Improving job creation potential through Skills and SME Development. Raffaele Boldracchi May 7, Cairo

Transcription

1 Improving job creation potential through Skills and SME Development Raffaele Boldracchi May 7, Cairo

2 Topics for discussions IFC initiatives taken in the context of the Deauville Partnership The Education for Employment Initiative Overview of SME in the MENA Region IFC AS in support of SME development: Joint IFC-IBRD MSME Facility, Business Edge & SME Tool kit 2

3 IFC Initiatives and Deauville Partnership (DP) MENA Fund MSME Support AFFI e4e Equity fund to boost confidence & support capital markets Scale up A2F and increase employment opportunities through real and financial sector investments MDBs/Regional partners may join It It will address Module 1 under DP: Co-investment vehicles WBG Regional facilities open to IFIs; using instruments such as fin. instruments and Advisory Services to scale up MSMEs. On target countries. Three complementary components: (i) SME Facility ; (ii) SME TA Facility $30-32m, (iii) RSF on a portfolio basis. It will address Module 3 under DP: SME Access to Finance Expand investment and Advisory engagement in infrastructure PPPs, in partnership with World Bank, IsDB and open to IFIs Jointly Components: with IsDB, (i) Public IFC & leading private the sector initiative windows; to (ii) AS; (iii) Policy engage reform the private sector create new opportunities It will address Module for employment- 5 under DP: Facilitation of PPP projects Jointly with IsDB, IFC is leading this initiative aimed at engaging the private sector to create new opportunities for employment-based education and enhance labor market skills for youth/women Joint AS program focusing on sector regulation for private sector It will address Module 6 under DP: Skills upgrading & VT Cross Cutting Themes: Institutional Strengthening Investment Climate Corp Govern Gender Youth Regional Integration Let s concentrate on e4e and MSME support 3

4 Topics for discussions IFC initiatives in the context of the Deauville Partnership The Education for Employment Initiative Overview of SME in the MENA Region IFC AS in support of SME development: Joint IFC-IBRD MSME Facility, SME Management solutions 4

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6 Job Creation and Skill Development Critical for Economic Development Education and Economic Development Move Hand-in-hand Graduates Not Equipped with Proper Skills for Employment Job Creation Skill Development Tackling Youth Unemployment Requires Addressing Both Labor Demand and Supply Work Readiness Skills of Paramount Importance to Private Sector Employers

7 Need for e4e in the Arab Region Arab Youth Unemployment Highest In World Arab region plagued with 25% youth unemployment, the highest in the world Labor Participation Rates Among Lowest in World Arab region s labor participation rates amongst lowest worldwide, currently 35% vs. global average of 52%

8 e4e s Strategy Increase supply of work-ready students Improve operating environment for the private sector & improve public-private interactions Address operating environment Change mindsets Investments in university education, Vocational Education & Training (VET) and workreadiness programs Investment vehicles to bring in other investors and diversify mechanisms In-depth country assessments Standards and quality assurance Address regulatory disincentives Match-making Signifying the importance of TVET, entrepreneurship, and work-readiness training Raising awareness Forming partnerships Public-Private dialogue Entrepreneurship Gender..Inclusiveness

9 Topics for discussions IFC initiatives in the context of the Deauville Partnership The Education for Employment Initiative Overview of SME in the MENA Region IFC AS in support of SME development: Joint IFC-IBRD MSME Facility, SME Management solutions

10 Overall Unemployment rate (%) Exclusion from political and economic participation Inadequate Employment Opportunities *MENA has the lowest female labor force participation rate in the world Syria Tunisia Yemen Egypt Jordan Lebanon Insufficient Voice and Accountability (Lower rank indicates worse score) 5 Turkey 0 EAP ECA LAC SSA MENA MENA (youth) MENA (female) Brazil India Source: World Bank Access to Finance Lowest in the World % of firms with a loan/line of credit from a financial institution Source: World Bank 10 Source: World Bank Governance & Anti-Corruption Indicators 17% of population living <$2/day High clustering around poverty line increases vulnerability of poor to shocks million jobs needed over next decade to absorb new labor market entrants & reduce unemployment Voice and accountability has worsened over last decade in almost all MENA countries

11 In Egypt, there exists a significant opportunity for SMEs lending with very low market penetration today, even by MENA standards Market size estimated by IFC at approx.406,000 SMEs today* of which only 15.3% have access to credit By MENA benchmarks**, particularly for non-gcc, Egyptian SMEs are highly underrepresented in the Banking system today Recent WB Group survey*** identified 37% of SMEs in Egypt consider access to finance and cost of finance as obstacles to growth. Sources: IFC- Mckinsey survey, 2010 * United Nations Development Program,2008** World bank Study, 2008*** Source: Union of Arab Banks Survey 2010

