A Microenterprise Training Guide 

for Peace Corps Volunteers

MODULE 

4 

Non-financial Business

Development Services

Sheep, Poultry 

Egg Production,

and Other

Agribusiness 

A Microenterprise Training Guide for Peace Corps Volunteers 

MODULE 4 

NONFINANCIAL BUSINESS 

DEVELOPMENT SERVICES 

A VOLUNTEER’S STORY 

A Peace Corps Volunteer in Nicaragua obtained a Small Project

Assistance (SPA) grant to finance a microentrepreneur woodcarving 

artisan project. The Volunteer was responsible for contracting the 

instructors, purchasing equipment, and inventory control. Over a sixmonth period, 20 youths ages 12-20 were selected and given training 

in how to design and carve marketable wood products. After

acquiring this new skill, they then received classes in marketing,

price setting, customer service, and basic accounting. Having 

obtained a marketable skill as well as the ability to create and 

promote their products, the group has begun to exhibit and sell their

products at fairs on the local and national level. 

* * * * * * * * * 

As a Peace Corps business Volunteer, chances are you will be assigned to an

organization whose mission includes delivering nonfinancial business 

development services (BDS) to those who are disadvantaged in society: the poor, 

women, minorities, or at-risk youth. For some organizations, this is their primary

mission, and for others, like microfinancial institutions (MFIs), women’s groups, 

or youth empowerment organizations, BDS is a secondary mission. This module

contains background information for all Volunteers who plan to share their 

understanding of business with microenterprise owners/managers and potential 

business owners. Module 4, “Nonfinancial Business Development Services,” 

presents an overview of BDS, discusses two current BDS debates, and looks at

good practices and innovations to increase the impact of BDS. Note: We use the 

term owner/manager because in nearly all small and microbusinesses the owner 

acts as the manager. 

By the time you complete the readings and activities in this module you should

have the knowledge, skills, and attitudes to be able to: 

• Explain how your personal knowledge and skills might assist an MFI in

providing its clients with nonfinancial services. 

• Articulate the major points of the “Minimalist vs. Credit Plus” and “Income 

Generators vs. Entrepreneurs” debates.

• Describe at least five activities that you feel would benefit actual or

potential microenterprise owners/managers in your host community, and 

give reasons why these activities would be beneficial. 

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• Write a one-page report or give a five-minute talk detailing how your

business sector project plan does or does not implement good BDS

practices. 

• Provide two reasons why subsector interventions is a promising innovation

and another two reasons why transferring BDS services to the public sector 

is a promising innovation.

• Demonstrate your ability to deliver nonfinancial training appropriate for 

solidarity groups in your host country.

* * * * * * * * * 

A LEARNING MOMENT

Food for Thought

Cigarettes and soft drinks are available in just about every

village. Clean water, primary education, or health services are 

not. Why is it that so many nonessential or even harmful 

products are so effectively distributed to every community that 

can afford them, and to many that cannot, while the things 

people really need are so often difficult to get, or not available 

at all? 

What can be learned from the above observation relative to 

microenterprise development, community development, and 

capacity building? Find a time to discuss this question with 

fellow trainees, Peace Corps trainers, and staff. 

* * * * * * * * * 

WHAT ARE NONFINANCIAL BUSINESS 

DEVELOPMENT SERVICES? 

Microenterprises exist in a broad market environment in which demand for their 

products is influenced by numerous factors related to consumer tastes, 

purchasing power, trade conditions, and politics. These can be classified

generally as “demand-side” factors. A microenterprise’s performance is also

affected by factors such as technical and management skills, networks, access to

resources, and information availability. Most interventions, including those of

Volunteers, are focused on improving the supply-side. Some, however, such as

international trade agreements and alternative trade organizations, focus on

changing the demand-side. 

The starting point in considering the design of any BDS intervention is the 

assessment of the needs and perceptions of microenterprise owners/managers.

Needs change depending on the particular circumstances of a business.

Typically, the pattern of needs varies according to factors such as business

sector, location, sex of owner/manager, and stage of development. Needs are not 

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static; they change throughout a business development cycle. The range of

possibilities is vast, and it is dangerous to overgeneralize about the nature of

these BDS needs. There are felt or perceived needs, which reflect the 

owner’s/manager’s analysis of his or her situation, and there are objective, real, 

or logical needs that BDS practitioners believe to be the needs of

microbusinesses. Good BDS practice calls for being as precise as possible in

analyzing needs. 

It is clearly not the case that microenterprise owners/managers always know

what is in their best interest. They do not have perfect knowledge of all the 

factors pertaining to their business (e.g., marketing opportunities, business

management practices, or technology trends). Development strategies based on

an external analysis of a microenterprise situation may well educate the 

owner/manager on the potential benefits of a suggested course of action. 

The most reliable measure of the perceived value of a BDS—demand—is the 

willingness to pay for the service. Most in the BDS community believe recipients 

of BDS are able to and should pay at least a portion of the service cost. Demanddriven services tend to be better accepted by microenterprise owners/managers,

and demand tends to eliminate unneeded BDS. 

The following is a list of BDS; it is quite long and not all-inclusive. An

individual microenterprise probably would “demand” only a few of these 

services. 

Business management training Entrepreneurship training 

On-site technical assistance Marketing links between 

Mentoring buyer and seller 

Input access (raw materials, New product development and 

 products for resale) testing

Trade fair organization Market research and information

Assistance with buying and selling Subsector research and 

 products information

Information on taxing and regulations Quality control of products 

Training in other areas (e.g., Subsector interventions

 leadership) Assistance with business 

 licensing

Most studies of the microenterprise sector stress the importance of nonfinancial 

constraints on growth and profitability. For many, or even most, 

microentrepreneurs, weak business management and access to markets are the 

most serious barriers to growth rather than lack of finance (Microenterprise 

Development Policy Paper, U.S. Agency for International Development. 

Washington, DC. 1005. p. 33). Peace Corps business Volunteers confirm that 

these two constraints are the main concerns of the microenterprise 

owners/managers they work with. 

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ACTIVITY 4:1 

A BDS SESSION PLAN PORTFOLIO

BDS trainings are a typical activity of Volunteers and their Counterparts.

Training is an ideal time to develop a portfolio of training sessions to have

available when you arrive at your site. 

Steps in developing training sessions:

• Identify and make a list of the most common training needs of

microenterprise owners/managers and potential business owners in your host

country.

• Each training participant or pair of training participants selects a topic of

interest and prepares a training session appropriate for microbusiness

people. The sessions should not be longer than one hour. Keep them

participative—learning is not a spectator sport—and use adult learning

methods. Materials listed in the Resources section at the end of this module 

contain examples of BDS trainings. Almost always, training sessions need to 

be adapted to the local situation. 

• Present the sessions to a pilot group of participants and obtain feedback on

the sessions—what was most useful, how might the session be improved,

and were there elements of the session that were not culturally sensitive or

did not fit the local business environment. 

• Rewrite session plans including changes based on pilot feedback, make

photocopies, and share with fellow trainees. If possible, provide copies of

session plans in the local language.

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TWO BDS DEBATES 

Microenterprise industry stakeholders agree: 

1. The poor need access to credit; 

2. Even more than credit, they need a safe place to accumulate savings; 

and 

3. They need education and health services. 

Stakeholders are still debating: 

1. Which target group, income generators or entrepreneurs, should benefit 

from limited BDS resources?

2. Can and should MFIs provide nonfinancial BDS? 

INCOME GENERATORS VS. ENTREPRENEURS

Is the most effective strategy for poverty alleviation helping numerous 

microenterprises or concentrating efforts on encouraging a few entrepreneurs

with good ideas and the knowledge, skills, and drive to grow their businesses? 

Without doubt, BDS need to be available to micro- and small businesses with

high potential for growth. Developing economies need job growth, and there are 

workers who do not want to own their own businesses or are not

temperamentally suited to self-employment. 

The vast majority of microenterprises are one-person operations or consist of the 

owner and his or her family. They are subsistence activities, formed out of

necessity to generate income. Most low-income microenterprise owners in

developing countries live and work in high-risk environments and seek,

therefore, to minimize risk. Because the owners often try to avoid risk and secure 

their livelihoods rather than to take risk and expand their activities, their 

economic activities often are not thought to have growth potential. If there is 

little potential for growth, does it make economic sense to put resources into

these tiny businesses? Are funds better spent on a few entrepreneurial individuals 

whose enterprises have the potential to grow and create jobs? 

Studies by the Harvard Institute for International Development and the United

Nations Development Fund for Women suggest that in avoiding risk and

overcoming constraints, many of these low-income microenterprise owners are 

quite innovative and entrepreneurial. If the risks and constraints they face are 

minimized, their economic activities can grow. “What organizations working

with low-income women have shown is that often women’s ‘subsistence

activities’ are viable and can be transformed into sustainable enterprises capable 

of generating surplus income.” (Beyond Credit: A Subsector Approach to

Promoting Women’s Enterprises, Martha Alter Chen (Ed.), published by Aga 

Khan Foundation, Canada, 1996. p. 4.) This may be true of male-operated 

microenterprises as well. 

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If you restrict analysis of the question, “Which target group, income generators

or entrepreneurs, should benefit from limited BDS resources?” to the largest 

return for funds spent, spending would be limited to entrepreneurial firms with a 

high growth potential. However, even though few microenterprises will grow

into small or medium-sized operations, most development organizations, 

including the Peace Corps, favor supplying BDS to microbusinesses with a lower 

likelihood for growth. The next question is how can this be done economically. 

Later in the module, we discuss two innovative ideas that have surfaced—

subsector interventions and providing BDS through the private marketplace. 

SHOULD AND CAN MFIs AFFORD TO DELIVER BDS? 

The first three modules of this series, A Microenterprise Training Guide for

Peace Corps Volunteers, highlighted the value of microfinancial services, the 

structures of organizations providing these services, and the impact credit and 

savings services have on the lives of people. A theme was the desirability of

microfinancial institutions (MFIs) achieving sustainability in order to continue

providing clients with financial services. This has proven more difficult than

originally thought. 

The field of microenterprise development has long been divided by a debate

over whether microenterprise programs should provide only financial services

(the “minimalist” approach) or also provide nonfinancial services (the “credit 

plus” approach). Perhaps a better name would be the “financial services plus” 

approach. There is a broad consensus that the provision of credit should be

accompanied by a provision for savings (financial services = credit + savings). 

Incorporating a savings component with credit benefits both the client and the 

MFI. Client savings expand the amount of money available for lending and

reduce the MFI’s cost of capital. Savings programs encourage clients to 

accumulate assets as a cushion for emergencies or to invest in their businesses. 

Today, the debate continues over whether an MFI’s financial services should be 

supplemented by nonfinancial services. It takes only one visit to a poor rural

village or urban slum to know nonfinancial services are needed. Many

international, national, and local relief and development organizations are 

dedicated to the delivery of nonfinancial services. Unfortunately, the number of

poor and their needs exceed the capacity of these organizations. The most

common of these nonfinancial services are business development services

(BDS)—management training, technical assistance in production, or service 

delivery. Health education and health services are a second category of services

often offered to the same target group as microcredit, and, to a lesser extent, 

numeracy and/or literacy training. The additional costs of providing these 

nonfinancial services make it even more difficult for an MFI to become

sustainable. 

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There are at least three reasons why MFIs are well positioned to provide nonfinancial services. 

1. MFIs are already committed to improving the economic well-being of their 

clients through providing financial services. 

2. MFIs have established networks of fieldworkers who are in regular contact

with the poor who could benefit from nonfinancial services. 

