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7.5.2 Social capital, community organisations and NGOs: Institutional design and capacity building
Another key issue is that most of the poor do not have access to the wider social networks that are usually needed to sustain new enterprises. Since enterprise creation is fundamentally a social rather than a technical process, appropriate steps must be taken to create and nurture social networks. A closely related concern is the need to develop 'industrial clusters' within the informal sector (see Schmitz, 1997).
7.4.2 Planning and research
There is a strong consensus that demand-driven training requires comprehensive 'labour market information systems' (LMIS) based on market indicators.
Training vouchers for Jua Kali enterprises in Kenya
The Micro and Small Enterprise and Technology Project in Kenya incorporates many of the key features of the Bank's overall approach to VET. The provision of training vouchers to 60,000 entrepreneurs and workers among already established jua kali (hot sun) manufacturing enterprises is the main mechanism for improving skill levels. The total cost of the project is US21.83 million over a six year period (1994/95 - 2000/01).

7.4 Characteristics of a pro-poor training system
Many of the key characteristics of market-driven VET reform strategies can and should be incorporated into the design of pro-poor training strategies. In particular, the state should perform a largely regulatory and facilitatory role while actual training provision should, wherever possible, be contracted out to independent training providers. The state must, therefore, take primary responsibility for the funding of such a strategy and, in consultation with the major stakeholders, take the lead in the overall design of the strategy with clear priorities and related resource allocations.
6.3.1 Indigenous skills and knowledge: For-profit and NGO training activities
The following discussion summarises the basic premises and key features of this new approach.

6.2 Traditional interventions: For-profit and NGO training activities
The training programmes of traditional NGOs have been similar in many respects to those offered by public sector VET government institutions. In particular, long-term pre-employment training in traditional trades for school leavers and the disabled have predominated.
5.3.5 Micro and small enterprises: Public sector training
Generalisations abound about the generally poor performance of public sector training institutions in supporting MSEs.

5.3.3 Women: Public sector training
common criticism of public sector training for the poor is that, at least up until fairly recently, it has been largely 'gender blind' which is part of a wider problem of mainly male policymakers simply 'not seeing' women.

4.3 The impact of economic liberalisation
The potential impacts of economic liberalisation on VET are twofold: change in incentives to invest in training and the availability of public funding for VET.
4.1.2 Enterprises with growth potential: The demand for training
Most training strategies in the informal sector have targeted manufacturing microenterprises that are considered to have some growth potential. However, even within this relatively better-off segment of the informal sector, the effective demand for training has frequently been found to be quite limited.
4.1 The potential for training interventions: The demand for training
As is well known, the supply of training does not usually create its own demand. Clearly, therefore, training provision for the poor has been powerfully shaped by the nature of the demand for training among targeted groups, in particular in the informal sector. Lack of effective demand is a key reason for both the limited training provision for the poor (and hence outputs and impacts) in most countries as well as the overall failure of national training systems to reorient their activities in support of the poor.

3.1.2 Training for the formal sector: Training priorities, resources and reorientation
Despite oft-repeated government pronouncements about the need for concerted efforts to improve the skills of the poor, responding to formal sector training needs has remained the top priority for most public sector training institutions during the 1990s.
3.1 The public sector: Training priorities, resources and reorientation
"While there is long history of poverty-focused training in developed industrial economies, it is still relatively rare in the large majority of developing countries where most of the poor live" (Malik, 1996:46). This seems particularly ironic given that most of the world's poor live in developing countries. The following discussion looks at why public sector training priorities continue to favour non-poor groups. We shall focus in particular on the design of poverty reduction programmes, overall resource availability and competing claims over training resources from other sectors and groups.

2.1.2 Lack of provision and system reorientation
It is widely argued that training systems in developing countries should meet the training needs of the poor in an effective and equitable manner. "The bulk of new jobs are being created in micro and small enterprises. Consequently, the training system should prepare people to be productively employed in these sectors" (ILO, 1998:57). The continuing lack of training opportunities for the poor and disadvantaged is, therefore, a constant refrain in the VET literature.

2.1.1 Poor outputs, limited impact
During the 1970s, there was considerable optimism among policymakers, donors and researchers about the potential impact of vocational training on productivity and incomes for the poor.

