BUSINESS DEVELOPMENT SERVICES VOUCHER PROGRAMME (BDS)

1. Background
It is recognized that the Micro, Small & Medium Enterprises (MSME) sector has great potential to generate employment and alleviate poverty. However, their growth is constrained by their inability to access business development services. In recognition of the foregoing, the Government of the Republic of Zambia, the Embassy of the Kingdom of the Netherlands, Embassy of Finland and the United Nations through the International Labour Organization launched a 3 year Business Development Services (BDS) Voucher Programme in November 2007. The goal is to enable MSMEs access specific Business Development Services (BDS). The overall objective of the BDS programme is to provide vouchers to build demand-driven capacities of MSMEs. The Programme is implemented through the Zambia Development Agency (ZDA) in collaboration with the Zambia Chamber of Small & Medium Businesses Association (ZCSMBA) and the Zambia National Farmers Union (ZNFU) as facilitators and Madison Investment Company Ltd (MICL) as Fund Managers.

2. Specific objectives of the Programme
o To create a conducive environment for MSMEs to access relevant technical assistance and managerial support for their businesses
o To empower MSME by providing them with means to purchase the technical assistance and managerial support that they need
o To support the creation of sustainable and competitive MSMEs that are active in growth oriented sectors of the Zambian economy
o To support business development service providers to continuously develop innovative and demand driven products through capacity building

3. Description of Business Development Services (BDS)
Business Development Services (BDS) refer to the provision of information, knowledge and skills, as well as advice on the various aspects of a business. Essentially, these services either improve the performance of the enterprise; its profitability and/or access to local, regional or international markets. A voucher is a document that is given to selected clients and entities to buy business support services from qualified and experienced service providers (SPs). The Business Development Services shall include, but not be limited to the following:

Advice and Consulting
Accounting
Taxation
Business planning
Legal advice
Machinery and materials sourcing and procurement
Market matching
Logistics and transport arrangements
Advocacy
Franchising
Marketing campaigns

Training
Start-up, entrepreneurship and business leadership
General management training
Growth courses
Effective marketing and selling
Production and technical training
Micro-skills development
Computer and Internet
Do your own business plans
Raising capital

Services
Marketing facilitation
Internet and computing
Product design and development
Export facilitation
Registration and licenses
Secretarial and translations
Trade fairs and events management
Tours facilitation
Corporate image, advertising and desktop publishing
Product design
Research and market surveys

Information
Internet research
E-mail subscription and maintenance
Contact and database management
Schedules and calendar maintenance
Advice on demand (via cell, phone, fax, etc)

Space Rentals
Mailbox and address systems
Web hosting services
Conference and events services
Computer and Internet facilitators
Training equipment rentals

Association Formation
Cooperative, association, foundation formation
National and local link development
Events management
Grants and proposal preparation
Microfinance Services
Brokering
Finance

However, the BDS programme shall not support company operational costs, capital expenditure, loan repayments and any activity that is deemed illegal. Below are the roles and responsibilities of the respective implementing institutions:

a) Coordinating Agency
The Zambia Development Agency will coordinate the activities of the BDS Voucher Programme. The agency will ensure that the programme operates in line with its objectives and will submit bi-annual progress reports to the BDS Review committee comprising the Cooperating partners, Ministry of Commerce, Trade and Industry, Zambia Development Agency, ZCSMBA, ZNFU, representatives of the BDS steering committee and other stakeholders.

b) Fund Manager
Madison Investment Company Limited will be responsible for the custodial and disbursement functions of the BDS Voucher Programme funds and will generally be responsible for formulating, developing and implementing fund management strategies and operational guidelines and policies relating to disbursement and investment of funds.

c) Allocating Agent or BDS Facilitators
The Allocating Agent is an organization appointed by the Zambia Development Agency to facilitate the implementation of the BDS Voucher Programme in a selected district. The Zambia National Farmers’ Union and Zambia Chamber for Small and Medium Business Associations through their affiliate organizations will assume the role of Allocating Agent. They will market the BDS Voucher Programme, assess the MSMEs’ business support needs and monitor the quality of service provision by the service providers.

d) Service Provider (SP)
A service provider is a private sector organization or NGO with specialist business development skills and has been contracted by the Fund Manager in consultation with the Allocating Agent to offer approved business development services to clients (MSMEs) under the BDS Voucher Programme.

