- withheld, OIA s9(2)(a)

- withhed, OIA s9(2)(a)

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,., ' } -- z ). EXECUTIVE SUMMARY The ast severa years have been a chaenging time for the board and staff of the Sma Business Enterprise Centre as they have recovered, aong with the rest of the Soomon Isands, from the tensions and the subsequent arriva of RAMS! in 2003. The Centre is now operating without any impediments and this review is intended to hep New Zeaand Aid identify how it can ensure that an efficient and effective service is provided to the community. The definition of a sma business in the Soomon Isands, which we use in this report, incudes anyone who trades goods to produce an income or any sma enterprise empoying up to ten staff. These definitions are based on the many Soomon Isanders who earn their iving from trading and because in the Soomon Isands any business that em)ioys ten or ess peope is restricted by aw to Soomon Isanders ony. This is the target group which the SBEC aims to serve. The Soomon Isands Sma Business Enterprise Centre provides business training for existing and start-up sma business peope. It reguary deivers these services in Honiara and in the provinces and is extremey we regarded by cients and referra organisations. The board of the Centre have sometimes strugged to maintain an effective governance roe due to the sma number of board members, the fact that the roe is vountary and other demands on their time. This may be resoved by increasing the board numbers and appointing members with the abiity to devote considerabe time to this roe. From our research and discussions service deivery appears to be of appropriate quaity with the Centre we regarded and constant demand for the training services, both from individuas and organisations. The training appears to be sufficient in regards to quantity and quaity. It is consistent with the standard of other Sma Business Enterprise Centres in the region in that it provides practica, reevant and simpe training for sma business peope. Other training services have been deveoped to compement the sma business courses and training in regards to 'managing your own finances' has shown a arge and growing market demand. The Centre does virtuay no mentoring and this is an area that the review team beieve the Centre shoud focus more effort and resource on in order to ensure that the investment made in training is not wasted. One of the common themes expressed by both cients and stakehoders during our consutation was the need for post-course mentoring. Amost every organisation interviewed expressed strong support for the centre and was aware of its training activities. A common theme from these interviews was the need to provide more training in the provinces and rura areas. Many times we heard from peope wanting the centre to bring more training, advice and support to their particuar province, community or viage. For some organisations course fees for their cients was an issue raised as neither they or their cients coud aways afford to pay athough sometimes this was resoved by SBEC not charging the cients, but ony charging for their trave costs and accommodation which sometimes the organisations were abe to pay for with other donors money. Another common request was the need for ongoing training as many participants practised what they had been taught, were keen to earn more and wanted to go further in deveoping their businesses. Many of these peope, particuary women, have ow iteracy eves and they reish the opportunity to undertake the training and mentoring the centre offers to improve their and their famiy's abiities to produce an income. A number of the peope interviewed fet that some sma business peope woud benefit from the opportunity to network and that this was something the SBEC coud do. Many SBECS around the region do run sma business networks of various sorts that often incude having speakers presenting on different topics. It is hard to quantify the impact the centre has as for most Soomon Isanders there are few obs and so sma business is their ony option often of generating an income and so it is difficut to determine if SBEC has infuenced the estabishment of new start ups.

I ~ A number of the organisations interviewed were abe to point to members they had who had attended training and as a resut had started sma businesses. These ranged from bakeries, crafts, and produce saes to fishing, farming and other such enterprises. We aso met with a number of existing businesses who had accessed the training or wanted to so they coud continue to improve their knowedge and grow their business. Whie there continues to be a very arge and unsatisfied need for the Centres services, the review team aso notes that the Centre ony has imited abiity to meet these needs and shoud progress carefuy without pacing huge pressure on the centres imited resources. In addition the Soomon Isands economy aso has imited opportunities for sma businesses at this stage and so the Centre needs to be mindfu of this. The centre does an annua survey of a sampe group who have attended its courses to determine outcomes which seem to be favourabe in terms of new businesses started and new obs created. Couped with this is the anecdota evidence that is very positive about the impact of the sma business enterprise centre in heping up ski those aready in business and those wanting to start.. Finay a number of the organisations interviewed had not met with the Manager either at a or for quite some time and they wanted to engage more formay and more reguary, incuding the government through the Ministry of Commerce and its SME division. The SME unit, aong with other organisations, are ooking to contract the centre to provide sma business training aongside severa SME programmes they intend running and hope to buid a ong term reationship with the centre. This idea of purchasing training was raised a number of times by various groups and it is the view of the review team that the Centre coud buid on these opportunities to increase revenue to provide more services other than through funding from NZ Aid however caution shoud be taken not to pursue revenue at the expense of meeting the needs of the community. Based on the interviews, our observations and research the review team beieve that the Centre is achieving the obectives set out in the funding deed by NZ Aid which are 'o provide consistent faciitation(incuding training) and consutation services of the highest quaity to existing and potentia sma businesses in the Soomon Isands" There are a number of recommendations that the review team fee wi add vaue to the Centre incuding:. Providing more mentoring and business networking both to existing and start-up business. 2. Appointing a business advisor and trainer to work in the provinces. 3. Partnering with financia institutions to offer training and access to oans. 4. Formaising a meeting schedue with the educationa, Ngo, Government, Provincia Government and other organisations on a quartery or six monthy basis. 5. Appointing up to two more board members. 6. Reviewing and updating the Trust deed. The review team are of the view that none of these recommendations wi require more resource from NZ Aid as there is sufficient budget currenty avaiabe to resource these recommendations. '-.. Finay, the review team woud ike to thank the staff, management, board and supporters of the Sma Business Enterprise Centre for their fu cooperation in providing information, time and vauabe space for this review. 2

