Phase 1

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Building a sustainable system for MSME development in northern Mozambique – PREMIER-Oholo (PRO)

The project aims to increase economic opportunities especially for youth and women in northern Mozambique by promoting the growth of micro, small and medium enterprises (MSMEs). This will be achieved by improving their business and financial management as well as their access to markets, finance and business development services.

Country/region	Topic	Period	Budget
Mozambique	Employment & economic development Other nothemedefined Employment creation Sector not specified SME development Business support & economic inclusion	01.01.2022 - 30.06.2027	CHF 7’869’500

The project in brief

Background	Mozambique is one of the poorest and least developed countries in the world. High poverty, inequalities, and severe lack of economic opportunities create a sense of social exclusion, especially for youth. Social exclusion is one among other drivers of the conflict in Cabo Delgado attracting young people to join insurgent groups. More than 150’0000 youth enter the labour market every year in northern Mozambique (500’000 youth in whole Mozambique) and the private sector does not generate jobs at the same rate. Many youth turn to vulnerable (self-)employment, mainly in the informal sector as a livelihood. The development of MSMEs can be a vehicle to improve economic opportunities for youth and women and indirectly contribute to stability. MSMEs are struggling to grow due to poor business skills, difficult access to finance and markets and a challenging business environment. The project is the only donor funded program in Mozambique with a holistic approach to developing the market system for local business development services and other service providers that MSMEs need to thrive.
Objectives	Increase incomes and employment in target areas of the Nacala Corridor, inclusive of women and youth.
Target groups	10’675 Micro, small and medium enterprises (MSMEs) in Northern Mozambique, including women and youth entrepreneurs Large enterprises to pilot and scale inclusive business models Local business development service providers to build the capacity of MSMEs
Medium-term outcomes	Outcome 1: Businesses respond to evolving end market demands via improved business management practices that put them on a growth trajectory/pathway. Outcome 2: Businesses scale viable commercial and inclusive sourcing models via improved value-add market/supply chain infrastructure and policy environment. Outcome 3: Financial institutions increase/improve lending and investment products/services for suppliers to meet their needs. Outcome 4: Business development service providers deliver increased/improved services to MSMEs and women- and youth-owned enterprises.
Results	Expected results: Capacities of business development service providers are strengthened with an improved product portfolio and a financially sustainable business plan. MSMEs and large companies receive capacity building technical assistance and increase their knowledge of business and financial management. Private companies create more formal relationships with farmers and MSMEs. Financial institutions increase their outreach and develop new products for financing for MSMEs, youth and women entrepreneurs. Results from previous phases: Results (preparatory phase): 308 micro and small enterprises trained in business skills in Nampula and Pemba 95% of the trained entrepreneurs adopted improved financial and business practices Increased savings for MSMEs (70% increase on average) As a result, their revenues grew by an average of 87% and 66 new jobs (38% women) were created Insights: It is critical to have well–functional local business development services to support MSMEs’ growth There are only very few business development service providers in Northern Mozambique and they are weak Many large companies want to be more inclusive but don’t know how to do so
Directorate/federal office responsible	SDC
Project partners	Contract partner Other International Organization Private sector Other OI Foreign private sector South/East Swiss Private Sector Technoserve
Coordination with other projects and actors	SDC projects: PROMAS, Futuro Mcb, SIM Other donors: USAID, World Bank Public sector: regulating the business environment
Budget	Current phase Swiss budget CHF 7’869’500 Swiss disbursement to date CHF 3’820’315 Total project since first phase Swiss budget CHF 554’500
Project phases	Phase 1 01.01.2022 - 30.06.2027 (Current phase)

Further technical details

Sector according to the OECD Developement Assistance Commitiee categorisation	OTHER SOCIAL INFRASTRUCTURE AND SERVICES Unallocated / Unspecified INDUSTRY BUSINESS & OTHER SERVICES
Sub-Sector according to the OECD Developement Assistance Commitiee categorisation	Employment policy and administrative management Sectors not specified Small and medium-sized enterprises (SME) development Business support services and institutions
Cross-cutting topics	Conflict reduction
Aid Type	Mandate without fiduciary fund Project and programme contribution
Project number	7F10843