Project Data Sheet

Project Data Sheets (PDS) contain summary information on the project or program: Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

PDS Creation Date
PDS Updated as of 16 Oct 2007

Project Name SME Sector Development (Project Loan)
Country Pakistan
Project/Program Number 34327-023
Status Approved
Geographical Location Pakistan
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
Sector Industry and trade
Subsector Small and Medium Enterprise Development
Strategic Agendas
Drivers of Change
Gender Equity and Mainstreaming Categories

Financing

Type/Modality of Assistance Approval Number Source of Funding Approved Amount (thousand)
Loan2067-0
TOTAL US$ 0

Safeguard Categories

For more information about the safeguard categories, please see http://www.adb.org/site/safeguards/safeguard-categories

Environment C

Summary of Environmental and Social Issues

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples

Stakeholder Communication, Participation and Consultation

During Project Design
During Project Implementation

Description

The SME Sector Development Project supports the implementation of policy reforms and the building of a market-based infrastructure for business development services (BDS) and financial services to SMEs and is structured in three subprojects. Subproject 1 (Policy Formulation and Implementation) supports policy formulation, including SME policy and labor protection and inspection policy. Subproject 2 (SME Business Support Fund) supports market development for SME BDS through SME Business Support Fund (BSF). Subproject 3 (Market Development for SME Finance) supports market development for SME Finance, including regulatory policy development, credit information, and capacity building for financial institutions; and SMR Bank restructuring.

Project Rationale and Linkage to Country/Regional Strategy

Development Impact

Project Outcome

Description of Outcome
Progress Towards Outcome

Outputs and Implementation Progress

Description of Project Outputs
Status of Implementation Progress (Outputs, Activities, and Issues)
Status of Development Objectives
Material Changes

Business Opportunities

Date of First Listing 2006 Dec 11
Consulting Services
All consultants to be financed from the proceeds of the ADB loan will be recruited in accordance with ADB's Guidelines on the Use of Consultants & other arrangements for the engagement of domestic consultants satisfactory to ADB. The Government requested that domestic consultants may be required to collaborate with international consultants. Subproject 1: Policy Formulation & Implementation A. Component 1.1: The implementing agency will be Small & Medium Enterprise Development Authority (SMEDA). The assistance will be implemented intermittently over 36 months. An international SME policy specialist (1.5 months), and domestic SME specialists (11 months) will support the Task Force (TF). SMEDA will provide office facilities for the consultants. The consultants will have expertise in policy development and will be selected by the implementing agency after concurrence by ADB on an individual basis in accordance with ADB's Guidelines on the Use of Consultants and other arrangements for the engagement of domestic consultants acceptable for ADB. Besides the terms of reference, the consultants will prepare quarterly progress reports and a final report at the end of the task. B.Component 1.2: Labor Protection and Inspection Policy Development. The implementing agency will be Ministry of Labour and Overseas Pakistanis (MOL). The component will be implemented over 24 months. An international labor policy specialist (6 months), and a full-time domestic labot specialist (20 months) will support the TF in conducting its task. MOL will provide office facilities for the consultants. The consultants will be experienced labor policy specialists and recruited on an individual basis consistent with ADB's Guidelines on the Use of Consultants and other arrangements for the use of domestic consultants satisfactory to ADB. Besides the terms of reference, the consultants will prepare quarterly progress reports and a final report at the end of the task. Subproject 2: Small and Medium Enterprise Business Support Fund The Executing Agency will be the Ministry of Finance represented by the core program management unit. The implementing agency will be the Ministry of Finance prior to eastablishment of Business Support Fund (BSF), and then BSF, commencing on the date on which BSF enters into a project agreement with Asian Development Bank. The subproject will be implemented over 60 months. An internationally experienced BDS specialist will be recruited on an intermittent basis to establish and manage the facility (32 person-months over 5 years), provide on-the-job training for staff, and induce a senior staff to take over the management function for the BSF. The international expert will be recruited on an individual basis consistent with the Guidelines on the Use of Consultants . Besides the terms of reference, the consultants will prepare brief quarterly reports and a final report at the end of the task. Subproject 3: Market Development for Small & Medium Enterprise Finance Component 3.1: Regulatory Policy Development, Credit Information, and Capacity Building for Financial Institutions. Consultants to be financed under this subproject will be recruited in accordance with ADB's Guidelines on the Use of Consultants and other arrangements for the engagement of domestic consultants satisfactory to ADB. The services require an innovative approach to awareness building , identification of participating financial institutions (PFIs), and PFI senior management commitment of their SME finance business plans, before assistance packages can be customized. Since there is no standardized approach for delivery of such services and the tasks of developing systems, lending processes, and procedures for SME finance are complex and require highly specialized skills and a significant degree of flexibity in the allocation of expertise, quality-based selection method will be applied for the capacity-building portion of this component (308 person-months of which 124 months are international and 184 months are domestic expertise). Since the participating FIs will be identified in the awareness-building process through short-term consultants, the requisite terms of reference and specialized skills will be customized to the needs of the individual PFI> The short-term positions (32 person-months of which 16 months are international and 16 months are domestic expertise) will be advertised and selected on an individual basis. The experts will have a strong track record in emerging markets in the followig areas: (i) SME finance policy/regulation, (ii) awareness building and training, and (iii) design and implementation of downscaling programs for SME finance. Component 3.2: SME Bank Restructuring This component will be implemented over 24 months and will assist the Government and SME Bank with the implementation of the restructuring plan, and provide expertise to (i) identify markets niches for SME Bank, (ii) establish lending policies and procedures, (iii) develop financial products, (iv) develop marketing strategies to enhance outreach, and (v) develop sound risk management through incentives for staff, controls, and sound management information systems. SME Bank will recruit an individual international expert as head of its SME business unit, who will lead for a 24-month period the buildup of the commercial SME business unit including the use of deposit and lending products for its clients. The expert will be selected in a competitive process by a committee composed of SME Bank and the core program management unit. Recruitment will be in agreement with ADB and consistent with the Guidelines on the Use of Consultants. The expert will prepare quarterly reports and a final report at the end of the task. The expert will have (i) at least 8 years experience in (a) establishing and managing SME banking for commercial FIs; (b) SME credit origination, management, and risk management; and (c) analytical, management, marketing, and interpersonal skills.
Procurement
Procurement of goods and services is in accordance with ADB's Guidelines for Procurement.
Procurement and Consulting Notices
http://www.adb.org/projects/34327-023/business-opportunities

