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 Report - Transitioning to Long Term Sustainable Development (MC)

 Report date: 04.11.2002

Transitioning to Long Term Sustainable Development
Technical Assistance to Grantee Organizations

"My Investment into the trianing I attended paid off apporximately twenty times." - Fikret, IDP

Mercy Corps Azerbaijan is currently transitioning from relief assistance toward long-term sustainable development, under its USAID funded six-year Azerbaijan Humanitarian Assistance Program (AHAP).

Mercy Corps was awarded umbrella grant management for AHAP in 1998. Economic Opportunities is one of the key sectors under the Mercy Corps program strategy. Supported activities include micro credit, and agriculture development through the provision of business development services (BDS).

Currently three BDS programs are implemented in the Southern and Central Areas of Azerbaijan, which are highly populated by Internally Displaced People (IDP).

The BDS programs incorporate one-to-one technical consultations, business trainings, and facilitation of farmers groups development applying market chain participation principals.

One of the challenges Mercy Corps encountered revolved around prevailing attitudes about small enterprises, especially those owned by IDPs. Traditionally IDPs were considered too poor to acquire business services commercially.

Thus, the services offered were often donor-driven rather than market oriented. Because of this the programs did not make an expected difference in peoples business behaviors.

Best Practices
A seminar on BDS cutting-edge initiatives was conducted to address the problem. AHAP Implementing Partners (IP) shared best practices experiences for developing transactional and business-like approaches to providing services.

The seminar focused on models applicable for the local environment and how to effectively apply them. Several IPs concluded changes were required in the projects in order to address high impact and sustainability of their efforts.

The BDS survey, previously conducted by Mercy Corps, convinced participants that clients are willing to pay for the business development products and services they need. Thus, it is possible many types of BDS can be provided on a commercial basis even to the lowest-income segment of the business sector by means of suitable product design, delivery and payment mechanisms.

As a result of this workshop, the IPs embraced the BDS market development approach and began applying cost recovery mechanisms. Through this new practice, sustainable BDS markets has been encouraged and the distortion of the BDS market through free training was considerably reduced.

In addition, utilizing fee-based services ensured that clients both valued and utilized the services for increased profitability.

The BDS programs worked with both start-ups and pre-existing businesses to improve their economic situation. In some instances, taking traditional skills such as food preservation for the family and turning it into a business was ideal.

Local Impact
Katya, a mother of three children, lives in the Arabia-build IDP settlement in the Barda region and, like many IDP women, she and her family are unemployed; making ends meet by selling small quantities of vegetables at the local market in season.

The BDS program came to the community and outlined a course to help the women conserve excess vegetables as a way of sustaining their families in the winter months and generating income by selling them out of season at higher prices.

Katya, along with other women in the community, comprised one Community Economic Recovery Group (CERG), pooled the jars, lids and necessary ingredients and managed to produce and sell 2,600 jars of preserves and 300 kg of bulk pickled products.

Their most respectable accomplishment is that they completed this production with absolutely no external financial assistance. The group is very excited about its prospects for the coming year, anticipating production level exceeding 10,000 jars.

In another example Fikret, a father of two sons and IDP from the Agdam region, launched a mud brick production after completing the business course. According to him, during the training the instructor proposed selling mud bricks that Fikret used for his house construction and facilitated him to develop the idea.

Fikret has already produced and sold approximately 5,000 bricks that resulted in 218 USD net earnings. With this money, three sheep and twenty chickens were bought and the remainder was saved for business enhancement.

In other cases the service identified ways to cut costs and improve production techniques for existing businesses. In addition, business consultants worked with clients to develop business plans ranging from basic one-page calculations to complex financial ratios, allowing clients to identify future production and financial targets.

Due to these successes there is now a growing cadre of believers who pay, value and actively recommend BDS services to others.

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