Microenterprise Voucher Training Programs Caren Addis Botelho Lara - PowerPoint PPT Presentation

Microenterprise Voucher Training Programs Caren Addis Botelho Lara Goldmark Development Alternatives, Inc.

Development Alternatives, Inc. The presentation � What is a demand-led microenterprise training program? � A comparison of voucher programs � How do we measure performance in these programs?

Development Alternatives, Inc. Supply-driven model: Provider is beholden to the government/donor Government/ Training International $$$ Provider Donor Client

Development Alternatives, Inc. Demand-led model: Provider is beholden to consumer Government/ Training International $$$ provider Donor $$$ Client

Development Alternatives, Inc. Overcoming information asymmetries � A underdeveloped training market is the result of information asymmetries � The voucher decreases the risks for consumers and providers � The consumer receives information to overcome asymmetry: � how to purchase training � how to use the voucher � how to prevent fraud

Development Alternatives, Inc. A “generic” program Financing and •International supervision or public entity Orientation Distribution Qualifying providers •Public agency Data bank Administration •NGO Auditing •Private firm Accounting Training provider Client/Voucher user

Development Alternatives, Inc. Double objective for voucher programs � Deliver training (better quality and more variety than in supply-driven programs) � Develop a sustainable training market

Development Alternatives, Inc. Introducing the programs and challenges Lots of vouchers for a long time Paraguay How to design programs to Argentina improve international competitiveness in the formal sector? How to attract private sector Ecuador, providers? Peru Does a well-designed exit Bolivia strategy work? How to balance information and Indonesia convenience? Can network-building and El Salvador market diagnostics be incorporated in microenterprise voucher programs?

Development Alternatives, Inc. Finance and administration Characteristic Origin Administrador Country of financing Paraguay IDB/Ministerio Min Justicia y Justicia y Trabajo Trabajo Argentina IDB/ADEC ADEC (Ag. de (Public/private) Desarrollo Económico de Córdoba) BID/Corporación Equador CFN Nacional Financiera (CFN)

Development Alternatives, Inc. Finance and administration (continued) Characteristic Origin of financing Administrador Country Bolivia COSUDE Swisscontact Indonesia World Bank/ Swisscontact Nestlé Fondoempleo/ Peru MITINCI/ Min de Ind (MITINCI)/ Swisscontact COSUDE El Salvador COSUDE Swisscontact

Development Alternatives, Inc. Development Alternatives, Inc. Size and reach Characteristic Geographic Duration Budget extension Country ( US$ 1000) 1999-2002 Asunción Paraguay 3,000 (3 years) Ciudad del Este 1998-2002 City of Córdoba Argentina 2,800 (3 years) 1999-2003 9 cities Equador 2,200 (3.5 years)

Development Alternatives, Inc. Size and reach (continued) Budget Duration Geographic Characteristic Country Extension ( US$ 1000) 1998-2000 Cochabamba Bolivia 300 (2 years) 1999-2000 East Java Indonesia 165 (1 year) 1999-2001 8 departments Peru 1,500 (2 years) 4 districts in Lima 320 1999-2002 San Salvador and El Salvador (4 years) limited regions

Development Alternatives, Inc. Goals Firms Target BDS Objective (#) Micros, Self-emp., others Training, 50,000 Paraguay Internships Small, Micros Training 20,000 Argentina Equador Micros, Potentials Training 50,000 Micros, Potentials Training 8,000 Bolivia Micros, Potentials Training 8,800 Indonesia Micro, small Training, 31,800 Peru Youth Technical assist., 4,500 Internships 2,800 El Small, Medium Training n/a Salvador

Development Alternatives, Inc. Development Alternatives, Inc. Supply-side Chaa. Number of Number registered Supplier Strengthening Suppliers courses (Activities/courses) 1300 (1996) Advertising, trade association/ 104 400 (1999) pedagogy Paraguay 154 400 Advertising/Marketing Argentina 92 321 Advertising/Costs Equador 8 N/A /Costs and technical Bolivia New courses Advertising, fairs, get- 36 prohibited togethers/Costs Indonesia 63 377 Advertising, get-togethers Peru Advertising/Courses, tech N/A assistance El Salvador 23

Development Alternatives, Inc. Prices Characteristic Value of Price training voucher Country (US$) hour (US$) Paraguay 20 1.7 (1996) 1.25 (1999) Argentina 50 and 35 4.68 Equador 10 0.36 Bolivia 13 0.78 Indonesia 6.50 or 50% 0.98 Peru 15 1.17 El Salvador 50% 6.11 (1999) 9.55 (2000)

Development Alternatives, Inc. Development Alternatives, Inc. Measuring performance with a focus on sustainability � Focus on program performance indicators that “predict” sustainability � Assume that good performance indicators bode well for sustainability

Development Alternatives, Inc. Demand and supply indicators Vouchers Used/Objective No. Active Country Used (%) suppliers suppliers (%) Paraguay 10,000 n/a 104 60 Argentina 1,600 10 154 30 Ecuador 5,000 50 92 50 Bolivia 4,000 100 8 100 Indonesia 1,150 15 36 50 Peru 3,470 20 63 65 El 2,276(1999) 100 Salvador 1,000 (2000) n/a 23 100

Development Alternatives, Inc. Supplier development � Active suppliers report 20 to 30 percent growth in the number of students � New product development � Better understanding of microenterprise clients’ needs � Providers reaching clients who have had no previous experience with training

Development Alternatives, Inc. Development Alternatives, Inc. Measuring subsidies to providers � Subsidy to course (% ) Voucher income / (Course income, including students with and without vouchers) � Subsidy to training activities (% ) (Voucher income) / (Training income from voucher and non-voucher courses) � Overall subsidy (% ) (Voucher income)/ (Total income of suppliers)

Development Alternatives, Inc. Subsidy indicators Subsidy to Subsidy to training Country course activities Overall subsidy Paraguay 85 47 n/a Argentina 50 14 5 Ecuador 40 23 16 Bolivia 70 33 28 Indonesia 45 <5 <5 Peru 73 35 14 26(1999) 6.5(1999) El Salvador 18 (2000) n/a 7(2000)

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