Establishment of the Entrepreneurship Development Committee (EDC) in Kassala State, Sudan
The initiative aims to improve livelihoods and nutrition security with special attention towards women and youth under 35 yrs. Within the perspective of a value-chain development approach, it seeks to integrate access to financial and non-financial services. Sudanese agro value chains present a high economic potential; however, the low financial inclusion of micro and small agro-entrepreneurs is one of the main reasons keeping this potential still untapped. With the aim to support the local food-processing sector, UNIDO started up a multi-stakeholder’s institution providing a full package of technical assistance to entrepreneurs in terms of entrepreneurial training, coaching and finance.
The EDC is a multi-stakeholders committee started up by UNIDO and aimed at supporting local entrepreneurship and fostering financial inclusion for business promoters in the Kassala State of Sudan. The EDC’s design and set up followed an integrated approach embedding several SDG dimensions. Bearing in mind that entrepreneurship may affect several aspects interlinked one each other, the entrepreneurs’ projects are selected on the basis of four assessment areas (and related indicators) such as: • Social impact • Impact on the rural economy • Environmental Impact • Financial Sustainability Such multi-dimensional approach is also pursued through the active participation of several public and private representing different technical fields including Universities, financial institutions, producers’ organizations and Ministries.
In October 2019, through the issuance of a specific law decree, the Governor of the Kassala State of Sudan turned the EDC into a legal independent institution and provided the institution with regular budget support. The EDC mandate refers to the pursuance of some selected SDGs; hence, the pursuance of SDGs is part of the institutions’ legal mandate, and it guides each strategic decision of the institution. An annual strategic meeting held by a State-level committee, reports the results achieved and their adherence to the target SDGs.
UNIDO started by carrying out consultations and roundtables with the public and private institutions of the local entrepreneurial ecosystem. As a result of this UNIDO established an institution called Entrepreneurship Development Committee, composed by all the main institutions involved. In 2019 the Government of Sudan turned the EDC into a legal independent institution and provided the EDC with regular budget support. The EDC operates through 3 components: I. A 1st stage of sensitization, collection and selection of business ideas carried out through an assessment of entrepreneurial ideas and candidates (‘Pre-selection Component’); II. A 2nd phase of training and coaching of entrepreneurial ideas to be transposed into business plans (‘Non Financial Services Component’); III. A 3rd phase of assessment, selection and financial support to selected business ideas (‘Financial Component’). This phase is preemptive to the accompaniment of the selected business plans to the local financial market. The idea is to create a pipeline of profitable and sustainable business plans to be presented to local banks for financing. Each of the stakeholders involved (university, banks, ministries etc.) provides technical support on each of these steps depending on its technical background. The total financial cost of this initiative (1st year) was 240,000 USD as follows: • 4 staff • 3 subcontracts to 3 institutions for each of the steps enlisted above • 2,000 USD per month for running costs covered by the Government of Sudan. As in-kind contributions: • 1 secretary paid by the EDC Chairman (Ministry of Production and Economic Resources) • 6 members of 6 different institutions participate to regular monthly meetings and assessments. • Office premise made available by the Government of Sudan.
Results (1 year): 336 entrepreneurs trained (65% women), 220 business plans created, 63 businesses financed (65% never accessed finance before), more than 200 jobs created. The EDC is a new model to foster financial inclusion through wide institutional collaboration. The EDC acts as a unique direction cabin, maximizing the impact of various initiatives having similar scope. 5 partnerships agreement have been signed with different agencies in Kassala. The institutions involved work to achieve the SDGs 8 and 9 as per the EDC’s mandate and through a partnership platform as per SDG 17. Many supported persons accessed finance for the first time and this leads also to social inclusion; the established mechanism makes the beneficiaries and the institutions involved careful of environmental and gender issues in their working activity. The institutional approach pursued by this project aims at creating a long-standing institutional model opening up social and financial inclusion in Sudan.
The access to a wide network of actors allowed to create a solid partnership and to involve the main decision makers of the local entrepreneurial ecosystem. Also, the expertise on financial inclusion of UNIDO staff was key. The potential resistance of some actors who perceived the initiative in competitive terms has been overcome by including these actors in cooperative terms. EDC has brought an innovative way of fostering financial and social inclusion particularly for youth and women. Compared to an overall implementation cost of about 240,000 USD the system has already leveraged about 270,000 USD from financial institutions.
The ‘institutional’ rather than the conventional ‘project’ approach pursued by the initiative allows to continue EDC operations over time. The legal recognition and the permanent budget support granted by the Sudanese Government allows the EDC to set long-term plans and become a permanent hub in the Kassala State. The institution bylaws provide for a governance structure setting key roles and responsibilities of each institution involved. The ownership of the members is very high and pave the way for future development. Sudan is a Federal Government with 18 States. Besides the Kassala State, UNIDO is programming to scale up the EDC to other Sudanese States. The EDC mechanism is well replicable as the main institutions involved have branches or twin-institutions in other Sudanese States (for example Central Bank has 1 branch per each State). EDC can be easily scaled up also to other countries thanks to the international presence of UNIDO across developing countries.
The COVID-19 impacted on the carry out of the training and sensitization activities, given the concentration of the people during these events. Also, some food-processing activities experienced lack of supplies due to the lockdown which disrupted some national and/or international agri value chains. It was put in place prevention measures like use of health devices and setting of virtual meeting. Moreover, it was given more focus to the local agri value chains, working on making this auto-sufficient at the regional level. The EDC can set its selection criteria by enhancing food businesses able to improve the local food security and agricultural value chains, hence promoting food and price stability, as well as job opportunities even during crisis affecting the international markets.
SDGS & Targets
Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all
Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation
Deliverables & Timeline
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The practice covers the Kassala State in Sudan (located in eastern Sudan). Therefore, it is implemented at sub-national level, however, on the basis of the results achieved, there are ongoing initiatives aimed at scaling it up to other Sudanese States.