Enterprise development

MIDAS will target assistance to labor-intensive SMIE"s which show strong growth potential and which have significant either backward linkages to smaller producers or forward linkages to larger producers. Financial assistance to these SMIE"s will take the form of (1) fixed or working capital loans, generally for 4-6 years at real market rates (currently 18%) provided either by MIDAS itself or through a cooperative arrangement with a local bank, and (2) a limited amount of venture capital loans. Loans will be offered only after a feasibility study has been conducted, and MIDAS will be responsible for loan processing and monitoring. Loans of over $50,000 will be submitted for approval to USAID/B. Other financial activities are, inter alia, to: support subcontracting relationships between businesses (including local collaborations with foreign firms), identify new products that can be so produced, improve existing subcontracting systems, and establish a subcontracting equity fund. MIDAS will also provide a range of non-financial services, including growth studies of various industrial subsectors (especially those where womem figure prominently as producers), consultancy and loan referral services, and a variety of application-oriented newsletters and pamphlets. By the end of project, MIDAS will: identify 30 promising subsectors for development; help establish about 200 entrepreneurial businesses, and catalyze 300 others; facilitate 50 collaborations between Bangladesh and foreign firms; undertake 200 business consultancies; leverage $1.5-2 million in loan funds from local banks; test new models for promoting productive relationships between businesses; and establish better relationships between public and private enterprise development organizations in Bangladesh. A.I.D. will provide MIDAS with access to a capital fund, TA, computer equipment and related software, and on-the-job, short-term overseas, and (possibly) in-service training.