Challenges Malawi agribusiness project is showing early successes

VAC business training Crops
The first year of Creating Robust Opportunities for Crop Production and Sale

In October 2018, Challenges launched its Creating Robust Opportunities for Crop Production and Sale (CROPS) project in Malawi. Funded by the Scottish Government, CROPS is an ambitious five-year agribusiness programme that aims to improve the livelihoods of thousands of rural farmers and their families in four districts in Malawi.

Challenges Malawi CROPS project VAC trainers trade

VAC staff at a trade fair with CROPS products.

With a focus on business and co-operative development, CROPS seeks to increase household incomes of 6200 rural farmers in four districts – Nkhotakota, Salima, Machinga and Chikwawa – by 10% by 2023. The project is being run in collaboration with Opportunity International, a network of more than 40 organisations, with a focus on microfinance institutions.

Central to this programme is improving the value chains of a range of Malawian crops, as well as enabling and promoting value addition and processing activities, boosting institutional capacity building, and improving access to finance and reliable markets. Ultimately, increasing yields of better quality products with improved routes to markets will generate greater incomes for Malawian farmers, thus contributing to the UN’s Sustainable Development Goal No. 8 (Decent work and economic growth).

Adding Value and Early Milestones

At the heart of the CROPS project are four Value Addition Centres (VACs). These centres were set up by the Malawian government to help commercialise agriculture, but had lain dormant until the commencement of Challenges’ CROPS project.

Challenges Group Business raining Malawi

Business training in Malawi.

An early milestone of the CROPS was the training of eight farmers as machine operators to operate the VAC machinery as well as the appointment and subsequent training of four business development officers who are VAC trainers and  managers.  The project further recruited and trained 4 agriculture extension officers to facilitate agricultural trainings in order to increase crop productivity.

Within each VAC is machinery to process and package agricultural products supplied by a government project called SIVAP (Smallholder Irrigation and Value Addition Project) that ended in December 2018. The project is also working on improving crop production and rotation, providing business training to both farmers and VAC staff, and facilitation of access to markets for the processed goods. The products being processed by the VACs include, but are not limited to, rice, high quality cassava flour, cooking oil, and pigeon pea (dry tool dhall). With crop rotation and diversification a key part of the CROPS project, over the term of the programme this list will grow as new products are trialled.

As each local VAC team works to develop the capacity and efficiency of the VACs, Challenges Malawi has been working with farmers in 10 irrigation schemes to increase the productivity of their crops and enhance the aggregation of crops and enable greater value addition.

CROPS results in focus
Challenges Malawi CROPS project

Challenges Malawi CROPS project.

With the project now well into its second year, it has already achieved substantial results. During the period April to September 2019, the CROPS project delivered or enabled:

  • a 60% increase in rice yield from winter farming, from 2.5 tonnes per hectare in the baseline, to 4 tonnes per hectare;
  • an average of £1,244 gross profit achieved by each VAC. The average revenue was £2,150 with expenses of £900 per VAC;
  • the production of 191 tonnes of organic fertilizer, a more sustainable and environmentally responsible solution to chemical fertilizer;
  • the establishment of demonstration plots for farmers in each district to learn new technologies in crop production, one of which is the System of Rice Intensification (SRI). This allows farmers to increase productivity while using less water and less organic fertilizer;
  • the identification and engagement of – on average – four new commercial buyers per VAC as part of a wider campaign of marketing activity that included representation at trade fairs and buyers’ markets;
  • the increase in the price per tonne of VAC processed crops from £588 to £749 per tonne, representing 27% average increase;
  • training of 2,845 farmers (928 males, 1341 females, 550 youth, 20 elderly, 6 disabled). This included:
    • training of 150 lead farmers (63 males, 52 females, 35 youth) aimed at equipping them with the skills and experience to deliver farmer-to-farmer services that reached an additional 1,385 farmers (707 males, 678 females);
    • training of 660 farmers (317 males, 343 females) in post-harvest handling to reduce losses in crop quantity and quality for processing;
    • training – and subsequent job creation – of four agricultural extension officers (3 males, 1 female) to enable them deliver agricultural trainings to farmers;
    • training – and subsequent job creation – of four business development officers (3 males, 1 female) to enable them effectively deliver business and co-operative management trainings to VAC members. The training was conducted by two trainers from Challenges Rwanda;
    • training – – and subsequent job creation – of eight VAC machine operators (7 males, 1 male) in machine operation and maintenance in order to equip them with processing and machine maintenance skills at each of the VACs;
    • training of 15 board of directors (all males) in leadership, governance and financial management. This allowed them to provide oversight role in VAC operations, and increase transparency and accountability within the VACs. One outcome of this was that all four VACs now have a functioning Board of Directors able to conduct quarterly board meetings;
    • training of 64 members (40 males, 24 females) of VAC executive committees in leadership, governance and financial management. This enhanced their skills in day to day management of VAC activities. This led to greater transparency and accountability within the VACs by setting up accounting and administration systems.

