VALUE INITIATIVE PROGRAM

1. VALUE INITIATIVE PROGRAM INTERVENTION PLAN 5 TECHNICAL AND BUSINESS TRAINING PROVIDER Stage of Intervention: Entry

2. INTERVENTION RATIONAL • TECHNICAL AND BUSINESS TRAINING FOR MICROPROCESSORS/VENDORS • Provision of technical and business skills to microprocessors will contributeto increased output of quality juice, increased sales and profits These will contribute to positive enterprise level change, VCD change and social change . MICROPROCESSORS/VENDORS ACCESS TECHNICAL AND BUSINESS SKILLS INCREASE IN OUTPUT OF QUALITY JUICE AND SALES SOCIAL CHANGE ENTERPRISE LEVEL CHANGE VCD CHANGE

3. MARKET ANALYSIS • Passion fruit is a very popular fruit in the domestic market either used as fresh fruit or for processing into juices. • Demand in East African markets for fresh and processed fruit products such as passion fruit juice is growing at more than 10% per annum. In Kenya, domestic demand is increasing and current supply is unable to fill the demand. • The leading passion fruit processors in Kenya include Kevian Ltd, Milly processors and FIPS Ltd, Ruaraka.

4. MARKET ANALYSIS • Extensive juice extraction is also carried out at household and cottage industries. Passion, orange, mango, papaya are the major processed and utilized fruit juices. • At micro-value add level, processing is done manually or by use of juice blenders bought from local supermarkets. • Value addition of passion fruits through micro processing presents an excellent opportunity to create new investment and employment for the poor Ampath clients in urban and peri-urban settings

5. MARKET ANALYSIS • VIP Ampath has identified the following as among the key constraints facing micro-value add enterprise development: • Inadequate processing skills • Poor quality and hygiene maintenance • Poor business performance due to lack of management and financial skills • VIP Ampath through Fintrac has recently launched a detailed market research initiative on the passion fruit value chain to among others study potential markets for Technical and Business training services for SMEs in the value chain. (See attached market study plan) • Some preliminary research on the markets reveals the following …………..

6. MARKET ANALYSIS • Supply of Technical and Business Training for Microprocessors TA Supply is at two main levels:- • Public Sector/Government • Ministry of Agriculture • Kenya Agricultural Research Institute-KARI • Kenya Industrial Research Development Institute -KIRDI • Universities • Kenya Bureau of Standards (KeBs)

7. MARKET ANALYSIS • Supply of Technical and Business Training for Microprocessors Continued…………. (2) Private and Voluntary Sector Organizations • NGOs, Faith Based and Community Based Organizations are promoting agribusiness through value addition including of Passion fruit • Private consulting agencies.

8. MARKET ANALYSIS TA SUPPLY CONSTRAINTS • Inadequate extension services at close proximity to households • Extension staff lack adequate resources and appropriate tools to do their jobs. • Coverage very limited and targets enterprises that generate quick results • Lack of critical number of properly qualified extension professionals with the right knowledge, skills and attitude

9. MARKET ANALYSIS TA SUPPLY CONSTRAINTS • Lack of good information databases and/or sharing networks posing a serious challenge to agricultural extension service providers who are required to broker agricultural knowledge and information for poor subsistence farmers. • Poor linkages between research and extension, hence technologies generated by the research system not widely taken up by farmers • Gender discrepancies in access to TA- most information is passed to men who don’t transfer it to women who are the main producers

10. MARKET ANALYSIS • Demand for Technical and Business Training Demand for the services is at two levels:- (1) Able and willing SMEs • Once exposed to suitable and affordable technical and business training services they are willing to pay for it due to anticipated benefits to their investment (2) Resource poor and vulnerable Ampath clients in urban settings; • These are the very poor and vulnerable AMPATH clients. • They are new micro-processing business and VIP Ampath will assist them to graduate to micro-processing via a stepped –up approach (see graduation sequence next slide).

