Micro, Small and Medium Enterprise Development

closed

The objective of the Micro, Small, and Medium Enterprises (MSMEs) Development Project for Nicaragua is to improve the competitiveness of micro, small, and medium enterprises and the business climate that affects those firms. There are four components to the project. The first component is the business and investment climate improvement. The objective of this component is to remove administrative and regulatory obstacles for MSMEs, especially in eight municipalities that have completed the International Finance Corporation (IFC) municipal scorecard diagnosis. The second component is the matching grants for MSMEs. It will finance matching grants for MSMEs. Grants will finance pre-investment and investment activities and be awarded competitively through a series of rounds with different technical focus (such as quality enhancements and certification, innovation, labor training, clean technologies, or resolving value chain bottlenecks for a specific sector). The third component is the increased access to financial services for MSMEs. It will improve the access of MSMEs to affordable, reliable, and appropriately designed financial products, providing a pilot Partial Credit Risk Guarantee (PCRG) for loans by regulated financial institutions to MSMEs. It will be disbursed gradually based on documented losses, with no initial capitalization with International Development Association (IDA) funds. Finally, the fourth component is the institutional strengthening of Ministry of Economy (MIFIC). The objective of this component is to improve the institutional capacity of MIFIC in its role as project coordinator, Sector Wide Approach (SWAP) manager, and technical and strategic leader for private sector development. National MSME surveys will be undertaken to better inform public policy discussions.