World Bank Lending for Small Enterprises, 1989 1993

The main objective of this report is to evaluate World Bank lending for small enterprises between FY89 and FY93, including both small and medium enterprises (SMEs) and microenterprises. There has been a marked shift in the Bank ' s work in this area, and this review details the nature and content of this evolution. Lending for SMEs began in 1973 and when it was discontinued in 1991, a total of 80 loans had been approved in 38 countries with a total loan amount of US$3.7 billion. This report updates an earlier review of the SME portfolio and consolidates information for the period 1973-1991, highlighting loans that were approved in the period of this review. Projects are catalogued; aggregate and regional flows of funds are documented; institutional arrangements employed by credit and technical assistance programs are outlined; project performance is evaluated where possible; and key issues for the future are identified. As lending for SMEs dropped off, the number of loan programs for microenterprises increased dramatically. Microenterprise lending began as small components of SME loans in the late 1980s, but shifted to become a centerpiece of poverty-related loans approved in the early 1990s. This review identifies these microenterprise programs, outlines their structures, and discusses issues that are likely to emerge within these operations over time. This report also identifies other forms of World Bank support for SMEs. Some direct support for SMEs is found in " disguised " SME projects and in SME components embedded within a variety of operations. Rural development projects and industrial sector operations that include SMEs within a larger pool of beneficiaries are channels ofindirect support. Policy-based operations that seek to improve the business environment for all private firms by clearing away policy and regulatory biases are another form of indirect support.