EVSE target groups: Learning to change
Poverty is the inability to maintain a minimal standard of living. It consists of two elements. The first is the expenditure necessary to buy a minimal standard of nutrition while the second element varies from country to country and reflects specific national normative concepts of welfare. As societies become wealthier, perceptions of the acceptable minimum level of consumption also change. Consequently, poverty is a context-specific concept and, as such, is very much a moving target (See DANIDA,1996).
Training and the Poor: Learning to change
This paper explores the role of training in assisting individuals who are economically vulnerable and socially excluded (EVSE) in developing countries. Roughly speaking, almost one in four of the population in the developing world lives in absolute poverty and this number continues to increase rather than decrease. Poverty reduction is now at the top of the policy agendas of most bilateral donor agencies and international development organisations within and outside the United Nations system as well as a growing number of governments. Ambitious targets to halve poverty by 2015 have been set by the Development Assistance Committee of the OECD (see UNDP, 1998; OECD, 1997).

Micro-enterprise and the 'mobile divide'
New benefits and old inequalities in Nigeria's informal sector
IV. Principle III: Reinforce Microfinance to Advance the African Private Sector
Key Principles for an African Model of Microfinance
3.3 Supporting entrepreneurship in micro and small enterprises: Working Out of Poverty
Small enterprises constitute a large and growing share of employment in the developing world, and are generally more labour intensive than larger firms.

Managing Credit Risk in Microlending Operations
One of the most important determinants of a successful microlending operation is the successful management of credit risk. Or, more simply, keeping loan delinquencies to an acceptable level.

Facts about SMEs in Africa
Very few countries have working definitions of SMEs, except some members of UEMOA/WAEMU and Mauritius and Morocco. So data on this is hard to compare, though patterns can be seen and countries can be ranked by extent of SME activity:
3.1 Links Between the Operations of MFIs and Banks, Donors and NGOs: Microfinance in Africa - Experience and Lessons from Selected African Countries
A. Developing Complementarities between MFIs and Banks
17.0 References: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005
References
10.2 Pre-start-up training: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005
Data from a 1997-98 training needs assessment of informal sector operators found that over 75 per cent of informal sector operators had primary education, while only seven per cent had attended vocational training courses. Most had acquired their skills in a variety of trades through apprenticeships or directly from their peers, but were unaware of the theoretical aspects (reported in Mlingi, 2000, p. 81). Only 5.3 per cent of the MSEs in the Swisscontact (2003) study had received any entrepreneurship training, and even fewer in new product technologies or costing and pricing. This suggests that most MSEs are “learning through trial and error” or from the practical know-how of other operators.
9.1 Women’s access to micro-finance and other forms of credit: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005
An unmet demand for credit
4.0 The state of women’s enterprises in Tanzania: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005
Currently, there is no comprehensive data on the number of women in the MSME sector, the size of their enterprises, or their distribution by sector. Only proxies are available. In NISS (1991) women accounted for about 35 per cent of informal enterprises. By 1995, it was estimated that the proportion of women in the sector could have risen to 70 per cent of the informal sector labour force. In a 2000 Economic and Social Research Foundation (ESRF) study, 55 per cent of the enterprises in the sample were owned by women (as reported in Mlingi, 2000, p. 89). Swisscontact (2003) estimated that women owned 43 per cent of MSEs.
3.1-3.2 The SME sector in Tanzania: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005
The Tanzanian government defines SMEs according to sector, employment size, and capital investment in machinery. Accordingly, SMEs are defined as micro, small, and medium-size enterprises in non-farm activities, including manufacturing, mining, commerce and services. A
6.1 The informal sector: Gender Entrepreneurship and Competitiveness in Africa 2007
Entrepreneurs—male or female—constitute a very small percentage of the population, according to household survey data. Almost everywhere, less than 1 percent of all women of working age (15 to 65 years old) are “employers”—that is, women who own a business in which they employ hired labor.
6.0 The broader context: Gender Entrepreneurship and Competitiveness in Africa, 2007
Although the focus on formal sector entrepreneurs sheds light on a particular, if small, facet of entrepreneurial activity, it is important to bear in mind both the wider context in which such activity occurs in Africa and the limitations of available data in interpreting these results.
1.0 Overview: Gender Entrepreneurship and Competitiveness in Africa, 2007
An appreciation of gender issues is important when considering strategies to improve Africa’s competitiveness in the world and ways to promote private-sector development.There are three main reasons why gender matters.
Ending poverty means abandoning charity and accepting reality
Benin Mwangi, who blogs about doing business in Africa, asked me recently: "should the discussion be about how to get the informal sector to become part of the formal sector or should it be how to cater to the informal sector?" This in an excursion into the morass of African poverty and development. The short answer is: neither; ending poverty has nothing to do with the informal sector.

