Skills Development for Entrepreneurship
- Reference: P-MZ-IZ0-001
- Appraisal Date: 15/03/2015
- Board Presentation: 30/11/2015
- Status: PipelinePIPE
- Implementing Agency: GOVERNEMENT OF MOZAMBIQUE MINISTRY OF FINANCE
- Location: NATIONWIDE
The project will be design around 3 main areas of support, namely:
a)Strengthen the capacities of business associations and business development service providers to better support and serve SMEs in Mozambique. The existing BDSPs would include largely private sector entities engaged in providing a range of BDS to their clients, which may or may not include SMEs among their target groups. The intervention will also target the most meaningful Associations, including associations of women entrepreneurs and to ensure reach, the intervention will seek to ensure that the associations have sectoral and geographic reach. b)Assistance to Growth Oriented SMEs assistance will be geared to build their capacity to better manage their growth, increase their productivity and profitability and effectively engage financial support to facilitate their growth. For sustainability and long term growth of the SMEs beyond the training the project will entail provision of advisory services and on-the-job tutoring. Business Development service providers will provide support and training to SMEs including put into place bankable business plans for credit access the under the credit guarantee facility in addition to the business management skills. c)Strengthen the capacities of Selected GoM institutions: the project will targeted TA resources to GoM to support enhanced policy environment namely on
(i) cost / ease of doing businesses
(ii) challenge of transition from informal to formal
(iii) Policy Incentives (eg. industrialisation policy; incentivise industries, economic zones & corridors. It will also support key GoM institutions in linking SME growth activities with TVET activities and promote and support effective dialogue on the topic of jobs engaging GoM, Private Sector and Civil Society.
The purpose of the project is to strengthen financial and non-financial support to growth oriented SMEs in Mozambique, thus enhancing SMEs' role and contribution to wealth and job creation in Mozambique.
The rationale of supporting SMEs lies in the willingness of achieving poverty reduction, increasing economic production and obtaining local empowerment. Mozambique's medium term Action Plan for Reducing Poverty (PARP, 2011 -2014) aims to reduce the poverty headcount from 54.7% in 2009 to 42% in 2014; close the country's infrastructure gap and promote human and economic well-being through rapid and inclusive growth, based on three objectives:
(i) increase of agricultural and fisheries production,
(ii) employment promotion, and
(iii) social and human development. These objectives are supported by two overarching pillars: macroeconomic management and good governance. In the Mozambique context, this "broad-based" growth can be achieved through investment in agriculture of the kind that will boost the productivity of the family sector and diversify the economy, creating jobs and linkages between foreign investment and the local economy, supporting micro, small and medium sized enterprises, and fostering human and social development. The Project is indeed aligned to Bank Group assistance strategy to Mozambique is built based on the strategic positioning of Mozambique in the Southern Africa regional integration agenda and on the corridors development approach. It also takes into account the previous Bank's interventions and the Government's response to the new evidence suggesting low poverty reduction and job creation despite relative high Gross Domestic Product (GDP) growth rates. The CSP is prepared in response to the prevailing country's development challenges through the following pillars:
(i) Pillar I: Enhanced private sector competitiveness through infrastructure development; Pillar II: Governance in support of inclusive growth. It is expected that the successful implementation of the strategy will promote business and expand SMEs activities and increase co-financing opportunities
The overall expected impact of the SMEs capacity building intervention is that SMEs including women-owned SMEs will improve profitability as well as their investment decision processes, enjoy increased success in applying and accessing finance from banks and thus increase the proportion of SMEs especially accessing finance from banks; increased profitability and growth (as measured by turn-over, asset base and employees including women-owned SMEs. The project is expected to faci litate and contribute to the creation of jobs, increase the proportion of women-owned SME borrowers' portfolio by about 30% of the total SME portfolio.
BARBOSA Yolanda Arcelina de Oliveira - RDGS2