SMALL ENTERPRISE DEV

closed

The Private Sector Development project will consist of four, mutually reinforcing components: (a) a line of credit which will provide the term resources needed to finance medium- and long-term investment; (b) an enterprise development fund to help entrepreneurs improve the design of their projects and strengthen their managerial capacity; (c) training and institutional support to the Ministry of Justice to strengthen its capabilities to design and implement legal and judiciary reforms aimed at improving the legal system; and (d) training and institutional support to the Ministry of Finance to undertake studies to design reforms aimed at improving the business environment, and to oversee project implementation. The line of credit will be reimbursed by the banks periodically according to a schedule matching the schedules set for subloans. The interest rate charged to banks will reflect the cost of funds and that charge to beneficiaries will be within the maximum ceiling presently set at 12.5 percent p.a. These interest rates will be variable and will be reviewed periodically to ensure they reflect inflation and macroeconomic conditions. The Enterprise Development Fund institution will receive the funds as a grant, and private beneficiaries will share in the cost of services provided.