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CEFE which stands for Competency–Based Economies, Formation of Enterprise developed by the German Agency for Technical Cooperation (GTZ), has evolved over the years from an approach of training individuals who want to start their own enterprise to a comprehensive training methodology which is designed to evoke enterprising behavior and competence in a wide variety of situations. The fundamental assumption is that people with a clearer vision of their goals and equipped with the skills to achieve them are far more likely to become productive individuals in society.


Although the training methodology has a wide appeal and has been applied in a variety of situations, its core focus remains the stimulation of growth and the development process of small and medium enterprises including that of the informal sector. It develops and enhances the business management and personal competencies of the two sets of actors which are considered as the most important players in the enterprise growth process, namely: entrepreneurs and the personnel or enterprise support and regulatory institutions. The emphasis with entrepreneurs is on improving their business performance while with personnel from enterprise support and regulatory institutions more attention is given to creating a positive enabling environment at the macro and meso levels.


Many training programs have the objective of transferring skills and know-how, with the result that knowledge is acquired but there is very little subsequent application. Why this is so? This is because of the absence: of working on the motivation to act, the strengthening of capabilities to act, and the testing of the capabilities in “real-life simulation exercises”. This is particularly the case with the lower income target groups whose experience and exposure to more formal business situations such as applying for a loan from a bank, precludes their competence in handling the rigors of sophisticated business environment that comes with growth.

The third stage is goal setting where the emphasis is placed in developing clarity of purpose in one’s short and long term goals in life.


 The first stage is awareness, in which the participants are encouraged to examine who they are, clarify their own values, and evaluate their own personality, motivations, capabilities and personal resources.


CEFE training focuses on the circumstances involved in decision-making during the kind of interactions described 

Its objective is to increase the competence of key economic actors to generate productive interactions. 

​ The fourth stage involves developing strategies or action plans, which are oriented to generating growth. This is done after analyzing the relevant components of six factors mentioned above and includes the upgrading of knowledge about economics and entrepreneurial decision-making.

There are essentially six stages in a CEFE training program regardless of the target group. The six (6) stages are as follows:

The fifth stage is direct experience where the emphasis is on doing structured learning experiences (SLE’s) and encountering “real-life” situations, assist in building up this experience in which strategies are tested, evaluated and modified.

 The second stage is acceptance or recognition of one’s strengths and weaknesses- not everyone has to be a leader or a hero, but being more creative, innovative, and competent is likely to produce rewards in any profession




In the context of this background and experience of CEFE, its main objective therefore is:

To improve the entrepreneurial performance of economic actors through:

• Guided self-analysis

• Stimulating enterprise behavior

• Build up of business competencies 

 The last stage is transformation and empowerment where the competencies acquired come together into a pattern that matches personal strengths and weaknesses with goals.

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