Small and Medium Enterprises Corporation of Zimbabwe

162 Harare Street, Unified Councils Pension Fund 3rd floor East wing Harare.
www.smecz.org www.smecz.co.zw

Poultry value chain in Peri-urban and rural areas of Mashonaland west,

Midlands, Masvingo, Mash-east, Manicaland, Mat south and Mat North
Provinces of the Republic of Zimbabwe

Value chain concept note for poultry production

January 2024
Contents
List of
abbreviations ......................................................................................................................................3
1.0 Introduction ............................................................................................................................................4
2.0 Why a Poultry value chain model ......................................................................................................... 4
Figure 1: Poultry value chain …………………………… ........................................................................................ 4

2.1 Value chain actors............................................................................................................................... 5

2.1.1 Summary of Roles of the Tripartite Finance partners ........................................................................ 7

Table 1: Categories of MSMEs that require finance .................................................................................... 8

3.1 Proposed Risk reduction measures ......................................................................................................

10
4.0 Proposed Working Methods ................................................................................................................ 11
4.1 Cross Cutting Issues ..............................................................................................................................
12
5.0 Monitoring, Evaluation and Learning (MEL) ........................................................................................ 13
6.0 Project Objectives, Indicators and Activities.........................................................................................
14
7.0 Proposed time frame for year 1 ............................................................................................................
17

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List of abbreviations
AMA Agriculture Marketing Authority
BDS Business Development Services
BDSPs Business Development Services Providers
CD Cluster Development
DRM Disaster Risk Management
MEL Monitoring Evaluation and Learning
MFIs Microfinance Institutions
MSMEs Micro Small to Medium Enterprises
MLAFWRD Ministry of lands agriculture Fisheries water and rural development
MWACSMED Ministry of women affairs community and sme development
DFI Development finance Institution
OHS Occupational Health and safety measures
SMECZ Small & Medium Enterprise Corporation of Zimbabwe
VCA Value chain actors
VCD Value chain Development
SHF Smallhoder farmers

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1.0 Introduction
This Value chain financing model was developed in line with the objectives of the Zimbabwe
National MSME policy 2021-2024. Apart from facilitating access to finance, the model includes
other crucial business development services such as advocacy for workspace, promoting
formalisation of MSMEs, Training in business and technical skills, marketing support and other
BDS. The National MSME Policy Framework provides for the capacitation of MSMEs so that they
enhance their productivity and quality and attain domestic and export competitiveness, thus
contributing to increased formal employment.
The Value chain financing model takes into account the following pillars of smallholder farmer
development,
• Financial Support and inclusion of Smallholder farmers
• Business Management, Corporate Governance, Innovations and Technical Skills
Development
• Enabling Legal and Regulatory Environment
• Market Development and Trade Promotion
• Workspace and Infrastructure Support

2.0 Why Poultry Value Chain model

Smallholder farmers need many different services and support in order to operate. However, it
is not possible for SHFs to access all the business development and support services from one
provider. The proposed Value chain development model brings in 3 major market players in SHF
development. These players are able to link the SHFs to other service providers.
The model aims at developing a supportive business environment make SHFs more productive
and competitive and widen employment opportunities. The model also takes into account
issues of Covid-19 recovery of enterprises run by SHFs and make them more resilient to shocks
from natural disasters such as Covid-19 and man-made disasters such the on-going economic
challenges facing Zimbabwe.

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Figure 1: Poultry Value Chain

