In order to better meet Sri Lanka’s changing development needs, Sewalanka Foundation has formed a fully owned subsidiary called Sewalanka Enterprise Development Company (SEDCO).

Youth Corp training in Mulkirigala.

SEDCO aims to complement one of Sewalanka’s expertise areas in social mobilisation and institutional capacity building, as it focuses on providing rural enterprise development services.

The two institutions operate independently and develop their own specific skills, expertise, and institutional networks, but work together towards a common vision: economically viable, socially just, environmentally sound rural development.

Rural enterprise development: the basics

Rural enterprise development projects have been implemented in Sri Lanka since the 1980s when non-governmental organisations (NGOs) began developing entrepreneurial training programs for micro and small-scale enterprises for rural communities.

The microenterprise-based approach to rural development has made considerable contributions by increasing awareness of business opportunities in the rural sector and building up enterprise planning and management skills.

However, experience has demonstrated the difficulties for projects to prove sustainable beyond the project cycle and to alter the structural inequalities between the urban core and the rural periphery. In part, this is due to the isolation of projects from information and marketing networks. That is a lack of access to national-level consumers, investment capital, business development services, international markets and/or information on current market trends; inputs needed for dynamic growth.

Compared to other countries in the region, research has shown Sri Lanka has not developed a coherent microenterprise sector. In Thailand and India, for example, small-scale enterprises have been linked to national and even international markets through producer organisations and marketing and information networks. The development of these social networks has enabled geographically isolated rural enterprises to access new technologies, to identify opportunities for market expansion, and to respond quickly to changing market trends.
In Sri Lanka, social development and economic development are rarely integrated. Some organisations possess considerable skills in social mobilisation and institutional capacity building. Their social development programs can lead to an initial rise in awareness, collective action, and the formation of local groups, but at a certain point, if no economic benefits are evident, interest wanes and institutional capacity declines.

CEFE mobile promoting the programme in villages.

Other interested organisations have focused solely on economic development and the formation of new rural enterprises. However, if enterprise development occurs without the formation of the necessary social networks, then new enterprises can remain isolated with little economic power and limited access to credit, markets and information. As a result, when the project cycle is over and external support and funding are removed, some of the enterprises go out of business or continue to operate at a very low level.

Why a separate organisation?

The formation of SEDCO enables Sewalanka and SEDCO to each focus on developing their specialised skill sets. As Sewalanka’s experience shows that different skills are required at different stages of a community’s social and economic empowerment process. A social mobiliser may not have the necessary marketing skills, and an accountant may not be familiar with the dynamics involved in mobilising a community. Ideally, the integration of these activities will ensure that:

–	groups see an economic benefit in collective action
–	enterprise development occurs in the context of a broader social network

These two goals are important as enterprise development can provide economic support for the community network, and the community network provides a safety structure in adverse market conditions

SEDCO’s business approach

SECDO provides complete assistance for the business cycle. A number of certified GTZ/CEFE (Competency-Based Economies through the formation of Enterprises) and ILO/SIYB (Start and Improve Your Business) trainers are available to assist rural entrepreneurs with the start-up process. SEDCO also fosters long-term growth, by offering a full range of business support services, including management and financial consulting, assistance with processing, packaging, labeling, and certification procedures, credit and investment services, and market linkages.

SEDCO’s target group includes potential entrepreneurs, established enterprises, and organised groups (community-based organisations, farmers’ organisations, fisheries cooperative societies, etc.). SEDCO also provides enterprise development and consulting services on a contract basis to other development institutions.

Rather than trying to copy urban industrial development, SEDCO builds on existing strengths in the rural economy. Support services are particularly directed towards the agriculture and fisheries sectors, handicraft development, and ecotourism services. Special attention is given to activities that capture more value for producers in rural communities (processing, packaging, organic certification, etc.) or shorten the supply chain (direct marketing, local and international fair trade networks, etc.).

SEDCO aims not to create more rural mudalalis or make it easier for large corporations to extract resources from the rural sector but to facilitate broad-based economic growth and structural change in rural Sri Lanka.

SEDCO office is near Sewalanka Head Office at 46/5 Dehiwala Road, Boralesgamuwa, Sri Lanka

>> For further information on SEDCO activities please contact:
SEDCO office on +94 (0)11 254 5688 or visit www.sedcolanka.org