I " ) 2. INTRODUCTION ~ 3 SISBEC was opened in 998 as part of a NZAID deveopment proect. The proect was originay managed under a management service contract for the first two years however after the tensions increased in 2000 the Centre was scaed down and the High Commission took responsibiity for management of the centre. For the past four years a consutant, Mathew Abe, has made short monitoring visits to ensure the centre has been operating efficienty and meeting its annua business pan requirements. In November 2005 NZ Aid decided, as per the agreement when the Centre was estabished, to undertake an independent review of the Soomon Isands Sma Business Enterprise Centre. 2. Purpose of the Review The purpose of the review was to assist the deveopment of sma business enterprise in the Soomon Isands. The review was to: Assess the reevance and appropriateness of the SBEC in reation to sma business in Soomon Isands. Evauate the efficiency and effectiveness of the SBEC in reation to sma business deveopment needs in the Soomon Isands. Consider the rationae and options for further Soomon Isands Government and NZAID support, and make recommendations to improve and extend the performance of SBEC. The team was ed by Care Noan and comprised Aan Daonga and ohn Caasen from the Soomon Isands NZ Aid office. The Manager and staff from the Sma Business Enterprise Centre provided assistance as required. 2.2 Methodoogy A four stage process was undertaken. Firsty, face-to-face interviewing was undertaken of management, staff, the Board of Trustees and a representative sampe of SBEC stakehoders and other government, donor and NGO organisations. Interviews were hed with sma sampes of cients both in Honiara and at an outer isand Gizo. Training of an evening cass was aso observed. Secondy documentation, from both the organisation and reports in reation to the state of the economy in the Soomon Isands, was evauated to identify the deveopment of the sma business sector, issues, poicy response, processes, procedures and outcomes of the Centre itsef. This materia incuded the Trust Deed, quartery reports, and minutes of meetings, financia records, service contracts and tracing surveys. The third stage invoved the coation and anaysis of information and the compiation into this draft report. The fourth and fina stage invoves debriefing and reporting back to NZ Aid Soomon Isands, SBEC Board and management, NZ Aid New Zeaand and the finaisation of the report. Sampe The process focused on stakehoders across a mixture of Government, NGOs and other organisations. The ist of interviewees was prepared by the NZ Aid office in Honiara. Sampe size A tota of approximatey 20 organisations and individuas were interviewed. Interview method A semi structured interview was chosen as the most appropriate way of obtaining the kind of information sought for this research. The questionnaire used was based on the terms of Reference and was not provided to the stakehoders but was recorded by taking comprehensive notes during and after the interviews. Interviews ranged from forty five minutes to two hours. 3

I I d ~.r ~-_) 3. SMALL BUSINESS DEVELOPMENT NEEDS 3. Sma Business Sector The Soomon Isands is sti recovering from the effects of the tensions that severey affected the Soonian Isands economy in 2000. With the start of RAMS!, in uy 2003, a number of economic and governance reforms have been initiated though the depth of the damage inficted over the tension years means that wi take a significant period of time to restore the economy and confidence of the community. The sma business sector is critica to the Soomon Isands economy and particuary in the provincia areas where sma business offers the best, and often the ony, opportunity in reation to income generation for famiies and communities. Agricuture makes up fifty percent of the Soomon Isands economy with most of this activity occurring in the rura area. The three main export commodities are timber, fish and copra, though much of the forestry exports are buit around unsustainabe ogging practices. There is no data avaiabe on the isand's sma business sector even though businesses are required to register and be icensed to operate. The definition of a sma business in the Soomon Isands, which we use in this report, incudes anyone who trades goods to produce an income or any sma enterprise empoying up.to ten staff. These definitions are based on the many Soomon Isanders who earn their iving from trading and because in the Soomon Isands any business that empoys ten or ess peope is restricted by aw to Soomon Isanders ony. This is the target group which the SBEC aims to serve. Most sma business activities centre on seing food, fishing, farming, guest houses, transport, retai and crafts. One of the chaenges is to encourage more Soomon Isanders to deveop businesses that create vaue from raw materias rather than simpy seing produce and fish. As at 2003 the per capita annua income was US$500 which made the Soomon Isands the most impoverished of the Pacific countries. The unempoyment rate is unabe to be determined but there are few obs with many hundreds of appicants often appying for the few advertised. Many of these obs are ony avaiabe to those with higher schoo education. No wefare system exists meaning that a arge proportion of the popuation must trade as a means of earning income. This is even more prevaent in the provinces and rura areas where there are virtuay no obs. 3.2 Constraints to Sma Business Deveopment There are significant impediments to virtuay a private sector deveopment in the Soomon Isands and the sma business sector is no different. Reasons for this incude: A compiance heavy business environment. Lack of access to capita/micro-finance. Inadequacy of ega and property rights. Low eves of iteracy. Lack of skied peope. Transport costs and barriers. Costy or non existent infrastructure. The Wantok system. 4

