Armenia: Women's Entrepreneurship Support Sector Development Program

Sovereign Project | 45230-001

Summary

The program comprises an integrated approach to enable women entrepreneurs and micro, small, and medium-sized enterprises (MSMEs) in Armenia to play a greater role in economic development. The program has two components: (i) a policy-based loan to help fund budget allocations to strengthen the business environment and the Small and Medium Entrepreneurship Development National Center (SME DNC) of Armenia and its support for women entrepreneurs and MSMEs; and (ii) a financial intermediation loan (FIL) to enable participating financial institutions (PFIs) to provide local currency loans to MSMEs, of which at least 50% are women's MSMEs. The program is supported by capacity development TA to improve the entrepreneurial capacity of women and to increase the capacity of the SME DNC, the project management unit of the German-Armenian Fund (PMU GAF), and PFIs to provide support for women's entrepreneurship. The implementation period is 2013-2017.

Latest Project Documents

Consulting Notices

See also: CMS

No notices are currently available for this project.

Procurement Notices

See also: Operational Procurement

No notices are currently available for this project.

Procurement Documents


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.

The Public Communications Policy (PCP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

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.

Project Name Women's Entrepreneurship Support Sector Development Program
Project Number 45230-001
Country Armenia
Project Status Approved
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan 2922-ARM: Women's Entrepreneurship Support Sector Development Program
Asian Development Fund US$ 20.00 million
Loan 2923-ARM: Women's Entrepreneurship Support Sector Development Program
Asian Development Fund US$ 20.00 million
TA 8200-ARM: Capacity Building for Women's Entrepreneurship Support
Technical Assistance Special Fund US$ 600,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Private sector development
Sector / Subsector Finance - Finance sector development - Inclusive finance - Small and medium enterprise finance and leasing
Gender Equity and Mainstreaming Gender equity
Description The program comprises an integrated approach to enable women entrepreneurs and micro, small, and medium-sized enterprises (MSMEs) in Armenia to play a greater role in economic development. The program has two components: (i) a policy-based loan to help fund budget allocations to strengthen the business environment and the Small and Medium Entrepreneurship Development National Center (SME DNC) of Armenia and its support for women entrepreneurs and MSMEs; and (ii) a financial intermediation loan (FIL) to enable participating financial institutions (PFIs) to provide local currency loans to MSMEs, of which at least 50% are women's MSMEs. The program is supported by capacity development TA to improve the entrepreneurial capacity of women and to increase the capacity of the SME DNC, the project management unit of the German-Armenian Fund (PMU GAF), and PFIs to provide support for women's entrepreneurship. The implementation period is 2013-2017.
Project Rationale and Linkage to Country/Regional Strategy

Women in Armenia are not reaching their economic potential. While women's educational achievements in Armenia are on a par with those of men, women's ownership of enterprises (31%) and share of management positions (13.5%) are below regional averages. Women's formal labor force participation rate is declining (from 65% in 2001 to 54% in 2012). In addition to public sector jobs, self-employment is a core occupation for women. Most women engage in small subsistence-based business activities in trade and retail services. While women are increasingly engaged in growth sectors including agro processing and tourism, their participation in these sectors remains small. Mutually reinforcing social, market, and institutional constraints limit women's access to economic opportunities and productive resources, and to the development of entrepreneurial attitudes. Small business is a crucial option for women to gain a livelihood. Yet women often lack the business skills, knowledge, confidence, and access to networks to increase their entrepreneurial capacity, and have less access to credit and other financial services than men.

Access to affordable finance and financial services remains an obstacle for many enterprises in Armenia. Historically, banks have been disinclined to lend to non-top-tier enterprises, citing inadequate collateral, poor business plans, and lack of transparency. Financial institutions (i) have limited experience in providing financial products and services to women entrepreneurs and MSMEs; and (ii) because of the nascent local capital market, face difficulties in structuring such products in ways which can help protect customers against currency, interest rate, and tenor mismatch risks.

