Technical assistance is a game-changer for our partners

Dmytro Nikolaiev explains just how valuable it is to ensure the long-lasting impact of our work.

What is technical assistance and what does it do?

Technical assistance, or TA, provides our partners with access to a range of tools, training courses and expertise to meet their non-financial needs so that they can develop their businesses and grow their organizations.

It acts as a real springboard and works to maximize the positive effects of our “traditional” financial operations on our partners and their final beneficiaries. By improving their institutional, financial, operational, social and environmental performance, we help make these organizations more resilient and sustainable.

It’s important because it enables them to guarantee and sustain their impact, so they can improve the living conditions of the millions of vulnerable people they work with.

What role do you play in technical assistance?

Here’s how it works.

On one side, we have the providers of financial resources, known as financial backers.

On the other side, we have our partners, which are microfinance institutions and sustainable agriculture organizations.

Alterfin’s TA acts as a bridge between these financial backers, their funds, and our partners' requirements. My role is to identify TA needs, develop projects with our partners and present them to financial backers to secure financing.

Where do the funds for technical assistance come from?

Today, we have three financial backers. The Belgian Investment Company for Developing Countries, or BIO, the Smallholder Safety Net Upscaling Programme, or SSNUP , and the Alterfin Guarantee Fund, or AGF.

BIO is a Belgian government organization that invests in SMEs in developing countries. In addition to being an Alterfin co-op member and investor, it also provides us with funds to finance the development of TA projects.

SSNUP is a Luxembourg-based initiative that works to improve the living conditions of families of smallholder producers, mainly in Africa; it’s the perfect fit for our own mission! It provides financial resources for a number of impact investors, including Alterfin.

Lastly, our much-loved AGF, which is primarily financed by donations from our co-op members, enables us to amplify our impact and our support by supplementing the funds of BIO and/or SSNUP.

Together, they provide us with considerable financing amounting to EUR 780,000.

Who benefits the most?

To date, the majority of TA projects have focused on our agricultural partners.

Because they're often considered to be too vulnerable or too risky by traditional financial institutions, for many of our partners, Alterfin is the first investor to have confidence in them.

Technical assistance is vital in these situations because it meets these partners’ non-financial needs and has a real impact on these organizations, making them stronger and more resilient!

How is the impact of technical assistance measured?

« The positive impact on the financial beneficiaries is the most important criterion when it comes to assessing our success »

For both our traditional financing activities and our technical assistance, the positive impact on the financial beneficiaries is the most important criterion when it comes to assessing our success and our impact.

We have a range of key performance indicators, or KPIs, for each project. These indicators vary, depending on the type of partner, the area of activity and the expected impact on clients, employees or producers working for our partners.

These KPIs are generally divided into three groups: “outputs” to measure short-term results, “outcomes” for the medium term and “impact” for the long term.

Let’s take a look at the KPI for certification, for example.

The list of indicators would include: for “outputs” (in the short term), the number of farmers informed about certification, trained and certified. For the “outcomes” (in the medium term), the effect of certification on farmers’ incomes or the payment of any bonuses. And for “impact” (in the long term), improved living conditions for farmers thanks to the certification.

A real-life example of a technical assistance project? 

From developing a marketing strategy and applying for fair-trade certification to improving HR management, information management and risk management systems, our technical assistance projects are as varied as our partners’ needs.

Let's take a closer look at the technical assistance project developed for PHYMA FRESH PRODUCE, a company specializing in the cultivation and export of fruit and vegetables in Kenya. The project was developed by Alterfin and financed by SSNUP.

The organization joined Alterfin as a partner in 2016. At the time, we were the first investor to place its trust in their project.

PHYMA works in the central, eastern and Rift Valley regions of Kenya - where agriculture is the main source of income. It buys its products from a network of over 1,800 small-scale farmers, 70% of whom are women. An exceptional proportion for the sector!

Its effects on local communities are numerous, as are its challenges. These include crop diversification and increasing the number of male and female farmers in the supply chain.

This is where our technical assistance comes in.

To mitigate risk and diversify its crop portfolio, PHYMA has identified a new product to develop: chilli peppers.

After identifying the right chilli producers, understanding their capabilities and providing them with training, PHYMA is now structuring its new value chain to sell its chillies internationally.

To do this, the organization needs to develop a chilli pepper traceability system, which is essential for managing and guaranteeing the quality of its products and facilitating their sale.

Last year, thanks to Alterfin’s technical assistance, a team of consultants worked to develop a traceability system for PHYMA. To date, 797 new farmers (518 of whom are women) have been registered in this new system, ensuring significant growth potential for PHYMA.

But our technical support doesn’t end there. A second project is already underway: ensuring that the entire chilli pepper value chain has GLOBALG.A.P GRASP certification.

What impact will these two projects have on PHYMA FRESH PRODUCE?

Better traceability and certification mean better quality chillies and more sustainable farming practices applied by producers.

This leads to higher yields through increased productivity and quality.

PHYMA can then access high-value-added markets and generate higher incomes for its farmers.

And what will be the effect on its farmers?

Access to high-value-added markets generates higher and more stable incomes for farmers, which means they're better able to meet the needs of their households and/or invest in their own farms. All this results in an overall and gradual improvement in their standard of living.

How's that for a positive outcome?

Overall, technical assistance provides a sustainable social contribution by helping businesses and local communities in rural areas thrive. It also has a more general impact on the development of the regions and countries involved. I have to admit that it’s very exciting and motivating to work in this area.

What does the future hold for technical assistance?

« Our partners can rely on our support to help them meet and overcome the challenges they face today and in the future »

I think there will be greater demand for technical assistance for two reasons. Firstly, because we work with more partners every year, which obviously means responding to more needs. Secondly, these needs are constantly changing and evolving, which illustrates the changing environment and world we live in.

Companies have to adapt and find new solutions. That’s when TA is so valuable and comes into its own.

Our partners can rely on our support to help them meet and overcome the challenges they face today and in the future.

To conclude, as Milton Berle puts it, “If opportunity doesn’t knock, build a door”.

_{PS : Congratulations on reading this far 😉 and thanks for your time.}