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2.1 Value chain actors

The value chain market model in Figure 1 shows MSMEs /SHFs in the middle being supported
BDSPs, Finance institutions and input suppliers.
(i) Finance Institutions
The model takes into account international BDS best practice which recommends that provision
of finance to businesses is best carried out by finance institutions and other business services
such business training, marketing, input supply, accounting services and others are done by
private BDSPs. The Value chain development MSME/SHFs financing project aims at working
with a number of finance institutions that have capacity to provide micro and small loans for
working capital and basic inputs to enterprises run by Smallholder farmers in different clusters
parts of the country. In line with international best practice and avoid market distortions, the
finance institutions will give the loans using their own lending terms.
(ii) SMECZ is the facilitator of the SMECZ BDSP Network. The role of SMECZ in the Value chain
development financing project is to link the MSMEs /SHFs to finance providers and negotiate
with the financiers for an inclusive finance packages for Smallholder farmers/ MSMEs. It will
also engage government and monetary authorities to support the Value chain arrangement.
SMECZ will also enhance the capacity of a pool of BDSPs so that they provide appropriate
and quality services to the MSMEs. In supporting the BDSPs and finance providers, SMECZ
will provide monitoring services as part of quality control and documentation of activities
and processes.
SMECZ works with membership based business associations and capacitates them to be able to
respond to needs of their members. The organization facilitates various business development
services through the BDSPs in business management, value chain development, taxation,
import and export and others. SMECZ has capacity and has developed linkages to organize
MSMEs in business associations and value chains and in lobbying duty bearers for supportive
business environment.
A recent profiling of BDSPs of the SMECZ BDS network shows that the network has members in
the following BDS categories. This service mixes if properly capacitated, refined well-
coordinated and supported is comprehensive enough to develop a vibrant MSME sector for
Zimbabwe and other countries in the region. The following are some of the BDSP categories
that were identified.
1. Business Consultancy Services in carrying out business surveys and diagnosis support in
developing business plans, developing financial, accounting and other policies, developing
business systems, procedures, organizational development.
2 Assistance with Market Access that includes market intermediation, establishment of
business and market linkages between enterprises facilitating collaborative marketing, and

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market research; providing market information, market research and participatory market
systems and value chain development
3 Input Supply support in providing information about suppliers facilitating collaborative
or joint procurement.
4 Technology Development and Transfer involving research and development of
appropriate technologies; promoting, distribution and installing such technologies, running of
tool hire centres, and advising on appropriate technologies.
5 Training and Technical Assistance In providing business or technical skills; changing
attitudes, enhancing awareness and knowledge of business policies, regulations, DRM, decent
work issues, the environment, gender, etc.,
6. Infrastructure includes provision of business infrastructure includes the construction,
operating or maintenance of markets, industrial parks, business incubators, storage and
cooling facilities, power generation/distribution, information and communication technology
(lCT) infrastructure, etc.
7. Professional Services providers include provision of legal, accounting and auditing,
insurance, and customs clearance services. The list can be expanded to include engineering,
architectural and lCT services, etc.
8. Policy Advocacy Services In facilitating MSMEs to engage and influence policy makers to
improve policies, regulations, procedures practices in order to improve the business
environment.

(iv) Immediate players in support of the Poultry value chain Development Finance Package
(a) Government and local authorities who will be providing MSMEs development policy
guidelines, supportive operational environment and workspace for the MSMEs. The BDSPs
and the MSMEs will engage these duty bearers on SHFs enterprise friendly policies. BDSP
facilitating organisations will build the capacity of the BDSP to improve service delivery to
MSMEs that includes enhancing their skills in as consultants, advocacy, Mentorship,
marketing, monitoring and other essential l BDS areas. The Finance institutions will also
complement the facilitating organisations by capacitating the BDSPs with loan orientation
skills, preparing of business plans to meet respective bank requirements and in monitoring
of the MSMEs that are given loans.
(b) BDSPs
The BDSPs are a network of business consultants and other business support organisations with
experience in providing a wide range of BDS to MSMEs. The BDS network is facilitated by
SMECZ whose aim is to capacitate the BDSPs in order to promote best practice and enhance
collaboration and sharing of experiences among the BDSPs. SMECZ also coordinates and
monitors the BDSPs when they are working on collaborative activities organized by SMECZ. The
SMECZ objective is to have a vibrant business development services network with capacity to
respond to ever changing support needs of MSMEs.

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2.1.1 Summary of Roles of the Tripartite Finance partners

1. SMECZ to MSMEs / SHFs

• Business and technical skills Training  Assisting in preparing business plans  Loan
orientation.
• Business advice and profiling smallholder farmers
• Monitoring
2. Finance Institution to MSMEs / SHFs
• Loan orientation
• Loan assessment
• Loan disbursements
• Monitoring
3. Finance Institution to SMECZ BDSP members
• Capacity building on loan orientation and monitoring

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 Table 1: Categories of MSMEs /SHFs that require finance
The following table gives a summary of the categories of MSMEs that the finance package will be targeting. These MSMEs includes those that are
direct players in the sector and the respective value chain actors. The specific details of the actual actor, the actual nature of support that they
require will be captured in the proposed situational analysis exercise to be done before rolling out other activities.

