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Newsletter
November 2012
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Introduction
The objective of Afghanistan Rural Enterprise
Development Program is to increase
employment, income of rural men and women,
and the sustainability of targeted local
enterprises.
AREDP is a national government-led multi-donor
funded, program that jump-starts and facilitates
private sector growth in rural Afghanistan. The
program strengthens the private sector through
integrated, value chain, top to bottom
knowledge based interventions, bottom to top
community enterprise development and by
addressing credit and capital needs on all levels
and in all locations.
The program operates under the Ministry of
Rural Rehabilitation and Development through
the Program Management Office (PMO) in Kabul.
The key principals of the AREDP Development
Objectives include supporting market
orientation, sustainable businesses, improving
coordination, building partnerships, facilitating
client decisions, sharing best practices and
vertical integration.
AREDP has two Program components and one
functional and support component.
The two Program components are Community-
based Enterprise Development which provides
knowledge-based and financial services to
community-based rural enterprises, and SME
Development which provides business advisory
and financial services to rural SMEs.
The support component consists of Program
management functions, the development of two
units that handle policy issues for rural
enterprises, plus research and technical support
services. M&E and Gender work across all
program components.
AREDP is national in scope and operation and
builds on other development initiatives of the
GIRoA, donors, private sector MFIs, national and
international stakeholders.
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The sustainable solution to Afghan rural enterprise development
• Market orientation
All Program interventions will be directed by local
and international clients' needs. Community
enterprises and SMEs will be empowered to
engage directly with the market to make their own
decisions.
• Sustainable businesses
All Program activities are aimed at developing
long-term economic potential and creating
sustainable businesses that will persist long after
the duration of the Program.
• Clients decide
AREDP will follow a non-prescriptive approach in
all Program interventions and will empower
clients to make their own informed decisions.
• Improving coordination
AREDP aims to integrate the disparate activities of
other projects, agencies and institutions into an
effective national enterprise development
Program. The Program will assume a coordinating
function and act as a source of knowledge for
other organizations. AREDP will continue to
develop its database of contacts of businesses that
operate in the rural areas, to facilitate trading
linkages.
• Crowding in not crowding out
AREDP has adopted a principle of avoiding
competition with existing institutions,
particularly with respect to MFIs but also
business development service providers. AREDP
will support BDS providers through outsourcing
contracts
• Simple Design
AREDP will set up minimal structures in a few
suitable provinces and gradually scale up as
learning effects are continuously incorporated
into the Program.
• Sharing best practices
AREDP will leverage opportunities for identifying
and disseminating emerging successful business
models among community enterprises and SMEs
in Afghanistan.
• Vertical integration
Working with a wide range of enterprises,
AREDP aims to improve backward and forward
linkages between community-based Enterprise
Groups and SMEs.
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A delegation of representatives from the Government of Islamic Republic of Afghanistan and the Danish Government, including Mr. Mohammad Tariq Ismati, MRRD deputy minister, Mr. Chirstian Friis Bach, Minister for the Danish Development Cooperation, Mr. Ib Petersen, Danish Secretary of State for Development, Mr. Franz-Michael Mellbin, Denmark’s Head of Department for Asia, Latin America and Oceania, Mr. Niels Boel Abrahamsen, Danish Ambassador for Afghanistan, Mr. Abdul Rahman, NSP Acting Executive Director and Rahamtullah Quraishi, AREDP Director of Operations, visited Balkh province on November 20, 2012.
The representatives visited saving groups in the Hazar Jereb village of Dehdadi district. The delegation was very pleased with the formation of saving groups and enterprise groups in Balkh province. The Afghanistan Rural Enterprise Development Program (AREDP) started functioning in Balkh Province in early 2011. Up until recently, AREDP has covered two districts and 32 villages in Balkh province. Since its establishment in Balkh province, AREDP has formed 260 Saving Groups 68 percent of which are females. The 3,730 Saving Group members (71% females) have saved a total amount of 4.3 million Afghanis.
The Afghanistan Rural Enterprise Development Program (AREDP) facilitated the formation of Setara, Insejam, Peshgam, Motahid, Sadaqat and Paiman male saving groups in Hazar Jereb village and simultaneously supported the establishment of eight female saving groups which include Gul Mariam, Nargis, Arghawan, Morsal, Gul Lala, Aria, Frozan and Kawsar groups. AREDP, meanwhile, provided an opportunity of income generation for the members of the saving groups and accessed loans from the groups and started businesses. The members also learned the process of internal lending among their groups. AREDP conducted capacity building trainings to Hazar Jereb village saving group members on bookkeeping, inter-loaning, consensus building etc. and provided necessary materials for the effective function of the group.
