Micro, small and medium enterprises (MSMEs) in the Middle East and North Africa are key to driving employment for millions of young citizens but businesses on the smaller end of the scale in this region have some of the lowest levels of access to finance in the world. And the World Bank's approval of a $50 million loan to Tunisia Thursday marked the launch of the bank facility designed to address this. The World Bank Group's MSME Facility is expected to channel over $500 million to Middle East and North Africa (MENA) countries over the next five years including support from the International Finance Corporation, regional partners such as the African Development Bank, and donors. "This regional facility, a partnership with a number of development institutions, is a strong and timely response to a MENA-wide lack of access to finance and jobs and is a critical pillar of the World Bank's Arab World Initiative," said Shamshad Akhtar, Vice President for the MENA region at the World Bank. "SMEs in the region have enormous potential to create much-needed employment opportunities for a growing, young and increasingly impatient population. A dynamic, open and growing MSME sector can create jobs and open up access to market opportunities at a rate that keeps pace with this growth. We urgently need to start this engine and creating access to finance is critical." Akhtar pointed out that only 10 percent of MSME expenditures in the MENA region are financed by bank lending. But as important as turning this trend around was ensuring that money flowed to MSMEs in an atmosphere of fair regulation, transparency and good governance, she said. The World Bank will make financing and risk-sharing instruments available to partner MENA governments through the MSME facility and, jointly with the International Finance Corporation (IFC), a comprehensive package of technical assistance will be offered to governments, regulators, financial institutions, and to MSMEs. Innovative and high potential enterprises will be linked with growth capital, markets, and know how. IFC, the private sector arm of the World Bank Group, will invest up to $150 million in the facility that will make it easier for SMEs to access financing and create opportunities and jobs. Additionally, it will offer a comprehensive package of advisory services to governments, regulators, financial institutions, and MSMEs to support the growth of this sector.
