Feasibility Study for Creating a Platform for Very Small Enterprise (VSE) Finance

2012-08-31 - 2012-11-30

LFS conducted a market analysis, assessing both the demand and supply side of Very Small Enterprise (VSE) financing in Morocco. This included institutional assessments of the three partner microfinance institutions: Al Amana, FBPMC, and FONDEP. Furthermore, LFS designed a survey (including questionnaire design and sampling of ca. 400 VSEs) and prepared a local survey institute for survey implementation and monitored it. Based on the findings LFS designed a proposal for a structured cooperation between the three participating MFIs (VSE platform) including the prerequisite measures to be taken to make the entry of the MFIs into the new market segment work.
Part I: Market Analysis and Institutional Assessment Analysis of demand for VSE finance in Morocco Explore existing definitions of VSEs and determine the size of the VSE sector Design of survey, training of local enumerators and supervision of survey implementation (sample size: 400 VSE) Define the business environment for VSEs and their relevance for employment and income generation Determine the potential credit demand of VSEs and potential financial products and instruments Analysis of supply of VSE finance in Morocco Assess the Moroccan regulatory and legal framework Define VSE funding options and determine involvement of banking and MF sector and other (informal) players Determine the need for/benefits of a guarantee fund for VSE finance Brief institutional assessment of the three partner MFIs and respective product offering Part II: Development of a Potential Structure for the VSE Platform Analyze strategic, legal and organizational considerations for the structuring of the platform. Possibilities and challenges of increasing the strategic alliance of competitors Definition of potential products for VSEs Feasibility of integrating the platform into daily operations of the three MFIs Integration of the platform at the staff level; distribution of responsibilities related to the lending process, including decision-making process and hierarchies Definition of necessary skill set (of mid-management, loan officers, admin staff) to effectively manage platform Legal duties and liabilities of the three institutions; documentation to be entered by the parties Marketing/branding of the platform Suggest an appropriate structure in cohesion with the above findings. Part III: Development of an Implementation Plan Provide a detailed description of different stages of implementation leading to the establishment of the financial platform (including timeline) Outline potential technical assistance support (for instance, for product development and staff training