Constraints to productivity improvements for female nano entrepreneurs – Is training the answer? Louise Fox World Bank Sub-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

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

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