SELECTION PLANNING AND

MANAGEMENT OF IGA

Session 1: The Process of beginning

IGA Selection
SESSION OBJECTIVES

By the end of the session participants will know how to facilitate the 5
important steps:
Step 1: Setting the scene (15 minutes)
Step 2: Define an Income Generating Activity (IGA) 45 minutes
Step 3: Create a list of IGAs that are common in the area (15 minutes).
Step 4: Identify and discuss reasons for success or failure (30 minutes)
Step 5: Introduce the five important points for IGA selection (15
minutes)
Step 1: Setting the scene (15 minutes)

 Level fears and expectations

 Set ground rules, ensure every member agrees
with the set rules. Example could include:
I. Attend all sessions and come on time.
II. Not come and go during the sessions, or talk on the
telephone.
III. Not criticize others when they share ideas or share
information about the mistakes they have made in
their own IGAs.
 Assign roles and responsibilities
 Finally explain the training objectives
 Step 2: Define an Income Generating
Activity (IGA) 45 minutes

 Ask participants to try and define what an IGA

is;
 Encourage everyone to talk, notice quite ones
and make sure they are part of the group.
 Draw and record responses on a flip chart.
 Pick out key words from the responses
 Show participants the definition of an IGA.
Define an Income Generating Activity cont.…

“An Income Generating Activity is

anything we make and sell, or
something that someone pays us to
do for them. It is an activity in
which the owner usually focuses on
income”
Define an IGA cont. show the
continuum
 IGA SME CONTINUUM

 IGAs tend to maximize the amount of income they take

from the enterprise and minimize reinvestment to what
is just enough to stay in business.
 SMEs tend to maximize the amount that is re-invested
in the business for growth.
 Draws out from participants some of the key distinctions
between IGAs and SMEs as follows:
 Distinction between IGA and SME
IGA SME
Unregistered Registered

No fixed premises Physical premises

simple or no technology Tend to invest in modern technology

Low skills Skilled and semi-skilled workers

Uses family labor to work in the business Uses skilled personnel’s, no relationship

No accounts Employ an accounting system

Does not pay tax Pays some tax

Mixed with family economy Separated from family economy

Enterprise does not grow They are growth oriented

Step 3 Create the list of IGAs that are
common in the area

By the end of the participants will:

 Identify IGAs that are common in their area

 Appreciate that it is possible to find an IGA from within
their community.
 Know that anyone can do something

“A fool is in the middle of an Ocean yet thirsty or hungry”

The list of IGAs that are common in the area
Step 4: Identify reasons for success or
failure

GROUP WORK:

 List all IGAs that are successful that you still do or would like to do
again, and IGAs which have been unsuccessful which you do not do
any longer.
 Discuss why they are successful or unsuccessful.
Do not draw up a big list but come up with at least two reasons for
success that seem common to most IGAs and two reasons for failure
and put these on cards to be stuck on a wall, fitting them in to the
appropriate boxes below.
Reasons for success Reasons for failure
Knowledge, skills and time availability
• Didn’t have the skills
1. Good knowledge of the business • Didn’t know anything about where to sell
2. Had no other IGA so could concentrate • Didn’t know where to get supplies
• Could find raw materials
Market and customers
1. Predictable seasonal demand • Bad location
2. Low competition, high demand all year around • Few customers
3. Good customer relations • Selling on credit
4. Good advertising/marketing skills • Poor quality product
5. Good quality product/high patronage • Too much competition
6. Knew customers well and good location
Income – Is the IGA Profitable?
1. Product known to be profitable but
needed high skills • Copied a common activity but no analysis
2. Which the owner had. he had been an was done
apprentice
Reasons for success Reasons for failure
Sources of capital

• No saving culture or place to

1.Low startup capital financed save
from savings • VSLA loans to small and too
2.5 year member of MFI short term
3.Got additional startup help • MFI loans needed to much
from parents collateral
4.VSLA member with a lot of roll • Borrowed from a moneylender
over savings and los land

Household income
1. Met needs for household cash • Small income, other IGAs more
expenses, so specialized. important
STEP 4: The “Five Important
Points” to consider when selecting
an IGA.
1. KNOWLEDGE, SKILLS AND TIME: Do I have the knowledge
and skills for my IGA and is the labour available to operate it?
2. MARKET AND CUSTOMERS: Will enough people buy my
product or service?
3. INCOME: Is the IGA profitable
4. SOURCES OF CAPITAL: Do I have enough money to start up
and operate the IGA
5. HOUSEHOLD INCOME: Will the income from the IGA, when
added to other family income, be enough to pay household
expenses?
Next steps
 During the next five sessions everyone will learn the Five
Important Points of IGA Selection.
 Before Selecting and Planning an IGA, members should
always ensure that these Five Important Points are
considered carefully.
 Each participant should start thinking of an IGA that they
would like to start or improve as a result of this course.
 Inform the members about the date and time of next
session
THE END OF THE SESSION