3. Target populations, through the efforts of the MFIs’ fieldworkers, are

already organized into functioning groups (solidarity groups and/or village

banks).

Piggybacking nonfinancial services on financial services seems logical. The 

same disadvantaged group that needs credit and savings services also benefits

from literacy and numeracy lessons, exposure to improved health practices, and

BDS. Why not offer health, education, or business management training when

people are taking out or repaying loans or depositing savings. Do MFIs have the

skills to deliver nonfinancial services? While there are several reasons why MFIs 

are well positioned to deliver nonfinancial services, there are other reasons why

they are not. 

1. Field agents/promoters do not have the expertise to deliver the additional 

trainings, and require technical training in the nonfinancial services. 

2. Group members come because they want financial services; they may not 

have the need, interest, or time for “add-ons.” 

3. There is an “opportunity cost” for the MFI; when field agents are providing

nonfinancial services the income they would generate providing financial 

services is lost. 

4. Hiring additional employees to deliver nonfinancial training increases 

employee and transportation costs. 

The bottom line of the MFIs is impacted in two ways. Costs increase to hire 

additional staff or to train existing staff, and revenues drop when field agents’

time is taken up with health, education, or BDS training. 

Grameen Bank and some of the other large MFIs have sufficient customer 

volume and self-generated low-cost capital to provide nonfinancial services. The 

Grameen Bank serves severely impoverished, mainly illiterate people. In

addition to microfinance they carry out a range of projects, such as promotion of

informal village schools, distribution of seeds and seedlings, and special projects 

such as fisheries and textile production. 

Actuar Bogotá is a private, nonprofit corporation founded in 1988 in Bogotá, 

Colombia, and affiliated with ACCION International. Actuar places relative 

importance on business and technical training, and has established a Basic 

Service Center, a wholesale depot at which borrowers can purchase inventory

and raw materials at lower prices—and more conveniently—than they can

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elsewhere. Plans include offering health care insurance. (These two examples are 

from What Makes Them Tick? Exploring the Anatomy of Major Microenterprise 

Finance Organizations. Elisabeth Rhyne and Linda S. Rotblatt, ACCION 

International, Cambridge, MA, 1997. p. 6.) 

Freedom from Hunger’s mission is expressed in the organization’s name. Their

microfinance strategy is called credit with education. The strategy uses village

banking combined with low-cost informal education to help women build their 

productive assets, accumulate savings, improve self-confidence, and improve 

basic business and family survival skills. 

Freedom from Hunger is a large international development organization.

Microfinance services are a vehicle to achieve the organization’s mission. Credit 

for them is a means—› to generate income —› to provide basic nutrition for 

families. They provide group-based poverty-lending integrated with simple, 

relevant, high-impact learning in better business management, health and

nutrition improvement, and family planning—delivered at substantially the same

cost as village banking programs without education. They do this through use of

well-developed, time-efficient education materials and cost-effective 

management systems. Freedom from Hunger believes business management

training increases the profitability of client’s business. Child health, nutrition,

and reproductive health information contribute to achieving “freedom from

hunger.”

The Grameen Bank is a long-established MFI, which has accumulated a loan

fund that exceeds the needs of its clients. The bank has excess funds, which can

be used to provide additional services. Newer, less well-established MFIs are not 

in as enviable a financial position. Actuar’s wholesale depot is an example of

clients paying for additional services; it is self-supporting. Freedom from Hunger

views services in addition to savings and credit as their priority and has 

structured their programs accordingly. These are three examples of successfully

providing more than just financial services. 

Although a few of the most successful MFIs have succeeded in self-financing 

nonfinancial services, the vast majority of MFIs have been forced to look for 

subsidies, find other organizations to deliver the nonfinancial services, or

deprive their financial clients of the additional, though often needed, services. 

However, most MFIs find they are unable to add services and achieve selfsufficiency. What are the alternatives? Since the skills to manage a financial 

institution are specialized and the provision of multiple services complicates 

operations, there is some agreement that it makes sense to separate the financial 

operations from the management and delivery of nonfinancial services. This is

done by:

• Separating the microfinance operations from other NGO activities, and, if

possible, operating as a separate legal entity. 

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• Operating the microfinance division as a “profit center” with specialized 

staff and management qualified to address the issues unique to 

microfinance, and fundraising separately to finance another division of the 

NGO, a “cost center,” responsible for delivering the additional services. 

• Charging fees to the clients who want the additional services. In some cases 

this is possible, but in most cases, the client cannot justify paying the fees 

based on an increase in income or immediate benefits. Even if the benefits

are in the future, should clients be willing to pay if the service is valuable?

Perhaps they are willing to pay, but with their time rather than with money.

If the time they spend receiving these services is time they would have used 

generating income, they are incurring an opportunity cost. This may be a 

high price for those who are struggling to earn enough just to survive.

 • Partnering with other NGOs whose mission is to deliver these services. They

would be given access to those lending group members who want their 

services. Assuming there are appropriate partners, both NGOs would

benefit. The MFI members gain access to additional services, and the 

service NGO gains access to pre-formed, motivated groups. 

* * * * * * * * * 

A LEARNING MOMENT

As you move about your host community—shopping with your 

host mom, attending a sporting event, doing your daily

walk/run—take time to meet and talk with the microbusiness 

people you encounter. They are interesting, creative people. 

Learn about their businesses. Ask them in an appreciative

way, “What are the constraints that keep your business from 

growing or becoming more profitable?” 

Later, share experiences with other training participants and 

your Peace Corps trainers. 

* * * * * * * * * 

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ACTIVITY 4:2 

MIND MAPPING BDS INTERVENTIONS FOR A 

MICROENTERPRISE 

You can explore the territory appropriate to many topics, including BDS, using

mind mapping. Start with a central image or word and order your thoughts by

radiating them out from this, printing key words on the lines or in boxes, circles, 

or other shapes. Show relative importance by the size of your writing or images, 

and by the thickness of your lines. It does not matter if you cannot draw, but try

to make it as creative and attractive as you can—use of color helps. Mind maps

help you to clarify, order, and summarize your thoughts. They can also serve as a

tool for communicating your ideas to others.

Pick a local microenterprise you are familiar with and use a “mind map” to

identify business development services you feel would benefit this business. The 

Learning Moment above may provide information on a business you want to use

to illustrate mind mapping. Use larger shapes, etc., to emphasize importance and

lines to show connections. Be as specific as you can on details of proposed BDS

interventions. Draw this diagram on a blank piece of paper. Or, use flip charts to 

share your ideas with others in your training group. 

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INNOVATIVE BDS APPROACHES

SUBSECTOR METHODS 

A mass-marketing approach has been instrumental in delivering microfinancial 

services to millions of individuals. Microloans and savings programs adapt more 

easily to mass delivery systems than BDS. These financial services are more 

generic-type services than the mixture of BDS required by diverse 

microbusinesses. 

However, one innovative BDS approach has been successful in working with

large numbers of similar microenterprises and levering their BDS resources. The 

subsector strategy holds that microenterprises in the same subsector or trade face 

constraints and issues that are common to them and distinct from other sectors.

Interventions that focus on overcoming these specific constraints are more likely

to have a significant effect than those that are more generic. A subsector is a 

vertically integrated group of enterprises (both large and small) that are 

concerned with the same product group. 

Manuals on the subsector approach list a number of key steps and thoughts to

consider in implementing the strategy (see the Resources section at the end of the 

module). These key steps can and should be undertaken in a participatory

manner, which stresses a target group’s own analysis and development of ideas

for interventions rather than that of an external catalyst. 

SUBSECTOR ANALYSIS IS THE FIRST STEP

Choice of subsector. Is this a subsector in which large numbers of

microenterprises are concentrated? What is important, interesting, or promising

about the subsector? 

Introduction to subsector. What does your target group have to say about the 

operations, technologies, participants, and links within the sector?

Subsector map. What are the main operations or functions, participants, 

technologies, distribution or marketing systems, product flows, production

relationships, or other important characteristics of the subsector?

Working environment. How does the regulatory and institutional environment 

affect enterprises in the subsector?

Dynamics within the subsector. What are the driving forces within the 

subsector and how do these interact? What are the constraints and opportunities

with regard to market demand, technological change, profitability of different

niches, barriers to entry, input supply, etc.? What are the common perceptions of

constraints, and do these reflect actual constraints?

Subsector strategies and points of leverage. What are the main interventions

planned? What interventions can influence large numbers of people? What types

of institutional infrastructure, services, and skills are proposed?

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IMPLEMENTING INITIAL INTERVENTIONS IS THE NEXT STEP 

Subsector analysis, in and of itself, is only a study and will have little, if any,

impact on microenterprises unless it is followed by actual implementation of

activities. 

Subsector constraints and opportunities can be addressed using a variety of

services and approaches. These include: 

• Promoting economies of scale by

— Joint procurement 

— Joint production for large contracts 

— Cost sharing of expensive facilities and machinery

• Advocating for improved regulatory environment

• Developing trade standards

— Financial ratios 

— Quality control standards 

• Developing new technology and products 

• Developing and implementing plans for specific business activities 

• Developing domestic and export markets

 • Providing training in business skills and technical assistance 

— Financial management

— Production of records that demonstrate credit worthiness

— Marketing, quality control, organization development 

(Adapted with permission from The Subsector/Trade Group Method: A 

Demand-Driven Approach to Nonfinancial Assistance for Micro and Small

Enterprises Frank Lusby, U.S. Agency for International Development, the 

GEMINI project, Arlington, VA, 1995.) 

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A few examples may illustrate the relationship between subsector constraints and

opportunities identified in a subsector analysis and possible interventions. 

Furniture Building Subsector

Subsector Constraints and 

Opportunities

Possible Subsector Interventions

Higher prices are paid by individual

microenterprises for raw materials 

Support trade associations to make

joint purchases of wood 

Lack of access to upscale markets Facilitate links with buyers and

designers in market centers

Inefficient and poor quality cutting of

wood 

Help owners develop plans for 

purchase of power tools

Train to upgrade skills to produce to

design specifications

Subsector interventions are only effective to the extent that there are local 

implementing organizations with the skills, knowledge, and resources to alleviate 

subsector constraints and take advantage of subsector opportunities. 

IDENTIFICATION OF ADDITIONAL CONSTRAINTS

AND OPPORTUNITIES

As you become better acquainted with a subsector, new constraints are apt to 

emerge and new opportunities will be identified. Address them with our clients

by designing and implementing new interventions or modifying existing ones.

Subsector methods are applicable only when a significant number of similar 

microenterprises exist in close enough proximity to benefit from common 

interventions. Are there appropriate subsectors in the area where you will be

serving as a Volunteer? The following activity may help you identify some

potential subsectors.

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ACTIVITY 4:3 

SUBSECTOR TARGETING

Divide your training group into three teams. Each team chooses a separate 

subsector and assesses the potential for subsector interventions based on the 

criteria shown in the table below. This presentation of subsector targeting is 

simplified here. In reality, a more careful study should be made before committing

resources to a particular subsector. Gather as much information as is feasible given

your training limitations, and then mark each criterion with a 1, 2, or 3 for high,

medium, or low potential. 

TARGETING A SUBSECTOR

Criteria Subsector

A_______ 

Subsector

B_______ 

Subsector

C ______ 

Number of microenterprises in the 

subsector within a short distance of one 

another: 

<10 low, 10–20 medium, >20 high ________ ________ ________ 

Potential for growth ________ ________ ________ 

Potential for employment opportunities ________ ________ ________ 

Potential for links with other 

microenterprises ________ ________ ________ 

Participation of women or disadvantaged

groups ________ ________ ________ 

Established markets available for 

products and services ________ ________ ________ 

Value-added potential 

(sales price minus costs) ________ ________ ________ 

Other criteria? 

