Stakeholders have expressed the different challenges they face as a result of their work with MSEs. Some of the challenges are internal to the stakeholders others are external related to the MSEs (or trainees) and the other to the general business environment.

Problems related to the MSE sector and the trainees are listed below.

General lack of entrepreneurial skill and dynamism
Traditional and underdeveloped business sector
Low diversification of businesses/ domination of petty trading
Dispersed fragmented and unorganized micro and small operators
Lack of capital and financial resources
Lack of basic business management skills
Insufficient skills and skilled workers
Absence of collaboration and cooperation among MSEs
Socio-cultural attitudes and low awareness towards quality, standard, safety, etc
Low demand for training, consultancy, etc services even if provided free

Like the MSEs most of the support organizations mentioned above also face problems and challenges internal and external. With regard to the internal challenges faced by the stakeholders include:

limited capacity (financial and organizational),
low financial sustainability and dependency on donor funded training,
low quality of training,
no market assessment and systematic feedback, monitoring and evaluation
lack of access to training materials and resources.
Limited capacity to influence policies and practices of others such as in setting standards and requirements for training or influencing of credit policies of MFIs.

The external environment has also affected the work of these organizations. Some of the adverse factors are listed below.

Lack of access to regular and up to date information on needs for skills training and other services
Lack of forum for discussing problems and challenges with stakeholders
Inconducive regulatory environment and insufficient support for the sector
Low recognition for equally trained women
Lack of employment opportunities for trainees
Policies and practices of one actor adversely affecting that of others

Some of the challenges mentioned above are clearly related to networking and communication.

The stakeholders do not have a system of feedback from the users of the services and the market. Although most of them share similar problems with regard to their work with MSEs they are unable to address them in a coordinated manner.

Generally there is limited networking among the different stakeholders. Networking efforts are weakest between the commercial service providers and the NGOs or government. The culture of working in isolation is common practice in both private and government offices.

In the absence of any significant level of networking between these different stakeholders it was not surprising to find that most have little or no awareness about the existence and mandate of the ReMSEDA.

It has also been observed that there is a general lack of awareness regarding the MSE sector and the MSE strategy and the duties and responsibilities of different actors.

Some of the organizations interviewed were able to identify some of the missed opportunities because of the lack of networking.

Complementarity between different support services for MSEs such as linking skills training with micro finance and business training.
Effective use of services and capacities available for use such as technological support services that could be provided or tailor- made skills training
Market information on market needs and economic potentials
Regular forum for awareness raising, to strengthen complimentarity and remove obstacles, lobby regarding regulatory environment, for discussing quality and standards for products and services and for creation of awareness among the MSEs.

There are more reasons why network is considered necessary at this stage.

The importance of the MSE Development in the ADLI strategy of the country and in the poverty reduction process
The increased need for forging strong collaboration among different MSE promotional stakeholders in the private or commercial government and non-government sector inorder to realize the strategy for MSE Development in the region.

The network of MSE stakeholders is of importance to others as well. One such body is the TVET/network or council which considers such a network important for achieving its own objective by accessing information and feedback on training needs of existing and emerging MSEs and collaboration on monitoring and evaluation activities.

The network can also be instrumental in forging collaboration within and outside the region and the country for experience sharing and acquiring new technologies and information.

The network enables MSE promoters to enjoy the synergy effect as reflected in streamlining services, making optimal use of resources for the sector's efficiency and avoiding duplications and conflicting actions.

2. Establishing sustainable network top

Many of the stakeholders as indicated earlier are engaged in similar activities. Few examples were also sighted on how the work of one organization complicates or facilitates that of others.

The organizations operate in the context of significant gap on who is doing what in the MSE sector. Most have expressed the need for a forum where they learn from each other.

The need for networking is obvious because of the following major reasons:

Lack of information on the existence, roles and responsibilities of different actors
Lack of understanding and information on the overall MSE sector and the problems faced
Existing gaps in coordination between different interventions
Lack of communication between different actors
Little overall impact on MSE development

Networking is a means through which organizations with common interest or goal learn from each other and support each other. It is a means for better use of resources and bringing about bigger impact.

Networking can be defined as 'a process of establishing and maintaining communication and linkages amongst individuals and organizations, in a non-structured informal and on-going manner’. Capacity Building of Networks in South Asia Report of Workshop March 17-19 1998 New Delhi PP 13)

Paul Starkey defined network as the following:

A network is any group of individuals or organizations who on a voluntary basis exchange information or undertakes joint activities and who organize themselves in such a way that their individual autonomy remains intact. ( Paul Starkey, Networking for Development pp.)