,. I ~ 32 Compiance A businesses are required to register with the Government Registration Office which is a very compex, sow and expensive process. Most sma businesses don't compy as it is beyond their abiities to navigate the system even if they understood it Issues with the tax system incude: High administration costs. Very difficut to interpret Conficting information and advice on tax compiance. Very itte enforcement This system makes It easier to not register and not pay tax, though non-compiance does generate resentment from those businesses who are compying who as a resut fee unfairy burdened. There are pans to reform the tax system but this is unikey to occur in the next five years or so. 3.2.2 Lack of access to capita/micro finance The tensions resuted in the government and other organisations withdrawing financia assistance to the sma business sector. As a resut most peope cite it as a rea impediment to the growth of sma businesses and the economy. As discussed ater a number of credit and oan type faciities are being reintroduced by both government and the private sector. A critica roe for the SBEC wi be educating the sma business sector about their avaiabiity and criteria to improve peope's access. 3.2.3 Inadequacy of ega and property rights A number of issues surround and rights and and hodings in the Soomon Isands incuding and eases, and vauation, methods of transferring ownership and carity of ownership. There are many cases before the courts of both and disputes and other contract disputes however the system is very sow, unreiabe and open to differing interpretations of the aw. These conditions create uncertainty and ack of confidence for sma businesses who then decide to operate outside of the system thus creating a viscous circe as they deprive the economy of their taxes and themseves of access to protection under the aw. 3.2.4 Literacy Soomon Isanders have one of the owest iteracy rates in the Pacific with adut iteracy rates at 30% and women's iteracy rates as ow as 7%. Accessibiity to education is very imited as there are teacher and resource shortages across many of the provinces and in Honiara. This creates an enormous barrier to the growth of the economy and makes it very difficut for the sma traders wishing to expand beyond a simpe trading activity into something more sophisticated that wi add vaue to their raw materias or service. 3.2.5 Skis The iteracy eves and the restricted access to higher educati.on couped with few obs means that the skis required to deveop more sophisticated sma businesses are simpy not avaiabe. As noted anyone with forma education generay either works for government of for the donoringo organisations. 3.2.6 Transport Because of the geographica spread of the Soomon Isands transport, particuary access to the main markets in Honiara and other arge provinces is critica to the sma business sector. However the quaity of the transport system is inadequate, expensive and unreiabe. There are ony 40 kiometres of paved roads in the whoe country and inter-isand air and sea transport is very expensive and therefore prohibitive to many sma traders. 5

} 3.2. 7 Costy or non existent infrastructure Because of the geographica spread of the popuation across many sma isands the costs of providing infrastructure are enormous and probaby uneconomica for some areas. Eectricity is often suppied by generators though this is costy and, even in Honiara, unpredictabe with reguar disruptions. Teephone services extend to neary a the provinces but the government owned company recoups the cost of subsidising the provinces by imposing higher costs on the businesses in Honiara and on internationa cas. Internet and ceuar services are expensive and ony avaiabe in Honiara and severa provinces. 3.2.8 The Wantok System The Wantok system is an a encompassing reationship that is communa in nature. You share everything with friends, visitors, neighbours and especiay your reatives - your wantok - no matter how tenuous the ink. This means that for many sma businesses in the Soomon Isands everything they earn is spent heping those in their v wantok and never saving anything. One of the key essons that the SBEC are trying to teach is that your business money is not the same as your famiy money and you need to save it to reinvest in your business. 3.3 Government Response The Government creates substantia barriers to doing business in the Soomon Isands and is beset with probems of high debt, under-quaified staff, inefficiency and services that are costy, confusing or in some cases non-existent. The past few years have seen the focus on restoring basic governance, financia stabiity and bringing aw and order to the country. Government reform is critica for the growth of the economy but this wi ony happen sowy in the foreseeabe future and wi take many years to achieve. However, the situation is not a bad as the Ministry of Commerce have a budget aocation to provide assistance to the SME community in the next financia year. The aocation is for approximatey $7.5 miion and wi be used in a range of schemes to assist SME incuding access to: Sma business training. Technica assistance. Capita. Unsecured oans The Ministry is keen to purchase training services from the SBEC in addition to deveoping their own training services. They beieve that the type of training SBEC offers is perfecty targeted at the start-up end of the rnarket and that their training wi be for more sophisticated SMEs. In addition the Ministry are aso working with UNDP to gather data on the sma business sector in order to identify its size and scope. The Ministry originay had their Head of Department sitting on the SBEC Board and woud be keen now to have the head of their SME division take a board position. Whie severa organisations have suggested that the SME fund may not materiaise after the eections in March, the review team fee that it woud be a very positive move for the centre to have the Government invoved again on the Board. The Ministry are aso keen to estabish an ongoing diaogue with the SBEC and it coud be beneficia to both parties for a forma meeting to be hed every quarter. 3.4 Roe of SBEC and other education/training organisations The review team met with both the Soomon Isands Coege of Higher education (SICHE) and University South Pacific (USP) ocated in Honiara. 6