_______________________________ 

_______________________________ ________ ________ _______ 

TOTAL POINTS ________ ________ ________ 

Compare results with others in your training group. Is there a subsector that 

appears to have a high potential for successful subsector interventions? 

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PRIVATIZATION OF BDS

The last few years have witnessed a significant change in prevailing views on

BDS. Development of private markets for delivering BDS has emerged as a 

priority area of interest. Yet, despite this substantial level of interest, there is 

comparatively little experience with market-development interventions to date. 

Market-development interventions are aimed at the development of “vibrant and 

competitive (primarily) private sector markets of relevant, differentiated services 

consumed by a broad range and significant proportion of microenterprises.” If

microenterprises see the need and are willing to pay for BDS then there is a 

“demand,” and the opportunity for other firms to meet this demand. 

In some instances, suppliers are building some BDS into product use. For 

example, a varnish distributor teaches furniture makers how to use the varnish so

they will be satisfied with the product and continue to purchase it. In other cases, 

the buyers of products are providing design and quality control standards. In the 

crafts industry, for example, craft buyers often offer advice on product 

development that benefits the micro-craftsperson as well as the buyer. 

Development workers are shifting some of their efforts to facilitate and promote 

BDS that are built into business links. 

Other development organizations are sponsoring projects to identify and assist

businesses that are privately providing BDS. For example, vouchers have been

offered to microenterprise owners to offset part of the cost of attending a private 

training. As markets for BDS become more organized, the opportunities for 

private providers is likely to increase. 

For sustainability of providing services, reaching large numbers of

microenterprises, and cost-effectiveness, privatization of BDS seems promising.

Still to be determined is if this approach will reach rural microenterprises or

those who may need and want but can afford to pay only a small amount for the 

BDS.

GOOD BDS PRACTICES 

Good BDS practices refer to approaches that deliver the most beneficial

outcomes. It would be simple to state that good BDS practices result in a 

microenterprise increasing its profit. However, because in many cases

microenterprises exist in competitive markets, the profit increase in one 

microenterprise may be at the expense of a competitor. BDS impact can take

place not only at the enterprise level, but also at the community and, possibly,

national level. So, in looking at good BDS practices we need to consider the 

improvement in a microenterprise market, not just one microbusiness. Case

studies and microenterprise literature suggest that the following are desirable

principles of nonfinancial assistance: 

Concentrates support on established enterprises, rather than attempting to

create new enterprises.

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• Cost recovery or partial recovery serves two functions: covering, or partially

covering, the cost of services and as an indicator of the value clients place 

on the services. 

• Microentrepreneurs are engaged in all phases of the design, execution, and 

monitoring and evaluation of nonfinancial assistance. 

• Training is simple and builds on existing knowledge of microenterprise

needs, keeping in mind that most microentrepreneurs acquire their skills 

informally. 

• Clients are organized into groups or associations, particularly according to 

trade group, thus reducing the unit costs of reaching them. 

• Assistance focuses on a “single missing ingredient” rather than addressing

multiple constraints. 

• Targeted to address the needs of particular industries or subsectors, rather 

than treat all microenterprises alike. 

• Investigates local market opportunities first; typically, there are fewer 

obstacles than in export markets. 

Volunteers are most often involved in BDS group trainings and in counseling 

individual microenterprise owners/managers. In this module, we have looked at 

the general field of BDS and given you an opportunity to develop BDS training

sessions. Module 5, “Business Counselor and Extensionist,” explores techniques

and methods for working one-on-one with microbusiness owners/managers and 

potential owners. 

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ACTIVITY 4:4 

MICROENTERPRISE ATTITUDE SURVEY

How have your attitudes about microenterprise changed since you started

learning about the field of microenterprise? To find out, take the attitude survey

below and compare your answers with the answers you gave when you first took

the survey in Module 1, “Microfinance—An Effective Poverty-Reduction

Strategy.” (The consensus answers of MFI practitioners from 15 countries given

at the New Hampshire College Microfinance Institute in June 1999 can be found

at the end of this module.) 

Attitude Survey

1. It is impossible to evaluate our work in enterprise development for the poor 

in terms of financial costs and benefits; human development cannot be

valued in dollars. 

Agree / Don’t Know / Disagree 

2. The best way to help poor people increase their incomes is to help a few

people, who may not themselves be poor, to develop enterprises that will 

employ the poor. 

Agree / Don’t Know / Disagree 

3. Poor people are unlikely to have their own good business ideas; MFIs must

help them by giving them ideas. 

Agree/ Don’t Know / Disagree 

4. Loans for poor people’s businesses must be at lower than market interest

rates or interest free. 

Agree / Don’t Know / Disagree 

5. MFIs, usually indigenous NGOs that are direct providers of credit and

savings services, should charge the poor for enterprise development

services, so that the MFIs themselves can become self-sustaining.

Agree / Don’t Know / Disagree 

6. MFIs should always encourage poor people to start group- or communityowned enterprises rather than individual businesses. 

Agree / Don’t Know / Disagree 

Continued 

Module 4: Nonfinancial Business Development Services Page 117 
A Microenterprise Training Guide for Peace Corps Volunteers 

Activity 4:4, continued 

7. It is better to give grants to the poor to help them develop enterprises than to

make loans to the poor. 

Agree / Don’t know / Disagree

8. If we do make loans to the poor for enterprise development, we cannot

expect them to repay them on time; we must be lenient. 

Agree / Don’t know / Disagree

9. Women are better at microenterprise than men; they reinvest the profits, or 

spend them on their families, and they repay loans better. 

Agree / Don’t know / Disagree

10. Most poor people do not need training to enable them to start a business; all

they need is access to finance. 

Agree / Don’t Know / Disagree 

(This attitude survey is adapted with permission from Empowerment Through 

Enterprise, by Malcolm Harper, published by Intermediate Technology

Publications, 1996.) 

After taking the survey, discuss the issues with your fellow training participants 

and trainers. 

• Which of your answers have changed?

• Can you cite observations, experiences, or examples in your host country

that support your attitude?

• Are you and your fellow training participants and the Peace Corps

programming and training staff in agreement on all the questions? If not, it 

is not surprising. As you read in “Two BDS Debates” in this module, the 

microenterprise industry has not yet reached agreement on some of these 

issues. 

Survey items 4, 7, 8, and 9 were discussed in previous modules; items 2, 3, 5, 6, 

and 10 are discussed in this module. Some insights into how to determine human

capacity building (item 1: It is impossible to evaluate the impact of business 

development services; human development cannot be valued in dollars) are 

contained in Module 5, “Business Counselor and Extensionist.” You should also

discuss this item in conjunction with the monitoring and evaluation of your

business sector project plan. Using local business project plan objectives, can

you determine how to measure human capacity development? 

Module 4: Nonfinancial Business Development Services Page 118 
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KEY TERMS

Key terms are defined as they are used in the module. A space is provided to

write the local translation of the word or phrase. Work with your language

teachers to find the right translations and build your vocabulary as you study this

module. 

Business Development Services (BDS) are services such as training,

technology transfer, marketing assistance, business advice, mentoring, and 

subsector analysis, which are aimed at helping small entrepreneurs and 

microentrepreneurs, improve the performance of their businesses.

Demand implies a felt need plus a willingness to pay for a particular good or 

service. 

Efficiency is concerned chiefly with the delivery of a BDS intervention and the 

rate and cost at which inputs are turned into outputs. 

Effectiveness measures the extent to which a BDS intervention’s objectives have

been met, including a comparison of impacts with costs. Assuming that these 

objectives are related to general development goals, effectiveness is also a 

measure of development relevance. 

Opportunity cost is the economic benefit that is sacrificed when an activity is 

eliminated as a result of choosing another activity. 

Outreach is the quantitative scale of a program’s influence—number of people, 

enterprises, etc., reached by a BDS intervention.

Subsector is a network of workers and enterprises involved in the production

and distribution of a given good or service. 

Sustainability can be seen at two levels: (1) the extent to which the BDS can be

financed through client fees, and (2) the extent to which changes in

microenterprises are durable. 

* * * * * * * * * 

Module 4: Nonfinancial Business Development Services Page 119 
A Microenterprise Training Guide for Peace Corps Volunteers 

RESOURCES 

These resources are available from the Peace Corps Information Collection and 

Exchange (ICE). The citations are presented as they appear in The Whole ICE 

Catalog. 

Accounting for the Micro Business: A Teaching Manual. Michael 

Ronan/PCV Colombia. (Peace Corps ICE.) 1975. 105 pp. (ICE No. 

R0023B) 

A teaching manual to help small business entrepreneurs learn basic 

accounting. Lessons explain the nature and objectives of such

fundamental business practices as balance sheets, profit and loss

statements, credit books, cash books, and transactions, among others. 

Designed for one-to-one or small group teaching. Also available in

Spanish, Contabilidad para la Micro Empresa: Manual de Ensenanza

(R0023). 

Beyond Credit: A Subsector Approach to Promoting Women’s Enterprises.

Martha Chen, Editor. (Aga Khan Foundation.) 1996. 155 pp. (ICE No. 

SB192) 

[Distribution to Peace Corps In-Country Resource Centers Only] 

Explores interventions to promote the enterprises of low-income

women in developing and redeveloping countries. Contains cases drawn 

from a variety of organizations in Africa, Asia, Latin America, and 

North America. Outlines framework and guidelines for understanding

and applying participatory subsector analysis. 

Entrepreneurship: How to Start and Operate a Small Business, Module 1, 

Chapters 1–17. Steve Mariotti (The National Foundation for Teaching

Entrepreneurship Inc.) 1987. 216 pp. (ICE No. SB193) 

[Distribution to Peace Corps In-Country Resource Centers Only] 

A simple course designed to teach young adults the fundamentals of

starting and operating a small business venture. Provides only a

minimal introduction to disciplines such as accounting and economics. 

The ultimate goals are financial independence, personal satisfaction,

and a sense of self-worth. Module 1 includes units on Introducing

Entrepreneurship, Types of Enterprise, and Exploring Profit.

Entrepreneurship: How to Start and Operate a Small Business, Module 2, 

Chapters 18–37. Steve Mariotti (The National Foundation for Teaching

Entrepreneurship Inc.) 1987. 216 pp. (ICE No. SB194) 

[Distribution to Peace Corps In-Country Resource Centers Only] 

A simple course designed to teach young adults the fundamentals of

starting and operating a small business venture. Provides only a

minimal introduction to disciplines such as accounting and economics. 

Module 4: Nonfinancial Business Development Services Page 120 
A Microenterprise Training Guide for Peace Corps Volunteers 

The ultimate goals are financial independence, personal satisfaction,

and a sense of self-worth. Module 2 has units on Business

Communication, Types of Enterprise (in addition to those identified in

Module 1), and Financing.

Entrepreneurship: How to Start and Operate a Small Business, Module 3, 

Chapters 38–50. Steve Mariotti (The National Foundation for Teaching

Entrepreneurship Inc.) 1987. 135 pp. (ICE No. SB195) 

[Distribution to Peace Corps In-Country Resource Centers Only] 

A simple course designed to teach young adults the fundamentals of

starting and operating a small business venture. Provides only a

minimal introduction to disciplines such as accounting and economics. 

The ultimate goals are financial independence, personal satisfaction,

and a sense of self-worth. Module 3 contains units on Real-World

Applications, Business Behavior, and The Entrepreneur’s 

Responsibilities. 

