Private Sector Development in South and Southwest Serbia (PSD) was a four-year, $6.5 million USAID initiative to promote small and medium enterprise and entrepreneurship development in 12 underdeveloped Serbian municipalities. A unique government-to-government effort, PSD aimed to increase sales, exports, and jobs in agribusiness, light industry, and fashion through partnering with Serbia’s national and regional rural development agencies.   

Under the EVAL-ME IDIQ, SEGURA Consulting conducted a mid-term performance evaluation of the first phase of PSD. SEGURA’s two-person team developed a random sample of the 200+ supported  enterprises and associations and traveled to interview 43 of them, plus the government agencies directly involved in the program. The evaluation team identified the project’s strengths and weaknesses and recommended adjustments and improvements for some components that required strengthening.

Methodology

Before deploying to Serbia, SEGURA’s evaluation team undertook a comprehensive desk review of available PSD Project-related documentation. The team used these sources to prepare three different questionnaires for field interviews with each stakeholder group (implementing partners, disadvantaged SMEs and start-ups, associations/clusters) and select 43 potential interviewees via random sampling.

The team then convened in Serbia for three weeks of in-country work, starting with a debriefing with USAID Mission staff and project management that presented the Team’s evaluation methodology and logistics. After interviewing project staff, the team embarked on a grueling two-week trip in the Serbian winter to reach all target municipalities. Along the way, the team conducted key informant interviews and focus group discussions with 25 SMEs, four associations/clusters, five start-ups helmed by women or youth, and five implementing partners (the National Agency for Rural Development and four Regional Development Agencies). All interviews, with the exception of those with implementing partners, were conducted primarily in Serbian with English translation. In an attempt to corroborate anecdotal evidence and broad claims cited by interviewees, the team triangulated interview transcripts with quantitative data provided by Serbian labor authorities and other financial/regulatory bodies.

Once the field surveys were complete, the evaluation team prepared an out-briefing presentation for USAID/Serbia Mission management and PSD technical staff. After returning from the field, and integrating USAID feedback, the team submitted the final report.

Main Findings and Recommendations

  • Achievement of Mission-Level Results: The team found that PSD achieved or exceeded all five Mission-level indicators. Notably, the annual revenue increase of nearly 8% within an economically challenging business environment was impressive. SEGURA advised USAID to consider adding performance indicators related to the number of exports generated and the availability of bank financing.

  • SME Competitiveness: The team noted that, while the number of SMEs receiving assistance exceeded the project target, fewer companies were able to sell in new markets than hoped. only 23.5% of the respondents who attended trade fairs entered new markets as a result, and fewer SMEEs participated in trade fairs than targeted. However, the value of sales contracts at international trade fairs ($355,000) significantly exceeded the $250,000 trade fair sales target. 

  • Linkages between SMEs and Serbian Development Agencies: The team found that the level of appreciation for, and willingness to cooperate with, rely on, and trust the Regional Development Agencies was supremely high among respondents. SMEs especially emphasized that calls for grant applications really sought participation by small businesses rather than favoring and ultimately rewarding only larger, more well-established businesses. However, SMEs viewed mentoring and consulting as overly general, so SEGURA recommended that Regional Development Agencies better tailor their advice to the particular requirements of individual enterprises in the next project phase.

  • B2B Linkages through Associations and Clusters: The team noted that PSD staff did work with double the target number of associations and clusters (8 rather than 4), and that supported associations and clusters showed an 11.5% annual growth rate. However, very few members joined these organizations, and most were not very successful in exhibiting at trade fairs and earning contracts from participating in trade fairs. SEGURA recommended that PSD improve its work with these organizations by ensuring that they are adequately prepared to engage businesses at trade shows. SEGURA suggested USAID to consider prioritizing lead firms that can provide technical support to their suppliers to raise product quality.

  • Government-to-Government Management: The team felt that the G2G approach brought a great benefit to PSD by serving as a cost-effective, efficient, transparent, and professional model for driving development results. SEGURA recommended that USAID replicate the model in other developing countries.

Client:
USAID/Serbia 

Year:
2016 

Technical Areas:
Monitoring, Evaluation, and Learning;
Competitiveness

Region:
Europe & Eurasia

Location:
Serbia