Bhutan: Preparing the SME/Mictoenterprise Development Program:Financing Component (formerly Financing for Micro Enterprises)

Sovereign Project | 39221-012

Summary

The TA will assist in providing support to Bhutan Development Finance Corporation (BDFC) with a view to ensuring sustainability in the medium and long term by addressing operational issues and increasing its outreach to the micro and small enterprises (MSEs). In line with the objective of the SME/Micro Enterprises Program, the TA aims to improve access to finance, income-generating opportunities, and job creation for the micro-and SMEs, particularly in the rural area.

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Project Name Preparing the SME/Mictoenterprise Development Program:Financing Component (formerly Financing for Micro Enterprises)
Project Number 39221-012
Country Bhutan
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 4837-BHU: Preparing the SME/Mictoenterprise Development Program:Financing Component (formerly Financing for Micro Enterprises)
Japan Special Fund US$ 500,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change Private sector development
Sector / Subsector Finance - Inclusive finance
Gender Equity and Mainstreaming No gender elements
Description

The TA will assist in providing support to Bhutan Development Finance Corporation (BDFC) with a view to ensuring sustainability in the medium and long term by addressing operational issues and increasing its outreach to the micro and small enterprises (MSEs). In line with the objective of the SME/Micro Enterprises Program, the TA aims to improve access to finance, income-generating opportunities, and job creation for the micro-and SMEs, particularly in the rural area.

The TA outcome includes (i) the design of a new strategy and business plan for BDFC to ensure that it represents a credible basis for establishing and guiding BDFC's MSE lending operations; (ii) the implementation of corporate governance structures and policies; and (iii) capacity building support to enable BDFC to implement its business plan, focusing on human resource development, MSE lending techniques, development of demand-oriented products and other areas,a s relevant. The TA outcome will further enhance the financing component under the SME/Micro Enterprises Program.

Project Rationale and Linkage to Country/Regional Strategy
Impact Improved access to finance, better income- generating opportunities, and greater job creation for micro- and small enterprises (MSEs)
Project Outcome
Description of Outcome The agreed design for the financing component of the SME/ Microenterprise Development Program, focusing on enhancing BDFC's capability in MSE lending
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

1. Improved corporate governance structures and operational policies and procedures

2. A new strategy and 5-year business plan (2007 2011) for BDFC to ensure that it represents a credible

basis for establishing and guiding BDFC's MSE lending operations

3. Strengthened institutional capacity building for BDFC to implement its business plan, focusing on human resources (HR) development, MSE lending techniques, development of demand-oriented products, and other areas as relevant.

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location Bhutan
Safeguard Categories
Environment FI
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services

ADB will engage three international consultants for the total of 15 person-months and one domestic consultant for a total of 12 person-months to provide the required consulting services. Consulting services will be delivered intermittently over 18 months. An international consulting firm will be recruited using simplified technical proposals under the quality-and-cost based selection method in accordance with ADB's Guidelines on the Use of Consultants and other arrangements satisfactory to ADB for selecting domestic consultants.

The identified consultants will have experience working in the noted areas in small economies, with exposure in South Asia region. The international consultant team (person-months are in parentheses) will comprise an MSE/Development Banking Specialist (Team Leader) (8); a Human Resource Development Expert (2); and an MSE lending Specialist (5). The domestic consultant will be an MSE lending/training specialist (12).

Responsible ADB Officer Chia-Hsin Hu
Responsible ADB Department South Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, SARD
Executing Agencies
Ministry of FinanceNim DorjiDepartment of Public Accounts
Timetable
Concept Clearance 30 Sep 2005
Fact Finding 21 Mar 2006 to 01 Apr 2006
MRM -
Approval 11 Sep 2006
Last Review Mission -
PDS Creation Date 31 Jan 2007
Last PDS Update 26 Jul 2010

TA 4837-BHU

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
11 Sep 2006 05 Oct 2006 05 Oct 2006 31 Mar 2008 15 Dec 2010 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
500,000.00 0.00 0.00 0.00 0.00 0.00 500,000.00 11 Sep 2006 475,704.68

Safeguard Documents

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Evaluation Documents

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