12 Topics for discussions IFC initiatives in the context of the Deauville Partnership The Education for Employment Initiative Overview of SME in the MENA Region IFC AS in support of SME development: Joint IFC-WB MSME Facility, SME Management solutions

13 Enhancing the performance and competitiveness of SMEs Joint IFC WB MSME Facility

14 Basic elements required to support a strong SME sector Financial Capacity Working Capital, Medium-Term Debt, Equity Leasing, Franchising, Insurance, Cash-Flow Management Domestic & Cross-Border Trade and Supply-Chain Finance Institutional Capacity to deliver financial services Physical & Financial Infrastructure Physical Infrastructure: Water, Power, Telecom, Transport Credit Bureaus, Registries, Payments systems Capital Markets/ Bond and debt markets Supportive Enabling Environment Information, Advice and Incubation Services for SMEs Training & Capacity Building for SMEs Strong regulatory and policy environment 14

15 IFC s Access to Finance Work in MENA Clients Microfinance Institutions Banks Government (Financial Infrastructure) Products - Strategy/Product Development - Risk Management Housing Finance New - SME Banking - Women In Business Risk Management and corporate governance Energy Finance Housing Finance leasing New Secured Lending Credit Bureaus Mobile Banking New Housing Finance Leasing Team and Targets 6 specialists FY 12 IDG: 560,000 new credit accounts 85% joint IS AS projects 10 specialists FY 12 IDG: 20,000 SME 80% joint IS AS projects 4 specialists FY 12 IDG: 200,000 new credit accounts Focus MSME access to finance

16 JOINT IFC-WB MENA SME Facility Regional Country Allocations: Distinct Pools In Country Engagements with Banks/FIs Senior Risk Tranche IFC + IFIs Junior Risk Tranche First Loss - RSF Morocco Jordan Egypt Tunisia Lebanon Bank/FI A Bank/FI B Bank/FI C Bank/FI D Small & Medium Enterprises MSME-TAF Donor Funded million USD 16

17 Activities The Technical Assistance Fund has 3 components executed by WB and IFC Enabling Environment WB executed (Financial Sector Policy reform, FSAP, Central Banks capacity building) IFC executed (Financial Sector infrastructure) Advisory Services to Banks and MFIs IFC executed (deep advisory services to banks and MFIs to develop their MSME portfolio) Support and Training to MSMEs WB executed (direct SME support, incubator and BDS) IFC executed (IFC management training for SME, Business edge, SME toolkit)

18 Enhancing performance and competitiveness of SMEs SME Management Solutions

19 IFC s SME Solutions : SME Toolkit and Business Edge Business Edge BE is an IFC owned training system specifically designed to strengthen the management skills of owners, managers and staff of SMEs. BE offers clients applicable management training solutions adapted to the local business context, and delivered by a network of local franchised providers and certified trainers. BE covers 42 management courses, available in 10 languages and rolled out in 27 markets. BE franchisees have trained more then 140,000 entrepreneurs and managers since

20 IFC s SME Solutions : SME Toolkit and Business Edge SME Toolkit ( The SME Toolkit leverages the latest information and communication technologies. It works with global partners and a network of local distributors, to provide SMEs with online and mobile phone access to business management information, interactive tools, and training resources. The SME Toolkit is available in 32 markets in 18 languages, and attracts 5 million unique visitors per year Kenya Saudi Arabia 20

21 Business Edge Workshops Personal Productivity Skills Human Resources Finance & Accounting Quality & Operations Marketing Leading your Team Delegating Effectively Motivating People Using Information for Decision Making Solving Problems Communicating effectively Managing Change Managing with Authority Becoming a More Effective Manager Managing Time Coaching Influencing Organizing for Successful Training & Development Recruiting for Key Management Positions Planning for HR Retaining Top Employees Establishing Compensation & Benefits Managing HR Communication Effective Job Design Controlling Costs Working with Budgets Using & Analyzing Financial Statements Developing a Business Plan for a New Venture Evaluating Investment Decisions Controlling Business Assets Understanding Quality Achieving Quality Auditing Quality Controlling Physical Resources Planning & Controlling Work In addition, 7 Tourism specific Modules have been developed Local languages & case studies Topics addressing key management issues & gaps Easily customizable Flexible delivery (channel, duration) Unique non-academic methodology transferring directly applicable Caring for the Customer Achieving Success in Marketing Assessing Marketing Opportunities Developing a Competition Strategy Positioning Yourself in the Market Establishing Your Marketing Mix Strategy Preparing Your Product Strategy Working out Your Pricing Strategy Creating your Distribution Strategy Developing an Integrated Marketing Communication Strategy Gaining Consumer Insights Marketing Services

22 Thanks for attention