11. Sequencing for Graduation to Micro-processing for the Poor Ampath Clients in Urban and Peri-urban Areas Stage 2 Vulnerable Graduation Stage 1 Very poor and Vulnerable TRAINING • juice processing technology, hygiene/quality, Biz Management • FACILITATION • KBS certification, municipal biz permit, credit & savings, public health certification • Experienced, rents a room or buys cool box, • savings requirement • . • Increased production capacity, • Increased income • Graduation to a microprocessor and business service markets • . • OUTPUT • 1 glass ready to drink is KES 40 (200ml) or KES 200/liter; aim for revenue of KES 4, 000 /day. Approximately KES 2, 000 /day.

12. INTERVENTION General StrategyHave equipment supplier embed TA into trading relationship with microprocessors

13. BUSINESS MODEL FOR TECHNICAL AND BUSINESS TRAINING • Equipment developer provides TA to microprocessors/vendors on embedded terms KIRDI-TECHNOLOGY DEVELOPER & TRAINER MICROPROCESSORS/JUICE VENDORS • Equipment +Tech & • Business Training • Loan repayment • Microprocessors • Financial • Package • FINANCIAL INSTITUTIONS: ROOT SOURCES OF FINANCE

14. CAUSAL CHAIN FOR TECHNCAL AND BUSINESS TRAINING FOR MICROPROCESSORS/VENDORS – PILOT PHASE % increase in # of MEs participating in value chain; % increase in market output BUSINESS MODEL % increase in monthly sales volume/value per vendor/MP Equipment developer provides technical and business training to microprocessors/ vendors on embedded terms % increase in monthly output of quality Juice # of vendors/MPs accessing Technical and business training INDICATORS Microprocessors/Vendors TA (+ Equipment) TA provider/ Technology developer Equipment and TA package MFI Loan repayment

15. CAUSAL CHAIN FOR TECHNCAL AND BUSINESS TRAINING FOR MICROPROCESSORS/VENDORS – MARKET UPTAKE PHASE % increase in # of MEs participating in value chain; % increase in market output BUSINESS MODEL % increase in monthly sales volume/value per vendor/MP Equipment developer provides technical and business training to microprocessors/ vendors on embedded terms % increase in monthly output of quality Juice # of vendors/MPs accessing Technical and business training INDICATORS Many Microprocessors/ Vendors TA (+ Equipment) TA provider/ Technology developer Equipment and TA package Many MFIs Loan repayment

16. MARKET ENTRY

17. MARKET ENTRY- PROGRESS

18. Marketing Strategy

19. Business Model to be tested • Equipment developer provides TA to microprocessors/vendors on embedded terms PILOT PHASE

20. Who will be involved? Core partners: VIP consortium, microprocessors/vendors, technology developer (KIRDI) and MFIs Other development agencies in the piloting areas (e.g. HCDA, FPEAK, KEPHIS, KARI, MOA, NGOs) will be involved in supporting the initiative.

21. ABOUT THE KENYA INDUSTRIAL RESEARCH AND DEVELOPMENT INSTITUTE (KIRDI) • KIRDI is a parastatal established under the Science and Technology Act, Cap 250, 1979 of the laws of Kenya. • Its mandate is to undertake research and development in industrial and allied technologies. • Among its institutional objective is to contribute to the creation of national wealth through development of technologies that are appropriate and accessible to micro and small enterprises in Kenya

22. KIRDI’s activities include : • Development/reverse engineering of agro-processing machinery and equipment and disseminating the same to small and medium scale food processors in accordance with vision 2030. Examples of equipment already developed and being piloted by KIRDI include: Fruit pulper, Pasteurizer, Blender and Electric drier • Process and product development • Establishment of pilot plants • Training, capacity building and consultancy services • Business incubation service