 

Read more

Progress for social enterprise Lilypads in Zambia after Challenges research

Lilypads Zambia Challenges Group

Lilypads is a Scotland-based social enterprise that seeks to address period poverty. As part of Challenges’ Access Africa Programme, Lilypads had engaged our Accra team to undertake a piece of consumer market research in Ghana and Zambia. This research targeted women and girls of menstruating age, and asked them about their requirements in regards to sanitary pads; whether they would be willing to use reusable pads; and their feelings towards ecofriendly sanitary pads, including how much they would be willing to pay.

Challenges identified a clear market opportunity for Lilypads, and its product and business model.

Lilypads ChallengesFollowing this market research, Challenges then looked at the practicalities of establishing a production and distribution base in a number of different locations, including Zambia. The legalities of producing pads locally, such as the requirements for establishing a factory that produces and distributes sanitary pads, was a key consideration. Costs, employment opportunities and future forecasts were also major factors.

Subsequently, Challenges Zambia engaged both the Zambia Bureau of Standards (ZABS) for the standards required for sanitary towels; and the Patents and Companies Registration Agency (PACRA) as to the legal requirements to establish Lilypads as a company in Zambia that would produce ecofriendly sanitary towels.

Challenges also engaged with a number of potential partners, identifying the One Planet Café Zambia, a business in South Luangwa that produces and exports banana paper branded One Planet Paper. This sustainability focused social business was receptive to partnering with Lilypads to produce ecofriendly sanitary pads.

Challenges is now working to raise capital on behalf of Lilypads in order to run a pilot in Zambia.


The Access Africa Programme

The Access Africa Programme enables Scottish social enterprises and social entrepreneurs to explore and expand into African markets. It provides market research and business development support, funded by the Scottish Government, to enterprises and individuals who have an idea, product, service or model that could make a real impact in Sub-Saharan Africa. 

Read more

RISE Ethiopia delivers investment ready programme and mentorship for social enterprises

RISE Ethiopia launch

In Ethiopia, Challenges is working with 20 social enterprises to become investment ready as part of a six-month project that will also provide 20 young professionals with the opportunity to participate in a business analysis mentorship programme.

The RISE Ethiopia project is the latest in a long list of Challenges initiatives designed to up-skill young people while also supporting sustainable business growth in the country.

Run in collaboration with R&D Outsourcing and Entrepreneurship Centre, and funded by the British Council, RISE has been designed to improve the investment readiness of social enterprises in Addis Abba. It comes as the Ethiopian capital prepares to host the Social Enterprise World Forum this October.

After an initial market scope and assessment, Challenges staff recruited 20 social enterprises from sectors including agriculture, crafts, education and tech. These organisations have now formed the first cohort of what we hope will become a programme for other ambitious enterprises.

And as with most Challenges’ projects, there are a number of angles to this project!

Training young professionals

RISE Ethiopia business training

 

Running tandem with our scoping of suitable social enterprises has been the recruitment and subsequent training of 20 university graduates. Each of the 20 Challenges business advisers has been provided with a key placement at one of the 20 social enterprises taking part in the RISE programme. Their aim is to take their designated social enterprise through a programme of analysis and implementation support to enable it to become investment ready.

