Consulting Services for The Promotion of the MSME related Finance Sector in Yemen

2013-08-31 - 2019-02-28
Yemen

During the German-Yemeni Bilateral Negotiations in May 2006 and July 2012 the two Governments agreed on a grant for the Social Fund for Development and its specialized unit Small and Micro Enterprise Development (SMED) to support the latter’s focus on micro and small businesses. The grant involves a financial component of 4.5 million EUR for refinancing SMED’s funding operations to its partnering financial intermediaries. In addition, the FC will also facilitate technical support for improving the institution and capacity building of both SMED as well as selected partnering financial intermediaries. In August 2013 LFS was awarded to carry out the technical assistance plan. The objective of the 4 year Project financed by the German Kreditanstalt für Wiederaufbau (KfW) Development Bank is the promotion of the MSME related finance sector in Yemen and the provision of technical assistance to the Yemen Social Fund for Development (SFD) in 4 areas of intervention: (i) Market intelligence to explore demand for MSE financial services and potential for a new MSME Greenfield Bank, (ii) Capacity Building of SFD, (iii) upgrading and Transformation of a specific MFI and (iv) upgrading of Yemeni MFIs. While LFS has extensive operational experience in the implementation of MSME finance in challenging urban, rural, and post-conflict environments, the continuing security risks in Yemen together with the travel warning from the German Federal Foreign Office remain the biggest challenge. LFS manages these challenges with tight monitoring of the security situation and flexible adjustments of the program and its activities to mitigate potential risks while ensuring a maximum degree of project implementation in line with the workplan. Due to the deteriorating security situation in the country, project activities were suspended in June 2015.   A first relaunch of the project took place in March 2016, with LFS providing consulting service in an additional field: Feasibility Study on a Green Finance Business Modell for Yemen MFI    On request of the client, the Small & Micro Enterprise Development (SMED) Unit of SFD, the relaunch was expanded from October 2017 onwards:
The objective of the five-year Project financed by the German KfW Development Bank is the promotion of the MSME related finance sector in Yemen and the provision of technical assistance to the Yemen Social Fund for Development (SFD), through four areas of intervention:   a) Advisory Services for the Development of the Microfinance Sector   b) Advisory services for SMED and senior management of MFIs   c) Advisory Services for a specific MFI (NMF)   d) Advisory Services for the Development of the MFIs     Due to the deteriorating security situation in the country, project activities were suspended in June 2015.   A first relaunch of the project took place in March 2016, with LFS providing consulting service in an additional field: Feasibility Study on a Green Finance Business Modell for Yemen MFI    On request of the client, the Small & Micro Enterprise Development (SMED) Unit of SFD, the relaunch was expanded to the following six project activities from October 2017 onwards:   Task 1: Capacity building to SMED in evaluating partner MFIs   Task 2: Capacity building for SMED/MFIs in Agricultural and Small lending   Task 3: Update SMED strategic plan for conflict and post conflict for the coming 3 years   Task 4: Activating the technical assistance for National Microfinance Foundation   Task 6: Support the establishment of the loan guarantee program (LGP)   Task 7: Development of a technology-based loan analysis tool for agricultural finance   Output:  Phase 1 (2013 – 2015) deliverables included:   Comprehensive market research on MSME finance gap in Yemen   Assessment of the Rationale of a Greenfield Microfinance Bank for Yemen   Training of SMED and/or senior management of MFIs through several workshops and exposure visits on strategic business planning, Internal Audit and Control, Risk Management, Training of Trainers, Leadership, Human Resources (workshops, exposure visits).    Review and update of the Operational Manual of the Apex SMED   Comprehensive advisory on Human Resources Management of NMF, the leading MFI in Yemen   Assessment of operations management of NMF   Development of the Strategic Business Plan 2015 – 2020 of NMF    Scoping mission on developing the MIS provided by SMED to the majority of MFI in Yemen.   Phase 2 (2015) deliverables included   Feasibility Study on a Green Finance Business Modell for Yemen MFI   Phase 3 (2017 to 2018) deliverables included   Capacity building to SMED in evaluating partner MFIs   Capacity building for SMED/MFIs in Agricultural and Small lending   Update SMED strategic plan for conflict and post conflict for the period 2018 – 2020   Supporting NMF in Strategic Business Planning 2018 – 2020 and HR management   Support the establishment of the loan guarantee program (LGP)   Development of a technology-based loan analysis tool for agricultural finance