AREDP Overall results to date in Hazar Jereb Village
Total saving groups: 14 (8 female – 57%)
Total members of saving groups: 221 (138Female –
62.5%)
Total savings: 359,920 Afs (of 219,240 AFN 61 % Saved
by women)
Aggregated loan amount disbursed: 70,000 AFN (16,00
AFN 23% was disbursed to women)
Aggregated loan repaid: 67,000 AFN
Aggregated loan outstanding: 3,000 AFN
Disbursed loan invested in livestock: 30,000 AFN
Disbursed loan invested in Agriculture: 22,000 AFN
Disbursed loan invested in small businesses: 10,000 AFN
Disbursed loan invested in small machineries: 8,000 AFN
MRRD Deputy Minister Accompanied Minister for the Danish Development Cooperation to Visit Saving Groups in Balkh
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Less Security but Significant Rural Developments
In November 2012, after completing a Technical
Feasibility (TF) and Economic Viability (EV), the
AREDP Helmand team short-listed some Small
and Medium Enterprises and selected eighteen
of them for Business Plans in sectors of
agriculture, construction, electronics, furniture,
embroidery, handicraft, metal and steel, poultry
and food.
In addition, during November 2012, a three-day
marketing training was conducted for six SMEs in
Helmand province. The training was an
opportunity for the trainees to learn more about
introduction to marketing, marketing Mix,
gradual marketing phase, micro and macro
environment, pricing, channel of placement,
communication with rural people, market plan,
rural marketing, importance of rural marketing,
constraints of rural marketing, preparation for
commercial exhalation, and customer services.
Afghan Leadership Support to Afghanistan Rural Enterprise Development Program
The Afghanistan Rural Enterprise Development
Program (AREDP) in November 2012 established
12 Village Saving and Loan Associations in
Bamyan Province.
In November 2012, a tailoring training was
conducted for Poshak Jawanan and Anjumane
Zanane Mumtaz SMEs in Bamyan province. The
two SMEs are the most dominant ones in
producing male and female modern garments to
the local people of Bamyan and other provinces.
In addition, the professional tailoring machines
or equipment purchased by AREDP were handed
over to the aforementioned SMEs. Similarly,
Habiba Sarabi, Bamyan Governor, officially
inaugurated the new sites of production to
Poshak Jawanan SME.
The Afghanistan Rural Enterprise Development
Program (AREDP) launched its third cycle of
SMEs’ shortlisting in Bamyan province in
November 2012. During the cycle, four news
applications and SMEs were recognized and
selected for Technical Feasibility (TF) and
Economic Viability (EV) out of which two SMES
are working in bee-keeping in Punjab district of
Bamyan province.
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A ten-day international training program for four
Small and Medium Enterprises (SMEs) in the saffron
industry from Herat province was conducted
between November 7 and 17, 2012. It was
facilitated and organized by the Afghanistan Rural
Enterprise Development Program (AREDP) and
conducted by Palampur and Sher-e-Kashmir
University of Agricultural Sciences and technology
(SKOAST), in New Delhi, India. The training was an
opportunity for saffron SMEs to build their technical
abilities, facilitate linkages with SMEs in India, learn
new techniques and share information and
experiences on how to grow their businesses.
At the institute, the trainees learnt about planting
materials, agro techniques, saffron processing,
economy of space, conservation, and cultivation,
including soil, bed preparation, planting methods,
nutrient management, weed management, and
flower harvesting. The participants also studied
disease management, including biological
management and use of chemical fertilizers. In
addition, they visited the Tissue Culture Lab at
SKUAST-Kashmir, where they received a lecture on
the application of tissue culture in saffron
cultivation. The lecture included information on how
to prepare a laboratory.
During their stay, trainees visited saffron traders to
see how they could apply these trader’s marketing
strategies to their own products. The trainees also
traveled to meet the saffron processing unit in
Kashmir called ‘Kasmir Kessar Mart’. The owner of
the unit explained the trade profile for saffron in
Kashmir. He discussed the methods used within his
own saffron business and linkages to other countries
such as German, Italy, Sweden, France and USA. The
Afghan trainees took the opportunity to exchange
their products with Indian traders and to discuss
trade linkages, processing, packaging, machinery,
availability of distributers, and prices on Indian
markets.
Trade Linkages between Afghan and Indian Saffron Traders is Inspiring
Achievements of the Training:
Trainees learned about new technology for
saffron cultivation.
