Programme description

Title: Promoting the competitiveness and growth of small and medium-sized enterprises and capacity development in the microfinance sector
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Senegal
Lead executing agency: Ministère de l’Economie et des Finances
Overall term: 2006 to 2015

Context

The Senegalese economy is characterised by small and medium-sized enterprises (SMEs) and a large informal sector, which in the Greater Dakar area, for example, employs roughly three-quarters of the active population, but which contributes only a small percentage to gross domestic product. With an increasing selection of international goods on offer and Senegal’s gradual opening to the European Union, SMEs can only survive if they become more competitive. However, the promotional institutions have little capacity as yet to provide support geared to competition and growth. A further hurdle is the inadequate range of needs-oriented financial services on offer.

Objective

Competitive and growth-orientated action by small and medium-sized enterprises is encouraged by a supportive environment, effective advisory services and an efficient microfinance sector.

Approach

GIZ supports the relevant Senegalese Ministry in implementing its national strategy to promote the competitiveness and growth of SMEs.

An important aspect here is promoting public-private dialogue. Representatives of governmental organisations and the relevant economic sectors are advised on developing joint solutions to the problems of small enterprises caused by an unfavourable business and investment climate. The concerns of women entrepreneurs are taken into special account.
In cooperation with research institutions, governmental and private business service providers are to develop services aimed at encouraging innovation, competitiveness and growth.

A public-private partnership has been set up in Dakar with trade associations in which business consultants advise small enterprises. This is being developed further in the context of the programme and is being extended to four regional capitals with support from the European Commission.

Starting in 2010, GIZ (until December 2010 GTZ) is also active in the microfinance sector, in order to improve demand-oriented financial services that are suitable for SMEs. The relevant Ministry is being advised on effective public communication concerning the new Microfinance Act. The national regulatory authority for microfinance is receiving support in performing its duties in supervising and consolidating the microfinance sector. Support is being given to the national association of microfinance institutions APSFD in designing services for its members. Training modules on basic financial training for borrowers, particularly from the SME sector, will be particularly significant here.
The programme is being implemented in close cooperation with the KfW Entwicklungsbank (KfW development bank). GIZ is cooperating with ministries, governmental and non-governmental organisations as well as with the private sector. It supports networking among them and also helps to coordinate donors.

Results achieved so far

The Ministry responsible for SMEs was advised on developing a national support strategy for SMEs, which was adopted by all the actors involved in the sector in May 2009.
Five trade associations were enabled to offer advisory services to their SME members on a long-term basis.
900 small and medium-sized enterprises benefited from an individual six month support phase to improve their management skills.
Expert advice to enterprises has led to the development of new products, such as bread that uses local grain, raising its nutritional value while reducing dependence on imported wheat.
Specific measures to raise energy efficiency have led to enterprises cutting their costs. A service for facilitated enterprise groups developed from these measures has raised the trade associations’ credibility among their members on account of its success. Associations have launched their first joint activities.
Together with the national SME support agency, 11 private training and advisory service providers have developed the RESAMPE network which has provided training for more than 500 SMEs since May 2008. The network now offers its activities nationwide.
The SME internet portal jointly developed with the SME support agency www.senegal-entreprises.net registers a steady 20,000 visitors per month.

Further information

• Internet portal on framework conditions and services for SMEs
  Services d'Appui aux Petites et Moyennes Entreprises (PME) du Sénégal
  www.senegal-entreprises.net
• Senegal web page of the KfW Entwicklungsbank (KfW development bank)
  www.kfw-entwicklungsbank.de/...