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Revolving Village Fund for small business to Women : A pilot experience in Albania. Kalyan Pandey UNDP CTA Local Governance Programme, Albania Presented in Sub-Regional meeting on MSME Development in SEE Skopje, Macedonia April 6-7, 2004. Local Governance : a Showcase for Localizing MDG.

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Revolving village fund for small business to women a pilot experience in albania

Revolving Village Fund for small business to Women : A pilot experience in Albania

Kalyan Pandey


Local Governance Programme, Albania

Presented in Sub-Regional meeting on MSME Development in SEE

Skopje, Macedonia

April 6-7, 2004

Local governance a showcase for localizing mdg
Local Governance : a Showcase for Localizing MDG

SME and Micro

Credit for Poor

Village Development

Fund for Women




Dimension of MDG

Support to CBOs

Local Governance


Clean and Green

For better


Support to Civil


Promotion of Architectural &

Cultural Heritage

Localizing Sustainable

Human Dev

Partnership Facility


At the sub-national



DGTTF, Capacity 2015

Brief description
Brief Description

  • Main Issues identified for SME support

  • closure of large enterprises (21,000 enterprises )

  • rising unemployment

  • rapid out-migration of economically active persons,

  • Infrastructure ( financial institutions) deficits

  • regional and local authorities’ legal responsibilities for local development and employment creation and existing capacity and resource constraints.

  • Issues Identified while working at community level:

  • No/less participation of women in development activities at the community level

  • Lack of opportunities for the entrepreneurs development

  • Poor and especially women have no access to fund

  • All micro-finance institutions funding require collateral

  • Group financing not encouraged due to Lack of trust on group lending

  • Rural Finance schemes are not targeted to the benefit of the Poor or Women

  • Women groups are strong and potential to make changes in their lives

2. Approach in Addressing the Issues;

  • Social mobilization to bring the community especially women together

  • Strengthening local governance to establish public-private partnership

  • Support to establish revolving fund to be managed at the local level

  • Provision of skills development training at the local level

  • Support to marketing and information (PAC)

  • Make available a micro fund for small business at the village/community level

  • Increase the village fund by means of contribution from women entrepreneurs

  • Convert the fund into credit union/ association

  • Project Objective;

    supporting the economic needs of the Women community organizations through the establishment of village fund (revolving) to provide access of small loan for income generating activities collectively planned and carried out by the Communities

4. Expected Output;

  • Community women member organize themselves into group and develop skills in planning and prioritizing small business;

  • A Revolving Village Fund established to be managed by a Local Board of LG and citizens

  • Developing the capacities of the members of COs through training to plan and prepare small project proposals for income generating activities.

  • Women CBO/members received fund for initiating small business and successfully run small business for income generating.

  • Establish contact and provide marketing information through advocacy (arranging Fare, prepare bulletins).

  • Develop Women entrepreneurs as well as village finance system that supports to establish and run small business by the women group/individual.


Arab- Gulf Fund (funding agency):

Local Government in the Commune

NGO as training provider

UNDP-LGP as Technical support provider

Use of AG Fund for Income Generating Micro-Enterprises


$ 20000


Enterprise 1

Village Development Revolving Fund for Micro Enterprises for CBOs

$ 22000

Capacity Development of CBO (LGP- UNDP)




CBOs Contribution to the Fund

$ 2000


Enterprise 3



Fund Board


Enterprise 4

  • Results Achieved:

  • 18 women CBO formed to work.

  • VDF Board established with member from Local government, CBO and NGO

  • A total of $ 20 000 per village is used as seed money and deposited in VDF

  • 9 types of small business identified and planned

  • 16 business activities started by 63 women;

  • Loan amount varies from $ 1000 to $ 5000 (depending upon number women involved in the business.

  • A total of $ 60,000 invested from VDF in six pilot villages in 2003 and additional $ 60000 is planned for 2004.

Experiences and lessons learned difficulty faced during implementation
Experiences and Lessons Learned: Difficulty Faced during Implementation

  • Entrepreneurs rely on their own capital

  • Difficult in bringing women together

  • Difficult to come business ideas from the women

  • Lack of social cohesiveness led to mistrust for group lending

  • Need more time and regular orientation and consultation.

Experiences and lessons learned issues to be considered during the implementation
Experiences and Lessons Learned:Issues to be considered during the Implementation:

  • Do women receive sufficient pre-training to understand the basic components of the business plan and to ensure they really want to start a small business?

  • Do the project staff have the skills to coach the women - to evaluate the potential success of the business and whether the business will generate sufficient profit within the loan payment to allow for the women to repay as per the schedule?

  • Do the VDFB’s understand their role in supporting the capacity building of loan recipients?

  • Is there sufficient support to assist the women to market their goods in innovative ways in order to ensure the success of the loans?

Experiences and lessons learned effectiveness and usefulness
Experiences and Lessons Learned Effectiveness and Usefulness

  • VD Fund is the ONLY accessible loan available to women in the villages.

  • HIGHLY effective means to provide opportunity for women who wish to have an independent source of income or who wish to expand and stabilize their existing businesses

  • Does not require collateral - this is VERY important as women have no collateral

  • The VDFB format encourages the responsibility of women to repay the loan due to social pressure;

  • Helps to build on social cohesion and social capital in the villages.

  • Opens a forum, though small, for public-private partnership by bringing the community and the local government in the management of VDFB.

Undp s new initiatives on sme
UNDP’s New Initiatives on SME

  • Formulation of Area Based Development programme as follow-up action to Regional MDG in one of the LGP regions.

  • Focusing on Local Productive and SME as additional component of ABD;

  • Working with Council of Europe Bank to initiate Micro Credit for Poor;

  • Working with IFAD to expand their micro lending to the poorest members of Community Organization on social collateral basis.

  • Starting a new project in collaboration with Regione Lazio of Italy to support the entrepreneur in Small Livestock Industry .