~ ' I ~ 3.4. S/CHE SICHE have a range of dipoma and certificate programmes for which entry is restricted due to their inabiity to meet demand. Within the Business and Administr:;>.tion Dipoma is a sma business management component which students can eect to do. The Head of Schoo at SICHE's Schoo of Finance and Business Administration stated that because of the arge unsatisfied demand for paces at the schoo they fet that SBEC payed an important roe in providing basic sma business training and that some of the graduates from SBEC coud then appy to be accepted for the dipoma programme. SICHE were aso keen for more reguar meetings to take pace between the organisations and for SBEC to provide speakers for the Sma Business Management units. 3.4.2 USP USP expressed a simiar view to SICHE in that they coud not meet the education needs for the numbers appying and that SBEC had an important roe in providing sma business training. The University had offered a short sma business management course of four weeks duration but had to drop it when they coudn't secure appropriate tutors. USP's Soomon Isands Centre Director fet that SBEC had a very important roe to pay in providing training as another option for many peope who woud never be abe to secure a ob because of the sma number of obs avaiabe. 3.5 Best Practice A best practice is a technique or methodoogy that, through experience and research, has proven to reiaby ead to a desired resut and in our view the Sma Business Enterprise Centre meet best practice in their training deivery and outcomes. The training is based on the very successfu generic 'Be Your Own Boss' training course used across the Pacific for start up sma business peope but amended for oca conditions. It is deivered as a basic and practica course that provides ski deveopment for peope wishing to start a sma business. The Centre deivers training most weeks of the year both on and offsite but the voume does not seem to affect the quaity. The course materia is easiy understood and we presented. For those cients with ow iteracy eves the tutors use spoken exampes and provide one on one assistance. Much of the training is competed using a whiteboard and discussions, and is based on a participatory approach. The review team sat in on an evening course which incuded a bank officer, a schoo teacher, a trader and severa other viagers a of whom participated in the course and were activey earning new ideas and skis. We were impressed with the tutor's abiity to understand and reate to this diverse group. We aso reviewed a sampe of course evauations for the past year which on average rated the course as 4 to 4.5 out of 5 which is the highest score. This party refects the appreciation that Soomon Isanders pace on any earning opportunity but does aso refect the cient's satisfaction and new skis earnt from these courses. 7

) ) ) 4. EFFICIENCY AND EFFECTIVENESS OF SBEC 4. The Centre The SBEC has four empoyees incuding the manager, deputy manager and trainer, receptionist and a ceaner. When required contract trainers are used for provincia and rura training in addition to the two senior staff. The offices are one street back from the main road in Honiara and comprise a reception area, two offices, a fie storage area, kitchen, toiets and a arge training room. The faciities are we presented and easiy accessibe to cients. They have computers and other appropriate office equipment. The centre has two vehices used for running errands arid visiting cients athough cient visits have not occurred recenty. The Centre has good signage out the front of the buiding and overa the Centre is of an appropriate standard for this type of operation and easiy accessed by cients. 4.2 Governance The board have six trustees. These are: Kevin Misii ohn Caasen/AIIan Daonga Luka Eta Gane Simbe osephine Teakeni Louis Fakaia Chairman NZAid PS Department of Tourism CBS I Voice Bong Mere (NGO) SIARTC The Board are required under the trust deed to meet a minimum of four times a year and more frequenty if required. The Board are vountary and it has proved difficut to achieve fu attendance at the Board meetings. The trust deed aows for up to ten board members and the review team beieve the appointment of severa new trustees with particuar skis reevant to the Centre coud reduce the oad on the current board and ensure ongoing deveopment of the centre. The review team, on checking the trust deed, note that the deed actuay requires a representative from the Ministry of Commerce to sit on the board and this woud be appropriate given their keen interest in participating. The review team beieves that another additiona board member (ideay from another we-organised trust or NGO) coud aso be beneficia but suggest it woud be appropriate to review the governance ob description first to ensure it sti is reevant and meets the needs of the Centre. The trust deed for the Centre does require any new trustees to be nominated by NZ Aid. In addition the deed states that at any one time the board must have a representative from the Deveopment Bank which is now in some difficuties so the Board may need to take some ega advice and amend the trust deed with approva from NZ Aid. 4.3 Management See confidentia annexe. 4.4 Data Coection The centre keeps very good records and a database of cients incuding their name, contact detais, type of service provided and date. The database is not backed up but a manua appication forms are fied. This data coection enabes the centre to undertake tracing surveys every year to determine the outcomes of its training and to further offer other appropriate services. 8

