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Private Sector Development Capacity-Building Project – Matching Grants for SMEs

Impact Evaluation Concept Note. Ethiopia. Private Sector Development Capacity-Building Project – Matching Grants for SMEs. Intervention Summary. Current situation: SMEs are not technically or managerially competitive with international firms

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Private Sector Development Capacity-Building Project – Matching Grants for SMEs

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  1. Impact Evaluation Concept Note Ethiopia Private Sector Development Capacity-Building Project – Matching Grants for SMEs

  2. Intervention Summary • Current situation: SMEs are not technically or managerially competitive with international firms • Proposed solution: Assist SMEs by accelerating their capacity such that they increase quality of output to international standards • Intervention is part of a three-component project • Component 3: Ethiopian Competitiveness Facility • Window 4: Matching grants for SMEs engaged in light manufacturing • US$ 5.5 million in matching grants to SMEs with marketable business ideas over 18-month period • Maximum $50,000 per grant, with 25% matching

  3. Evaluation Questions • Does the matching grants for SMEs component lead to an increase in sales and employment? • Sales target: 10% increase • Does targeted promotion of, and support during, the program improve uptake, efficiency of processes, and results?

  4. Evaluation Design • Option 1: Encouragement design (random promotion) • Program to be implemented simultaneously across entire country • No eligible SMEs can be excluded from applying • About 80% of eligible grant applications will be approved • Option 2: Matching with similar SMEs in different countries • How to identify suitable firms? • How to control for confounding factors? Option 1: Encouragement Design

  5. Evaluation Design Promotion of matching grants program for randomly selected eligible SMEs (10-50 employees) • Updated registry of all eligible SMEs with 10-50 employees • Randomly assign firms to treatment and control groups • Start program!

  6. Sampling and Data • Expected take-up by treated firms: 80% • Sample size: 700 firms (350 treatment, 350 control) • Data sources: • Business plans submitted by firms • Dedicated surveys • Customs and Revenue Authority

  7. Timeline • July-August: Intervention design, final IE design, updating of firm registry • September: Additional Financing approved by Ethiopian Government and World Bank (expected) • October: Baseline Survey • Program implementation: November-April 2013 • April 2013: Follow-up Survey • August 2013: Final IE results and feedback into program design for scale-up

  8. Team and staffing • Project Team: TesemaAbebeGirmay, TsigeBekaluAzeze • World Bank: AsyaAklog (TTL), Miriam Bruhn, Marcus Holmlund

  9. Budget • Expected need: US$200,000 (mainly data collection) • Sources: • World Bank trust funds • World Bank Research Support Budget • External sources (?)

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