World Bank advisory programme aims to strengthen MSME ‘backbone’ of region’s economies

AMMAN — The World Bank Group, is launching a new, expanded phase of an advisory programme to help improve access to financing for micro, small- and medium-sized enterprises (MSMEs), promote sustainable job creation and boost private sector-led economic growth across the Middle East and North Africa (MENA) region. 

According to a World Bank Group statement, “MSMEs are the backbone of MENA economies”, comprising nearly 90 per cent of private firms and playing a pivotal role in the creation of dynamic, competitive and inclusive economies and jobs. 

However, “their ability to grow has been severely limited”, largely by restricted access to finance. As a result, MSMEs in MENA have among the lowest levels of usage of bank loans in the world, the statement said. 

The five-year advisory programme is aimed at energising the MSME sector in Algeria, Egypt, Iraq, Jordan, Lebanon, Morocco, Tunisia and the West Bank and Gaza, and will be conducted by implemented by the World Bank and IFC through targetted regional advisory projects as well as country-focused initiatives, in partnership with the Netherlands, the United Kingdom, Sweden and Switzerland.

The programme takes a 360-degree approach in improving MSMEs’ access to finance. This involves enhancing the enabling environment, developing financial market infrastructure and building the technical and funding capacity of financial intermediaries. 

It particularly focuses on supporting women entrepreneurs and leveraging digital technology to enhance financial inclusion, the statement noted.

“A robust MSME sector can generate jobs, economic opportunities for women, innovation and channel youth energies productively. We are committed to helping economies in the Middle East and North Africa in their efforts to promote access to digital financial services by entrepreneurs,” World Bank Group Vice President for Equitable Growth, Finance and Institutions (EFI) Ceyla Pazarbasioglu was quoted in the statement as saying.

Sérgio Pimenta, IFC Vice President for the Middle East and Africa, said: “A vibrant private sector, underpinned by strong MSMEs and forward-looking entrepreneurs, is vital for sustainable, long-term growth in MENA. We will work together with our development partners across the region to stimulate private sector development and help enhance financial sector sustainability and stability.”

In this second phase of the initiative, activities will build on the experience of previous advisory work implemented from 2012 to 2018 under the MENA MSME Technical Assistance Facility, the statement noted. 

During the first phase, the programme covered Morocco, Tunisia, Egypt, Jordan, the West Bank and Gaza, Libya and Lebanon. 

The statement noted that 80 projects were implemented, with achievements including the disbursement of 5,247,647 microloans — 58 per cent of which were distributed to women — and 69,075 SME loans at a total value of $7.9 billion, as well as the creation of 336,867 jobs through Bank Group credit lines, among others. 

The World Bank Group is one of the world's largest sources of funding and knowledge for developing countries. It comprises five closely associated institutions which each play a distinct role in the mission to fight poverty and improve living standards for people in the developing world, the statement said.