Constraints to productivity improvements for female nano entrepreneurs –Is training the answer?

Louise FoxWorld BankSub-Saharan Africa Region

Regional study on household enterprises (HE)

•What are they?▫Household enterprises are very small enterprises not legally separated from household activities. ▫They consist of self-employed workers and unpaid family members engaged in non-farm business activities. ▫They are at the lower end of the spectrum of what is often categorized as micro, small and medium enterprises. ▫They are the fastest growing employment category in SSA

Household Enterprises are common in rural and urban areas - but most are

low productivity

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Burkina Faso Cameroon Ghana Tanzania Uganda

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Rural Urban

Why are HEs growing?

•Low qualifications of labor force • Initial conditions – few wage and salary

jobs relative to growth of labor force•Household need for cash (more “push than

“pull”)•Growing demand for goods and services

(traditional and non-traditional) with economic growth

• In E. Africa, equally males and females; in Ghana and some other W. Africa countries traditionally female

What do HEs identify as constraints?

•Work spaces, markets, security▫urban planning not include this group, market

stall are expensive, lax security brings theft•Access to markets, lack of demand▫need for infrastructure to lower transport

charges, bring connectivity, but▫ often in easy-entry sectors such as trading

•Working capital, access to finance▫most households in SSA lack access to

financial services (savings and lending)▫under both for profit and non-profit models,

micro-finance interest charges are high

HE owners rarely access training programs – especially females because apprenticeship

programs biased toward men

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Apprentice Formal Training None

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Ghana Tanzania

Is training the answer to low productivity?•Our field work did not yield high demand – other

constraints more important• Publicly provided training rarely effective (not

designed for this group at all)•Donor financed NGO: very limited success•Need to organize the target group to be effective▫Ghana model: organize into associations at district

level▫Assess demand for technical training (e.g. soap

making), find providers (IFAD, JICA finance)•Micro finance model could work▫Combine basic business skills w/loan – some

evidence for effectiveness