MSME financing remains inadequate. In 2011, there were about 150,000 registered MSMEs in Armenia, of which about 60.0%, or 90,000, were active. Women's MSMEs represented about 11.0%, or 9,900, of active MSMEs. In 2010, about 13,600 new MSMEs were registered, of which about 3.0%, or 400, were registered by women. The total MSME sector accounted for 98.5% of all registered enterprises and contributed 43.0% of GDP and 42.5% of employment, representing a doubling of the MSME contribution to the economy since 1999. The MSME share of Armenia's export volume was 18.0% in 2011, an increase from 14.3% in 2003, and about 33.0% of banks total lending portfolio went to MSMEs.

Facilitating women's entrepreneurship can contribute to economic growth. Enhancing business skills, financial literacy, and confidence in their entrepreneurial abilities will enable women to build productive businesses in profitable sectors, operate to scale, access finance, and benefit from economic opportunities. Providing financial support in the form of start-up support, loan guarantees, and local currency loans is essential for women to invest in new technology, equipment, and other fixed assets needed to increase their productivity and competitiveness. Supporting PFIs through the local-currency-denominated FIL can help make the finance sector more broadly based, competitive, and efficient. It will allow PFIs to provide local currency loans to MSMEs; contribute to the government's de-dollarization efforts; as well as mitigate currency, interest rate, and tenor mismatch risks. By focusing on MSMEs, and women entrepreneurs in particular, the loan will help spread financial intermediation to outlying areas by developing financial services.

MSME development has been recognized as one of the key development priorities for the government. It has set out its commitment to development of women entrepreneurs and MSMEs through the Concept for SME Development Policy and Strategy in Armenia, and the Law on State Support to Small and Medium Enterprises, both adopted in 2000. Annual programs for state support of MSMEs have been implemented since 2001. In 2012, a national strategy for small and medium entrepreneurship development was drafted, which specifically promotes entrepreneurship among women and is in line with the government's On the Approval of the Gender Policy Concept Paper, the Gender Policy Strategic Action Plan, and the Gender Policy Action Plan for 2012. In 2002, the SME DNC was established by the government to implement the annual SME state support programs (footnote 2). The Law On State Support to Small and Medium Enterprises requires funding for implementation of the annual program to be allocated in the state budget. However, while the budget allocated to the Ministry of Economy (MOE) increased 8.1% from 2009 to 2012, the budget allocation to the SME DNC was reduced by nearly 74%, from AMD573 million ($1.35 million) in 2009 to AMD150 million ($0.4 million) in 2012. The MOE has requested Asian Development Bank (ADB) support to (i) develop women's entrepreneurship and MSMEs through improved access to business knowledge, training, information, and finance; (ii) help the establishment of start-up enterprises; (iii) promote entrepreneurs and MSMEs in remote and rural areas; and (iv) improve the business environment for MSMEs.

The program is consistent with ADB's country operations business plan, 2012-2013 for Armenia, which aims to increase the role of women entrepreneurs and SMEs. In developing the program, consultations were held with the government, donors, potential PFIs, women's associations, women business leaders, and academe. The program will complement ADB's $65 million Small and Medium-Sized Enterprise Finance Program approved in 2011 to promote broad-based growth, but differs by (i) offering an integrated approach to support women entrepreneurs; (ii) using Asian Development Fund resources through a sovereign operation, allowing longer and more favorable terms for lending to MSMEs; and (iii) mitigating currency, interest rate, and tenor mismatch risks.

Impact Women benefit from increased economic opportunities
Project Outcome
Description of Outcome Improved enabling environment for women entrepreneurs
Progress Toward Outcome Ongoing. A review mission was fielded in July 2014. The next review mission is scheduled for Q2 2015.
Implementation Progress
Description of Project Outputs

Improved institutional framework supports women entrepreneurs and MSMEs

Improved capacity of women entrepreneurs and MSMEs

Improved access to finance by women entrepreneurs and MSMEs

Improved business environment supports MSMEs

Status of Implementation Progress (Outputs, Activities, and Issues)

Women Entrepreneurship Development Strategy was elaborated. It is translated into Armenian. The strategy was submitted by SME DNC to MOE and was adopted by MOE by the Ministers order.

An interagency coordination working group on women's entrepreneurship a total of three meetings. A joint time bound action plan has been developed.

SME DNC has conducted 16 trainings of which 7 are under the ADB TA. They have reached 250 new participants, of which 40% are women.

