Enabling SME Growt...

Enabling SME Growth through Integrating SME Financing and Business Incubation

BACKGROUND

The Islamic Corporation for Development of the Private Sector (ICD) and infoDev aim to explore the potential for a partnership between the two institutions that enables SME growth in developing countries. The partnership would aim to build scalable local institutional capacity to provide Islamic SME financing and development support services, thereby creating an enabling environment for entrepreneurs/SMEs to start and scale their businesses to competitive and export oriented levels.

The program would provide a mix of business development and market linkage support, along-side appropriate Islamic financing products, and would aim to serve as a catalyst for a broader partnership with financial institutions, venture capitalists and private sector entities to invest in local SMEs. The Program is envisioned to provide tailored Islamic SME financing along with SME capacity building in developing countries where both parties have a strategic and mutual interest, a clear market gap and return against risk exist, and where existing ICD and infoDev experience and partner networks can be leveraged. The partnership would also aim to develop linkages to local and international seed/ venture capitalists, and to other fund providers in development and commercial financial institutions that have an interest in financing viable SMEs.

ICD and infoDev are looking to recruit a reputable consulting firm or consortium of consultants to:

1. Assess the potential and feasibility of a joint ICD-infodev program that leverages the experience and resources of both institutions to support the start-up and growth of SMEs by providing business incubation and financing in an integrated fashion in two countries (Syria, Tunisia, Jordan, Lebanon and Saudi Arabia are potential target countries)

2. Provide specific recommendations with respect to a pilot program roll-out in the two countries as well as recommendations on the opportunity for, and approach to scaling such a program to a larger number of countries in the future.

Scope of Work

This assignment includes 3 components, as follows:

1) Market Opportunity Assessment. The market opportunity assessment should start with a preliminary desk study of 4 potential target countries, with the objective to select two countries for further exploration. The Consultant should then conduct a detailed market study of business incubator and business & innovation support services, SME finance, Seed/Venture capital, and related services industry in the pilot countries (A and B). Under this component of the assignment, the Consultant should undertake a survey of the existing competitive institutions, their products and services, types of customers, etc.

2) SME Finance Program Approach: The Consultant should assess the market opportunity for integrating Islamic SME financing instruments and capacity building in each pilot country. Based on the market assessment, the consultant should recommend the target size for the SME Fund for the program, and the feasibility of establishing a common fund targeting both countries. The consultant should also provide recommendations on the following aspects of the fund:

• The appropriate Islamic financing products to be offered

• How to obtain an appropriate risk balance

• A due diligence framework

• A management framework for the program.

• Best practice operational guidelines and a sample term sheet between the program and the investee SME.

Program Implementation Approach

The Consultant should propose a business model for implementing a holistic SME financing and business incubation program in the two pilot countries (A and B), responding to the market opportunities identified and leveraging the expertise of ICD and infoDev. The fund should offer a return attractive to potential partners, and the business support program should aim to become financially sustainable over time.
Please see the attachment for further details regarding this assignment.

FUNDING SOURCE

This is a fixed budget assignment for USD 100,000, out of which the World Bank will pay 50 percent and the ICD/ Islamic Development Bank will pay 50 percent.

For more information, please contact infoDev at sboulos@worldbank.org.



 


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