USAID Business Ecosystem Project Quarterly Progress Report (Apr 1 – Jun 30, 2021)

The project aims to transform the competitiveness of micro, small, and medium enterprises (MSMEs) in North Macedonia by strengthening business services, finance, and market linkages. BEP has three overarching objectives: (1) Improved Business Support Organization (BSO) services to MSMEs, (2) Improved MSMEs' access to sources of financing, and (3) Lead firms investing in the development of supply chains and labor forces (Private Sector Engagement). To achieve these objectives, BEP will generate 15 percent average annual growth rate for MSMEs, resulting in $81.5 million in MSME revenue growth, create 5,750 new jobs, provide access to alternative and traditional financing for 250 MSMEs, facilitate $100 million in financing for MSMEs and startups, and leverage $10 million from lead firm and private sector partners. BEP has made impressive strides in the past three years, surpassing several indicator targets while remaining flexible and responsive to the changing needs of the project. The project has implemented proof-of-concept activities with the private sector, developed insights to scale successful initiatives in targeted sectors, and deepened collaboration with both the private and public sector through its integrated approach. Under Objective 1, BEP and Strategic Development Consulting (SDC) worked with the remaining BSOs that received no-cost grant extensions through May 31, 2021. Four BSOs - Macedonian Association of Metal and Electrical Industry (MAMEI), Macedonian E-Commerce Association (E-commerce), Makam-Trans, and Solar Macedonia - successfully finished implementation of all activities. A final networking meeting was organized where all grantees discussed their experiences, shared lessons learned, and announced their future programs. BEP's integrated approach ensures sustainable results and strengthens the impact of activities by bringing together an array of multi-level stakeholders. The project takes an innovative approach to ensure activities leverage the benefits to MSMEs from the interrelated nature of services, finance, and Private Sector Engagement. For example, the ability of MSMEs to access finance depends on access to complementary services by BSOs to prepare firms to receive financing. In the past quarter, BEP faced challenges due to the COVID-19 pandemic, which forced the project to postpone some activities and adapt to the situation. However, the reaction to the pandemic gave rise to new opportunities, specifically in the field of access to finance for an unserved population of nano enterprises. BEP finalized close-out activities for the BSOs, lobbied for additional Access to Finance opportunities, and procured and installed equipment in the Private Sector Engagement activities. BEP's Quarterly Progress Report for April 1 – June 30, 2021, highlights the project's achievements and challenges during the quarter. The report provides an overview of the project's progress, achievements, and challenges, and outlines the next steps for the project.