FIDIKA! Business Training for Women’s Groups: The Tototo Way. Kevin 

Kane/Tototo Home Industries staff. (World Education, Inc.) 1992. 66 

pp. (ICE No. SB156) 

Contains 14 easy-to-follow lessons in business skills. Designed for 

trainers and extension workers helping village groups develop

successful and profitable businesses. Can be adapted to a variety of

training situations, including the training of trainers.

Improve Your Business: Handbook. D.E.N. Dickinson, Editor. 

(International Labor Organization.) 1986. 129 pp. (ICE No. SB094) 

Suitable for trainers and individual business people, this manual

provides the basics to succeed in business on the premise that business

improvements are the result of creative entrepreneurs. Consists of eight

sections dealing with buying and selling, manufacturing and service

operating, bookkeeping, costing and pricing, marketing, management

accounting, office work, and planning. Supplements text with

illustrations and practical examples. 

Improve Your Business: Workbook. D.E.N. Dickson, Editor. (International 

Labor Organization.) 1986. 83 pp. (ICE No. SB095) 

Contains eight sections of problems corresponding to the eight portions 

of the handbook. Each section asks a set of questions, then gives you a 

number of business exercises, and finally shows you how to set up an

action program to solve your problems. Useful for trainers and 

extension workers. (Accompanies handbook, ICE No. SB094, 

described above.) 

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Income Generation and Money Management. PCV Sheila Reed. (Peace 

Corps ICE.) 1994. 70 pp. (ICE No. R0087) 

 Originally entitled Income Generation and Money Management: How

to Train Gambian Women, this manual is applicable to low-literate 

entrepreneurs in other parts of Africa and perhaps elsewhere. Contains

helpful numeracy activities and good materials for small 

business/women in development projects.

Marketing Strategy: Training Activities for Entrepreneurs. Suzanne

Kindervatter and Maggie Range. (OEF International/UNIFEM.) 1986. 

96 pp. (ICE No. SB092) 

Examines the problems women entrepreneurs face in developing small 

businesses that focus on marketing. Provides activities that facilitate the 

implementation of new ideas for women with their own businesses. 

Useful text for experienced trainers, extension workers, and 

programmers. Also available in Spanish, Estrategiá de Mercadeo: 

Entrenamiento para Empresarias (ICE No. SB124), and in French, 

Strategie de Marketing: Activités de Formation pour Entrepreneurs

(ICE No. SB125). 

Nonformal Education Manual. Helen Fox. (Peace Corps ICE.) 1989. 163 

pp. (ICE No. M0042) 

Demonstrates how the techniques of nonformal education (NFE) can be 

used by virtually all Volunteers. Emphasizes full-scale community

participation at all stages of development. Uses Volunteer experiences

to illustrate the nature and principles of NFE. Includes information on

adult learning, identifying people’s needs, planning and evaluating NFE

activities, working with groups, and developing appropriate materials 

for NFE activities. Also available in French, Manuel d’Education Non 

Formalle (ICE No. M0048). 

Recording and Using Indigenous Knowledge: A Manual. (International 

Institute of Rural Reconstruction International Development Research

Centre Publications.) 1996. 211 pp. (ICE No. CD054) 

Provides the information and tools to integrate indigenous knowledge

into development work. Describes more than 30 methods for recording

and assessing indigenous knowledge and 11 mini case studies that show

how projects can build on indigenous knowledge. Focuses on many

aspects of indigenous knowledge, including agriculture, livestock

rearing, food preparation, and natural resource management. 

Module 4: Nonfinancial Business Development Services Page 122 
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Internet: 

www.microenterpriseworks.org — This is the Internet site for the 

Association for Enterprise Opportunity. The site contains success

stories of low-income entrepreneurs. 

* * * * * * * * * 

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ACTIVITY 4:4 Reference

ATTITUDE SURVEY: 

CONSENSUS ANSWERS BY A GROUP OF MFI

PRACTITIONERS

The answers below, offered at the New Hampshire College Microfinance 

Institute in June 1999, reflect the thinking of MFI practitioners from 15 

countries. Did you agree or disagree with them?

Attitude Survey

1. It is impossible to evaluate our work in enterprise development for the poor 

in terms of financial costs and benefits; human development cannot be

valued in dollars. Disagree

2. The best way to help poor people increase their incomes is to help a few

people, who may not themselves be poor, to develop enterprises that will 

employ the poor. Disagree

3. Poor people are unlikely to have their own good business ideas; MFIs must

help them by giving them ideas. Disagree

4. Loans for poor people’s businesses must be at lower than market interest

rates or interest free. Disagree

5. MFIs, usually indigenous NGOs that are direct providers of credit and

savings services, should charge the poor for enterprise development

services, so that the MFIs themselves can become self-sustaining. Agree

6. MFIs should always encourage poor people to start group- or communityowned enterprises rather than individual businesses. Disagree

7. It is better to give grants to the poor to help them develop enterprises than to

make loans to the poor. Disagree

8. If we do make loans to the poor for enterprise development, we cannot

expect them to repay them on time; we must be lenient. Disagree

9. Women are better at microenterprise than men; they reinvest the profits, or 

spend them on their families, and they repay loans better. Agree

10. Most poor people do not need training to enable them to start a business; all

they need is access to finance. Agree

Module 4: Nonfinancial Business Development Services Page 124 
A Microenterprise Training Guide for Peace Corps Volunteers 

TRAINER'S NOTES 

MODULE 4 

NONFINANCIAL BUSINESS DEVELOPMENT 

SERVICES 

Overview: 

In this module we turn our attention from financial services—credit and

savings—to nonfinancial business development services (BDS). Topics covered 

include: What are business development services? Discusses two current BDS 

debates, a look at best BDS practices, and innovations to increase the impact of

BDS. 

Time: 

Reading 1 hour

Activities 10 hours 

Materials: 

It is important to have on hand several business training manuals. The ICE

materials in the Resources section at the end of the module list several good 

books; there are a large number available in the market. 

Preparation: 

Find out from the business project manager and current Volunteers what types of

business development services the Peace Corps has been involved with. What 

have been the successes, the challenges? You might want to consider compiling 

a list of local BDS best practices and checking to see how they compare with the 

ones the international committee developed.

Debriefing the experience and processing the learnings:

Business development services constitute a major effort of many Peace Corps 

business Volunteers. Spend some time having training participants develop a

small portfolio of BDS training session plans. The majority of activities in this 

module are designed to provide trainees with skill development opportunities to 

practice identifying BDS skills local microenterprise owners/managers need, 

modifying trainings to fit the local economic context, and BDS training. 

Module 4: Nonfinancial Business Development Services 

TRAINER’S NOTES — Page 125 
A Microenterprise Training Guide for Peace Corps Volunteers 

TRAINER'S NOTES 

ACTIVITY 4:1 

A BDS SESSION PLAN PORTFOLIO

Objective: 

The objective of this activity is to provide training participants with experience 

in developing and delivering BDS training, The activity stresses identifying

common needs of microbusiness people, designing participatory adult trainings,

and delivering these trainings. 

Time: 

The time needed to design and present these BDS sessions will depend on the 

number of training participants. On an individual basis, each participant should 

spend at least two hours preparing for a one-hour training.

Materials: 

Training participants need to have available several business training books for 

session ideas and examples. See ICE materials listed in the Resources section at 

the end of the module. 

Preparation: 

If possible, training participants should take responsibility for arranging the pilot 

sessions. Depending on training logistics, training staff may need to help set up

the pilot training sessions. Trainees need access to computers, printers, and 

photocopying equipment to write and reproduce session plans.

Debriefing the experience and processing the learnings: 

Training staff as well as fellow training participants should be prepared to

provide feedback on pilot BDS sessions. Give presenters the opportunity to say

what they observed when giving the session. When was the pilot group actively

involved? Did presenters feel the training objectives were met? Did pilot group

participants feel the training objectives were achieved?

Module 4: Nonfinancial Business Development Services 

TRAINER’S NOTES — Page 126 
A Microenterprise Training Guide for Peace Corps Volunteers 

TRAINER'S NOTES 

ACTIVITY 4:2 

MIND MAPPING BDS INTERVENTIONS FOR A 

MICROENTERPRISE 

Overview:

This activity allows training participants to express visually BDS interventions

for a local microenterprise. The mind maps can serve as a starting point for 

discussions of BDS for microenterprises in the local business environment and 

the different interventions needed to serve a diverse assortment of

microenterprises. 

Time: 

To draw mind maps 30 minutes

Discussion time varies

Materials: 

Sheets of paper for each trainee and pencils or pens. 

Preparation: 

Gather information, think about, and prepare a list of BDS interventions that 

have been successful in assisting microenterprises grow or become more 

profitable in your country. Can you speculate why some BDS interventions have

been successful and others not? Be prepared to share this information with

training participants. You may want to ask the Peace Corps business project 

manager or a local BDS provider to take part in the discussion. 

Debriefing the experience and processing the learnings:

Have each participant present and explain the reasoning behind the BDS they

chose to include on their mind map. In debriefing, use the mind maps as a 

starting point for discussions of local BDS. Training participants should choose 

different types of microenterprises, providing a chance to discuss the various

BDS needs of each. Expand the discussion to include the local experience with

BDS—what works, what does not, and which organizations are active in

providing BDS.

Module 4: Nonfinancial Business Development Services 

TRAINER’S NOTES — Page 127 
A Microenterprise Training Guide for Peace Corps Volunteers 

TRAINER'S NOTES 

ACTIVITY 4:3 

SUBSECTOR TARGETING

Overview: 

In this activity, training participants have a chance to investigate a few local 

subsectors and evaluate their potential for subsector interventions. 

Time: 1 hour

Materials: 

Matrix contained in participants’ activity. 

Preparation: 

If participants have not had experience with enough local microenterprises to be

able to identify three subsectors, you may need to help them gather information

on subsectors.

Debriefing the experience and processing the learnings: 

Discuss with participants their findings and explore any assumptions or

conclusions you feel are not based on the local business environment. 

Module 4: Nonfinancial Business Development Services 

TRAINER’S NOTES — Page 128 
A Microenterprise Training Guide for Peace Corps Volunteers 

TRAINER'S NOTES 

ACTIVITY 4:4 

MICROENTERPRISE ATTITUDE SURVEY

Overview: 

In this activity trainees retake the attitude survey first presented in Module 1 and

discover how their attitudes about the microenterprise field have changed. One 

of the items addresses monitoring and evaluation of human capacity

development; the remaining items are divided between microfinance issues and 

nonfinancial business development services issues. 

Time: 30 minutes

Materials: 

Attitude survey contained in the module. If individuals who are not training

participants take the survey, you will need to make additional copies. 

Preparation: 

To quickly get a composite of the groups’ answers, write the numbers 1–10 on a 

flip chart followed by the three choices: 

 AGREE DON’T KNOW DISAGREE 

Have participants make a mark next to the answer they chose. 

Debriefing the experience and processing the learnings: 

There are no right or wrong attitudes. Differences in attitudes lead to interesting

discussions. Encourage participants to support their attitudes by citing

experiences, observations, and examples that come from the host country. The 

discussions will be richer if a number of residents of the host country participate 

in the conversation. Another added dimension would be to include Volunteers 

working with microenterprise organizations that provide financial services, 

nonfinancial services, or both. 

