Thematic Areas:

Progress Report Quarter 2 2011
Progress Report Quarter 1 2011

[Last Updated Sep 2011]

Rural Enterprise Development in Kandahar (REDKAN)
The Rural Enterprise Development in Kandahar (REDKAN) is implemented by Afghanistan Rural Enterprise Development Program (AREDP).” REDKAN, under AREDP, aims to achieve higher market participation of targeted rural enterprises and SMEs in Kandahar Province, resulting in increased income and sustainable employment opportunities for the population in the rural areas of the province.
ANDS Pillar 3
Economic and Social Development

Kabul Communique Focus Area
Agriculture and Rural Development

Proposed Budget
$9.4 mil USD

Resources*
$9.4 mil USD

Implementing Partner
Ministry of Rural Rehabilitation and Development (MRRD)

Donors
Canadian International Development Agency (CIDA)
Project Overview

The project is aiming to achieve higher market participation, promotion of entrepreneurship skills and support local enterprises and SMEs to identify their needs and support them to become sustainable means of income for local population of the province. REDKAN has two main components:

1. Community Enterprise Development:
The Community-based Enterprise Development component has been designed to address failures in the market for business and financial services to rural entrepreneurs. Under this component, Savings Groups (SGs) will be formed in order to address the demand for increased access to financial services by rural entrepreneurs. The Program will then promote the SGs to Village Savings and Loan Associations (VSLAs) to augment and to administer the joint funds of Savings Groups and the seed capital that will be provided to VSLAs from the Project. Simultaneously, Enterprise Groups (EGs) will be formed and will be further strengthened through provision of various trainings.

2. Small and Medium enterprise (SME) Development:
SME development component will support the small and medium enterprises in the province with business advisory services and will connect the SME to available credit and other financial services and support them to qualify for credit requirement of the financial institutions besides introducing modern business skills through capacity development and tailored trainings.
 
Context

Poverty affects 53 percent of the rural population in Afghanistan. Rapid and sustained economic growth over a long period is essential for getting the nation out of deep poverty. However, it is not just the pace that is important; the type of growth is crucial.

Kandahar producers lost previous markets when the transport infrastructures disrupted in the 1980s and 1990s. Processing equipment obtained during the soviet era are inefficient and are often unusable, leading to poor quality products that find few markets beyond local demand therefore the project will work to rehabilitate and improve the existing SME technologies to improve quality of the products.
SMEs Lacking the capacity to prepare suitable business plans to attract credit for their businesses therefore access to credit will remain of the key challenges for SMEs in the country as whole and in Kandahar in Particular where opportunities for SME growth is very high specially in Agro-business sector.
REDKAN is a joint initiative of MRRD and UNDP with financial support from CIDA is committed in supporting people of Kandahar province in poverty reduction through generation of sustainable employment and increase in family income of the targeted enterprises and SMEs.

Key Results
REDKAN project is designed for three years march 2010- June 2013 therefore the project is in its initials thus results of the project will be known once the first support cycle to targeted enterprises is complete. Despite the challenging working environment the project was able to achieve the following:

• 36 SMEs applied for SME support: Project has started its first round selection for the support to SMEs. As a result 36 SMES has shown interest and 27 application where sorted for technical feasibility and economic viability study out of 36. Finally, 22 SMEs would be assisted in developing interactive Business Plan and support action plans to deliver the identified needs.
• Provincial Situation Analysis for Kandahar: REDKAN project has started Provincial Situation Analysis for Kandahar aiming to identify opportunities and challenges for economic development in the province. It is expected that this study will serve as a base line for the project and at the same time will identify new value chains for the support through the project.
•  Establishment of provincial office:  REDKAN was able to establish its office in Kandahar  and contacts with Provincial and District authorities were established and work on both components of the project has started. The component A is delivered by Afghanistan Innovative Consultant Bureau (AICB).

 

REDKAN Contacts
Ms. Ghizaal Haress
Executive Director, Afghanistan Rural Enterprise Development Programme
ghizaal.haress@mrrd.gov.af
www.aredp-mrrd.gov.af/

Aminuddin Hamedi
Programme Officer UNDP
Aminuddin.hamedi@undp.org
www.undp.org.af