Training, mentoring and funding: three key steps for supporting micro entrepreneurs in the energy field in emerging economies

Micro-enterprises represent the clear majority of the SMEs in developing countries (above 93%). A large part of these micro-enterprise can be found within the informal sector, outside of regulation. They often struggle in their development as they lack skills to operate safely and manage their venture, and have few resources to grow. In the energy field, actions have to be taken to support them through three key steps: training, mentoring and funding.

1: Training to start off in the right way
Raising awareness around entrepreneurship to limit the risk of failure
To formalize, structure and develop their activities, electricians need to gain some practical knowledge about entrepreneurship. Since many start their activities without any idea of business management, development or communication, the Access to Energy program of Schneider Electric, has developed awareness raising modules. As well, our multiple training partners are actively developing activities to promote entrepreneurship and provide their trainees with insights on how to run their potential ventures.

Equipping entrepreneurs in energy with the adequate skills to operate safely and grow
Training programs which provide entrepreneurs with technical, managerial and financial literacy also enhance their chance to effectively be successful. Concretely, for an electrician craftsman, this implies updating technical knowledge in electrical installation and maintenance as well as practical skills regarding sales, services and communication. When exiting the training sessions, these electricians will be able to operate in safer conditions and get a recognition for their job through a certification.

2: Mentoring as the key for success
Mobilizing local actors and sharing knowledge
The key factor of success for entrepreneurship is a real program to accompany and advise. Even after training, entrepreneurs need to be accompanied and advised by mentors, either people who launched their own ventures or people having a recognized expertise in the field, such as professional organizations or incubators. Entrepreneurs particularly need to have visibility on the regulatory framework at stake as well as on the potential business opportunities in local markets. To mentor more effectively these entrepreneurs and help them adress the market, gathering them in economic interest grouping can also be an opportunity.

Providing entrepreneurs with managerial tools
Managerial tools are also essential to run a business. We experienced this in our mixed-gender entrepreneurship program in Brazil, where women and men entrepreneurs were equipped with starter kits in business management, such as an account book after having been trained on electrical installation.

3: Facilitating access to finance for development
Finally, entrepreneurs need to have access to finance to start their business. However, it remains very difficult today in developing countries, where half of them are underfinanced[1],with unmet credit needs estimated between $2.1 and $2.5 trillion[2].

Putting entrepreneurs in relation with potential funders & fostering tailored forms of funding
Fortunately, public, private, and hybrid initiatives aiming at providing funding solutions for entrepreneurs, are growing. A major need for the entrepreneurs is to get to know these funding opportunities through organizations that play a role of relay. Microfinance institutions and their microloans’ offer can for example address the needs of informal entrepreneurs in energy.
Programs supporting entrepreneurship are more successful when they involve various support instruments and manage to create ecosystems locally[3]. Therefore, partnerships between the public, associative and private sector will be a key element of success.

Want to find out more?

[1] World Bank, Financing for Development post-2015, 2013
[2] World Bank, Doing Business 2015: Going Beyond Efficiency, 2014
[3] Cho Yoonyoung and Honorati Maddalena, ‘Entrepreneurship Programs in Developing Countries: A Meta Regression Analysis’, Labour Economics, Vol. 28 (June), 110–130, 2014

Diane Le Goff is Project Manager – Access to Energy Training and Entrepreneurs at Schneider Electric.



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