The USDA-funded Agribusiness Investment for Market Stimulation (AIMS) program implemented by Global Communities seeks to bolster agriculture trade of agribusiness small and medium enterprises (A-SMEs) in Kenya, Tanzania, and Malawi. One of its objectives is to build the capacity of A-SMES to access markets and financing. Unlike most donor-funded programs which fully cover the cost of the advisory services, AIMS uses a fee-for-service approach to business advisory services (BAS) whereby the A-SMEs are to pay for services. This helps to ensure that the services are demand-driven, market-based and sustainable. The program has qualified business advisory service providers (BASPs) in the three target countries across key business areas where A-SMEs have identified a need, and where they would be better able to access markets and finance.
The AIMS program conducted an assessment of A-SMES to determine whether they were using BAS and if not, why; what types of BAS were of most interest; and if they would be willing to pay for the services. The assessment showed that most A-SMEs were not aware of BASPs. It also showed that many A-SMEs were willing to pay for services if it was available. One of the key areas of interested pointed out by the A-SMES is support in marketing. Additionally, AIMS reached out to BASP to understand the challenges of serving the A-SME sector. Access to clients was a common issue. Also, BASPs did not view agribusiness as a viable sector, citing limited ability of A-SMEs to pay for services. To bridge this gap, AIMS organized forums in the three countries where BASPs and SMEs can interact and BASPs can pitch their services.
TRACE it AFRICA Limited is one of the qualified BASPs under the AIMS program. The Tanzania-based firm provides advisory services in sales and marketing incuding products design, branding, labelling, and barcode certification to SMEs, but had not previously considered agribusiness as a viable sector. “Normally I was looking for clients from soap and detergent industries, beverages (particularly soft drinks), honey industry, bakeries and nibbles products including cakes, and never thought of agribusiness SMEs as potential clients,” said Mr. Pius Mikongoti, director of TRACE it AFRICA.
The AIMS’ BASP-SME engagement forums were also an eye opener for Mr. Mikongoti on the potential of this new market. “Being exposed to agribusiness SMEs during the AIMS business linkage forum and giving me a chance to pitch my services resulted in the establishment of 10 business deals to provide services to AIMS agribusiness SMEs in areas of branding, packaging and promotions,” explained Mr. Mikongoti. The businesses fully paid the cost for services provided which totalled about $3,800.
It is telling that before the partnership with AIMS, Mr. Mikongoti worked an average of four days every two weeks, but now he is far busier. Demand for his services has increased through the linkages made through AIMS. When asked why he had not supported the agribusiness sector before, he said he did not know where to locate the agribusiness SMEs, and did not even know if they could afford his services. But now Mr. Mikongoti says the will focus more on the agribusiness sector; he has already started marketing his services using several available platforms including the agricultural trade fairs the and has started exploring partnerships with other organizations working in the agribusiness sector such as Tanzania Milk Producers Association and Tanzania Edible Oil Seeds Association working in the agribusiness sector to expand his network of agribusinesses.
TRACE it AFRICA has proved that agribusiness is a viable sector and that A-SMEs can and will pay for these needed services if they are affordable and help boost business. TRACE it AFRICA continues to participate in the AIMS sponsored BASP-SME forums and other events. AIMS is also working with TRACE it AFRICA to expand its reach to more remote areas to support A-SMES on marketing and branding.