Timetable

Concept Clearance
Fact-finding 19 May 2003 to 03 Jun 2003
Management Review Meeting 29 Aug 2003
Approval 19 Dec 2003
Last Review Mission

Milestones

Approval No. Approval Signing Effectivity Closing
Original Revised Actual
Loan 2067 19 Dec 2003 10 Feb 2004 05 Jul 2004 30 Jun 2009 30 Sep 2009 21 Jun 2010

Utilization

Date Approval Number ADB (US$ thousand) Others (US$ thousand) Net Percentage
Cumulative Contract Awards
21 Oct 2014 Loan 2067 5,804 0 98.00%
Cumulative Disbursements
21 Oct 2014 Loan 2067 5,917 0 100.00%

Status of Covenants

Covenants are categorized under the following categories—audited accounts, safeguards, social, sector, financial, economic, and others. Covenant compliance is rated by category by applying the following criteria: (i) Satisfactory—all covenants in the category are being complied with, with a maximum of one exception allowed, (ii) Partly Satisfactory—a maximum of two covenants in the category are not being complied with, (iii) Unsatisfactory—three or more covenants in the category are not being complied with. As per the 2011 Public Communications Policy, covenant compliance ratings for Project Financial Statements apply only to projects whose invitation for negotiation falls after 2 April 2012.

Approval No. Category
Sector Social Financial Economic Others Safeguards Project Financial Statements
Loan 2067

Contacts and Update Details

Responsible ADB Officer Joao Pedro Farinha (jfarinha@adb.org)
Responsible ADB Department Central and West Asia Department
Responsible ADB Divisions Public Management, Financial Sector and Trade Division, CWRD
Executing Agencies Ministry of Finance
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Links

Project Website http://www.adb.org/projects/34327-023/main
List of Project Documents http://www.adb.org/projects/34327-023/documents