As part of their on-boarding with Challenges, each associate underwent an intense two-week training programme delivered by the RISE project team. Our Ethiopian project team designed this bespoke training to complement each adviser’s own work experience and degree, which cover a range of disciplines, including finance and accountancy as well as business administration and social sciences. This immersive approach gives the young professionals the unique opportunity to access all areas of a business and enables them to understand the competing tasks managers must balance in order to successfully run an enterprise. By having this rounded experience it puts them in the optimal position to secure a job either directly with the enterprise they have been placed in or in a job after they successful complete the programme as they have both the theoretical knowledge and the skills to put this into practice.

Business analysis

During the RISE programme, each enterprise will receive an in-depth analysis of its investment readiness. They then receive professional business consultancy support from a Challenges associate; access to senior technical expertise to address specific business issues related to investment readiness; monthly group training programmes and workshops for enterprise leaders focused on entrepreneurship and management skills; implementation support including access to our business diagnostic tools; and leadership coaching as well as networking opportunities.

It’s this multi-faceted approach that Challenges is becoming known for. In a nutshell, the RISE programme is recruiting young graduates, giving them a work placement, employment experience and business training, while also supporting the growth of social businesses, which in turn will drive sustainable economic growth and job creation. Our ability to pull together various strands in order to achieve multiple aims reflects our expertise in being able to understand the on-the-ground detail while also fulfilling the ambitions of organisations and agencies seeking to address the UN’s sustainable development goals.

Read more

Coffee market building for peace and prosperity in Rwanda

Challenges Rwanda Coffee Market Building for Peace and Prosperity

Challenges Rwanda is a member of The Challenges Group, a family of social businesses committed to building prosperity. Challenges Rwanda launched in 2017 and offers a range of business growth services including business diagnostics, market assessments, pilot and prototypes, deal strengthening, investment readiness, and more. Our team of experienced associates also deliver accredited training programmes in business, management and leadership from the Chartered Management Institute, and we are uniquely placed to deliver tailored programmes adapted to rural and isolated environments and/or remote audiences, ensuring we provide trainees with the best opportunity to grow personally and professionally.

One of our key projects in Rwanda is the Coffee Market Building for Peace and Prosperity, which is funded by the Scottish Government. The coffee sector has been one of Rwanda’s success stories, playing a pivotal part in restoring the economy after the genocide 25 years ago, and rebuilding trust between community members. Helping the Rwanda coffee sector to better access the international market is one of the key aims of our Rwanda coffee project.

Launched in partnership with Twin Trading and the Scottish Fair Trade Forum in 2017, the Coffee Market Building for Peace and Prosperity project is working with eight coffee co-operatives in the country’s western and southern regions. The project, which is also supported by Enactus and Matthew Algie Coffee, aims to increase the capacity of eight Rwandan coffee co-operatives by delivering business, management and leadership training; improving quality control and each co-op’s “cupping scores”; streamlining and better enabling infrastructural processes; widening access to international markets; encouraging the adoption of clean tech innovations; and working with communities, particularly women and young people, to overcome systemic barriers to economic growth.

Read more

Challenges partners with Uganda Solar Energy Association to enhance services

USEA Uganda Challenges Group

The off-grid solar energy sector is an exciting and fast-moving arena that Challenges is excited to be working in. Our Challenges team in Uganda has partnered with the Uganda Solar Energy Association (USEA) as part of its mission to grow solar energy businesses in Uganda and the East African region.

Founded only a few years ago in 2016, USEA is an independent non-profit business membership body that was formed to act as a driver for the development of the off-grid solar energy sector in Uganda. It also seeks to push for improvements of solar energy standards, and to attract new entrants to the solar energy sub-sector.

Challenges Uganda is working with USEA to better understand its potential to act as a broker of business development services for its members. Most recently, we conducted needs assessments of 25 USEA members, giving us detailed insights into the sector as well as each business’s individual needs, as well as their future investment strategies, risk profiles, and whether they have the appetite for USEA’s support in connecting them to business development services. Data from this research has now fed into the construction of a pilot training programme in organisational leadership and sales and marketing, which will be offered at a subsidised rate for USEA members. At the same time, we’re also working with USEA to enable it to operate this training and business support model in the long-term without outside assistance.

We hope that by the end of this project USEA will be equipped with the training and tools to develop an in-depth understanding of the needs of its members, and that it can use this information to construct impactful business development service and investment pipelines. Like us at Challenges, USEA wants to significantly boost the ability of the solar energy sub-sector to reach the many Ugandan households who do not yet have access to electricity.