3 4.5 Business panning The centre's annua business pan is prepared by the Manager and approved by the Board and foows a tempate estabished some years ago which seems to sti be appropriate. The pan is aso submitted to NZ Aid for their approva. The targets for the centre to achieve this current year, une 2005 -une 2006 and the resuts for the first quarter are as foows. u;,..,.... i ~;)~.:{;i;;: ;Oi~~~ ~t~i!'i; ~ f~ '. @i}~ugit' 'Q!Ifputor... Business Courses -Honiara -Provinces - Rura areas 2. Consutations/mentoring/ foow-up/coaching -Phiip -Ceia - Others contracted 3. Other Services -Sma business (association/cub) networking 7 3 2 2 20 20 0 50 5 6 2 3 3 2 2 3 0 0 0 25 0 0 25 20 0 0 0 0 60 40 0.outptfoh atr4+:i 7 3 2 2 20 20 0 50 4. Other activities - Tracinq survey - Other research to measure output & outcome -Train women's trainer - Networking with other partner organizations 0 2 Based on evidence from quartery reports of previous years the centre has itte probem meeting its training targets athough it does strugge to meet its mentoring some of the other targets. The centre does not have a current strategic pan however the Manager advised that this is something the board may deveop eary next year as part of the ongoing business panning process. 4.6 Range of services SBEC offers reevant and practica business training courses designed for peope with itte or no business experience. The courses cover the usua subects of sma business panning incuding: Goa setting. Starting your own business. Book keeping. Handing Money. Costing and pricing. Marketing and customer service. Managing cash fow. (Current courses provided by SBEC) Starting your own business Marketing and Customer Service 9

Business Pan Wrinting Book-keeping for Sma Business Managers Financia Management Persona Financia Management Cash Fow Management In addition the Centre has now started running courses on how to manage your persona budget. This is because many of their cients have ony rudimentary skis in money management and so this course is intended to be a pre-cursor to going on the Start Your Own Business course. The courses are between five and ten days in duration depending on the ocation and needs of the particuar group. A night course of three nights a week is aso hed for those cients currenty working during the day. The courses are run in Honiara and in the provincia areas, sometimes as a resut of an approach being made to the centre for specific training. As far as we coud ascertain training has been deivered in: Guadacana Makira Maaita Santa Isabe Western Province The Centre advertises its courses heaviy in the Soomon Star which the review team beieve may be unnecessary. Instead of this smaer press ads and radio coud be used aong with fyers and presentations to community groups. Given the demand for training the centre shoud review its marketing strategy. 4.6. Speciaist training This year the Centre ran a speciaist course in partnership with the Department of Fisheries and Marine Resources. This inked the business skis training with the technica requirements for starting a fishing business. This course was run over two weeks and spit between the Department's premises and the Centre's training room and had approximatey 5 attendees. The attendees had to be engaged even at a sma eve in a fishing activity and paid $350SI to attend with some of them traveing from other provinces to participate. The senior trainer was from the Papua New Guinea Sma Business Deveopment Corporation and he provided expertise and training resources previousy unavaiabe to the Department of Fisheries and Marine and the SBEC. The response from course participants was overwheming and there is aready a waiting ist for the next course. The tutor from SBEC advised that the Centre wi conduct foow-up visits with each of the attendees to monitor their progress. In discussions with one of the women's groups they taked about the food handing course they had attended and that it woud be of rea benefit to the women if SBEC coud partner with these sorts of technica providers for ongoing training. It is the view of the review team that these types of speciaist courses meet a rea need and that the Centre shoud buid on these speciaisations and ook to partnering with other technica providers for reevant courses. This coud incude technica and business training in farming, fisheries, tourism and services. 4.6.2 Courses for Women The centre has been contracted by a number of organisations to provide sma business training to women. As in many societies women in the Soomon Isands face particuar barriers in obtaining finance and accessing services as they are often intimidated by bureaucracy, ack security and have ow iteracy eves. However many women in the Soomon's are the key income earner and it is the women who generay save money to meet the famiies needs of schoo fees, food and other things. 0

