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Capacity Development for Rural Organisations: No Say in the Matter!

The Dhulikel market place for providers and beneficiaries of capacity development services was a first in Nepal. Rural organizations normally don’t buy services to improve their performance. National programs decide what is needed and buy training packages in bulk from consulting firms. That is supposed to be cheaper. Well is it? The 40+ rural organizations in the Dhulikel market place were shocked. One of them joked:

“I wanted to buy a shirt, but all I could afford was a handkerchief. Donors should give us the money: we can negotiate much better prices!”

For Capacity Development service providers, a dialogue with potential clients was a very new experience. It has inspired them to think of selling their services directly to beneficiary organisations rather than indirectly to donor funded programs and projects. In discussing with the service providers, rural organizations realized that they do not know their capacity needs, and have no ideas about how their performance could be improved. It was the first time they actually discussed with CD service providers.

Providers discovered that some “high end” rural clients have more money than anticipated. A consultant explains:

“One community wanted to upgrade their mini-hydro-power plant. They offered a price for our service, but when we explained what was involved they realised the price offered was too low. Without asking they tripled the amount. They have money! We exchanged contacts, and I think there is a contract possible.”

Another consultant also observed:

“Money is not the problem. The problem is, how do we get our services out there?”

That is the mission of RE-source -- a Local Capacity Development Facility, inspired by SNV Netherlands Development Organisation -- in the rural Renewable Energy sector in Nepal. Hosted by the Alternative Energy Promotion Center (AEPC), REsource aims to get affordable CD service “out there” to local organisations and companies who can bring renewable energy solutions to remote households and entrepreneurs Nepal.

Why REsource? Because a lot of money goes to waste on workshops and training programs that actually achieve very little in terms of performance improvement of local organisations. One example from Resource Management and Rural Empowerment Centre (REMREC), an NGO that is based in Dhulikhel:

“Some of the cooperatives we work with wanted to start a micro-hydro-power plant. They can get subsidy from the government, but this does not cover all the costs. I went to Kathmandu for two years to workshops and training about rural credit, but I never managed to find out how these cooperatives could actually get access to credit. Finally I was fed up and invited a few rural banks from Kathmandu to come to Dhulikel. I told them: don’t come if you are not prepared to give credit to the cooperatives. They banks and cooperatives met, and I pampered the bank directors with nice food and a hotel for the night. The next day, 10 cooperatives had signed for a loan. I monitor the repayments, and 7 of them are on time. The banks are happy too, because they have to pay a fine if they do not invest in rural areas.”

There are too many workshops and training events that do not make any difference in the performance of rural organisations. This is because the beneficiary organisations have no say in the matter. They haven’t asked for it and they are not paying either. REsource wants to change that into normal “market” behaviour, where the actual client dictates what is needed and pays the bill. And yes, we may need to subsidize or co-finance such services, but rural organisations do have some resources of their own that can be tapped. The market place in Dhulikel demonstrated that if local organisations have a say in the development of their own capacity, they will invest.

After negotiations with REsource, two organisations who made the highest bid on a service that was in high demand in the market place accepted a co-funding price. The Kavre District Energy and Environment Section (DEES) was runner up, and received 50% co-financing for a 5 day proposal writing training, by the Centre for Local Development Training and Social Studies. The Ganesh Renewable Energy Promoters' Association received the first price (see photo), 80% co-financing of the 7 day program they wanted to buy on Gender Equity and Social Inclusion with REMREC.

For more about distorted capacity development markets read this earlier blog.

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