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Chapter 10

It would be very unfortunate if the support given to a community, group or individual applicant were to end with the presentation of the investment proposal to the financing agency. Although this may have seemed to be the final goal while formulation was underway, in reality it is just the beginning.

Between the formulation of an investment proposal and the actual launching of the project, lie many tasks that are extremely difficult for persons who have no experience in negotiating with bankers, lawyers and government officials, (either municipal or from the central government, as is the case when applying for health permits). Even when these obstacles have all been surpassed, there is still the enormous challenge of making the investment function smoothly. If the group encounters a problem after a few months of operation, where does it go for help?

A. The Importance of Support and Follow-Up

In order to achieve a successfully functioning project, it is vital that the small investors have a reliable and accessible source of support and follow-up during the preparation and start-up period The best person to provide this support is, without doubt, the same person that helped the group identify and formulate the proposal. If for some reason it is impossible for the field technician to continue with the group, he or she may be replaced by someone else, but some support should always be made available during this critical period. If it is not provided, the entire effort is at risk, because there is a good possibility that the project will never get underway as it was conceived.

Among the most important tasks to be taken care of during this period, are the following.

(a) Helping the applicants to reaffirm their commitment to the project and their participation (especially in the case of community-based projects);

(b) Accompanying the applicants in financial negotiations, the acquisition of legal permits, etc.;

(c) Support in preparing the start-up plan;

(d) Procurement or contracting of goods and services needed in the investment and their installation and supervision;

(e) Follow-up in the execution process.

Below, each of these tasks is described in detail.

B. Reaffirmation of the Commitment of the Applicants

To ensure the applicants’ full commitment to the final project, it is first of all necessary to have their active participation throughout the process, starting with identification. As the final design emerges from the formulation process, it is important to verify that the group is both capable and willing to provide its contribution as stipulated in the final design, as and when needed, be it in cash, labour or in the supply of materials. To evaluate this capacity and availability, the technician, working with the applicants, should conduct at least one meeting before presenting the final proposal to the financial agency, to explain it to the applicants and to insure that the final product reflects their intentions and interests.

He or she should conduct an additional meeting, once the formulation and evaluation process is concluded, organized by the members of the applicant group, at his request. One condition that the group must fulfil is attendance and the personal involvement of all adult members (men, and women of the participating families) in the meetings. As a result, they should develop an outline of the plan of execution, which specifies:

C. Accompanying the Applicants in Financial Negotiations and Seeking Legal Permits

The field technician, with the approval of the applicant group, should make contact with the financial institutions that collaborate in the process of investment. This could involve periodic consultations with the financing agency on the progress of the proposals in formulation, or may require only a single presentation upon completion of the detailed proposal. However, once the formulation and evaluation phase is completed, the technician is responsible for advising the applicants as to any specific administrative requisites of the financial agency. This might include, for example, attaching a variety of legal documents relating to the applicants to the investment proposal.

The financing agency may also require the applicants, or at least their selected representatives, to attend a formal meeting for the review of their application, and they should be supported at this meeting by the technician. He or she may also help by gathering information on legal aspects, or assisting them in filling out mandatory forms.

It is possible that the group may need guidance on selecting between alternative financial options.

D. Support in Preparing a Start-up Plan

Whether during the detailed formulation and evaluation phase, or during the resource procurement stage, the field technician, should assist a working group, chosen by the applicant group itself, to prepare a plan for the implementation of the project, based on the investment proposal. This plan must contain:

It is essential that the groups be provided with adequate training on the administration of funds. Among other tasks, the field technician might advise them on aspects of accounting and general administration. Alternatively, he or she might act as an intermediary in obtaining such assistance from another advisor.

Once the project is underway, the technician will normally only make periodic visits to follow up on the progress of the investment. In particular, it is important to try and identify problems before they cause serious difficulties and help the project members to obtain appropriate advice on how to deal with these problems. In this regard, it is recommended that the agency sponsoring the investment process, keep a register of specialist advisors from governmental and nongovernmental institutions to which projects with problems can turn.

Such a register of approved advisors can serve as a powerful tool, by laying down specific requirements for those who wish to offer their services. Those wishing to be listed in the register can be required, for example, to participate in RuralInvest training, and those who perform poorly can be removed from the register (this latter procedure makes it necessary for the work of each advisor to be evaluated by project members). However, the significance of the register can be even more important; having a list of approved experts will allow the sponsoring agency to leave in the hands of the applicant group the selection of the person they want, and thereby, strengthen their participation in the process.

E. Purchase and Contracting of Goods and Services

The financial agency will probably have requirements and standards for the procurement of goods and services, for example, demanding three quotes and a transparent selection process. Even if such established procedures are missing, it is important that the applicants follow a clear process of identifying, evaluating and selecting vendors and service providers. Furthermore, there must be norms for the monitoring and control of the activities carried out by the contractors, including procedures for materials control, register of advances and certification of the time dedicated to the job by the contractor and his team.

F. Follow-Up to the Implementation Process

Each agency or financing project should have its own methodology for the process of follow-up on the implementation of the investment. The important aspect is that it have a methodology. Investments that are begun without some form of follow-up will be more likely to fail, in comparison with those that receive support and advice.

In many cases, project participants will need training in accounting and in the local laws, in matters concerned with taxes, health permits, and social benefits for employees, among other things. Frequently, project managers will need training in planning, marketing and similar subjects. If the project involves the management of production processes, it is possible that there will be technical problems during the first year of operations.

There are two general models for handling this type of support. The first is to continue with the field technician or community promoter, playing the role of "family doctor"; this means that the technician visits the community or investment every month or six weeks and keeps an eye on the progress of the work. If a problem comes up, it is the responsibility of the technician to request the approval of the financial agency or the sponsor, to use specialized consulting and to select, or to help the investors to choose, the right person for the work required.

The second model, is to contract a local consulting firm, NGO or other group to take on the total responsibility for supporting the project members during a period of one or two years. With a set amount of resources available, the advisors arrange for all of the support the group needs. On a more sophisticated level, it should be possible to relate the remuneration received by the advisors to the success of the investment, although, in practice, this arrangement is not that easy.

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