1. What is the MSME Project?

The MSME (Micro, Small and Medium Enterprise) Project is a joint pilot project of the Federal Government of Nigeria and the World Bank.

The MSME Project has four components:
1. Access to Finance
2. Business Development Services
3. Investment Climate
4. Public Private Dialogue

2. When did the MSME Project start and when will it end?

The MSME project started in 2005 and is scheduled to end by June 30, 2010.

3. Who runs the MSME Project?
The MSME Project is a project of the Federal Government of Nigeria jointly funded by the World Bank and the FGN. It is executed for the Government by the Nigerian Investment Promotion Commission, NIPC, through a specially designated Project Management Unit. Oversight is exercised by the Commission, The Federal Ministry of Finance, the World Bank and a Project Review Committee composed of seven members drawn from both the private and public sectors.

The Project’s activities are authorized through a Development Cooperation Agreement between the World Bank and the federal Government of Nigeria. These activities are further spelled out in a mutually agreed Project Implementation Manual.

4. What is the purpose of the MSME Project?

The MSME Project is intended to enhance productivity and employment in non-oil sectors of the target states of Abia, Kaduna and Lagos.

5. How will the MSME Project achieve its purpose?

The MSME Project will achieve its purpose by assisting in improving the environment for micro, small and medium enterprises both by encouraging new institutional initiatives to provide them financial and non-financial services and by improving the general policy environment in which they function.

The Project does not directly provide services to MSMEs.

6. What is the rationale for the commercial focus of the Project?

The commercial approach was adopted because it is the best way to ensure the sustainability of the projects and their benefits even after the end of the Project.

7. Does the Project have a particular size category of Micro, Small and Medium Enterprise in view?

Even though the MSME Project covers all aspects of enterprises, it is primarily focused on the access to finance activities concerning micro enterprises in line with the Federal Government’s Microfinance development Policy. However, it is important to note that the MSME Project’s other components and subcomponents like the Business Development Services, Value Chain Development and Investment Climate serve small and medium enterprises.

8. What activities does the MSME carry out under the five components?

A. Access To Finance

The MSME Project is promoting access to finance through the provision of grants to seven new privately funded microfinance initiatives to support world class technical assistance to them. This will be based on their performance in terms of volume of outreach (number of MSMEs served) and financial sustainability.

The supported institutions are Accion, Susu, MIC, Integrated, AB Microfinance Bank and the microfinance programme of Oceanic Bank. A new MFB, Microcred Nigeria has received its Approval in Principle from the CBN and will soon commence operations in Kaduna.

B. Business Development Services

The MSME Project is promoting access to high quality non-financial business development services by providing matching grants to private sector initiatives. These services are based on their performance in terms of outreach i.e. number of MSME served and their financial sustainability which would be determined by rate of cost recovery.

At present, there are 58 private sector initiatives which have received grants.
About 30-40 grants are expected. Roughly 10 grants each are made in connection with the value chain initiatives mentioned below.