Landell Mills was contracted to design and implement the Afghanistan Business Innovation Challenge Fund (ABIF). ABIF was part of DfID Afghanistan's Supporting Employment and Enterprise Development (SEED) umbrella programme (2009-2013). ABIF was designed using the Making Markets Work for the Poor approach (M4P) and uses a challenge fund cost/risk sharing mechanism to implement the M4P conceptual framework.
The key objective was to enhance competitiveness of Afghan businesses through stimulating systemic change in markets where large numbers of poor people are present. ABIF focused on building the capacity of service markets, allowing the private sector to make money out of delivering developmental objectives with an impact at scale.
Landell Mills carried out market analysis of various sectors in Afghanistan, analysing which sectors have the highest proportion of poor people as both consumers and producers, and out of these sectors which have the most potential for pro-poor growth. Major constraints and blockages throughout each value chain were analysed and 'themes' were developed for each round of the challenge fund.
Results achieved were as follows:
Successfully implemented a pilot challenge grant fund within an M4P framework in a conflict/post-conflict environmentIntroduced an innovative, risk-adjusted challenge fund model that provided objective rationale for the effective and efficient provision of public sector grant money to the private sectorAwarded twenty-three grants from a pool of over 500 investment concept applicationsExceeded targets indicated in the business case for number of private sector actors supportedIncentivised and facilitated full implementation of eighteen projects Over 280,000 consumers, workers and producers experienced better value for money and/or improved income opportunities as a result of ABIF support to investment projectsExhibited a successful model for how development interventions can effectively deliver sustainable economic benefits into rural Afghanistan despite security challengesImplemented a highly successful post-grant support programme, which substantially impacted grantees' efficiency, capacity and the future sustainability of their investments while leveraging additional private sector fundsEstablished value-adding monthly financial reporting system whereby grantees could better manage the finances of their projects and provide ABIF with outcome data related to implementation of their investment projectsManaged a third-party monitoring and verification subcontract, which provided strong evidence for the quality of ABIF's reported outcome and impact data.
Projects for support were chosen in the following sectors:
Livestock;Agriculture/ Horticulture (dried fruits, vegetables etc.);Carpets;Small-scale mining;Furniture/ carpentry;Pharmaceutical/ Healthcare services
Examples of investments include support to the following agri-businesses:
Sanziada, an agri-processing company in northern Afghanistan, which purchases cotton seeds from farmers for conversion into cooking oil. With support from ABIF the company is investing in modern bottling and packaging equipment, and in a contract farming scheme whereby the company is training farmers in improved techniques and providing inputs, in return for a guaranteed market. Over 10,000 farmers will be involved, while the oil will be able to compete with imported oils on the market (i.e. import substitution)Trio Ltd, which, with is setting up a commercial nursery of high-yield fruit tree rootstock and saplings (including pear, apple, peach, apricot and figs), coupled with embedded professional cultivation training services through the retail network that it uses for distributing the saplings to farmers throughout Afghanistan. Trio has already sold 50,000 saplings with another 100,000 saplings ready for sale. As well as Trio's own investment to the project ($500,000 plus $300,000 of ABIF grant), it is expected that farmers themselves will invest $1.5m to increase their fruit production capacity over the next four years.Herati Cashmere and Skin Processing Company (HCS) has set-up, with ABIF support, a second line of cashmere dehairing processing equipment. As part of the investment, HCS partners with an NGO to provide training to goat herders on how to better produce, analyse and harvest the raw wool, and have also set-up cashmere collection centres in rural areas, which enable remote cashmere producers to access markets.