23. Proposed Roles for KIRDI in VIP Partnership To develop and provide micro-processing equipment directly to the SMES or via existing supermarket chains Training and capacity development of microprocessors Business incubation services to microprocessors Future promotion of the business models NB: KIRDI is well established to undertake the above roles now and in future. Ampath is set to initiate dialogue with KIRDI

24. Assess KIRDIs training package and facilitate upgrading as necessary to include: • Adult learning principles and practices/training methodologies • Overcoming language/communication barrier • Overcoming ethnic and class issues • Mainstreaming Environment, Gender and HIV • Assess KIRDI other capacities e.g. # of trainers and requisite skills and support capacity development if necessary PILOT PHASE: Developing the Service

25. PILOT PHASE: Stimulating Demand • Demand for services during the pilot will be stimulated as follows: • Direct intervention by VIP partners: • FPI/ AMPATH will document the business model • EPC will disseminate the model in workshops, seminars, trade shows and media • Fintrac will facilitate establishment of market linkages:- microprocessors/vendors – MFIs – Training &Technology provider (KIRDI) • KIRDI and MFI will market own services

26. PILOT PHASE: Target Outreach • Service Providers • TA & Technology Provider : 1 ( VIP will work with KIRDI • MFI:-1 [Equity bank] • SEs (Microprocessors/vendors): 30 per pilot region x 5 regions = 150 • Pilot regions: Eldoret, Mosoriot, Chulaimbo, Kitale and Webuye

27. Determining Pilot Success Key determinant of pilot success will include: • Ability to graduate the very poor urban dwellers and vulnerable from dependency to self reliance

28. MARKET UPTAKE – Stimulating Demand • If the outcomes of the pilot tests on TA function will be positive: • VIP Ampath will strike a deal with KIRDI to continue carrying out the TA provider function on wide scale commercial basis . • VIP Ampath will document the business models for promotion by KIRDI

29. MARKET UPTAKE – Stimulating Demand Continued……… • VIP will/might provide initial subsidy to KIRDI to market the business development services to other microprocessors/vendors and banks through media campaigns, seminars and marketing materials • VIP will phase out any direct subsidies to enable the partner to operate commercially.

30. MARKET UPTAKE – Stimulating Demand • 2. VIP will facilitate traders, lead farmers, agrovets and nurseries to establish networks through which information/knowledge would be transferred. • 3. Traders, nurseries, agrovets and lead farmers assisted in the pilot will market themselves to other farmers 4. VIP will collaborate with Government supported agencies and not-for profit organizations to spread awareness on the business model • For example :- KARI-Agriculture information Centre, Export Promotion Council, NGOs

31. MARKET UPTAKE – Stimulating Demand Continued……….. 2. Ampath will facilitate microprocessors/Vendors to establish networks through which information/knowledge would be transferred. 3. KIRDI will market itself to microprocessors/vendors 4. Ampath will collaborate with Equity bank, Government supported agencies and not-for profit organizations to spread awareness on the business model • For example :- KARI-Agriculture information Centre, Export Promotion Council, NGOs

32. MARKET UPTAKE – Target Outreach • High target outreach due to successful pilot and effective uptake strategies: • Micro-processors/vendors (including graduated Ampath clients = 100 per district x 14 districts = 1400 • Distributors = 2 per district x 8 districts = 80 • Employees = 500 • Sensitized community members = 1000 • TOTAL = 2,980 households equivalent to about 14,900 individuals

33. EXIT PHASE • Since the TA intervention will have been geared towards sustainably, the only remaining functions of VIP at exit will be: • Monitoring of market • Estimating the impact of the intervention • Evaluating the intervention to gather lessons learned relevant to the next program intervention.

34. INTERACTION WITH OTHER INTERVENTIONS • Successful TA will be dependent on microprocessors/ vendors having access to financial services and quality control services. Hence…. * Technical and Business Training provider, Quality control system,; and Tailored Financial Service products interventions will as a package

35. TENTATIVE WORKPLAN