.. ) d ~ d The courses run specificay for women seem to be very we supported and again the need is enormous with far more women wanting to access the training than the Centre can assist. The review team met with a range of women's organisations that were a very supportive and compimentary about the centre and its roe. Many of them had attended training themseves and fet it was very usefu, even those women who worked in NGOs were abe to use some of the skis earnt in these organisations. The review team fee that the SBEC has an important roe in providing training and education to those women wanting to deveop their business skis and that they are doing an exceent ob of meeting some of the need. A key issue raised by many groups incuding women was the need for capita to hep start their sma business. It was noted that before the tensions there were a range of grant programmes athough some of the women said they were difficut to access without security. The review team beieve that there are emerging oan funds but that there needs to be better education about the detais of the oan funds avaiabe. It may be an option for SBEC to tria, in partnership with some of these oan providers, speciaist seminars on avaiabiity of sma business oans. 4.7 Cost of training The Soomon Isands sma business centre is one of the few SBECs in the Pacific region that charges for its training courses. This decision was made many years ago when the Centre was estabished and has not been reviewed since. Cients on Guadacana are charged $508 and cients in the Provinces are charged $008. On occasion the SBEC has run courses where the cients have not been charged but a donor has paid for the tutor's trave and accommodation costs. There seems to be no hard and fast rue as to how these decisions are reached about payment and it woud be appropriate that a poicy be deveoped. The review team however beieve that overa the process seems to work reasonaby we. Whie a number of peope raised the cost of attending training as an issue, given the unsatisfied demand for training the fees do hep act to reduce the demand to a more manageabe eve. In discussions with the provincia government of Western Province they noted they had no abiity to pay fees of any kind but woud approach the government to fund the training with the support of the Centre. The Centre does pay a roe in directing cients and organisations to potentia funders and it does on occasion assist with these appications to other agencies and donors. 4.8 Linkages The Centre has a number of other organisations it works with both as a provider of services for their cients and as referra organisations. These incude: Rura Training Centres EU- micro proects Kastom Garden UNDP Word Vision (SI) Women in Business Provincia Government Government Departments (Forestry) Many of these organisations buy training services from the SBEC for their cient groups which incude rura peope, women, young peope and other provincia and community groups. It is a testament to SBEC's

reputation and abiities that the demand for training from these organisations continues to grow though there is a need to stay focused on the Centre's business pan and spread training eveny across the provinces. The deputy manager advises that if an organisation asks for training and can pay then they wi receive it. This may not aways be appropriate if it means that more training is deivered in one province and none in another. The review team met with the provincia government of Western province who were desperate to secure more training services from the Centre but were unabe to pay. They noted that they received government funds of ess than.75 cents S per head of popuation and there was no money avaiabe. Given some of the tourism opportunities being deveoped in the Western province they were very keen to have training provided and were wanting to maintain reguar diaogue with the SBEC and other donors to hep them. The review team fet that it is very important that SBEC is seen to deivers its services in a fair and equitabe way across a the provinces where possibe. 4.8. Reationships with Banks The review team met with both the Nationa Bank Soomon Isands and ANZ. Both banks were aware of SBEC but had no reationship with the Centre. The Deveopment Bank of the Soomon Isands was estabished to promote economic deveopment and to support activities that created new investment opportunities and had a trustee on the Centres Board. As part of their activities the Bank did offer oans and capita to sma businesses but over recent years has experienced significant financia difficuties and is now no onger trading. The other commercia banks fee quite confident about the growth in the economy and are investing in resources to hep them expand their banking services. The ANZ have started a rura banking initiative which is taking banking services out to the provinces and viages. In addition they are now offering unsecured oans to peope subect to a range of criteria. Meanwhie the NZSI are aso introducing a roving bank officer who wi work in the provinces and concentrate on making oans. Both existing banks have seen a significant increase in peope appying for oans to start a sma business in areas such as farming, tourism, fishing, retaiing and sma manufacturing. One of the issues for the banks is financia iiteracy and they are very keen to support SBEC in its training particuary the persona finance management course and are happy to provide speakers for those courses. In addition to this ANZ are working with UNDP to deveop financia iteracy education. It is expected that they wi aunch this proect shorty after training approximatey 50 trainers who wi then work across the country. The banks are becoming very competitive and recognise the sma business market as the growth sector and so are ooking to meet the markets needs by deveoping sma business products such as unsecured oans etc. The review team's view is that these new products wi meet sma business needs sufficienty and that the SBEC's roe woud be to educate their cients about the products avaiabe and how to meet the criteria. Many of the peope and organisations interviewed raised the issue of ack of capita being a barrier, however we are satisfied that the banks and other government and NGOs are working to meet the sectors needs and are being innovative about the way they do it. This couped with the funding that wi be avaiabe from the Ministry of Commerce shoud be sufficient to meet the needs, particuary given the imited abiity for the economy to sustain too many sma business start-ups in the short term. 4.9 Perceptions of key stakehoders Overa approximatey 20 stakehoder individuas or organisations were interviewed in the timeframe avaiabe. Organisations were seected by geographica spread, experience with the Centre and cients. (Outreach training ocations were aso seected.) 2

