Business Ecosystem Project

Speeches Shim

Business Ecosystem Project
Business Ecosystem Project
USAID

BACKGROUND 

Despite the progress achieved over the years, North Macedonia’s economy still faces low productivity. Most micro-, small- and medium-sized enterprises (MSMEs) still use outdated technology, lack adequate finances for capital investment, and are not well integrated in regional and global supply chains. The inadequately skilled workforce and the increasing emigration of young people further exacerbate companies’ productivity and threatens their viability. USAID contributes to North Macedonia’s efforts to improve economic security and growth.

PROGRAM DESCRIPTION

The aim of the Business Ecosystem Project is to build a responsive and sustainable business ecosystem in North Macedonia. USAID transforms the competitiveness of MSMEs by strengthening business services, finance, and market linkages to catalyze a significant increase in MSME growth, productivity, and employment. USAID partners with business associations, chambers of commerce, consultants, and training centers to improve the services available to MSMEs for accessing new markets, finding qualified workers, accessing relevant information, and obtaining necessary documentation. We work with financial institutions and financial consultants to help MSMEs access commercial financing. We also support the Government of North Macedonia’s efforts to better promote competitiveness, innovation, entrepreneurship, and workforce development, and to adapt to the needs of MSMEs. Additionally, we are fostering strategic partnerships with lead firms to co-finance the development of their supply chains, leveraging private sector resources for sustained growth. We have piloted several global USAID initiatives to facilitate resource partnerships, which feature USAID investments alongside local resources to advance country ownership of development. These initiatives include private sector engagement, performance-based grants (i.e., pay for results), domestic resource mobilization, and collaborating, learning, and adapting. We are also working to diversify and develop new alternative sources of financing, such as crowdfunding for startups, promoting a multilateral cashless settlement system aimed to improve MSME liquidity, an interest free microcredit financial instrument in response to the Covid-19 crisis, and digitized platforms promoting financial services.

ACHIEVEMENTS AND IMPACT

  • Thirteen business support organizations strengthened their services and membership base. They introduced 84 new services and upgraded 150 resulting in a total membership increase of more than 1,370.
  • Forty-seven financial facilitators helped more than 1,125 MSMEs prepare bankable proposals. Almost 700 of these have accessed finance, resulting in $110.8 million in new investments ($82.2 million from financial institutions and $28.7 million from their own resources). 
  • Access to finance results were achieved through timely information exchange among stakeholders. USAID cooperated closely with 15 financial institutions representing both commercial (banks) and alternative (government institutions, microfinance institutions) sources of funding to ensure success.
  • In the pilot phase, USAID launched eight proof-of-concept private sector engagement initiatives - in agriculture (dairy and high value crops), apparel, and workforce development – which helped pinpoint the sectors where donor assistance would have the best value for money. As a result, we have engaged 49 lead companies and unlocked $9.4 million in investments geared towards the development of 325 MSMEs and individual farmers, greatly improving supply chains.
  • Almost 4,180 people gained new skills, 3,740 MSMEs improved their management practices or technologies, and 670 MSMEs developed linkages to new buyers.
  • Our partner companies generated over 5,890 new jobs and increased their annual revenue growth average by 28.5%, far surpassing the project target of 15%.
  • We focused on preserving the gender balance and youth inclusion in all activities. Throughout the project 47% female and 24% youth (under the age of 30) participants contributed to all activities, surpassing the project’s targets of 35% and 20% consequently.

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Last updated: February 10, 2022

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