Training has commenced. Results will be reviewed one year upon completion of training.

The FI loan only became effective on December 19th 2013. An advance has been provided GAF in February. Four Phase I PFIs were approved in 2012. Two phase II PFIs have been approved in 2014. Withdrawal applications have been submitted and liquidated.

The Doing Business Ranking improved to 40 in 2013 report and to 37 in 2014 report.

The ranking for the indicator on paying taxes improved to 103 in DB 2014 report.

Geographical Location National
Safeguard Categories
Environment FI
Involuntary Resettlement FI-C
Indigenous Peoples FI-C
Summary of Environmental and Social Aspects
Environmental Aspects

The policy-based loan will not trigger safeguard policies and is categorized as C for environment.

The FIL is categorized as Financial Intermediary (FI) for environment.

Subprojects categorized as A for environment will not be eligible for financing under this program.

Activities included in ADB's Prohibited Investment Activities List are excluded.

Each PFI will have in place or establish an appropriate environmental and social management system (ESMS) acceptable to ADB to ensure proposals for subprojects are screened for environment and social impacts and (if applicable) mitigating measures are in place.

The PFIs under the Project are separated into two groups to facilitate implementation. The first group will finance subprojects that are Category B for environment and Category C for indigenous peoples and involuntary resettlement. The second group will finance subprojects that are Category C for environment, indigenous peoples and involuntary resettlement. This means PFIs under the first group will be required to meet the condition for withdrawal in paragraph 2 of Schedule 3 of the Loan Agreement, while that condition is amended such that PFIs under the second group will be required to meet it when they wish to finance subprojects that are Category B for environment and Category C for indigenous peoples and involuntary resettlement. For PFIs under the second group that will not have an ESMS nor designated staff to screen prospective subprojects for safeguard purposes, the project management unit of German-Armenian Fund of the Borrower will carry out the screening of prospective subprojects.

Involuntary Resettlement

The policy-based loan will not trigger safeguard policies and is categorized as C for involuntary resettlement.

The FIL is categorized as Financial Intermediary (FI) (treated as C) with respect to involuntary resettlement.

Subprojects categorized as A or having involuntary resettlement impacts will not be eligible for financing under this program.

When there is a need from the MSME subborrowers to acquire fixed assets under the credit loan activities, the acquisition must be based on the willing buyer and willing seller mechanism and not involve involuntary land acquisition under eminent domain. Such transaction must be supported with the relevant due diligence documents from the PFIs and the clients and recorded in the program's ESMS.

Indigenous Peoples

The policy-based loan will not trigger safeguard policies and is categorized as C for indigenous peoples.

The FIL is categorized as Financial Intermediary (FI) (treated as C) with respect to indigenous peoples.

Stakeholder Communication, Participation, and Consultation
During Project Design Consultations and discussions were conducted with the program public and private key stakeholders. A strategy was developed to continuously communicate the program objectives to these stakeholders, during program implementation.
During Project Implementation

The key stakeholder communication objectives of the program are:

(i) To inform potential and existing women entrepreneurs and MSMEs of the opportunities that the program offers including capacity building activities and increased access to credit resources;

(ii) To empower potential women entrepreneurs and encourage them to enter into business ventures;

(iii) To strengthen MSMEs official network and create a learning environment through sharing of experiences; and

(iv) To create public support for the program.

These objectives will be met through the various components and activities of the program, as detailed below.

Tranche conditions under the policy-based loan will support communication through improved access to information and training programs to women entrepreneurs and MSMEs. These include:

(i) Implementing Participating Appraisal of Competitive Advantages exercises to define target groups by sector and region;

(ii) Conducting annual surveys of women entrepreneurs and MSMEs to identify needs and effectiveness of support services provided, including lessons learned and opportunities to be developed for women;

(iii) Implementing an action plan for developing women entrepreneurs in identified sectors;

(iv) Improving SME DNC website and online market place to meet the specific needs of women entrepreneurs;

(v) Providing start-up training programs;

(vi) Implementing awareness campaigns about business development resources;

(vii) Using information and communication technologies to increase the reach of start-up campaigns;

(viii) Piloting a mentorship network for women entrepreneurs; and

(ix) Updating and expanding the SME DNC database to include sex disaggregated data.