Module 4: Nonfinancial Business Development Services 

TRAINER’S NOTES — Page 129 
A Microenterprise Training Guide for Peace Corps Volunteers 

 

Module 4: Nonfinancial Business Development Services 

TRAINER’S NOTES — Page 130 
A Microenterprise Training Guide 

for Peace Corps Volunteers

MODULE 

5 

Business Counselor 

and Extensionist 

Small-scale

Construction 

and Repair

Enterprises 

A Microenterprise Training Guide for Peace Corps Volunteers 

MODULE 5 

BUSINESS COUNSELOR AND 

EXTENSIONIST 

A VOLUNTEER’S STORY 

A women’s sewing cooperative wanted an Armenia business

Volunteer to help them get a loan from Catholic Relief. The three 

seamstresses apparently had a successful growing business making 

and selling dresses to well-off women in the capital. They had 

recently started to make school uniforms on contract to local schools,

and this business was growing very rapidly. The loan was for the 

purpose of purchasing two more sewing machines. 

The cooperative had never worked out the cost of the dresses, since 

every item sold slightly below the prices of the originals from which 

the designs were copied. The schools had asked for quotations, based 

on samples, and the seamstresses had carefully worked out the 

amount of cloth, cottons, and thread needed for each garment and 

had estimated how much time it would take to cut and sew. To these 

costs they added 10 percent profit. This pricing structure always

secured the school contracts. Now they had more orders than the 

three women could fill. 

A few questions from the Volunteer revealed that it was necessary to 

add at least 25 percent to the cost of materials and labor to cover

overhead, such as sewing machines, rent, and maintenance. The 

cooperative was losing money on every uniform and was planning to 

increase their losses by buying two more sewing machines. The loan 

would have been a disaster. 

* * * * * * * * * 

Nonfinancial business development services (BDS) are delivered through a

range of methods—books, radio, television, classroom instruction, individual

consultancy, and today the Internet. Volunteers use all of these methods. A

number of excellent books have been written about business training in group 

settings, some of them are available through the Peace Corps Information 

Collection and Exchange (ICE), and today the Internet offers additional ideas for 

Module 5: Business Counselor and Extensionist Page 131 
A Microenterprise Training Guide for Peace Corps Volunteers 

training business groups. (See the Resources section at the end of this module.) 

There is not as much guidance available for Volunteers engaged in individual, 

one-on-one training. This module attempts to fill that gap by guiding you as you

explore how to assist microenterprise owners/managers and potential owners in

their places of business. The term microenterprise owner/manager is used 

because in reality the owners of these microbusinesses are also the managers. 

Your primary assignment may be to a nongovernmental organization (NGO) 

whose mission is to assist small businesses, a community economic development 

organization, a municipality, or a microfinance institution (MFI). You, with

your co-workers, conduct group trainings. But, ultimately, in delivering

nonfinancial services, Volunteers spend a significant part of their service 

working one-on-one with microenterprise owners/managers and those who want

to become business owners. This last module of A Microenterprise Training 

Guide for Peace Corps Volunteers concentrates on guiding you in the 

acquisition of knowledge, skills, and attitudes to work effectively as a business 

“counselor” and “extensionist.” We assume as Peace Corps business Volunteers

you already know the business basics, and therefore we focus on how you can

share what you already know. By the time you finish the module you should be 

able to: 

• Explain why the roles of business counselor and extensionist are consistent

with the three goals of the Peace Corps and the goals and objectives of your

business sector project. 

• Give at least three country-specific illustrations of typical differences 

between Volunteer’s and local businessmen’s and business women’s cultural 

values.

• Demonstrate how “the questioning methodology” helps a micro or small

business owner or manager find solutions to their own problems.

• Conduct an interview to determine if a business’s most pressing needs are: 

— Lack of capital, 

— Not enough customers,

— Related to poor management, 

— Market or technical assistance information, or 

— Could be helped by joint activities with other small business people. 

Module 5: Business Counselor and Extensionist Page 132 
A Microenterprise Training Guide for Peace Corps Volunteers 

THE ROLE OF A VOLUNTEER AS BUSINESS 

COUNSELOR AND EXTENSIONIST 

Generally, counselor and extensionist are more appropriate roles for a Volunteer 

than consultant or advisor when working directly with microenterprise 

owners/managers. An understanding of four words—advising, extension,

consultancy, and counseling—as used in the field of development helps explain

why counselor and extensionist are preferred roles for Peace Corps business

Volunteers. 

Consultancy is expert advice, on specialized technical and managerial issues, 

provided by a skilled and experienced consultant who appraises the situation and

recommends a course of action. For a long time, consultancy was the standard

model used by small and medium enterprise development agencies. However, in

recent years, there has been increased concern over a number of aspects of

consultancy: 

• An expert’s recommendations from another country are not necessarily valid 

in a developing or redeveloping country. Bad advice, if taken, can be

devastating to a struggling small business.

• There is often a social and cultural distance between the consultant and the 

local businessperson that prevents the local businessperson from sharing

information with the consultant. . As a result, many consultants are unable to

offer effective recommendations and do their jobs right. 

• Consultancy, particularly where it is free of charge or heavily subsidized, is 

not accepted by micro and small business owners. 

• And, last but not least, consultancy can lead to dependency. When small and 

micro business owners come to depend on consultants to “fix their 

problems” they are not building the management capacity to run their 

businesses.

Advising is to offer advice, to recommend, or suggest. It differs from consulting 

in that the advisor is not necessarily an expert. Nevertheless, most of the 

concerns are the same. 

• A foreign advisor’s advice, recommendations, or suggestions may not be

appropriate under different economic conditions. 

• A foreign advisor is apt to encounter the same reluctance with information

sharing as a consultant. 

• “Free of charge” advising may be viewed with suspicion. Business owners

question the motives behind the advice and the value of the free advice. 

• Advising can lead to a dependency situation rather than capacity building.

Module 5: Business Counselor and Extensionist Page 133 
A Microenterprise Training Guide for Peace Corps Volunteers 

Counseling is a guided process of self-discovery, whereby the counselor guides

and helps the client identify problems, opportunities, and resources, define

options, and select a course of action. It could also be described as “coaching”

for microenterprise owners with the view to strengthening their entrepreneurial

capacity and competence. Counseling requires a high level of interpersonal 

skills, such as being able to listen, empathize, communicate, and motivate. 

Counseling, too, raises concerns.

• Counselors from big businesses or those with a high level of business

education can find it difficult to pursue a capacity-building process of

counseling and sometimes revert to telling the business owners the solutions

to their problems. Encouraging people to learn for themselves takes patience 

and a lot of time. 

• It is hard to obtain direct payment from clients for counseling services, since 

the business owner may not see a direct product of the counseling (e.g., in

the form of a business plan or written report offering recommendations). 

• It is more difficult to assess the benefits of counseling, since capacitybuilding outcomes are often not as tangible as monitoring and evaluating 

business improvements based on consulting or advising recommendations.

Counseling also offers grassroots capacity-building opportunities consistent with

the Peace Corps’ three goals and the goals and objectives of your business sector 

project. In the ideal situation, your Counterpart as well as micro and small 

business owners benefits from your counseling efforts. During the business 

counseling process you have ample opportunities to: share technical skills, share 

American culture, and gain firsthand experiences about local life and culture to 

share with friends and family when you return to the United States. 

If you have not already reviewed your business project plan, ask your technical

trainer and/or Peace Corps country staff to go over the project plan with you.

Identify where in the plan counseling could help achieve the plan’s goals and 

objectives. 

Extension is the delivery of any form of advice or nonmaterial assistance outside 

a classroom, usually to clients at their places of business. It is a generic term, and 

includes advising, consultancy, and counseling.

Extension is about “where,” while advising, consulting, and counseling are about

“how.” The major disadvantage of extension efforts are the time and cost

required to make visits to business sites. Going to the micro and small business 

owners is especially appropriate because: 

• Micro and small business owners may be uncomfortable in a classroom or 

group setting. This can result from their lack of formal education or social 

norms—women may be uncomfortable in the presence of men, or older 

business owners in a class with young people. However, after group-training 

sessions take place, extension visits can be a valuable addition to the class. 

Module 5: Business Counselor and Extensionist Page 134 
A Microenterprise Training Guide for Peace Corps Volunteers 

A Volunteer assigned to the Chamber of Commerce in Santo Domingo, 

Dominican Republic, has been instrumental in getting that organization to

include an extension visit as a follow-up to business classes. 

• Micro and small business owners are often competitive with one another. 

They may be willing to cooperate to a certain extent, but there is always a 

risk that one person’s success will result in the failure of his or her neighbor. 

He or she would rather discuss business matters in the privacy of his or her

own business.

• Training may need to go to the micro or small business owners because they

are unable to afford the time away from their businesses (they often run their 

businesses single handed) and costs to travel to training.

• Unlike financial services that offer a commodity, that is, money, different

businesses need a variety of BDS. Working at the business enables the 

counselor to see the situation and tailor BDS to fit the business. 

• You and your Counterpart will have a more complete understanding of a 

business if you observe it in operation.

• Extension visits provide chances to work one-on-one to build management

capacity. 

IN BUSINESS CULTURE MATTERS 

As you carry out counseling and extensionist efforts with Counterparts,

community partners, and host country individuals interested in starting or

expanding a micro or small business, you will occasionally—perhaps often—

have the feeling that you are unable to communicate. This may be more than

your lack of language skill; it may be due to cultural differences. How exactly

does culture impact written oral and body language business communications in

your host country? How do you bridge these cultural differences? Experienced 

Volunteers and your Peace Corps’ trainers and program staff are good people to 

discuss these questions with.

A good source of information on bridging the cultural gap in business is, Global

Business Challenges: Am I Ready? by Maija Gazue, International Concepts. Ltd. 

Boulder, Colorado. 1994. 

You can avoid creating unnecessary problems for yourself by realizing you are 

bridging two, sometimes more, cultures. This can, at times, feel like you are 

walking a tightrope. The following advice can make your Peace Corps

assignment more enjoyable and your work with your Counterparts, community

partners, and business clients more effective: 

• Genuinely respect the culture and strive to be a good guest. 

• Keep learning so you can understand your hosts better.

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• Accommodate differences: These consist of the laws, legal practices, and 

important social conventions. (An important social convention in many

countries is that to do business, you must get to know the people and build a 

trusting relationship.) 

• Choose to accommodate some superficial behaviors, customs, and 

courtesies. (It is polite to behave according to their culture. However, they

are also curious to learn about you and your culture.) 

Now that you are aware of the impact of culture, let’s move on to explore how

you can be a business counselor in an extension situation. Key elements are keen

observation, asking thought-provoking questions, and, of course, your cultural

sensitivity. 

THE QUESTIONING METHODOLOGY

Learning is most effective if the learner believes that he himself (or she herself)

is the source of the new knowledge. This may be the only way somebody can

learn from a person whom they believe knows no more than they do about their 

business. A skillful teacher does not tell a child that 2 + 2 = 4, but leads the child

to this conclusion by a series of carefully chosen questions, so that the child feels

he or she is making the discovery. Similarly, on a higher lever, a small business 

counselor must act as a guide rather than an instructor. Remember, you probably

need to get to know the business owner and establish some rapport before 

beginning the questioning methodology. The following two simplistic examples

illustrate this approach. 

The first is a dialogue between a shopkeeper with a low number of sales and 

a business counselor. 

Counselor: These figures show that your shop is making a good profit on

everything it sells, but it is not selling enough. How do you 

suppose you can sell more goods?

Shopkeeper: By having more customers.

Counselor: And why do you think customers come to a particular shop?

Shopkeeper: Well, they come where their friends are, where they can find

what they need, and where it is convenient. 

Counselor: Your shop is convenient, and you have many of your friends and

family around here. Can they find everything they need here?

Shopkeeper: Well, I have everything the other shops have.

Counselor: Do your customers know you have it?

