India: Micro, Small, and Medium Enterprise Development Project
The project aimed to improve access of micro, small, and medium enterprises (MSMEs) to commercial financing and market opportunities, thereby fostering growth, competitiveness, and employment creation in India. There were three targeted outputs. First was enhance credit delivery through Small Industries Development Bank of India (SIDBI) and participating financial institutions in the MSME subsector. Second was increased SME productive and managerial capacity and related new jobs created for new markets. Third was increased MSME portfolios in participating banks through the use of ADB’s partial credit guarantee (PCG).
The project consisted of a sovereign loan from the Asian Development Bank (ADB) of $50 million from ordinary capital resources, and a partial credit guarantee of $250 million as nonsovereign operations. The borrower was the Government of India while the implementing agency for the loan was the SIDBI, which was to channel the sovereign loan to smaller MSMEs. The PCG was offered to all public sector banks in India engaged in the MSME subsector and they were expected to benefit from long-term funds raised under the PCG facility. The project was supported by a parallel development grant of $3 million financed by the Japan Fund for Poverty Reduction (JFPR) to help build awareness and capacity of MSMEs targeting women microenterprises in relatively poor states.
This report validates the completion report's assessment of the project. IED overall assessment: Less than successful.