USAID Business Ecosystem Project Quarterly Progress Report (Jan 1 – Mar 31, 2021)

The project, implemented by Palladium, has three overarching objectives: Improved Business Support Organization (BSO) Services to MSMEs, Improved MSMEs' Access to Sources of Financing, and Increased Private Sector Engagement (PSE). BEP will achieve these objectives through a mix of grants and technical assistance, working with traditional and alternative financial instruments, and catalyzing lead firms to invest in the development of supply chains and labor forces. BEP has made significant 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. BEP's three components address key facets of the business ecosystem that are naturally interconnected and mutually reinforcing. Under Objective 1, BEP and Strategic Development Consulting (SDC) have worked with BSOs to address challenges imposed by COVID-19, providing consultation and support to find alternative ways to adapt to the crisis. BSOs have been strengthened to provide services for MSMEs and startups, introducing new technologies, innovations, standards, and business practices, facilitating relationships with new clients or markets, and building their technical and business skills. Implementation of grants and technical assistance to BSOs has been ongoing, with a focus on strengthening internal capacity and sustainability. BEP has also facilitated inter-BSO networking and partnerships, enabling BSOs to share best practices and leverage resources. Under Objective 2, BEP has worked with traditional and alternative financial instruments to ensure access to financing for MSMEs, providing financial literacy, management, and access to finance support. BEP has also catalyzed lead firms to invest in the development of supply chains and labor forces, leveraging $10 million from lead firm and private sector partners in support of project activities. The project has generated 15 percent average annual growth rate for MSMEs, resulting in $81.5 million in MSME revenue growth, created 5,750 new jobs, and provided access to alternative and traditional financing for 250 MSMEs. In the past quarter, BEP has finalized planned work, including processing close-out activities for part of the BSOs, lobbying for additional Access to Finance (A2F) opportunities, and procurement and installation of equipment in PSE activities. The project has also adapted to the COVID-19 crisis, restructuring initiatives to address the challenges imposed by the pandemic.