Shopkeeper: Well, it is all here on the shelves or on the floor for them to see. 

Counselor: Can they see it from outside in the marketplace before they have

even decided to come in?

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Shopkeeper: No, I suppose not.

Counselor: How can you tell them that you have what they need in here 

before they even decide to come in?

Shopkeeper: I am not sure. 

Counselor: Come outside a moment. Now look around the market. Which

shops are the busiest? How are they different from the others?

Shopkeeper: They are all brightly covered with advertisements, and my shop 

looks very uninteresting. I can soon change that.

They then went on to discuss obtaining more sales per customer, by selling

products that were not already in stock elsewhere in the village. Here again the 

shopkeeper herself recommended the idea, and the specific items that people 

presently had to travel to another town to find. 

Are you beginning to understand how to effectively use leading questions? Let’s 

read through one more example before trying it ourselves.

Example of a metal window frame maker’s conversation with a business

counselor who works for a microfinance institution (MFI). The frame 

maker has applied for an additional loan. 

Counselor: You say you want an electric grinder to smooth the corners of

your window frames now that there is power in the village, but 

you cannot get a loan. Our figures show us that you have a large

amount of money tied up in this business already. What have you 

used those funds for?

Window M: The stock of metal strips for windows.

Counselor: And how often do you go to the city where you can buy more

steel strips?

Window M: Every week. 

Counselor: And why did you buy six months worth then?

Window M: Because I got a three percent discount for buying such a large 

quantity. 

Counselor: How many grinders could you have bought for the money you 

paid for those strips?

Window M: Three or four, but I needed the strips. 

Counselor: Yes, but in order to save three percent on the strips you deprived 

yourself of the grinder. Would you rather have the great heap of

steel strips and the three percent savings or a grinder?

Window M: A grinder I suppose, but what can I do about it now?

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Counselor: Are you saving already for your next six months purchase of

steel strips?

Window M: Yes, I already have a quarter of the money I need. 

Counselor: What else might you do with that money?

Window M: Well, it might be enough for a grinder by the end of the next

month . . . 

Here, the idea of capital as something that can be used and that is profitable at 

the discretion of the owner was introduced by the counselor’s questions, but the 

idea appeared to originate from the businessman himself. Next time the 

businessman needs something for his business, might he think of other

alternatives before asking for a loan?

No advice is better than bad advice. 

—a business Peace Corps Volunteer 

in the Czech Republic 

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ACTIVITY 5:1 

QUESTIONING ROLE PLAY

Form pairs for this role play. If the numbers are uneven, or just for fun, talk

some of the training staff into participating. Read the situation below. Decide

which member of your pair will play the role of the shopkeeper and who will be

the counselor. Do the role plays away from the other training participants so they

cannot overhear. After all pairs have finished, share your solution. If there are 

differences of opinion on the best solution, discuss them. 

A shopkeeper has $10 to spend on new stock. She can either buy ten blankets,

which she will sell for $1.50 each, or 100 packets of tea, which she will sell for

$0.11 each. She will sell the blankets at a rate of one per month, and the tea at a 

rate of 100 packets per month. Should she buy the blankets or the tea? Why? 

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WHAT AREAS PRESENT PROBLEMS FOR MICRO AND

SMALL BUSINESSES? 

Research suggests that the problems of micro and small businesses in developing 

and redeveloping countries are not fundamentally different from those of small 

businesses in developed countries. Yet it is still necessary that training materials 

and assistance programs be modified to suit local circumstances. To this end, we

have:

• Emphasized awareness of cultural differences in working with small 

businesses; 

• Used a counseling approach and questioning methodology to tailor 

assistance to the individual business owner’s needs; and 

• Adopted the business-extensionist policy because small business owners are 

often reluctant or cannot afford to go to group training. 

Now we turn our attention to some common concerns of these small and micro 

businesses. Businesses need capital, suppliers, equipment, buildings, customers,

employees, and, above all, proper management. We shall investigate later how

we can find out the needs of any specific business, and we shall see that they do 

not always need what they believe they need. Nevertheless, small and micro 

businesses do face difficulties. In particular: 

Capital: Most entrepreneurial business people are short of capital, since they

have more ideas than they have money to put them into effect. Nearly all small 

business people state that their biggest, or even their only, problem is shortage of

capital. This is not always correct. 

Banks may not be an option if the business lacks collateral to secure a loan or the 

loan is too small or too risky to justify a bank’s transaction cost. Families may be

willing to lend money, but when this source is exhausted the small company

needs to turn elsewhere. Combining the MFIs described in modules two and

three may be the solution. MFIs’ mass-marketing lending methods allow them to

make small loans at a reasonable cost. 

Customers: Every business needs customers, but micro and small business 

people often find it particularly difficult to sell enough of their products or

services to keep them busy and earn a reasonable living. They cannot afford to 

hire professional salespeople or advertise; big international companies are not 

competing in remote rural markets, and the small businesses are at a 

disadvantage even in their own villages. They are far less able to sell their goods

in the growing urban areas, where people often need the products, because the 

large firms can afford to use modern marketing tools. 

The Internet may offer some hope. Particularly in the craft market, small rural 

craftspeople are able to access national and international markets through the 

Internet. Access to and an understanding of the Internet can open new markets

for previously isolated businesses. Another possibility is for a small business to

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join with other businesses to reach more customers than it is possible to reach on

its own. 

The quality of goods or services may cause customers to purchase someplace 

else, but often it is a lack of customer service that turns customers away. 

Microenterprise owners may not realize that how they treat their customers has

as much to do with their sales as the products and services themselves. 

Joint activities: Small business people often need to cooperate with one another 

to obtain reliable and economical supplies of raw materials, to market their 

goods, and to present their views to government and the general public. 

Individually it is difficult to order large amounts of raw materials and get 

quantity discounts, market their products outside their local area, and be heard

by government and the public. Yet, any form of cooperation requires initiative 

from an experienced person who has the time and ability to organize it. 

Frequently, the only way micro and small businesses can compete with larger 

ones for sources of supply, for markets, and for government attention is through 

cooperative efforts.

Information: Micro and small businesses are often unable to take advantage of

services provided by government, development agencies, or NGOs because they

do not know about them. They may also lack information on emerging markets

for their services and products. Here again joint activities and the Internet help

bridge the communications gap, as does the radio in rural Africa, MFIs 

informing their clients of training and marketing opportunities, and development 

organizations like the Peace Corps. 

Management: Finally, and most important, micro and small business people are 

in need of management assistance. They must compete with managers and 

management techniques, which have been tried and tested in large firms. We

have already defined small business as those where management is, in a sense, a 

part-time activity, carried on by someone who is mainly a craftsperson or a shop 

assistant. Small businesses cannot afford to hire full-time managers, so their 

owners have to learn to “do it themselves.” Micro businesses are often new

operations, and children have not had the opportunity to learn from their parents. 

Small business people sometimes need more capital, but they nearly always need 

management training. Better management can help them make better use of their

limited capital. Many small business people fail to realize that if they do get a 

loan they will have to repay it with heavy interest charges. Better management

can also help them identify low-cost marketing techniques and design their 

products and services to appeal to their customers.

As you start working with a small business owner or manager, be a detective.

Through observation and conversations discover what would make the business 

more profitable and able to grow—more capital, additional customers, better 

access to marketing and technical information, joint activities with other small 

business people, or improved management. You must be able to do more than

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pass on standard business advice and check that it is followed on subsequent

visits. A good business counselor is a sort of “business doctor” who can examine 

each patient individually, diagnose the problems, and then ask the right questions

to help the business owner or manager figure out the remedies to heal them.

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ACTIVITY 5:2 

FOUR MICROENTERPRISE CASE STUDIES 

Divide the training group into groups of three or four people. Each person is

responsible for reading the case study, developing a plan for helping the

microenterprise owner find a solution to his or her problem, and presenting the 

case study to their group for discussion. Your technical trainer may have

additional local case studies for you to discuss. 

The Baker 

The baker claimed that she needed more capital; her ovens and her labor were

only half occupied because she could only sell her bread through this shop. If

she had a pickup truck she could transport the bread to outlying villages and 

run her bakery at full capacity. She asked for a loan to buy a pickup truck. 

Careful questioning revealed that the daily cost of running a pickup on the very 

bad roads in the baker’s home area would almost equal the total value of the 

bread it could sell in one day. The neighboring villages were widely scattered, 

along four different roads out of the town where the bakery was, and it would be 

necessary for the pickup to pass through the town three times a day in order

reach all the villages. This meant that the truck would have to cover many miles,

and the villages were too small to buy more than a few loaves each. If the baker

had been able to obtain a loan and buy a pickup, she would very soon have 

gone bankrupt, because of the high expenses of running the vehicle when 

compared with the very small profits to be obtained from selling more bread.

What did the baker need? She did not need a loan. She needed to know how to

calculate the costs of her proposal—cost of the pickup and potential profit from

the additional bread sales. The results of her calculations would encourage her to

find a better solution to her problem. 

What questions would you ask to encourage the baker to investigate other 

alternatives and find a more profitable solution?

Continued

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Activity 5:2, continued 

The Shoemaker 

The shoemaker made shoes in four different styles. They were well made and 

durable, and had sold regularly in the village for many years. Sales had 

dropped off recently, and the shoemaker complained that he needed more

customers; as he saw it, his business was shrinking because people were not

buying as many pairs of shoes as they used to. He thought that he would be able 

to do better if he could afford to sell on credit. 

A brief inspection of people’s footwear, and one or two questions, showed that

they were now going to a nearby town where a large shoe shop sold the latest

styles. These were expensive, and not very well made, but the younger people in

particular felt they had to adopt the latest modern fashion. 

What did the shoemaker really need? The shoemaker thought he needed more

customers. He was right, but he had first to realize that it was his job, as a 

businessman, to find out what his customers wanted, and to provide it. He really

needed to learn about marketing.

What questions would you ask to help him work through his marketing problem?

The Carpenter 

The carpenter made simple furniture and sold it from his shop to local people. 

He said that he could not bid for large contracts to make school desks and 

benches because he did not have enough money to buy the quantities of wood 

that would be needed. 

When the carpenter’s accounts were computed, it showed that he was earning a 

reasonable profit every month, which was more than enough to pay for his

simple way of living. He eventually admitted that he gave all his spare cash to

various relatives who continually pestered him with requests for help. 

What did the carpenter need? He thought he needed more capital, but his family

would probably have talked him out of the money he obtained through a loan.

He really needed to stand back and look at the long-term. He then realized that 

his family’s long-term benefit depended on short-term sacrifices and proper 

financial management.

How would you help the carpenter think through an approach to gain his 

family’s cooperation?

Continued 

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Activity 5:2, continued 

The Tank Maker 

The tank maker manufactured circular water tanks out of corrugated iron 

sheets. He had to spend a great deal of time, and money, in buying ready-curved 

sheets from the city and transporting them to his village. He asked for a loan to 

buy a curving machine for himself. With this he could save time and money, 

since he could buy uncurved sheets from the dealer in the village without going 

to the city. 

When the tank maker was shown how to calculate the cost of the curving 

machine each month, he soon realized that he could not employ it economically

on his own. He could curve all the sheets he needed in four days out of the 

month. The rest of his time was taken up building, selling, and delivering the 

water tanks. There were three other water tank makers in town who also went to

the city to purchase curved corrugated iron sheets.

What did the tank maker really need? He needed a machine, but more important

he needed to know how to calculate the cost of owning a machine and figure out 

a more profitable solution to his problem. 

What questions would you ask to help him come up with a different and better

proposal?

