Programs promoting enterprises and self-employment address the range of critical needs required for enterprise viability and growth, ensuring enterprises can be economically viable within the existing enabling environment, in both the short and long term.

Key indicators (to be read in conjunction with the guidance notes):

• Analysis is conducted of the targeted systems and enabling environment, including infrastructure and support markets (see guidance note 1).
• Improved linkages between enterprises and business services which provides finance, technical information to improve products and transport (see guidance notes 3 and 4).
• Market information is accessible regarding where to source inputs and sell their products for the best price (see guidance note 5).
• Enterprises are aware of regulations and are enabled to abide by the regulations to the extent possible (see guidance notes 6).
• Mechanisms for public-private dialogue are established to ensure coordination between private investment and public spending to maximize return on investment (see guidance note 8).

Guidance Notes:

1. Market analysis: Ensuring the viability of a given enterprise and market is built on a solid understanding of customer needs and works backwards from these customers to ensure that the entire market chain is configured to serve these customers. To effectively promote given enterprises and markets, it is critical that agencies conduct a market assessment to understand the market chains in which the enterprises are operating. A market assessment will reveal which products are viable in terms of demand, profitability, the access to inputs, what sort of regulations and standards exist that an enterprise needs to meet in order to operate, and the dynamics which reflect the power relationships and control of who can effectively participate in the market. There is also a need to determine if the supporting infrastructure exists (roads, markets, communication systems) or needs to be replaced or refurbished (see Standard 3 for more information).

Example: Often individual micro-producers cannot produce a sufficient volume to sell to large traders and wholesalers. Whether this is a constraint, can be assessed via a market analysis, as well as then identifying potential solutions that still enable micro-producers to engage in the market. An agency which builds capacity with individual enterprises in how to organize, buy inputs in bulk and sell collectively, as well as facilitate market links with traders/wholesalers can make the difference between enterprise success and failure.

2. Linking enterprises to business service providers: As enterprises did not operate ion a vacuum, but are part of larger markets, they require access to a range of products and services in order to succeed. Transport, finance, storage, repair services for tools and equipment are examples of support services an enterprise needs to be successful. A market assessment will determine if the required services exist and if the targeted enterprises can access them. If the needed services are not accessible and a program can not readily promote them via the project or in partnership with others, then it may not be viable to support the target group and other economic activities need to be considered. There are many means by which a program can indirectly support enterprise development by linking enterprises with service providers, including providing vouchers to encourage enterprises to try a service, linking rural enterprises into service providers urban areas, or doing training of trainers to develop new service providers when too few or non exist. Often, in crisis settings key service markets for enterprises not functioning and program inventions have to temporarily fill gaps. (See Standard 3, guidance notes 3 & 4 for indicators regarding activities to address service gaps.)

Example: After a natural disaster, urban traders may have lost links with rural producers, which will affect urban retailers and end consumers. To assist urban retailers who are having trouble getting their supply, an agency may be most effective in assisting traders to link with rural producers. If transport is the issue, as there are many checkpoints, the agency may decide to provide the transport of goods from rural areas to reach the traders who then sell to the retailers. It is extremely important that the agency develop an exit strategy before taking on this role, or their participation in the market can distort the market with the subsidization of transport.

3. Financial Services: Sometimes the provision of financial services through an MFI (microfinance institution) is not available during the transition from disaster to post disaster. In this case the organization should investigate indigenous savings and credit schemes that exist in order to facilitate the rejuvenation of these activities to enable the provision of financial services or engage other credit systems (supplier credit, loan guarantees with non-MFI banks, warehouse receipts, voucher systems for input supplies) or indigenous systems, such as ROSCAS (rotating savings and credit associations), susus, and merry-go-rounds.

4. Market information: Without access to market information, a business may be paying an inflated price for goods and getting a very poor price from buyers. Enterprises require information on what price consumers will pay for a product to judge what price to sell a trader or wholesaler, and they need to know where they can get a reliable supply of goods at a fair price. This can reduce supply costs and/or increase revenues which contribute towards increasing incomes.

Example: An agency involved in enterprise development links key market actors in different areas via a text messaging system on cell phones, so that price information can be passed on via text messages and the actors can publicize this information in public places.

5. Regulatory framework for enterprises: An agency committed to developing enterprises should be knowledgeable of the regulatory framework for enterprises and ensure that the enterprises they choose to work with are legal and compliant to the existing regulations. This would include compliance with rules to operate in public market places and with the required licenses and tax requirements. Informal economies will also have regulations which are controlled and enforced through social networks and links to those in power. Often power dynamics will have a very important role in informal economy regulations where bribes and corruption may be part of the regulatory framework. Understanding the rules of who can participate in which occupation or enterprise is very important in post disaster work. If enabling environment is such that informality is widespread, it may be all right to support informal enterprises and advocacy/policy agenda to help them more towards formality.

6. Public-private dialogue mechanisms: Public-private dialogue can take come in a variety of forms, ranging from national competitiveness councils to informal community-level working groups. Regardless of the level of formality and focus, these groups provide a valuable forum where different stakeholder groups (i.e. private sector, government, NGOs & donors) can meet to coordinate activities.²³