The project will initially target 14000 MSMEs /SHFs for 2 years.

Nature of business Nature of business development

Target groups Categories finance and support services
• Land and land tenure
• Commercial and semi commercial small holder
farmers in horticulture including mushroom growing, • Water supply
crop farming and animal husbandry • Energy supply
• Veterinary service • Working capital • Agro business skills and advice
Primary production an
• Orchard and tree nurseries • Equipment • Technology and production
agricultural SMEs d
• Bee keepers and other sustainable non timber machinery skills
harvesters • Marketing support ( input and
outputs)
 poultry producers
• Advocacy skills
• Traders, an • Workspace
• processors, d • Licenses and permits
• input Suppliers • Business skills and advice
• manufacture and repair of agricultural equipment • Technology and production
and machinery and other low cost labour saving devices  • Working capital skills
Non-primary production Tillage and crop processing hire units. • Equipment • Marketing support ( input and
agricultural SMEs • Protective clothing manufacturers machinery outputs)
• Leather tanner • • Advocacy skills
• Rope makers
• Packaging manufacturers and suppliers
• Branding and labelling services
• Transport services
• Designers, an • Workspace
• Working capital
• equipment and component manufacturers, • Equipment d • Licenses and permits
SMEs in the renewable
• material component suppliers machinery • Business skills and advice
energy value chain
• builders and Installers and maintenance technicians, • Technology and production
•
• Sales of renewable energy( battery charging, power skills
 8

Target groups Categories

Nature of business Nature of business development
finance and support services
sharing schemes) • Marketing support ( input and
• Green house builders outputs)
• Charcoal producers from renewable trees • Advocacy skills
• ITC services
• Low cost transport devices
• Designers, and • Workspace
• pump and component manufacturers, • Business skills and advice
• material component suppliers • Working capital • Technology and production
• Well diggers and builders • Equipment skills
SMEs in the renew water
• Plumbers, pump Installers and machinery • Marketing support ( input and
and sanitation value chain maintenance technicians, outputs)
• • Advocacy skills
• Cleaning services
• Water delivery and purification
• Waste collectors and recycling
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Poultry value chain pending business

Area of business activity Inputs collection points Number of birds Total cost
Nyamusosa Manicaland
Rusape Manicaland
Mabvazuva Rusape 30 000 birds
Banket Mash west
Mutorashanga Mash west
Masvingo rural Masvingo
3.0 Description of benefits to MFI
The Finance Institution will benefit from interest paid on the loans, increased number of MSMEs
who open bank accounts and the opportunity to tap into government external funds for SHFs
enterprise loans. Poultry business is a short turnaround and quick return business as for this
value chain the availability of off takers where farmers are farming for supply.
Benefits to MSME / SHFs
The MSMEs/SHFs will benefit from the business loans for working capital and re-tooling from
the finance institutions. They will also benefit from the business skills Trainings, business advice
marketing and Advocacy support from the BDSPs.
Benefits to BDSPs
The BDSPs will benefit from capacity building by the facilitating organisation and by the banks.
They will also benefit from the payment the services they give to the SMEs and from a wider
client base of SHFs enterprises.

3.1 Proposed Risk reduction measures

From the perspective of most finance institutions, investing in MSMEs and Agri-SMEs tends to
be perceived as riskier than investing in larger businesses. Direct agriculture producers
repayment is normally expected after maturity and sales of crops or animals. Repayment can be
affected by crop or animal failure. SHFs/ MSMEs are considered as a risk group because they
lack security and due to their mobility, they are likely to change or close enterprise when faced
with financial problems.
The following risk reduction considerations are being proposed in order to improve the
bankability and fundability of SHFs/ MSMEs. This will provide the value chain fund partners
information to assist them in selecting the most bankable and fundable youth MSMEs. a)
Getting to know the MSME well by establishing:
• The business ability and capacity to generate returns (profit or cash) and pay off its debt
as at when due and still provide returns for business owners and investors increases the
opportunity of the business to access funds of being fundable
• The capacity and ability of the business to tap into realistic business and market
opportunities
• The entrepreneur’s personal character exhibited by transparency and the willingness to
repay debts
• The capacity to manage the business shown by the capability to maintain good sales,
adequate cash flow, proper care of assets and products, adequate record keeping,
compliance with relevant regulatory requirements, and some level of collateral.
• History of running the enterprise consistently
b) Proof of orders for goods and services can support a loan request.