Note: A few possible solutions to the problems posed in these case studies are 

listed at the end of the module. You probably can think of others and perhaps

they are better than the ones listed.

(Case studies adapted with permission from Consultancy for Small Businesses

by Malcolm Harper, Intermediate Technology Publications Ltd., London, 1977. 

pp. 6–8.) 

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MICROENTERPRISE OWNER-MANAGER CAPACITY

BUILDING 

Capacity is the ability to put ideas into action. Microenterprise owners/managers 

often have great ideas, but they lack the ability to put those ideas into action. In

the case studies and examples, we have read about owners/managers who lacked 

the ability to calculate cost, to attract customers, to deal with relatives, to form

links with similar businesses, etc. These microenterprises and their 

owners/managers are a diverse lot, and of course their competencies also differ. 

However, there are certain basic changes that would increase the capacity of

most microenterprise owners/managers.

1. Changes in attitudes and behavior, not just an increase in knowledge. We

want the business owner to perform better and not merely to be able to pass 

an examination in management.

2. Ability to analyze their own situations. It is not enough to learn facts about 

business in general. They must see how these learnings apply to their own

businesses.

3. Evidence of bigger profits. Appealing to the profit motive is a learning

motivator. We probably will not see financial reports showing higher 

profits; microenterprise owners/managers are reluctant to share this

information, but we may see improvement in business facilities, more 

employees, or improvement in living conditions of the owner’s family. 

4. Willingness to practice what they are learning on their own. Microenterprise

owners/managers work alone; unlike owners and managers of larger firms,

they do not have the encouragement of colleagues.

5. Permanent changes in management skills. We want the business people not 

just to perform better when we are watching, or the following month, but for 

many years.

6. It is extremely important that the microenterprise owners/managers choose 

what is right for themselves as individuals, and not just follow general rules 

that may be quite wrong in particular cases. Microenterprises are vulnerable; 

individually these tiny firms have little power to protect themselves from

misfortune, or bad advice, and owners often depend entirely on their 

businesses to support themselves and their families. 

Module 5, “Business Counselor and Extensionist” was written primarily for PreService Training. However, the readings and activities can easily be adapted to

involve Counterparts at an In-Service or Mid-Service Training or at your site. 

The intention is that you engage in business counseling and extension work with

your Counterpart.

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As a team you and your Counterpart strengthen each other. 

• The presence of a Counterpart helps bridge cultural gaps. 

• Your Counterpart may be able to assist with translation until your language

skills improve. 

• Counterparts “know the territory.” They can ease your transition into the 

business community and advise you on local business practices. 

• You are a source of new ideas, connections, skills, and enthusiasm for your

Counterpart.

• Ideally, your Counterpart will gain the capacity to carry on the business 

counseling and extension work after you return home.

• Two sets of eyes and ears in observing a business are better than one. 

The counseling process usually involves several visits to a microenterprise

owner’s business. Keeping organized records helps you keep track of what 

happened during each visit, and at the same time model good business recordkeeping habits. What follows is one idea for a client counseling record. Does it 

meet your and your Counterpart’s information requirements? If not, modify the 

form or design a new report. 

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CLIENT COUNSELING RECORD 

(Name of the organization you are assigned to)

Client’s Name: __________________________________________________ 

Name of Business: _______________________________________________ 

Name(s) of Counselor(s) __________________________________________

Who initiated the visit? ___________________________________________

Date of visit ____________ Date of ___________ Next ___________

 last visit appointment date 

Is the business operational: _____ Yes ______ No

How many people work in the business full time? _____ Part time? _____ 

Has the number of people working in the business changed since your last visit? 

 _______________________ 

What in the business appears to have changed since your last visit? 

________________________________________________________________ 

Area of Counseling: 

Business start-up _____ Computer System _____ 

Marketing or sales _____ Export _____ 

Business plan development _____ Insurance _____ 

Accounting _____ Licensing _____ 

 and financial reports Networking/links _____ 

Cost control _____ Customer service _____ 

Inventory Control _____ Personnel _____ 

Information sources _____ Produce/service quality _____ 

Time management _____ Managing customer _____ 

Cutting business costs _____ credit

Other ___________________ _____ Decision making _____ 

Comments: (Describe the business concerns that were discussed. What 

information needs to be gathered before the next appointment? Include what

decisions the owner/manager made as a result of the counseling. What does the 

owner/manager plan to accomplish before the next appointment? Add additional 

information on the back of the page, if needed.) 

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ACTIVITY 5:3 

PRACTICING THE COUNSELING AND EXTENSIONIST

SKILLS YOU HAVE LEARNED

Do this activity individually or in pairs. Large groups destroy the dynamics of

one-on-one counseling. Look for an opportunity in your training community to

counsel a microenterprise owner. Your host family may be able to suggest a

business, or ask your training staff to help you locate a microenterprise. If

language is a problem, invite a language instructor to accompany you. 

• Spend some time getting acquainted with the microbusiness owner/manager. 

• Explain who you are and why you want to learn about microenterprises in

their country. 

• Discuss the concerns they have about their business.

• Be appreciative in how you ask questions. Notice and mention the things

they are doing right in their business.

• Use the form on the preceding page or make your own form to record 

counseling information.

• Listen, ask thought–provoking questions, but do not give advice.

• Offer a small gift to say “Thank you for your time” if that is culturally

appropriate. 

Discuss with your fellow training participants and trainers what you observed

and learned. Were your experiences similar or different? What conclusions did 

you reach? What does the owner/manager think he or she needs? What do you

think they need? What actions are they willing to take to improve profitability? 

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Working with microenterprise owners/managers and potential 

microentrepreneurs is fun, exciting, satisfying, and, at times, frustrating. If you 

seem to not be communicating with a micro–business owner/manager, review the 

cultural business values to find out if cultural barriers are causing your

difficulties. Capacity-building takes time; do not expect changes to happen

overnight. It can take several months just to develop a level of trust where a

business owner/manager will discuss his or her business with you. You are not 

alone. Volunteers in approximately 60 countries are assisting microenterprises to 

increase profits and families’ quality of life. 

* * * * * * * * * 

KEY TERMS

Key terms are defined as they are used in the module. A space is provided to

write the local language translation of the word or phrase. Building a local

language vocabulary of terms related to microenterprise prepares you to function 

effectively in this area of development. Work with your language instructors to

find the appropriate translation and definitions in the local language and build

your technical vocabulary as you study this module.

Advising is to offer advice, to recommend, or suggest.

Consultancy is expert advice, on specialized technical and managerial issues, 

provided by a skilled and experienced consultant who appraises the situation and

recommends a course of action.

Counseling is a guided process of self-discovery, whereby the counselor guides

and helps the client identify problems, opportunities and resources, define

options, and select a course of action.

Capacity is the ability to put ideas into action.

Extension is the delivery of any form of advice or nonmaterial assistance outside 

a classroom, usually to clients at their places of business. It is a generic term and 

includes both consultancy and counseling.

* * * * * * * * * 

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RESOURCES 

These resources are available through the Peace Corps Information Collection 

and Exchange (ICE). The citations are presented as they appear in The Whole 

ICE Catalog. 

Accounting for the Micro Business: A Teaching Manual. Michael 

Ronan/PCV Colombia. (Peace Corps ICE.) 1975. 105 pp. (ICE No. 

R0023B) 

A teaching manual to help small business entrepreneurs learn basic 

accounting. Lessons explain the nature and objectives of such

fundamental business practices as balance sheets, profit and loss

statements, credit books, cash books, transactions, etc. Designed for 

teaching on a one-to-one basis or in small groups. Also available in

Spanish, Contabilidad para la Micro Empresa: Manual de Ensenanza

(ICE No. R0023). 

Beyond Credit: A Subsector Approach To Promoting Women’s Enterprises.

Martha Chen, Editor. (Aga Khan Foundation.) 1996. 155 pp. (ICE No. 

SB192) 

[Distribution to Peace Corps In-Country Resource Centers Only] 

Explores interventions to promote the enterprises of low-income

women in developing and redeveloping countries. Contains cases drawn 

from a variety of organizations in Africa, Asia, Latin America, and 

North America. Outlines framework and guidelines for understanding

and applying participatory subsector analysis. 

Entrepreneurship: How to Start and Operate a Small Business, Module 1, 

Chapters 1–17. Steve Mariotti (The National Foundation for Teaching

Entrepreneurship Inc.) 1987. 216 pp. (ICE No. SB193) 

[Distribution to Peace Corps In-Country Resource Centers Only] 

A simple course designed to teach young adults the fundamentals of

starting and operating a small business venture. Provides only a

minimal introduction to disciplines such as accounting and economics. 

The ultimate goals are financial independence, personal satisfaction,

and a sense of self-worth. Module 1 includes units on Introducing

Entrepreneurship, Types of Enterprise, and Exploring Profit.

Entrepreneurship: How to Start and Operate a Small Business, Module 2, 

Chapters 18–37. Steve Mariotti (The National Foundation for Teaching

Entrepreneurship Inc.) 1987. 216 pp. (ICE No. SB194) 

[Distribution to Peace Corps In-Country Resource Centers Only] 

A simple course designed to teach young adults the fundamentals of

starting and operating a small business venture. Provides only a

minimal introduction to disciplines such as accounting and economics. 

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The ultimate goals are financial independence, personal satisfaction,

and a sense of self-worth. Module 2 has units on Business

Communication, Types of Enterprise (in addition to those identified in

Module 1), and Financing.

Entrepreneurship: How to Start and Operate a Small Business, Module 3, 

Chapters 38–50. Steve Mariotti (The National Foundation for Teaching

Entrepreneurship Inc.) 1987. 135 pp. (ICE No. SB195) 

[Distribution to Peace Corps In-Country Resource Centers Only] 

A simple course designed to teach young adults the fundamentals of

starting and operating a small business venture. Provides only a

minimal introduction to disciplines such as accounting and economics. 

The ultimate goals are financial independence, personal satisfaction,

and a sense of self-worth. Module 3 contains units on Real-World

Applications, Business Behavior, and The Entrepreneur’s 

Responsibilities. 

FIDIKA! Business Training for Women’s Groups: The Tototo Way. Kevin 

Kane/Tototo Home Industries staff. (World Education, Inc.) 1992. 66 

pp. (ICE No. SB156) 

Contains 14 easy-to-follow lessons for training people in business 

skills. Designed for trainers and extension workers helping village

groups develop successful and profitable businesses. Can be adapted to

a variety of training situations, including the training of trainers.

Improve Your Business: Handbook. D.E.N. Dickinson, Editor. (ILO.) 1986. 

129 pp. (ICE No. SB094) 

Suitable for trainers and individual business people, this manual

provides the basics to succeed in business on the premise that business

improvements are the result of creative entrepreneurs. Consists of eight

sections dealing with buying and selling, manufacturing and service

operating, bookkeeping, costing and pricing, marketing, management

accounting, office work, and planning. Supplements text with

illustrations and practical examples. (A workbook [ICE No. SB095] is

available to accompany this handbook.) 

Improve Your Business: Workbook. D.E.N. Dickinson, Editor. (ILO.) 1986. 

83 pp. (ICE No. SB095) 

Contains eight sections of problems corresponding to the eight portions 

of the handbook. Each section asks a set of questions, then gives you a 

number of business exercises, and finally shows you how to set up an

action program to solve your problems. Useful for trainers and 

extension workers. (Accompanies handbook [ICE No. SB094] 

described above.) 