Ending poverty means abandoning charity and accepting reality
Benin Mwangi, who blogs about doing business in Africa, asked me recently: "should the discussion be about how to get the informal sector to become part of the formal sector or should it be how to cater to the informal sector?" This in an excursion into the morass of African poverty and development. The short answer is: neither; ending poverty has nothing to do with the informal sector.

Black Economic Empowerment, like charity, is not investment
South African businesses have become one of the largest investment blocks in Africa. Many African countries regularly fret that they are losing their local business ownership to their cousins down South. Every sector of South African business is represented in this new scramble to invest; from mining to telecommunications to retail.

Other informal sector Related Articles

Ending poverty means abandoning charity and accepting reality
Benin Mwangi, who blogs about doing business in Africa, asked me recently: "should the discussion be about how to get the informal sector to become part of the formal sector or should it be how to cater to the informal sector?" This in an excursion into the morass of African poverty and development. The short answer is: neither; ending poverty has nothing to do with the informal sector.

12.0 The Entrepreneurial Firm Corporate Governance: Entrepreneurs and entrepreneurship in Africa
Very few studies of entrepreneurship concern themselves with corporate governance. This is particularly true in Africa where by far the majority of entrepreneurial firms are very small and operate in the informal sector.
4.0 The state of women’s enterprises in Tanzania: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005
Currently, there is no comprehensive data on the number of women in the MSME sector, the size of their enterprises, or their distribution by sector. Only proxies are available. In NISS (1991) women accounted for about 35 per cent of informal enterprises. By 1995, it was estimated that the proportion of women in the sector could have risen to 70 per cent of the informal sector labour force. In a 2000 Economic and Social Research Foundation (ESRF) study, 55 per cent of the enterprises in the sample were owned by women (as reported in Mlingi, 2000, p. 89). Swisscontact (2003) estimated that women owned 43 per cent of MSEs.
10.2 Pre-start-up training: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005
Data from a 1997-98 training needs assessment of informal sector operators found that over 75 per cent of informal sector operators had primary education, while only seven per cent had attended vocational training courses. Most had acquired their skills in a variety of trades through apprenticeships or directly from their peers, but were unaware of the theoretical aspects (reported in Mlingi, 2000, p. 81). Only 5.3 per cent of the MSEs in the Swisscontact (2003) study had received any entrepreneurship training, and even fewer in new product technologies or costing and pricing. This suggests that most MSEs are “learning through trial and error” or from the practical know-how of other operators.
1.0 Introduction: Microfinance in Africa - Experience and Lessons from Selected African Countries
Small enterprises and most of the poor population in sub-Saharan Africa have very limited access to deposit and credit facilities and other financial services provided by formal financial institutions. For example, in Ghana and Tanzania, only about 5–6 percent of the population has access to the banking sector. This lack of access to financial services from the formal financial system is quite striking, when one considers that in many African countries the poor represent the largest share of the population and that the informal sector is an important part of the economy.
2.3 Looking for Financial Sustainability: Microfinance in Africa - Experience and Lessons from Selected African Countries
The technologies described above, based on the formalization of informal techniques and on group-based instruments, have been used to promote financial sustainability of MFIs. They have the advantage of addressing a number of problems faced by financial institutions when operating with the poor or with the informal sector, for example, asymmetry of information, lack of collateral, and difficult enforcement of legal rights.
Micro-enterprise and the 'mobile divide'
New benefits and old inequalities in Nigeria's informal sector
4.1.2 Enterprises with growth potential: The demand for training
Most training strategies in the informal sector have targeted manufacturing microenterprises that are considered to have some growth potential. However, even within this relatively better-off segment of the informal sector, the effective demand for training has frequently been found to be quite limited.
SME's - The need for more thought by African governments on the informal sector
The importance of a proper informal sector policy.
About.com’s Martin Murray’s post “Non-Profit Organization Suing ERP Supplier” A Sign of the Times?
In a white paper that I had written in 2007 titled “SAP Procurement for Public Sector” I had highlighted how the challenges with failed ERP-centric initiatives extended beyond the public sector to include the private sector. The difference as one senior Colgate-Palmolive executive told me shortly after scrapping a failed program was that “unlike the public sector in which a failed initiative becomes front page news, private sector company ERP failures rarely make a blip on the media’s collective radar screen.” The lack of media awareness notwithstanding, the frequency of failures in the private sector is comparable to the number of setbacks that occur in the public sector.
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