A interviews used a stakehoder questionnaire (see appendix 2) and resuts from this consutation are summarised beow. Approximatey 70% of the organisations interviewed had a reationship of some sort with the Centre for a number of years. Around 30% of the organisations knew about the centre but had not actuay deveoped a reationship or used its services. The organisations interviewed range from a minor referra source (referring a cient) to a maor referra source (purchased training) to organisations that supported the centre. A of the organisations were one hundred percent satisfied that the service was meeting cient needs and where feedback was received it was positive. The evauation team had the opportunity to view course evauations hed at the Centre which were aso overwhemingy positive. None of the community organisations had experienced any difficuties in deaing with the Centre or staff, and were in fact extremey voca in their support for the Centre. A those interviewed fet that the Centre deat with them professionay, and with courtesy and empathy. The ony issues raised were difficuties with being abe to access the training either because of cost or geography. A of the community organisations interviewed expressed the desire for more training and advice to be avaiabe in the provincia and rura areas and for the need for funding for training. The Centre's service deivery was viewed as accessibe, empathetic, friendy and achieving good resuts for the cients. The outreach courses were seen as being particuary usefu in meeting the needs of the provincia cients who often coud not afford to trave to Honiara for training. There were a number of suggestions for improvement to the services. These incuded: Reguar and consistent outreach courses in new areas. This was the area in which community organisations most often wanted to see an increase in service. It is noted by the evauation team that at present Centre staffing eves this woud not be achievabe. Provision of speciaist training such as food handing, fishing etc. Again this is a resource issue. Mentoring services to be avaiabe to those businesses that have finished training and need ongoing advice. Provision of business networking There was unanimous agreement amongst the stakehoders that the Centre is providing an exceent service and a of the organisations stated that they wished to see the service continue and expand. 3

') 5. EVALUATION OF SERVICE DELIVERY The review team evauated the performance of the Centre against previous years by comparing the KPis. The spread and numbers attending training for the past seven years are: } ) 2002 278 85 335 35 548 2005 463 22 585 The ower numbers for 2002 were as a resut of the tensions and SBEC operating on ony 2 staff. In terms of its training the centre is certainy meeting its annua performance requirements athough it is not meeting its mentoring requirements. One of the issues for the Centre has been we were advised was the time spent training the new Manager and Deputy Manager which has reduced the focus on mentoring. Athough we were unabe to discuss this issue with the Manager, the deputy manager advised that she had itte time avaiabe for mentoring as she was constanty training or preparing for training. We reviewed the training materia used in the courses and found it to be of an appropriate quaity for the sma business market. We did question how the trainers used the materia with the cients who have ow iteracy and were advised that the tutors worked one on one with these cients using some of the course materia. The materia is based on the generic sma business start-up training modues avaiabe across the Pacific but amended for Soomon Isands use and appropriateness. As noted earier in this report the review team interviewed a number of cients and stakehoders who had some reationship with the centre. A the cients we spoke with were unanimous in their praise for the Centre and the training which they a agreed had improved their business skis. Severa of the Women's organisations aso stated that they beieved many women's ives had been improved as a resut of the training as it opened up options for women to increase their income generating activities successfuy. The Centre has undertaken severa tracing surveys over the past eight years with good resuts. The surveys whist not statisticay vaid are usefu in assessing the ong term impact of the centre. One of the barriers contributing to the survey probems is the transient popuation with many of the peope attending courses then returning to their homes in the provinces and rura centres. The cost of tracking these peope is prohibitive, however there seems to be reasonabe evidence that the centre is and has made an impact. Of the surveys undertaken in 999 and again in 2004 the outcomes seem to indicate that Fewer women attend training than men. Many existing sma business peope attend the training. Those not starting a business after competing training cite access to capita the reason. Retai and service businesses are predominant. Retai and manufacturing aso provide the most new obs. 4

} ) If the question was asked of a these participants 'are you in a better position now than before you attended the training?' it is ikey that most peope woud answer yes. This is evidenced by the discussions with past cients who a stated that their businesses had improved after attending the training. For some of these peope it was the first time they had accessed some forma earning and received a certificate, for others it was earning money management skis and for many it was earning to grow their business beyond a simpe trading operation. The review team aso beieve that if the Centre deveops its mentoring services again this wi aso aid the Centre in evauating the impact as they wi have buit onger term reationships with cients over a six to tweve month period. It is hard to measure the impact of the Centre statisticay but based on the response from cients and stakehoders there woud seem to be a arge unfied need eft if the centre was to cose. 5