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c) Other active players in the value chain in which the MSME participates can also provide
guarantee for loans or apply the loan selves to procure inputs or tools for the MSME partner.
c) Possession of movable assets can also be used as security.
d) Maintenance of a bank account can make an MSME bankable
d) References of previous loan repayments
e) Co-guarantee from other MSMEs in the same business association or value chain
f) No previous record of blacklisting
g) Availability of guarantee schemes by Government and other projects. SMECZ has engaged
the Reserve bank of Zimbabwe for SMEs to be supported by the Export Credit Guarantee
Company.
h) SMECZ use the bank model where all buyers will pay directly to the bank account and MFIs or
banks will deduct the loan premiums.
i) The cluster model also works as a co-guarantee for di-risking the sector

4.0 Proposed Working Methods

• The first project activity will be a situational market analysis carried out involving the
enterprises and district stakeholders. The main objective of the situational assessment is to
find out the operational status of the enterprises which includes the production capacity
and financial status as well as skills and marketing levels, their operating environment
including workspace tenure, legal form of enterprise and compliancy issues. The assessment
will also establish the short to medium term business improvement plans and perceived
business support services including financial needs. This information will be used as a
baseline for the project, update the database of enterprises and also assist to refine project
interventions based on situation on the ground and so as to make the interventions demand
driven.
• The assessment will also enlighten the project about the effects of Covid-19 on the young
MSMEs and their recovery initiatives and plans, as well as the market outlook for their
products goods and services. It will find out how the enterprise are coping with the
continued economic changes and hear their plans to improve resilience in terms of
widening markets, raising business finance and improvements in production capacity. The
project will also assess if the MSMEs are affiliated to any functional business/trade
association or value chain network and find out issues of current concern in the associations
and networks. Some of this information will be obtained from literature review.
• The outcome of the situational analysis will then allow the BDSPs to initiate activities of
assisting the preparation of business plans. The process will be very participatory to allow
the MSMEs to make the draft through a mentorship process so that they own and
understand the business plans form the start. The plans will assist the enterprises to
ascertain their enterprise growth/ recovery, finance and business development needs.

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• The report of the situational analysis will also assist the financial institutions to have an
appreciation of the prospective clientele and possible customize the financial services
accordingly.
• Loan orientation sessions for BDSPs and the MSMEs will be facilitated by the financial
institutions. The orientations will include banking principles and financial literacy, financial
products on offer and loans application requirements. In order increasing outreach, the
BDSPs will also be capacitated by the financial institutions to carry out the MSME loan
orientations. The fund disbursement and repayment schedules will be outlined and the
financial institutions will be able to draw up their respective work plans to be shared with
the other partners
• After the loan orientations the MSMEs will be able to decide on the type of financial
products they need and if they need to apply for loans they then get BDS support if
necessary to finalize their proposals to meet the financial requirements.
• The SMECZ will utilise the findings of the assessment to assist in refining the capacity of the
BDSPs and prepare them to offer the necessary BDS to the MSMEs. The findings will also
point out to advocacy issues that need to the pursued together with the MSMEs and other
stakeholders.
• The BDSPs will also use the findings of the situational analysis to customize their BDS
products and organize MSMEs capacitation activities according to demand.
• MFIs will also use to target respective business support to the enterprises and the BDSPs.
One key BDS principle is to avoid burdening the youth enterprises with debt and therefore
SMECZ will discuss with SNV ways on how to improve enterprise resilience and were
possible self-reliance such as in repair and maintenance of production equipment or in
training each other in order to reduce costs and spread the spirit of social enterprise among
the youths.
• In order to spread the costs of providing BDSPs, an attempt will be made to organize group
sessions as well as utilise online communication and sharing if information with the MSMEs.
• Participating BDSPs will be selected from directory of members of SMECZ BDS Network or
sourced from other BDSPs if not available in the network
• The project will strengthen its collaboration with the line ministries in providing business
advice.
• In order to reach out to more enterprises and build up critical mass, the participatory
markets linkages will include other existing SMEs not trained by the project.

