Stakeholder capacity and motivation is key to rural entrepreneurship support model in Togo - IOE
Rome, 13 July 2023 – An IFAD-supported project in Togo successfully trained 3,263 rural entrepreneurs in business creation and management and 1,116 in technical aspects, and helped to develop around 10,000 business plans. While these figures are high for a two-and-a-half-year implementation period, they fell short to contribute to high-quality and sustainable outcomes. This is according to an evaluation of the National Rural Entrepreneurship Project (PNPER) carried out by the Independent Office of Evaluation of IFAD (IOE).
Among other factors, the evaluation found these findings to be partially due to the fact that the project overestimated key stakeholders' capacities and motivation, such as the readiness of microfinance institutes (MFIs) to participate in the project without a functional guarantee or risk-sharing scheme, or the ability of young entrepreneurs (men and women) to contribute up to 10 per cent of the total financing of the business plans. Moreover, none of the 500 established microenterprises and small businesses targeted by the project was effectively supported by the expected line of credit from MFIs and a government guarantee scheme.
Against this backdrop, sustainability prospects for the project’s outputs are low. Firstly, the continued provision of non-financial services for microenterprises and small businesses and cooperatives is at risk, as the project did not manage to consolidate a truly organized network of consultants and mentors to provide local support, and there are no national institutions in place to continue facilitating access to this type of non-financial services. Secondly, the PNPER MFI’s portfolio's mixed performance is unlikely to change the view of the existing microfinance institutions present in rural areas about the risk involved in financing microenterprises and small businesses and first-time entrepreneurs. As a result, the economic sustainability of the supported microenterprises and small businesses will largely depend on developments in the local and national economic environment and the business climate.
To respond more effectively and sustainably to the challenges faced by poor rural microenterprises, small businesses and young project owners in Togo, the IOE evaluation recommends allocating sufficient time, resources and expertise to their targeting, and providing personalized and ongoing technical and economic assistance to support the creation of rural microenterprises and small businesses. The report also notes the importance of strengthening the model for promoting access to financial and non-financial services for microenterprises and small businesses.
The overall objective of the PNPER was to help reduce poverty and improve living conditions in rural areas, and to develop rural entrepreneurship, particularly for young people and women. The project was implemented between May 2014 and 31 December 2021, at a total estimated cost of US$39.57 million. The evaluation of the PNPER involved comprehensive desk research and remote interviews, as well as two field surveys to gather the views of a sample of rural entrepreneurs, cooperative members and key local implementing partners.
Togo is a small coastal country in West Africa located between Ghana and Benin and stretching about 700 km from north to south with a width not exceeding 150km. Its population, predominantly rural and young, is estimated at 8.28 million people. The country recorded an average GDP growth rate for the past decades, despite the covid-19 pandemic. The country is classified in the “low human development” category, with rates of relatively high levels of poverty and inequality. Female-headed households remain the poorest.
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- To access the National Rural Entrepreneurship Project evaluation, please click here.
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