing facility in Rwanda majority owned by a women's cooperative, and a fruit and vegetable retailer that sources from and trains smallholders in the Kathmandhu Valley in Nepal. Fundraising is ongoing to reach the £6m target for Phase 2 of the Enterprise Development Programme.

Key resources

Nepal: Kalpana's story

Oxfam is working with around 1,200 women farmers in Nepal, helping them to learn farming techniques, earn a higher level of income, and provide for their families.

Growing mushrooms in Rwanda

We support a woman-led enterprise which works with the most disadvantaged and marginalised women farmers