Image courtesy of Uganda Solar Energy Association.

 

Read more

Clean Water Wave offers breakthrough solution for water filtration

Clean Water Wave Rwanda Challenges Group

In Rwanda, the Challenges team in Kigali are collaborating with a Scottish social enterprise called Clean Water Wave. Clean Water Wave has developed a water-filtration system that is high volume, and low power and low maintenance.

Clean Water Wave

Clean Water Wave’s CAFE system can turn dirty water into safe drinking water.

Within our Access Africa Programme, Challenges is working with Clean Water Wave to identify the most feasible partner in Rwanda for a pilot that will demonstrate the potential of CWW’s CAFÉ water filter system. This innovative and sustainable treatment solution can be used in rural and hard-to-reach communities. It’s a breakthrough system that can treat polluted ground and surface water, and turn it into clean drinking water. All of us at Challenges and Clean Water Wave are deeply excited about the potential for CAFE.

Working with Clean Water Wave, Team Rwanda is in advanced talks with the national water regulator, the Rwanda Water and Sanitation Corporation.

Clean Water Wave is a social enterprise committed to providing technology that can provides clean water to everyone around the globe. Like the team at Challenges, CWW believes in working collaboratively with local partners, NGOs and other social enterprises in order to fulfil its clean water aims and help generate jobs.

Have a look at Clean Water Wave’s website for more information on their water treatment system.


 

The Access Africa Programme

The Access Africa Programme enables Scottish social enterprises and social entrepreneurs to explore and expand into African markets. It provides market research and business development support, funded by the Scottish Government, to enterprises and individuals who have an idea, product, service or model that could make a real impact in Sub-Saharan Africa. 

Read more

Future bright for Rwandan coffee co-op after Challenges’ solar power initiative

Rwandan Meshpower Rwanda Challenges Group

In 2017, Challenges began working with eight coffee co-operatives in Rwanda as part of a forward-looking project to generate sustainable growth. With backing from the Scottish Government, this has project also pioneered the adoption of innovative solar technology, drastically improving the prospects of a remote coffee co-op severely hampered by a lack of electricity.

Since 2017, the Challenges team in Rwanda has been working with eight coffee co-operatives to build capacity, generate market links, deliver leadership training and improve sustainability.

But alongside this far-reaching project sits another innovative programme that beautifully demonstrates Challenges’ methodology of innovation, partnership and sustainability, as well as our commitment to clean energy!

Rwanda, and its large agricultural sector, is liable to be hit hard by climate change. It is something that its farmers and politicians alike are all too aware of. And as part of the Scottish Government’s climate justice campaign, capital funds were made available for a pilot programme for the innovative use of an innovative product, championed by Challenges.

Solar PV micro-grids are breaking new ground across much of Africa as individuals and organisations realise the potential for solar energy to connect difficult-to-reach communities. In 2018, Challenges partnered with Meshpower, a state-of-the-art micro- and mini-solar grid engineering company, to deliver such a system to one of the recipient co-operatives.

At Challenges’ we always measure our work by the impact it can create, the economic growth it can facilitate, and the sustainability for the future. Selecting which co-operative was not an easy task, but measured against these factors we chose Buhanga in southern Rwanda. Cut off from the national grid, Buhanga lacked electricity in its office, due in part to its remoteness and in part the expense of generators. But the business also suffered from break-ins, while the inability for staff to use laptops or other electrical equipment inhibited further growth. When we spoke to the management team at Buhanga it was clear to us all that the potential for the scheme and the opportunities it could create was significant.

The Meshpower Installation at Buhanga is a clean energy solution to a continent-wide rural problem: access to reliable energy. This installation, slated for completion in December 2018, now enables the coffee co-op to develop and open new methods of data gathering and storing, book-keeping, marketing and so on. It also gives them the opportunity for a modest secondary income as they can now charge a minimal fee for members of the local communities to charge phones or print documents. And it means that co-op staff will be trained in both the solar PV technology but also the equipment and software its adoption has enabled. The Buhanga coffee co-op now has a valuable income-generating asset that enables business growth and staff development.

