Paris, France, April 14, 2003—Today’s
first donor board meeting of North Africa Enterprise Development (NAED)
marked the formal launch of IFC’s newest multidonor small and medium
enterprise facility. NAED will offer an integrated package of technical
assistance and capacity-building services to support small and medium business
growth in Morocco, Algeria, and Egypt.
In September 2002, IFC announced its partnership with the Swiss government
to form NAED, with the parties contributing $5 million and $3.5 million
respectively. Since then additional funding from France ($3 million), Italy
($1.5 million), and Belgium ($500,000) has generated an initial total of
some $13.5 in donor support for the new facility, which will be managed
by the SME Department. NAED is now beginning formal operations, leveraging
IFC’s investment program in the region and coordinating closely with the
SMEs comprise more than 90 percent of the firms in the private sector of
Morocco, Egypt, and Algeria. But their performance is severely limited
by inadequate financing; few affordable sources of training, consulting
and other needed services; and a difficult business environment whose complex
and inefficient regulatory framework raises the costs of doing business.
Donors at the Paris meeting expressed pleasure with the initial start-up
phase and endorsed NAED’s new operational strategy, which aims to ease
some of these difficulties with several specific goals:
- Improving SME Access to Finance: Helping
local banks improve the quality and quantity of their SME portfolio by
developing their information and credit management systems and new financial
products and by providing targeted training in SME finance.
- Improving Access to Business Development
Services: Assisting training institutions and consulting firms in introducing
new performance-enhancing commercial products and services for SMEs. NAED
will also help business associations in Morocco and Algeria develop new
member services (information about business opportunities, information
technology services, and others) that will increase revenue generation.
- Supply Chain Management: Forging new
links between large firms and SMEs, both by training SMEs to meet the higher
quality standards of large firms to qualify for contracts and by working
with large firms to create more business opportunities for potential SME
- Improving the Business Enabling Environment:
Advising and assisting the government on SME-related policies, reducing
costs of licensing and registering a businesses, easing regulatory burdens,
and facilitating public-private dialogue.
NAED has offices in Cairo (the coordinating office), Algiers, and Rabat
and a full-time staff of twenty five. Current projects include:
Morocco—Microfinance: NAED will help Al Amana, a leading Moroccan
microfinance institution, develop new financial products , namely the individual
loan product, aimed at financing microentrepreneurs.
Algeria—Business Associations: After completing a demand survey of
23 business associations in Algeria, NAED has begun helping a women entrepreneurs
group improve its member services and gain stronger policy reform advocacy
Egypt—Business Development Services: Sensing strong demand from private
Egyptian training institutes for the “teach-yourself” management and
marketing workbooks IFC has developed for SMEs in other regions, NAED
has partnered with a leading e-learning company to commercialize seven
marketing training modules for SME managers, aiming to reach 1,000
participants per year.
“NAED is the eighth SME facility IFC has created with our donor partners,
and we are looking forward to bringing the lessons of our experience to
this region,” said SME Department Manager Thomas Davenport, who chaired
the meeting on behalf of IFC. “By working closely with many of the local
private sector, governments, the World Bank Group, and some of the world’s
leading small business development organizations, we hope to add some important
missing ingredients that will help more local SMEs reach their potential.”
As part of the World Bank mission to reduce poverty, NAED’s core mandate
is to improve the lives of people in North Africa by creating higher incomes,
jobs, and opportunities through a flourishing SME sector. Like other IFC-managed
facilities around the world, it will have an underlying requirement of
generating solid, measurable results that do not rely on continued external
subsidies. NAED has a commercial orientation, tailoring its products in
response to local demand and seeking to recover costs by charging appropriate
fees to clients.
IFC’s mission is to promote sustainable private sector investment in developing
countries, helping to reduce poverty and improve people’s lives. IFC
finances private sector investments in the developing world, mobilizes
capital in the international financial markets, helps clients improve social
and environmental sustainability, and provides technical assistance and
advice to governments and businesses. Since its founding in 1956,
IFC has committed more than $34 billion for its own account and arranged
$21 billion in syndications for 2,825 companies in 140 developing countries.
IFC’s committed portfolio at the end of FY02 was $15.1 billion,
with an additional $6.5 billion held for participants in loan syndications.
For more information on IFC, please visit www.ifc.org.