USAID Business Ecosystem Project Year 5 Work Plan (Extension period)

The project's overall goal is to achieve a self-sustaining cadre of Business Service Organizations (BSOs) that offer targeted services to MSMEs, a robust network of alternative financing mechanisms, and lead firms actively investing in local economic development activities. To achieve this goal, BEP will focus on three main objectives: improving BSO services to MSMEs, improving MSMEs' access to financing, and leading firms to invest in development of supply chains and labor forces. The project will implement various tasks under these objectives, including strengthening internal capacity and sustainability of BSOs, introducing new or upgrading existing BSO services, and facilitating inter-BSO networking and partnerships. One of the key areas of focus for BEP is the development of supply chains and labor forces. The project will implement the Private Sector Engagement (PSE) initiative, which aims to develop critical aspects of the ecosystem needed to make the PSE model successful. This will include supply chain development, strengthening labor force, and lobbying efforts on all levels. BEP will also focus on improving MSMEs' access to financing. The project will support MSMEs to improve their financial literacy, management, and access to finance. This will include tasks such as pipeline management, capacity building, and operational follow-up activities. Additionally, the project will support the introduction of multilateral cashless settlement systems and crowdfunding platforms. Throughout the project, BEP will be guided by a broader vision of building North Macedonia's capacity to address systemic constraints to MSME growth and productivity. The project will also be guided by an exit strategy that transfers BEP capacity to a dynamic ecosystem of business service organizations, financial facilitators, business services providers, government, and financial institutions supporting the MSME sector. The project's theory of change model highlights the interconnectedness of the three project objectives and the results framework to achieve the overall project objectives. The model shows how the project's activities will lead to the desired outcomes, including a self-sustaining cadre of BSOs, a robust network of alternative financing mechanisms, and lead firms actively investing in local economic development activities. Overall, the USAID/North Macedonia Business Ecosystem Project aims to transform the competitiveness of MSMEs in North Macedonia by strengthening business services, finance, and market linkages. The project will focus on improving BSO services, improving MSMEs' access to financing, and leading firms to invest in development of supply chains and labor forces.