The Gender Action Plan, through support of technical assistance, will support communication to women entrepreneurs and MSMEs. Actions include:

(i) Implementing action plans linked to National Strategy of Small and Medium Entrepreneurship Development targeted at women entrepreneurs and MSMEs;

(ii) Implementing public awareness campaigns supporting women entrepreneurship;

(iii) Training SME DNC and participating financial institutions on gender awareness;

(iv) Improving availability of loan guarantees to women; and

(v) Increasing outreach and tailoring training and business development services for women entrepreneurs and MSMEs.

ADB will communicate information about this program and the outcome of this program through its publications, presentations and on its website. ADB will also communicate with the program's internal stakeholders (MOF, MOE, CBA, PMU GAF, SME DNC, PFIs and MSME subborrowers) through written documents. MSME subborrowers would provide information at the time of subloan application and would have personal follow-up interactions with the PFIs. PFIs would communicate with ADB the FIL status through submission of quarterly progress reports to PMU GAF, which it will in turn, forward to ADB. PFIs can also communicate to their staff through training programs, sensitization programs and workshops, to MSME subborrowers through public campaigns.

The loans (program and financial intermediation) became effective on 19 December.

Program loan:

The first tranche of $10.0 million was released upon effectivity. The second tranche of $10.0 million is yet to be released. ADB fielded a review mission in July 2014 to review compliance with policy actions. As of March 2015 good progress has been made in meeting policy actions.

Financial intermediation loan:

The initial advance of $8.01 was released on 4 February 2014 to the imprest account held with CBA. The German-Armenian Fund (the project management unit) will manage the project imprest account and ensure timely transfer of the proceeds to the participating financial institutions (PFIs).

The implementation of the financial intermediation component was divided into two phases. The total allocation is $20.0 million. The first phase with an allocation of of $15.5 was completed in 2013 and funds were allocated to three banks and one universal credit organization (UCO). Selection of phase two PFIs has been completed whereby two additional UCOs have been included in the program. One PFI from phase one has opted to withdraw from the program.

Business Opportunities
Consulting Services

The policy-based loan and FI loan do not have consultancy requirement.

The technical assistance (TA) for Capacity Building for Women's Entrepreneurship Support will support the program. It will have two outputs: (i) increased capacity of the Small and Medium Entrepreneurship Development National Center (SME DNC), project management unit of the German-Armenian Fund (PMU GAF), and participating financial institutions (PFIs) to support women entrepreneurs; and (ii) strengthened awareness and technical capacity of women entrepreneurs and business support organizations to ensure women entrepreneurs can benefit from increased credit resources under the financial intermediation loan (FIL) component. The TA is estimated to cost $630,000. ADB will provide $600,000 from its Technical Assistance Special Fund (TASF-IV), and the government will provide counterpart support in the form of counterpart staff, office space, workshop venues, radio and television time for communication campaigns, and other in-kind contributions. The TA will be implemented over 3 years during program implementation. The Ministry of Economy (MOE) (through the SME DNC) will be the implementing agency for the TA. ADB and the SME DNC will jointly review implementation progress. The TA will require services of three international consultants (9 person-months total) and eight national consultants (68 person-months total).

Consulting services have already been hired, through a firm, and will continue until 31 December 2015.

Procurement A procurement plan is not required for the policy-based loan and Financial Intermediation loan.
Responsible ADB Officer Anna Charlotte Schou-Zibell
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, CWRD
Executing Agencies
Ministry of Finance (MOF)Liana HunanyanPRESS@MINFIN.AM1 Melik Adamyan, Yerevan
Armenia
Timetable
Concept Clearance 26 Jul 2012
Fact Finding 30 Jul 2012 to 13 Aug 2012
MRM 12 Sep 2012
Approval 25 Oct 2012
Last Review Mission -
Last PDS Update 26 Mar 2015

Loan 2922-ARM

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
25 Oct 2012 25 Jan 2013 19 Dec 2013 31 Dec 2017 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 25.00 Cumulative Contract Awards
ADB 20.00 25 Oct 2012 10.05 0.00 53%
Counterpart 5.00 Cumulative Disbursements
Cofinancing 0.00 25 Oct 2012 10.05 0.00 53%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - - - Satisfactory