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Income Generation and Money Management. PCV Sheila Reed. (Peace 

Corps ICE.) 1994. 70 pp. (ICE No. R0087) 

 Originally entitled Income Generation and Money Management: How

to Train Gambian Women, this manual is applicable to low-literate 

entrepreneurs in other parts of Africa and perhaps elsewhere as well. 

Contains helpful numeracy activities and good materials for small 

business/women in development projects.

Marketing Strategy: Training Activities for Entrepreneurs. Suzanne

Kindervatter and Maggie Range. (OEF International/UNIFEM.) 1986. 

96 pp. (ICE No. SB092) 

Examines the problems women entrepreneurs face in developing small 

businesses that focus on marketing. Provides activities that facilitate the 

implementation of new ideas for women with their own businesses. 

Useful text for experienced trainers, extension workers, and 

programmers. Also available in Spanish, Estrategiá de Mercadeo: 

Entrenamiento para Empresarias (ICE No. SB124), and in French, 

Strategie de Marketing: Activités de Formation pour Entrepreneurs

(ICE No. SB125). 

Nonformal Education Manual. Helen Fox. (Peace Corps ICE.) 1989. 163 

pp. (ICE No. M0042) 

Demonstrates how virtually all Peace Corps Volunteers can use the 

techniques of nonformal education (NFE). Emphasizes full-scale 

community participation at all stages of development. Uses Volunteer 

experiences to illustrate the nature and principles of NFE. Includes 

information on adult learning, identifying people’s needs, planning and

evaluating NFE activities, working with groups, and developing

appropriate materials for NFE activities. Also available in French, 

Manuel d’Education Non Formalle (ICE No. M0048). 

Internet: 

www.microenterpriseworks.org — This is the Internet site for the 

Association for Enterprise Opportunity. The site contains success

stories of low-income entrepreneurs. 

* * * * * * * * * 

Module 5: Business Counselor and Extensionist Page 153 
A Microenterprise Training Guide for Peace Corps Volunteers 

ACTIVITY 5:2 Reference

SUGGESTED SOLUTIONS FOR CASE STUDIES 

The Baker 

• Buy a motorbike and hire a student to deliver loaves of bread to the four

neighboring villages. 

• Get the local bus driver (assuming there is a bus) to deliver the loaves of

bread. 

• Diversify product line and make bakery products other than bread to sell in

the bakery. 

The Shoemaker 

• Visit the store in a nearby city where his former customers are buying shoes

to see what styles are selling.

• Advertise in the local newspaper that he takes special orders to make shoes 

to customer’s specifications. 

• Make several pairs of the new style shoes and display them in his window.

The Carpenter 

• The carpenter may need to keep money in a bank account instead of at 

home, where it is easy for him to give it to relatives. 

• The carpenter may hire some relatives to fill the larger orders so they can

appreciate the benefits of the carpenter growing his business.

• The carpenter may need to learn to say “no,” although that may not be

culturally acceptable. 

• Perhaps he could enlist the help and understanding of the elder in the family

to explain to family members why the carpenter will not be able to give

away money for several months.

Continued 

Module 5: Business Counselor and Extensionist Page 154 
A Microenterprise Training Guide for Peace Corps Volunteers 

Activity 5:3, Suggested Solutions, continued 

The Tank Maker 

• The tank maker might explore forming a cooperative with the other three 

tank makers and sharing the cost of the bending machine. 

• The four tank makers might agree to purchase curved corrugated sheets

jointly, getting a quantity discount and sharing the cost of transportation.

This would result in cost and time savings for all of them. 

• The tank maker might approach the other tank makers and offer to sell them

curved corrugated sheets at a price less than they are now paying. This

assumes that using the curving machine is a more profitable use of his time 

than making, selling, and delivering tanks.

• The four tank makers might explore forming a joint venture, cooperating on

the whole business process, purchasing raw materials, curving the sheets,

building, selling, and delivering tanks. 

Module 5: Business Counselor and Extensionist Page 155 
A Microenterprise Training Guide for Peace Corps Volunteers 

TRAINER’S NOTES 

MODULE 5 

BUSINESS COUNSELOR AND EXTENSIONIST 

Overview: 

This last module concentrates on preparing training participants for their roles as 

business counselors and extensionists. Since the role of counselor depends

heavily on interpersonal skills, training participants are alerted to the impact of

business cultural values and how to bridge differences in culture, and the use of

“questioning methodology” in enabling businesspeople to solve their own

problems. To better understand why the roles of counselor and extensionist are 

preferred, these roles are compared with those of a consultant or advisor. Much

of the module is devoted to case studies of typical small business situations to

provide trainees with practice in analyzing business situations and counseling

business owners.

Time: 

Reading 1 hour

Activities 10 hours 

Materials: 

Provide several books that cover the delivery of nonfinancial business

development services (BDS). See Resources section for suggestions. Also,

provide copies of the Business Sector’s Project Plan. 

Preparation: 

• Arrange with the business program manager or other Peace Corps staff to 

discuss their project plan and how counseling and extension help achieve

project goals and objectives. 

• You may wish to translate the business cultural values continuum so more

local people can participate in discussions of cultural issues with the training

participants. 

• Arrange for pairs of training participants to practice their counseling and

extensionist skills with small business owners. These might be the same

people the training participants shadowed in an earlier module. 

Continued 

Module 5: Business Counselor and Extensionist TRAINER’S NOTES — Page 156 
A Microenterprise Training Guide for Peace Corps Volunteers 

Trainer’s Notes, continued 

Debriefing the experience and processing the learnings: 

Important learnings in this module are that it is not enough just to transfer

technical skills. Volunteers need to build the management capacity of

microenterprise owners, and the way they do this is by asking questions to help

the business owner pull together his or her own knowledge to reach solutions

that will increase the business’s profitability. Discuss the aspects of counseling

that were difficult and explore how individual training participants can continue

to improve their interpersonal, cultural, and counseling skills. 

Module 5: Business Counselor and Extensionist TRAINER’S NOTES — Page 157 
A Microenterprise Training Guide for Peace Corps Volunteers 

TRAINER’S NOTES 

ACTIVITY 5:1 

QUESTIONING ROLE PLAY 

Overview: 

This role play activity allows training participants to practice using the 

questioning methodology, have a little fun, and hopefully realize they should 

consider a wider range of issues than just the numbers. 

Time: 30 minutes 

Materials: 

None other than the scenario contained in the reader’s training materials. 

Preparation: 

Training participants should be able to conduct this simple activity themselves. 

Debriefing the experience and processing the learnings: 

If training participants do not bring up the following themselves, use the 

“questioning methodology”:

• The 10 blankets will be sold in 10 months and generate a profit of $5: 10

blankets at 50 cents profit each ($1.50 sale price minus $1.00 cost). 

• The tea will be sold in one month and generate a profit of $1.00: 100 tea 

packets at 1 cent profit each (11 cent sale price less 10 cent cost). 

• The profit margin on the blankets is higher, but so is the risk of having stock

on hand for nine more months than the tea. 

• What would be the profit over the 10 months if the shopkeeper used $10 of

the $11 sales each month to buy 100 packets more of tea? 

• Should she consider buying some blankets and some tea? If so, why? And 

how many items of each? 

Ask questions in an appreciative way so respondents do not feel like they are 

being cross-examined. Did anyone, as they did the role play, take out paper and 

pen and work through the calculations together? 

Module 5: Business Counselor and Extensionist TRAINER’S NOTES — Page 158 
A Microenterprise Training Guide for Peace Corps Volunteers 

TRAINER’S NOTES 

ACTIVITY 5:2

MICROENTERPRISE CASE STUDIES 

Overview: 

These case studies enable training participants to think about typical 

microenterprise problems and devise ways they would assist the owners in

thinking through solutions.

Time: 1 hour 

Materials: 

The case studies contained in the reader’s training materials. You might want to

write some additional case studies based on your local experience or ask current

Volunteers to write case studies based on their experiences with local 

businesspeople. 

Preparation: 

Training participants should be able to conduct this simple activity themselves. 

Debriefing the experience and processing the learnings: 

Have training participants facilitate the discussions. The conversations will 

probably be more interesting if business programming staff, local small business

consultants, and/or Volunteers can participate in the conversations. The 

following are merely a few suggestions; there are no right answers. The process 

of helping a microenterprise owner arrive at a reasonable solution is what is

important. 

Suggested solutions for case studies:

The Baker 

• Buy a motorbike and hire a student to deliver loaves of bread to the four

neighboring villages.

• Get the local bus driver (assuming there is a bus) to deliver the loaves of

bread. 

• Diversify product line and make bakery products other than bread to sell in

the bakery. 

Continued 

Module 5: Business Counselor and Extensionist TRAINER’S NOTES — Page 159 
A Microenterprise Training Guide for Peace Corps Volunteers 

Trainer’s Notes, Activity 5:3, continued 

The Shoemaker 

• Visit the store in the nearby city where his former customers are buying

shoes to see what styles are selling.

• Advertise in the local newspaper that he takes special orders to make shoes 

to customer’s specifications. 

• Make several pairs of the new style shoes and display them in his window.

The Carpenter 

• The carpenter may need to keep money in a bank account instead of at 

home, where it is easy for him to give it to relatives. 

• The carpenter may hire some relatives to fill the larger orders so they will 

appreciate the benefits of the carpenter growing his business.

• The carpenter may need to learn to say “no,” although that may not be

culturally acceptable. 

• Perhaps he could enlist the help and understanding of the elder in the family

to explain to family members why the carpenter will not be able to give

away money for several months.

The Tank Maker 

• The tank maker might explore forming a cooperative with the other three 

tank makers and sharing the cost of the bending machine. 

• The four tank makers might agree to purchase curved corrugated sheets

jointly, getting a quantity discount and sharing the cost of transportation.

This would result in cost and time savings for all of them. 

• The tank maker might approach the other tank makers and offer to sell them

curved corrugated sheets at a lower price than they are paying. This assumes

that using the curving machine is a more profitable use of his time than

making, selling, and delivering tanks.

• The four tank makers might explore forming a joint venture, cooperating on

the whole business process, purchasing raw materials, curving the sheets,

building, selling, and delivering tanks. 

Module 5: Business Counselor and Extensionist TRAINER’S NOTES — Page 160 
A Microenterprise Training Guide for Peace Corps Volunteers 

TRAINER’S NOTES 

ACTIVITY 5:3 

PRACTICING THE COUNSELING AND EXTENSIONIST 

SKILLS YOU HAVE LEARNED

Overview: 

This activity allows training participants to experience and put together the 

various elements discussed in the module—cultural business values, core 

competencies for microenterprise owners/managers, the “questioning

methodology,” and working with an owner/manager one-on-one to discuss

business concerns and help the owners/managers arrive at their own solutions. 

Time: 2–3 hours

Materials: 

Copies of the “Client Counseling Record.”

Preparation: 

Depending on the training community, you may need to help training 

participants identify microenterprise owners/managers to visit for this activity. In

some communities participants can set up these visits themselves. 

Debriefing the experience and processing the learnings: 

Have each individual or pair report to the training group on their findings. 

Discuss commonalities and learnings. What would training participants do

differently in their next visit to a microenterprise owner/manager? Did they

notice cultural differences? 

Also, use this final activity as an opportunity to discuss the history of the Peace 

Corps in your country with nonfinancial, business development services. Where 

have Volunteers had successes in this area in the past and what are unexplored 

opportunities? Are their “potholes” to watch for? What local resource people 

might assist Volunteers with BDS?

Module 5: Business Counselor and Extensionist TRAINER’S NOTES — Page 161 
A Microenterprise Training Guide for Peace Corps Volunteers 

Module 5: Business Counselor and Extensionist TRAINER’S NOTES — Page 162