4.1 Cross Cutting Issues

Gender and mainstreaming people living with disability, decent work issues, social responsibility
as well as disaster risk reduction are key cross cutting issues that are taken into consideration
by this project.
Gender inclusion and participation of women in enterprises will be enhanced by implementing
interventions that reduce work burden and time. Examples include introducing labour saving

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devices in agriculture and manufacturing services as well as providing access to renewable
energy both at home and in her workplace.
Women and workers' rights are still issues that need to be respected in the informal sector.
Issues of child minding and proper water and sanitation in the workplace are crucial in
providing descent work for women. The same goes for those living with disabilities who can be
encouraged to participate in enterprises provided the workplace has appropriate working
environment for them.
Descent work issues and DRM are crucial for sustainability and building resilience of MSMEs.
MSMEs often risk health for short term gains by failing to adopt proper OHS measures in the
workplace. They are also not prepared to save for tomorrow when they are no longer able to
work. MSMEs also fail to plan for possible disasters that may occur and usually ignore the issues
of environmental protection. They are often affected when disasters occur especially without
and fall back measures. Typical examples are loss of assets, good and employment due to fire
out breaks at SMEs sites, government clean-up/relocation activities and other disasters such as
diseases and drought.
Social responsibility develops a culture of having concern for other people. Young people should
be encouraged to be role models by giving back to the community that has helped them. This
includes participation in crucial community development issues as well as offering to assist and
train other youths in business or social activities.

5.0 Monitoring, Evaluation and Learning (MEL)

MEL is meant to provide information and facilitate learning, gather evidence and enables
partners to quickly respond to emerging issues and in aligning activities to the project
objectives. MEL is a shared responsibility of all partners. It is not used to blame others for
failure but facilitates inter-organizational learning among partners.
A report for each activity will be written and shared with partners according to an agreed
format. Each activity report will be accompanied by the target group register, as well as digital
photos and videos. Achievements and failures will document for evaluation of progress. A
database of the enterprises desegregated gender, types of trade, and geographic location will
be maintained by SMECZ.
Regular joint monitoring activities and partner coordination meeting will enhance ownership
and sharing of experiences.
The monitoring and evaluation activities are listed in the section on project objectives below.

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6.0 Project Objectives, Indicators and Activities
Project objective: Improve recovery and productivity for at least 4000 Youth Enterprises through access to microfinance and
complementary business development services.

The expected outcomes from the action How to assess the outcomes
 Recovery and improved productivity of  Continued operation of the enterprises, improved sales and cash flow positions.
the enterprises.
 Improved job retention and • Number of young people who continue running enterprise
employment creation for the young • Number of other people employed by the youth enterprises
people running enterprises.
 Improved banking practices by • Number of youth enterprises that open bank accounts
youth/SHFs enterprises. • Loan Repayment rate.
 Improved working environment for  Changes in the business operating environment and the number of SHFs/ youth
youth MSMEs. enterprises that get workspace as a result if advocacy activities with duty
bearers.
 Number of MSMEs that comply or formalize there operations
 Improved utilization of BDS.  Increase in number of SHFs enterprises that access BDS

Means of
Result Indicator Targets
verification
Loan assessment
reports
1. Number of enterprises that 85% enterprise get loans
Output 1: Loan disbursement
successfully apply for loans 2. 65% repay loans on time
Access to micro finance facilitated. registers
Loan repayment trends.
Loan repayment
reports

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Output 2 1. Number of MSMEs access BDS BDS activity reports
Support Recovery and productive services 14000 x MSMEs Copies of business
capacity of enterprises through access 2. Number of BDSPs capacitated 20 x BDSPs plans
to BDS and participating
Means of
Result Indicator Targets
verification
BDSP Capacitation
reports
Output 3 1. Number of advocacy issues At least 3 x advocacy Advocacy reports
Strengthened enterprise awareness taken up with duty bearers issues affecting Young
and capacity to engage duty bearers on 2. Number of issues addressed by MSMEs taken up to duty
issues affecting other enterprises duty bearers bearers