It should be noted here that there is a difference between networking and network. While networking is a lose form of association where group of people /organizations come together for a certain common purpose the network is more structured form of association with its own identity defined by its members.

'Networking is integral in maintaining and running an effective network but does not necessarily have to have a concrete form and structure as a network does'. (Capacity Building of Networks in South Asia Report of Workshop March 17-19 1998 New Delhi PP 13)

Networking is the main element in networks. It evolves over time and does not necessarily happen because organizations form a network.

Ranges of formal and informal networks exist in Ethiopia in the private sector (such as the chambers of commerce, and various business associations, iddirs, iqquibs, mahbers, etc.) among NGOs and in the public sector.

Different levels of success have been achieved in establishing and running sustainable networks. The following SWOT (Strength, Weaknesses, Opportunities, Threats) summarizes some of the pertinent lessons.

Strengths	Weaknesses
Bring diverse people and experiences together. Have the potential of pooling resources for greater Impact. Can bring about better coordination and efficiency. Good opportunity for policy dialogue. New ideas are generated in such forums. Help to increase understanding and clarify ambiguities.	May bring diverse people with no common vision. May be dominated by the more strong/elite. Could be used by vested interests, dominant institutions groups or individuals. May be too ambitious and without impact. May suffer from lack of resources. May become donor driven and collapse when donors lose interest. Members become inactive. Network secretariat could become bureaucratic and centralized. Secretariat acting independent of members. Expectations of direct benefit cause some to lose interest.
Opportunities	Threats
Can attract donors and other stakeholders. Can easily link up with other networks. Visibility and collective strength.	Legal registration may prove difficult. Informal networks may not attract donors. End up creating another dysfunctional institution.

Based on lessons learned universally certain principles and practices seem to have contributed for successful networks. These principles and practices include the following:

2.1 Existence of Common Purpose and Clarity of Vision and Purpose top

Networking should be based on a clear definition of common interest or purpose. This is fundamental to a sustainable networking. It is important to clarify the interests and expectations of each member and identify common grounds on which the networking could be based. This process should start from availing information and conducting series of discussions on the roles, capacities, problems and challenges of each organization.

Having a clear vision and objective for a network is an essential element for its sustainability. A network with diverse membership will have difficulty of developing a clear common vision and objectives. Lack of clarity in these will cause problems in effective coordination of the network at latter stage. Members of network should be able to define their interest and decide what the outcome of the networking should be. Network should focus on core issues that interest all stakeholders.

2.2 The Process of Establishing a Network back

Network should evolve and should not be imposed. Increased awareness, communication and networking, development of common interests around issues and initiatives of joint work and collaboration for a significant period of time may finally lead to the establishment of a formal network. The process is usually gradual and starts informally within few organizations and grows over time. Therefore it should not be rushed.

Most networks usually starts with a handful of organizations that are able to develop common purpose and vision. As the network develops others who share the vision join. Starting a network with a small group of organizations has the advantage of working more closely and intensively with less difficulty in coordination. It is also easier to reach consensus and agree on initial purposes and functions which can and should be reviewed and changed as the network expands.

2.3 Offering Concrete Benefits to Members top

A network will not be sustainable if it is not offering concrete benefits to its members. If members do not feel they are benefiting from being a member of a network their commitment will disappear. Therefore the work of the network should focus on what it can do for its members in facilitating their work, building their capacities, lobbying on their behalf or publicizing their work etc.

2.4 Leadership and governance back

Good quality leadership is critical for successful networks. There should be critical mass of members who are able to create dynamism in the network. Leadership should be participatory and transparent. Tasks and responsibilities have to be shared. Each member should feel responsible and important for the network’s success. Each member should contribute to the network in different forms and also benefit from the contribution of others.

2.5 Accountability and Transparency top

Network facilitator should be member driven, accountable to the members and transparent. Institutional membership brings with it power. It is possible that network could be dominated by strong institutions and become a major source of conflict in networks. This should be avoided by making sure that all members of the network participate and benefit equally from the network activities.

2.6 Conflict Management top

Networks are bound to face conflicts among members. However it needs good leadership to mange it and uses it skillfully for allowing space for the members to articulate their needs, air their grievances and frustrations. Differences of opinions could be a source of learning and should not be discouraged. Networks with members of diverse capacity need to assist the weaker members to become articulate and negotiate and contribute equally.

2.7 Sharing of Common Resources top

Networks create opportunity for members to contribute to the strengthening of the network by making their resources available. The network should be able to use regularly the resources of its members to achieve its goals instead of developing parallel capacities that compete with its members. A good network relies on the resources of its members.

For further information have a look on the
Network study for Tigray (Desta Solomon) in our library

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