31 December 2020
By JAIF Management Team
The micro, small and medium enterprises (MSMEs) play a considerable role in economic integration within the ASEAN region. Although MSMEs vary in size and capacity, many micro and small enterprises (MSEs) are struggling to stay afloat due to lack of funds and resources. An effective means to address this common plight of MSEs across the region is mentoring the MSMEs which is an institutionalized capacity building program to scale-up their operations and improve their profitability and sustainability.
There existed many MSME training programs implemented by the governments, but there was no mentoring program that provided comprehensive or continuous guidance from A to Z, claims Merly M. Cruz, Senior Adviser of the Philippines Center for Entrepreneurship (PCE-Go Negosyo). Merly herself had worked on the government side as a former Undersecretary of the Regional Operations Group (MSME Development Division) of the Department of Trade and Industry (DTI), Philippines.
In 2016, the PCE teamed up with the DTI to launch the “Kapatid1 Mentor Micro-Enterprise (KMME)” Program in the Philippines, a mentorship program for MSME capacity development that incorporates Private Public Partnership (PPP). By incorporating PPP, the PCE recruited mentors from private sector while using DTI’s nationwide network. Also with the back-up from the Government, their policy can ensure sustainability of the mentorship initiative.
The “ASEAN Mentorship for Entrepreneurs Network (AMEN)” project was modeled on the KMME and was implemented from December 2018 to November 2019 for one (1) year as a pilot run in three (3) countries with the largest number of MSMEs in ASEAN namely Indonesia, Malaysia, and the Philippines proposed under the 2017 Philippines’ ASEAN Chairmanship.
The strength of AMEN project is the pool of mentors around the region and the partnership between the private sector and the Governments. In addition, unique part of the project is that instead of hiring professors from academia, there is a mechanism that can transfer knowledge more effectively by using real entrepreneurs who have hands-on experiences, she proudly expresses.
Prior to this initiative, PPP structure in Indonesia and Malaysia on any specific capacity building activity for MSMEs was not commonly observed, and it was necessary to start from creating the PPP framework between the government ministries and the private sectors. It is notable that the first steps toward achieving the formalized PPP for the AMEN were taken in Malaysia and Indonesia during the project implementation.
Under the AMEN project, 48 mentors (10 in Indonesia, 19 in Malaysia, and 19 in the Philippines) were certified through the project and 127 mentees (30 in Indonesia, 49 in Malaysia, and 48 in the Philippines) were trained.
10 AMEN Mentorship Modules were developed that includes essential topics for all MSMEs such as Entrepreneurial Mind-setting, Supply and Value Chain, Entrepreneurial Accounting & Financial Management, Human Resource & Organization Management along with other practical modules. Taxation and Business Law modules were replaced by Digitalization and Governance and Ethics modules based on the inputs from the participating countries in order to achieve universality of the modules to be used in all 10 ASEAN Member States (AMSs).
Virgilio Espeleta, who is an active mentor in the AMEN project shared his experience.
While working as a consultant based in Cebu Province for micro, small and medium businesses, he has a strong passion for mentorship. He gives practical advice to number of MSMEs on how to make family businesses flourish into national brands.
Virgilio, who was involved in the KMME program and also took part in the development of the 10 AMEN Mentorship Modules, said he was elated and grateful that the AMEN project was realized with the support of JAIF and the KMME model was scaled up to the ASEAN region.
The AMEN project that trains mentors has a ripple effect, if one mentor trains 20 to 50 mentors in a lifetime, the cost-effectiveness of investing in mentors is significant. He has witnessed numerous positive impacts in his mentees’ lives, whom he came into contact through this project.
One of his mentees, a business woman who ran a semi-order women’s apparel shop in Cebu City is now successfully expanding her branches in Manila. She herself has become a mentor for the AMEN project, raising the next generation of mentees. In addition, a man who runs a restaurant business was hit hard by the COVID-19 pandemic, but he switched to a community-based catering business combining his food menu with his wife’s homemade pastries and successfully recovered his sales from $10 a day to $ 600 a day. The steady growths of these micro-businesses lead to supporting many households and beyond.
The number of MSMEs in the whole ASEAN region is enormous. In all AMSs, MSMEs accounts for more than 90% of all the entities in the respective countries. The employment, sales, and investment generated by these MSMEs are immense. MSMEs is the key to bring the country out of recession. Mentorship is an important tool for achieving ASEAN economic integration, and it must be sustained, he claims with enthusiasm.
There are many colleagues who resonate with mentorship, but there are cases where skills and substance are lacking, and it is the 10 Modules that raises the level of such mentors to a uniform standard. The Modules include “laymanized” contents that can be put into practice immediately by the MSMEs without having to go through a full-fledged MBA course.
The AMEN project also envisions to establish an ASEAN Mentorship Institute in the future, to recruit, train and deploy mentors in the ASEAN region. The Institute will improve the quality of mentors, increase the competitiveness of MSMEs, which will lead to their growth by making mentorship sustainable and using uniform teaching materials, translated into local languages of the AMSs.
Virgilio expresses that mentoring is about benefiting the next generation. He concludes with the strong hope and passion that more people will continue to believe and support this mentorship initiative. As more MSMEs are capacitated through mentorship, further spillover effect is anticipated to press forward the development of the ASEAN economy.
Japan supports development of MSMEs especially in the area of Entrepreneurship and Human Capital Development through tailored programmes for AMSs based on ASEAN Strategic Action Plan for SME Development 2016-2025 (SAP SMED 2025). Please see our Sector Brief for more information on JAIF support for MSMEs. This project was supported by the Government of Japan through the Japan-ASEAN Integration Fund (JAIF).
1 Kapatid means “big brother” in Tagalog language representing large corporations from private sector to coach and mentor micro and small enterprises.