Technical assistance (TA) has become an increasingly important complement to finance in private-sector development. Businesses need capital to invest and grow, but funding alone cannot solve every challenge they face.

Many businesses may struggle with operational and managerial gaps which inhibit sustainable growth. These include weak systems, gaps in management capacity, poor market positioning, ineffective recruitment, or business models that have not yet been tested against customer or employer demand. TA is used to address these challenges. It ensures capital can be used to fuel business growth that delivers value to clients and returns to investors  —rather than to pursue unsustainable growth, which simply burns through investor cash.

The Challenge Fund for Youth Employment (CFYE) has seen these challenges across a diverse group of businesses. Delivered by Palladium in partnership with VSO and Randstad, CFYE invests in growth-stage businesses and provides technical assistance to help them expand commercially and deliberately create high-quality jobs.

Over six years, CFYE delivered technical assistance to 132 very different businesses across 11 countries—Burkina Faso, Egypt, Ethiopia, Jordan, Kenya, Morocco, Nigeria, Senegal, Sudan, Tunisia and Uganda—and in sectors ranging from waste management to technology-enabled skills training. The businesses also varied in maturity. Since its launch, the programme has supported more than 260,000 jobs and attracted EUR 162 million in additional investment. For every euro invested by CFYE, partners contributed EUR 1.78.

According to Nimrah Karim, Senior Manager, Technical Assistance, Strategy, & Impact at CFYE, the programme’s experience shows that TA works best when it is not offered as the same package of training to every business. Instead, support should address a clearly identified problem holding that business back. “We found that businesses were less likely to use generic support or support offered at the wrong time. When assistance was based on a careful assessment of their needs and tailored to them, businesses participated more and were more likely to put the recommendations into practice.”

This has important implications for how TA facilities are designed. The starting point should not be the available menu of consultants or training modules, but the problem the business actually needs to solve.

Start with the Business Problem

CFYE first assessed each business to understand how it operated, the results it wanted to achieve and where its capabilities were weakest. The central TA team led this process with in-country teams that worked directly with the businesses. They used tools such as a business profiling matrix alongside open conversations about opportunities and constraints. Because local teams knew the businesses and their context, the assessment reflected conditions on the ground. CFYE could then focus and time its support around specific operational or commercial problems, rather than offering a topic simply because it seemed broadly relevant across the portfolio.

“This matters in a portfolio of very different businesses,” adds Karim. “An early-stage business may first need basic financial, HR or monitoring systems before it can grow.” A growth-stage company may benefit more from help entering new markets, improving supply chains, increasing sales or preparing to seek investment. More established firms, however, often need specialist expertise and will engage only when the support clearly fits their priorities. CFYE therefore used the same approach to assess every business, but tailored the resulting support to each one.

There is always a trade-off between cost and depth. Webinars and online resources allow a fund to reach many businesses at relatively low cost, and CFYE found them useful for raising awareness and teaching the basics. More mature companies, however, made relatively little use of generic content. Tailored coaching, business clinics and one-to-one support cost more, but were more likely to lead to changes in how a business operated or pursued its strategy.

Tackling Barriers

CFYE worked with two digital platform-based businesses in West Africa. Niokobok in Senegal is an e-commerce company that connects product suppliers with women who resell goods in their communities and with end customers. The Digital Marketing Skill Institute in Nigeria (DMSI) offers online training that helps learners build digital skills and find employment. Both businesses faced the same broad challenge: keeping people active and engaged on their platforms.

Instead of giving both businesses the same workshop, CFYE examined each case separately. The team interviewed users to understand where problems arose as they moved through each company’s services. This process revealed that the two businesses needed different solutions:

Niokobok needed a wider range of products to keep customers interested, but informal local supplier networks made it difficult to find goods at competitive prices. CFYE helped the company improve how it bought and sourced products. Niokobok expanded its supplier network, negotiated better prices and improved one-third of its product range. These changes increased customer engagement and gave women resellers a stronger selection of products to offer.

DMSI allowed learners to complete training first and repay the cost after finding work. The model became too expensive to sustain because too few learners repaid, their earnings grew slowly and some dropped out. “At the design sprint we were not lectured, we were made to think,” shares the DMSI team. “We were asked to look into the feelings and expectations of the people we were trying to reach and create solutions to problems that felt difficult for them to achieve.”

Through workshops focused on learners’ needs and experiences, CFYE helped DMSI redesign its payment model. Learners could pay in instalments linked to finding a job, which lowered upfront costs and improved access, registrations, revenue and overall business performance.

In both cases, growing the business did not automatically produce reliable income. If Niokobok expanded its product range without improving how it sourced goods, prices could rise and women resellers could earn less. DMSI could enrol more learners through its pay-after-employment model, but that growth would not help if repayments remained low or uncertain. CFYE’s support helped both businesses strengthen the day-to-day systems needed to make growth financially sustainable.

“For TA programmes that want to help businesses grow, CFYE’s central lesson is to start with the problem, not a ready-made solution,” adds Karim. “Focus support where a business is ready and able to use it, adapt it to the company’s stage of development and motivations, and show clearly how it can improve business results.” When those conditions are present, TA becomes more than an extra alongside finance: it can help businesses grow and create better jobs.

To find out more about lessons from CFYE in TA delivery, consult the full learning brief here: https://lnkd.in/dt9RCEPz