Participants met with Kanwal Group Saffron
Production, exchanged produce with them
and visited their production sites.
Participants met with the Vice President of
the Indian Saffron Exporters Association,
Mr. Noor-u-Din Azad. They discussed the
future linkages between the Afghan and
Indian saffron traders.
Participants met with Kashmir All J&K
Saffron Growers Development and
Marketing Cooperative Association LTD and
Chand Kesar’s Company President. They
discussed future linkages between Afghan
and Indian saffron traders.
Participants learnt the control quality
methods that can be applied at the village
level without advanced machineries.
Participants learned how to prepare vermin
compost culture (a new fertilizing method)
in which 500 kg of vermin compost culture is
equal to 20 tons of farm yard manure.
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The Afghan Rice Processing Mill
There was no rice processing mill in the eastern
region of Afghanistan. Instead, rice was
processed by traditional rice processing units in
rural areas. These units could not meet the
demand of local farmers, so processing service
charges reached over 50% of the total product
value. Traditional systems used outdated
equipment and did not provide quality products
or services. Impurities, empty grains and small
stones remained in the finished products.
In response to this, Mr. Azizi established a well-
equipped rice mill at in the Sorkhroad district of
Nangarhar in 2010. The business began milling
rice, but faced some technical challenges and
constraints.
The Afghan Rice Processing Mill was selected
during the first cycle of the AREDP support
program. Mr. Azizi requested technical training in
rice processing and an Islamic loan to purchase
boiling and drying units.
Eight days of training were arranged in Lahore,
Pakistan. The goal of the training was to support
the smooth running of the Afghan Rice
Processing Mill and to promote sustainable rice
enterprise in Afghanistan. The Afghan Rice
Processing Mill was selected during the first cycle
of the AREDP support program. Mr. Azizi
requested technical training in rice processing
and an Islamic loan to purchase boiling and
drying units.
Eight days of training were arranged in Lahore,
Pakistan. The goal of the training was to support
the smooth running of the Afghan Rice
Processing Mill and to promote sustainable rice
enterprise in Afghanistan.
The Afghan Rice Processing Mill
requested that the training explored
the following areas:
Operation of rice processing
machinery
Maintenance of rice processing
machinery and risk
management
Steaming and parboiling
Drying
Market surveys
The training proved to be fruitful
and the following improvements
were observed:
Better operation of the rice
processing mill, better
maintenance of machinery and
smoother running of the mill
overall
183% increase in the
employment rate
200% increase in the number
of rice suppliers used
Increase in production rate
from 150 tons to 450 tons of
rice
Following the training, Mr. Azizi said “I
really thank AREDP for its technical
support and the training provided to
our employees”. AREDP’s component
B, Small and Medium Enterprise
Development, has so far developed 40
business plans for SMEs and has
extended its support to 9 SMEs in
Nangarhar province.
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Creditable Achievements
to Date
Total districts covered: 24
Total villages covered: 592
Total Saving Groups: 4,415 (2,017
female – 46%)
Total members of Saving Groups:
43,263 (23,723 female – 55%)
Total savings: 60.8 million AFN.
(of which 27.9 million AFN 49%
was saved by women)
Members accessed loans: 5,917
(2,880 female – 49%)
Aggregated loan amount
disbursed: 41.5 million AFN
(of which 16.5 million AFN 40 %
was disbursed to women)
Total Enterprise Groups: 523 (230
female – 44%)
Total members of Enterprise
Groups: 3,066 (1,641 female –
53.5%)
Total Village Saving Loan
Associations: 68
Total SMEs selected: 564 (73
female- 13%)
Total SMEs supported: 52 (9
female- 17%)
Impressive Capacity Building Programs
During November 2012, the training unit conducted six
trainings for Provincial Enterprise Facilitators (PEFs) and
Village Facilitators (VFs) and 85 trainings for Saving
Group members. The trainings were conducted in
Helmand, Bamyan, Herat, Parwan and Balkh provinces
in which a total number of 2191 trainees, 2082 saving
group members participated.
In addition, the training unit conducted various trainings
on marketing to the PEFs, VFs, Saving group, SME, and
VSLA group members.
Contact AREP for your feedback and comments
E-mail: [email protected] Phone: 0093 (0) 752122880 0093 (0) 752122881 Website: aredp-mrrd.gov.af Address: Darrullaman main road,
Nila Bagh Street, Kabul Afghanistan We welcome and value your feedback for questions or comments concerning the AREDP.
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