Activities Targets Responsible

Output 1 Activities
1.1 Youth enterprise tripartite loan package
Tripartite partners
negotiated with interested financial Agreement with financial institutions concluded
institutions
1.2 Loan orientation training for BDSPs
20 x BDSPs equipped with loan orientation skills Financial institutions
carried out
1.3 Loan orientation training for MSMEs
14000 x enterprises participate in loan orientation trainings. Financial institutions
carried out
1.4 BDSPs assist MSMEs to write business
14000 x enterprises assisted in finalizing business plans SMECZ
plans
1.5 Financial institutions 14000 x enterprise succeed to get loans for working capital and
Financial institutions
assess loan applications equipment
4000 x enterprises succeed to get loans for working capital and
1.6 Loan disbursement and repayment Financial institutions
equipment

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Output 2 Activities
2.1 Capacitation of BDSPs by SMECZ SMECZ
2.2 Assist MSMEs to develop bankable
4000 x enterprises assisted to develop business plans SMECZ
business plans
2.3 Provide on demand BDS including
4000 x enterprises access BDS SMECZ
business advice to MSMEs
Output 3 Activities
3.1 MSMEs organized and capacitated to 1 x district association of young MSMEs per district in project
SMECZ
jointly engage duty bearers areas is functional.
Activities Targets Responsible
3.2 Facilitate stakeholder meetings and
advocacy activities in support of Youth / 4 x meetings held with stakeholders and duty bearers SMECZ
SHFs enterprises
3.3. MSMEs participate in Life skills, descent
2 sessions per district MFIs, SMECZ
work and DRM trainings
MEL Activities
1 x situational survey carried out on 4000 Youth enterprises. To
1. Youth /SHFs MSME Situational analysis find out the operational status, plans immediate plans and MFIs, SMECZ
operational environment of enterprise
Bi monthly coordination meetings held by partners to share
2. Partner coordination meetings SMECZ
progress, feedback and steer the project
An activity report will be written for each activity. The report to
3. Activity reports shared with partners include processes followed, registers of participants and SMECZ, Financial institutions
recommendations for next steps.
4. Periodic reports written and shared with Quarterly narrative and financial reports for activities that have SMECZ, Financial institutions
partners been done and an update of the outputs and targets.
1x tracer study for and agreed sample of Youth enterprises. To
5. End of year Tracer study establish the operational status, plans immediate plans and SMECZ, MFIs
operational environment of enterprises that have received

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 support under the tripartite arrangement. Database of MSMEs
updated and shared
LCB, SMECZ, Financial
6. Mid-term Evaluation 1x Mid-term Evaluation
institutions
LCB, SMECZ, Financial
7. End of Phase Evaluation 1x End line Evaluation
institutions
7.0 Proposed time frame for year 1
Activities Responsible 1 2 3 4 5 6 7 8 9 10 11 12
MEL Activities
Administrative partnership meetings MFIs, SMECZ
Situational analysis of MSMEs MFIs, SMECZ
Partner coordination meetings SMECZ
Quarterly Reports SMEZ, Financial
institutions
End of year Tracer study SMECZ, MFIs
Output 1 Activities
1.1 Youth enterprise tripartite loan package Tripartite partners
negotiated with interested financial institutions
1.2 Loan orientation training for BDSPs carried
Financial institutions
out
1.3 Loan orientation training for MSMEs carried
Financial institutions
out
1.4 BDSPs assist MSMEs to write business plans SMECZ
1.5 Financial institutions assess loan applications Financial institutions
1.6 Loan disbursement and repayment Financial institutions
Output 2 Activities
2.1 Capacitation of BDSPs SMECZ
2.2 Assist MSMEs to develop bankable business
SMECZ
plans
2.3 Provide on demand BDS including business SMECZ
advice to MSMEs

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Output 3 Activities
3.1 MSMEs organized and capacitated to jointly
SMECZ
engage duty bearers
3.2 Facilitate stakeholder
meetings and
advocacy activities in support of SHFs enterprises SMECZ

3.3. MSMEs participate in Life skills, descent work

BDSP /LCB, SMECZ
and DRM trainings

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