As we monitor the success of this clean energy programme, as part of the wider Coffee Market Building for People and Prosperity project, we look forward to seeing this pilot rolled out beyond Rwanda, and used to create a case for ethical lenders and grant-makers to invest in similar initiatives at other sites lacking in sustainable and reliable clean energy.

When Challenges first approached Meshpower about this initiative, we had no idea this was the first project of this kind the business had undertaken. It’s also likely the first of its kind in the region … and maybe all of Africa! Who knows, maybe one day every co-operative office will hum with solar energy!

Read more

Pioneering research prompts banking giant Prudential to develop bespoke insurance products for Zambia’s entrepreneurs

Prudential Zambia Challenges Group

The Challenges team in Zambia has undertaken a ground-breaking assessment of 80 small and medium enterprises across 18 sectors to understand their needs as part of an innovative partnership with global insurance giant Prudential and Zambian enterprise agency PEPZ. Their findings have helped Prudential shape a new range of financial product and services geared towards SMEs, while also deconstructing some of the negative myths around insurance.

Challenges is committed to supporting business and helping them grow, through implementing good operational and business practice, and encouraging the development of SME-centred products and services. We know that as businesses grow, everyone benefits through increased earnings and stable jobs leading to growth in the wider economy.

One of the issues sometimes overlooked by entrepreneurs and small business owners is life insurance, an area often clouded by myth and misinformation.

Aware of the potential to support Zambia’s SMEs and the need to generate greater awareness of its products, the global insurance giant Prudential partnered with the Challenges team in Zambia, tapping into their expert knowledge of the SME landscape and its extensive network of contacts and businesses. Zambian enterprise agency PEPZ also supported the project, which aimed to deliver a much-needed life insurance product to small business owners; people who were all too often excluded from traditional products and who, according to our findings, felt excluded from such offerings or felt they didn’t apply to them.

Insurance in Zambia

Market penetration for life insurance in Zambia is minuscule; for the past few years, it’s sat at less than 1% of a population of some 17 million people. But it’s not just life insurance; insurance products as a whole are only activated up by about 5% of the population.

Across many business owners, we found that there was a widespread belief that insurance was expensive, sometimes prohibitively so, while many people considered it an unnecessary cost, rather than an important asset to their business.

Aware of these issues, Prudential sought to design a product that catered to SMEs and entrepreneurs, leading to the PRU SMART Entrepreneur insurance, the first of its kind in Southern Africa.

The PRU SMART Entrepreneur is designed to provide Group Life Assurance Cover to small businesses, who, because of the unstructured nature of SME and entrepreneurs’ operations and lack of formal salaries, make them unattractive for conventional Group Life cover. The new Prudential product was designed specifically for the SME and entrepreneur, with the aim of increasing the financial inclusion of these businesses. The research undertaken by Challenges consultants was integral to the development of this innovative insurance product.

Prior to its launch, Prudential wanted to assess the product design and its planned distribution to SMEs and entrepreneurs, commissioning the Challenges team to undertake a far-reaching and in-depth market research project in Lusaka and in Zambia’s Copperbelt provinces. The research had two aims: to test Prudential’s own assumptions, and to ensure maximise the customer value that Prudential could deliver with the product, bringing greater benefit to the business people.

The Challenges researchers found that businesses are willing to pay more if they think the product gives them a truly special and significant value, and if the product is presented to them in just the right way.

The team also found that the majority of SMEs (62%) had set aside savings for when unexpected events that could affect their business, such as death, disability and critical illnesses.

Our analysis showed there was significant potential for the Prudential product, and following the research, we recommended a number of changes to the PRU SMART product. We also found that although there was clearly a market for this product, customer education and intelligent marketing would be invaluable to help the potential customers among Zambia’s SME community understand and appreciate the PRU SMART insurance. 

Key findings: 

  • Majority of SME-owners prepared for unexpected events, relying on savings, family, etc
  • Research spanned 79 SMEs across 18 sectors, ranging from renewables and health to tourism and transport.
  • Almost half of SMEs had some form of motor insurance, while nearly one in three had fire/theft insurance.
  • About one in six SMEs had no insurance whatsoever.

Two-thirds of SMEs agreed the PRU SMART product met their needs. Only 5% said it didn’t.

Read more
Latest Articles