Loan 2923-ARM

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
25 Oct 2012 25 Jan 2013 19 Dec 2013 31 Dec 2017 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 20.00 Cumulative Contract Awards
ADB 20.00 25 Oct 2012 8.01 0.00 42%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 25 Oct 2012 8.01 0.00 42%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - - - Satisfactory

TA 8200-ARM

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
25 Oct 2012 29 Nov 2012 29 Nov 2012 31 Dec 2015 31 Dec 2016 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
600,000.00 0.00 0.00 0.00 0.00 0.00 600,000.00 25 Oct 2012 303,860.54
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - - - Satisfactory
Title Document Type Document Date
Assessment of Needs for Business Services Among Women Entrepreneurs of Armenia, 2014 Consultants' Reports Dec 2014
WESSDP - Digital Literacy for Women Entrepreneurs of Armenia (2014): Consultant's Report Consultants' Reports Dec 2014
Project Agreement for Women's Entrepreneurship Support Sector Development Project (PA6) Project/Program Agreement Sep 2014
Project Agreement for Women's Entrepreneurship Support Sector Development Project (PA5) Project/Program Agreement Sep 2014
Report on GSVC Exercise in Tumanyan District: Analysis of Tourism Value Chain with Focus on Bed & Breakfast Consultants' Reports Aug 2014
Amendment to the Project Agreement with Closed Joint Stock Company "ACBA-Credit-Agricol Bank" for Loan 2922/2923-ARM: Women's Entrepreneurship Support Sector Development Project Project/Program Agreement Aug 2014
Amendment to the Project Agreement with Open Joint Stock Company "Araratbank" for Loan 2922/2923-ARM: Women's Entrepreneurship Support Sector Development Project Project/Program Agreement Aug 2014
Amendment to the Project Agreement with Closed Joint Stock Company "CARD AgroCredit" Universal Credit Organization for Loan 2922/2923-ARM: Women's Entrepreneurship Support Sector Development Project Project/Program Agreement Aug 2014
WESSDP - Exploring Export Promotion Programs in Armenia: Consultant's Report Consultants' Reports Jul 2014
Amendment to the Loan Agreement for 2923(SFJ)-ARM: Women's Entrepreneurship Support Sector Development Project Loan Agreement (Special Operations) Jul 2014
Women’s Entrepreneurship Support Sector Development Program: Biannual Progress Report Consultants' Reports Jun 2014
Women‘s Entrepreneurship Support Sector Development Program Project/Program Administration Manual Oct 2013
Women‘s Entrepreneurship Support Sector Development Program Procurement Plans Oct 2013
Loan Agreement (Special Operations) for Women's Entrepreneurship Support Sector Development Program Loan Agreement (Special Operations) Jan 2013
Project Agreement for Women's Entrepreneurship Support Sector Development Project (PA4) Project/Program Agreement Jan 2013
Guarantee Agreement (Special Operations) for Women's Entrepreneurship Support Sector Development Project Guarantee Agreements Jan 2013
Project Agreement for Women's Entrepreneurship Support Sector Development Project (PA1) Project/Program Agreement Jan 2013
Project Agreement for Women's Entrepreneurship Support Sector Development Project (PA2) Project/Program Agreement Jan 2013
Loan Agreement (Special Operations) for Women's Entrepreneurship Support Sector Development Project Loan Agreement (Special Operations) Jan 2013
Project Agreement for Women's Entrepreneurship Support Sector Development Project (PA3) Project/Program Agreement Jan 2013
Կանանց ձեռներեցության ոլորտի սատարման և զարգացման ծրագիր : Ծրագրի ամփոփ նկարագիր Translated PDS Nov 2012
Women's Entrepreneurship Support Sector Development Program Reports and Recommendations of the President Oct 2012
Women's Entrepreneurship Support Sector Development Program Gender Action Plans Oct 2012
Women's Entrepreneurship Support Sector Development Program Project/Program Administration Manual Sep 2012

Evaluation Documents

See also: Independent Evaluation

No documents found.


The Public Communications Policy (PCP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.