 

 

 

 

 

4. Implementation schedule (pilot and roll-out)
The BDS Voucher Programme was piloted in the following four districts namely: Livingstone, Petauke, Mumbwa and Kasama for the period November 2007 to December 2008. However, beginning January 2009 the programme is being roll-out in sixteen more districts. These include Mongu, Mazabuka, Kabwe, Mufulira, Chililabombwe, Monze, Choma, Chipata, Kapiri Mposhi, Mkushi, Katete, Mansa, Luanshya, Kasempa, Mpika and Senanga.

5. Participation Eligibility
In order to qualify under the BDS Voucher Programme, an MSME must be:
o A fully paid member of either the Zambia National Farmers’ Union, Zambia Chamber for Small and Medium Business Associations or any other institution that will be affiliated to the BDS Voucher Programme;
o An existing enterprise operating in the district from which the application to the BDS Voucher Programme is made; and
o A wholly owned Zambian company.

6. Selection Criteria (Qualitative and quantitative parameters applied)
The following selection criteria shall be applied;

o The enterprise should have been in business for at least 3 months at the time of application to the BDS Voucher Programme

o The enterprise should have at least three (3) employees

o The enterprise should have a specified line of business.

7. Documentation Required
A standard application form shall be completed by all enterprise wishing to obtain support from the BDS Voucher Programme. In this way, facilitators will collect sufficient information to assist in the screening and evaluation of the applying MSMEs.

8. Framework for identifying BDS Providers
For specific services, Terms of Reference shall be developed as a pre-requisite to identification of service providers under the BDS Voucher Programme. This shall be followed by an invitation to would-be BDS service providers to make Expressions of Interest. The Expressions of Interest, however, shall be preceded by the compilation of a database for consultants. The database shall serve as a guide for consultants who are eligible to make an Expression of Interest.

8.1 Selection Criteria

Prospective BDS Providers shall be required to meet the following selection criteria:
o Registration as a legal entity
o Operate in the same area as the target cluster
o Relevant experience in all the business development interventions with demonstrable expertise in the service area/intervention chosen.
o Relevant work experience and qualifications for the different business development interventions chosen.
o Demonstrable track record – A list of work completed and contact details of the institutions. Trade references will be conducted
o Adequate number of staff to carry out all the interventions.
o Accessibility in relation to phone, fax or e-mail and willingness to travel the client’s business premises.
o If operating in more than one district, all offices should be fully operational at the time of submission of an application.

8.2 Requirements

Phase 1: Basic Requirements (Compulsory)

o Completed Service Provider Application
o Company Profile
o Company Registration Number
o CV’s and Copies of proof of qualification of staff listed in the application form
o Motivation against each service area/intervention chosen

Phase 2: (If short-listed)

o Copy of Company Registration Certificate
o Copy of the VAT Registration
o Tax Clearance Certificate

The following organizations can be selected as BDS providers:
o NGOs
o Private sector initiatives, e.g. sectoral organizations, chambers, consulting (both management and engineering) companies, associations, etc.
o Small commercial operations
o Professionals (individual or groups) e.g. lawyers, accountants, tax advisers, investment advisers, etc
o Trade groups (e.g. exporters, traders, etc)
o IT groups (e.g. providers, designers, net workers, etc)
o And many more

9. Remuneration / Fee Structure
The fees payable to the BDS providers shall be determined by the prevailing market rates. This notwithstanding, the Fund Manager shall endeavor at all times to negotiate for the best rates for cost- effectiveness of the program.

 

10. Service Delivery Guidelines
All guidelines for the delivery of services shall be determined by the stipulated Terms of Reference and administrated on a competitive tender basis within the designated location.

11. Service Quality Measure
In order to determine the quality of service delivered by a particular BDS provider, the programme shall depend on the feedback of the MSME and facilitator involved. The Fund Manager shall also use a tool kit to assess the quality of service delivery.

12. BDS Provider Agreement
A standard agreement shall be duly executed by the Fund Manager and service provider clearly outlining the scope of work to be undertaken, deliverables and remuneration.