" } } a 3 -' 6. EXPANSION AND RATIONALE Since its inception the Sma Business Enterprise Centre has enoyed the support of the Soomon Isands Government, primariy through the Ministry of Commerce who at various times have had a representative on the Board of the Centre. Because of the focus of the government and other donor's on stabiizing the country and strengthening and buiding community and civi society deveopment, the Centre has been amost entirey funded by NZ Aid. Given the unknown timetabe for ongoing RAMSI assistance and the enormous chaenges faced by the country it is very unikey that any other sort of support wi be avaiabe for the Centre in the short term from the Soomon Isands government or other organisations. Other donors are supporting the Centre through providing funding for their interest groups to access the training which is a good outcome and a cear indication of support. The review team, as noted earier, found the Centre payed an important and amost excusive roe in providing sma business training at the start up evel However our investigations aso identified that the Centre has focused a its resources on meeting the growing demand for training, sometimes to the excusion of other services. We recommend a sma expansion of activities and that the Centre empoys a roving trainer/advisor based in one of the provinces to support the training provided by the Centre in those regions. In addition with some better time management we recommend that the centre start meeting it's mentoring KPis in the business pan which we think are achievabe by the existing staff without having to empoy extra resource. Our rationae is that if the Centre does not meet its mentoring requirements then it may be compromising the investment the Centre and NZ Aid are making in the training and even in the Centres existence. Without mentoring foow-up some of the businesses wi strugge to grow and survive and as is the mode of SBECs in the Pacific the mentoring is a key component As noted earier in the report there is a growing and unsatisfied demand for business mentoring and training however we caution against a arge expansion at this time as the Soomon Isands ony has a imited abiity to support new businesses. There is a cear need for the Centre's services but the services provided shoud be within the capabiity of the Centre to deiver and aso shoud be deivered across a geographica area and targeted in some cases to speciaist groups e.g. farmers and women. The rationae for this sma expansion incudes: Need to be seen to be deivering services outside of Honiara. Sma cost invoved in increasing services. Growing need in the provinces. Opportunity to partner with other providers in technica provision. The cost of appointing a new trainer/adviser coud come out of the existing budget as the review team noted that the Centre did not aways upift its entire annua grant from NZ Aid. In addition we beieve that the centre has a generous budget and that there are areas where expenses coud be reduced incuding: Vehices. Vehice costs. Entertainment Advertising. Genera office costs. 6

We are confident that there are savings to be made within the budget that wi fund this sma expansion however we have not drawn up a specific budget due to uncertainty over some of the unexpained expenditure and other issues. The review team beieve that once the board have reviewed the auditors report for the 2004/05 year they wi be abe to identify the savings we beieve are in the annua budget. The review team aso beieve that if further expansion of the Centre were to occur in the future then areas for focus incude youth training and extended training for existing sma businesses. Finay, based on the interviews, our observations and research the review team are of the view that the Centre is achieving the obectives set out in the funding deed by NZ Aid which are "to provide consistent faciitation(incuding training) and consutation services of the highest quaity to existing and potentia sma businesses in the Soomon Isands" 7

,, ~ ~_ L_L L_) L.L.0 L~ --. 'c. I::.L... \..-... ~ ~ '\...-.:.- '------"' \..-...:_ '---._..) '---' ~ ~ ~- 7. RECOMMENDATIONS 0 The foowing action pan is designed to provide guidance to the Trust in addressing the issues identified in this review. It is expected that the Board and Management wi set the timeines, responsibiities and may modify, deete or add to the activities required. Mento ring I Achieving at the minimum the Ensure each staff member meets the required I uy 06 I Board/Manager mentoring KPis in the 05/06 business mentoring hours. pan.. Keep individua cient records recording the I Staff ongoing person, date and number of hours provided. Report each quarter against the business pan. I Manager/Board Appoint a new I Enabe the Centre to meet some of Review position description trainer/advisor the training and mentoring needs in the provinces Identify with stakehoders appropriate provinces for the person to operate from Deveop a budget incuding saary, trave, etc Advertise and shortist Identify appropriate pane to interview I February/March I Board/Manager Partner with Provides integrated service to cients Deveop with the various institutions some form institutions of agreement to partner offering access to capita Draw up a schedue for year of activities Agree to measure outcomes at year end Evauate success of partnerships I Feb/March I Manager Annuay Manager Reationships Deveopment of a pan and process Estabish a simpe schedue for these meetings Immediate Manager for reguar meetings with a range of and incude in quartery reporting stakehoders to ensure SBEC is considered consuted and, when appropriate, contracted for training other sma business needs. 8