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World Bank - The Big Business of Small Enterprises: Evaluation of the World Bank Group Experience with Targeted Support to Small and Medium-Size Enterprises, 2006-12

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World Bank The Big Business of Small Enterprises: Evaluation of the World Bank Group Experience with Targeted Support to Small and Medium-Size Enterprises, 2006-12
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The Big Business of Small Enterprises: Evaluation of the World Bank Group Experience with Targeted Support to Small and Medium-Size Enterprises, 2006-12: summary, description and annotation

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The World Bank Group promotes small and medium enterprise (SME) growth through both systemic and targeted interventions. Targeting means focusing benefits on one size-class of firms to the exclusion of others. Targeted support for SMEs is a big business for the World Bank Group, averaging around $3 billion a year in commitments, expenditures, and gross exposure over the 2006 12 period. In the context of broader reforms, such targeted support can be a powerful tool. Targeting SMEs is not an end in itself, but a means to create economies that can employ more people and create more opportunity for citizens to achieve prosperity. A thriving and growing SME sector is associated with rapidly growing economies. A central challenge is to level the economic playing field by ensuring dynamic markets; strengthening market-support institutions; and removing constraints to participation. IEG found that financial sector development can have both a pro-growth and propoor impact by alleviating SMEs financing constraints, enabling new entry of firms and entrepreneurs and better resource allocation. Layered on top of this are targeted forms of assistance; these interventions may build on a foundation of more systemic reforms, may come in tandem with them, or may in fact be a means to build systemic reforms from the bottom up. Any credible justification of targeted support to SMEs must be focused on establishing well-functioning markets and institutions, not simply providing a temporary supply of benefits to a small group of firms during a projects lifespan. Thus, targeted interventions need to leverage resources to produce broader benefits for institutions and markets. To make targeted support for SMEs more effective, the World Bank Group needs to do several things: Clarify its approach to targeted support to SMEs. Enhance the supports relevance and additionality. Institute a tailored research agenda. Strengthen guidance and quality control for such support. Reform MIGAs Small Investment Program.

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2014 International Bank for Reconstruction and DevelopmentThe World Bank 1818 - photo 1

2014 International Bank for Reconstruction and
Development/The World Bank

1818 H Street NW, Washington DC 20433

Telephone: 202-473-1000
Internet: www.worldbank.org

Some rights reserved
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This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries.

Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved.

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This work is available under the Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO) http://creativecommons.org/licenses/by/3.0/igo. Under the Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions:

AttributionPlease cite the work as follows: World Bank. 2014. The Big Business of Small Enterprises: Evaluation of the World Bank Group Experience with Targeted Support to Small and Medium-Size Enterprises, 200612. Washington, DC: World Bank. doi:10.1596/978-1-4648-0376-5. License: Creative Commons Attribution CC BY 3.0 IGO

TranslationsIf you create a translation of this work, please add the following disclaimer along with the attribution: This translation was not created by The World Bank and should not be considered an official World Bank translation. The World Bank shall not be liable for any content or error in this translation.

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Third-party contentThe World Bank does not necessarily own each component of the content contained within the work. The World Bank therefore does not warrant that the use of any third-party-owned individual component or part contained in the work will not infringe on the rights of those third parties. The risk of claims resulting from such infringement rests solely with you. If you wish to re-use a component of the work, it is your responsibility to determine whether permission is needed for that re-use and to obtain permission from the copyright owner. Examples of components can include, but are not limited to, tables, figures, or images.

All queries on rights and licenses should be addressed to the Publishing and Knowledge Division, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625 e-mail: .

ISBN (paper): 978-1-4648-0376-5
ISBN (electronic): 978-1-4648-0377-2
DOI: 10.1596/978-1-4648-0376-5

Cover photos (from top left): Ami Vitale/World Bank, further permission required for reuse; Anvar Ilyasov/World Bank, further permission required for reuse;
iStock/temis, used with permission, further permission required for reuse; Jacqueline Andrieu, used with permission, further permission required for reuse; Andrew H. W. Stone, used with permission, further permission required for reuse; iStock/kzenon, used with permission, further permission required for reuse; Curt Carnemark/World Bank, further permission required for reuse; Eric Miller/World Bank, further permission required for reuse.

Cover design: Crabtree + Company

Library of Congress Cataloging-in-Publication Data

The big business of small enterprises: evaluation of the World Bank Group experience with targeted support to small and medium-size businesses, 2006-12.

pages cm

Includes bibliographical references.

ISBN 978-1-4648-0376-5 ISBN 978-1-4648-0377-2 (ebk)

1. Small businessDeveloping countries. 2. Economic development projectsDeveloping countriesEvaluation. 3. Economic developmentDeveloping countries. 4. World BankDeveloping countries I. World Bank.

HD2346.5.B52 2014

338.642091724dc23

2014025856

Contents

Abbreviations

Acknowledgments

Overview

Management Response

Management Action Record

Chairpersons Summary: Committee on Development Effectiveness

The Logic of Targeted SME Support

Literature Analysis

Scope of This Evaluation: Targeted Support to SMEs

Portfolio Review: SMEs Are Big Business for the World Bank Group

Theory of ChangeConnecting Support to Outcomes

Evaluation Design

IFC Support for SMEs

Rationale

IFC Investments for Targeted Support to SMEs

IFC Advisory Services for Targeted Support to SMEs

MIGAs Targeted Support to SMEs

Rationale

MIGA Guarantee Portfolio Overview for Targeted Support to SMEs

MIGAs SME Portfolio: FY0612

SIP Portfolio

MIGAS Regular Guarantee SME Projects

Overall Conclusion

The World Banks Targeted Support for SMEs

Rationale

World Bank Lending Portfolio

Efficacy of the World Banks Lending Portfolio for TSME

Efficiency of the World Bank TSME Lending Portfolio

Work Quality

World Bank Analytic and Advisory Work

Conclusions and Recommendations

Motivation

The Logic of Targeted Support for SMEs

IFC and Targeted Support to SMEs

MIGA and Targeted Support for SMEs

Small Investment Program

The World Bank and Targeted Support for SMEs

Conclusions and Recommendations

Appendices

Appendix A

Portfolio Review Methodology

Appendix B

Methodology and Finding of Statistical and Econometric Analysis of Enterprise Survey and Portfolio Data

Appendix C

Econometric Analyses of IFC and World Bank SME Lending Projects: Drivers of Successful Development Outcomes

Appendix D

Social Media Outreach

Bibliography

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