NEWS ABOUT WORLD BANK GROUP SMALL AND MEDIUM ENTERPRISE INITIATIVES Vol. 1, No. 6, July 2000 KeYword: Partnerships ihThe World Bank Group SME Department n business since March of 2000, the new SME IN BRIEF IDepartment is working within the World Bank, IFC, MIGA, and the global small business com- Small an emetmunity to create new and better SME support Small anmdimntrprograms. These programs will be based on key (SMEs) play a central role in devel- (SMEs play acalrl an del- lessons from past experience about what does and eopngounfieally.Lst aswecl doesn't work as well as creative new thinking 7eonmial Lastig v s about SMEs. Outputs will be focused more on advisory services and the business environment them. Yet they have a hard time,.. sthmYeteha a hdf time and less on provision of capital-which is impor- struggingss agaironsets di t carely tant, but often better provided by others, includ- business environments and rarely ing IFC-supported financial sector activities. able to obtain the financing and otherforms of support they need Rather than "booking assets" that provide financ- potential, or fail altogether. ing in its own name, the department will be a cat- potential, orfdil aliogether alyst and a service provider, working almost Intern nal efforts to sist S s exclusively through partnerships, both inside and need better coordination and idea outside its own organization. It will be a nexus ned betteTo strengthen its own con- point to help the World Bank, IFC, MIGA, and sharing,uto angtenation con- external partners do a better job of strengthening ship the World Bank Group (WBG) SMEs with a goal of reducing poverty in devel- has now created a global SME opng countries. : KS Department-a joint effort C that for the frst time combines the The department is itself a partnership, dedicated a ba small- business policy expertise of to building bridges between the World Bank and ..-the the World Bank with the transaction IFC in the SME field. It puts these two organiza- Worl kand company-level experience of tions' SME activities under a shared management the Internatzional Fzinance structure, headed by a director who reports to Corporation. The approach can be both IFC and World Bank vice presidents. -- )frector: summed up in one word: Hard FILE COPYpartnerships. / 'R _rig ht@ic'r he approach will be flexible and team-based, the orientation very much client-driven and results-oriented. On one side it brings the World Bank, well equipped to help governments improve the local business and policy environ- ment for SMEs through targeted reforms. On the other it has IFC, with hands-on investment expe- rience with SMEs, financial institutions, strategic partners, and other key stakeholders in small business development. The two will mutually reinforce each other, continuing an organizational trend that began in January 1999 with the appointment of Peter Woicke as the first execu- _ tive vice president of IFC to also hold the title of Peru: Cutting sugarcane managing director at the World Bank. These important synergies are starting to be bet- into new operations, backed up by financial and ter exploited, helping improve the overall effec- other resources when needed. The ultimate test tiveness of the World Bank Group's extensive will be in the department's ability to build capac- small business investment and technical assis- ity, especially at the local level. tance programs. In the past, many SME special- ists in the World Bank and IFC did excellent This will not be easy. Past attempts in this field work, yet missed out on the benefits of having (by the World Bank Group and others) have their two legally distinct, independently funded sometimes fallen short of the mark. Why should and managed sister organizations working togeth- this one be any different? Perhaps because the er. And even though many of these specialists department is starting off with: will continue to stay in their own institutions, they will now have the SME Department's lead- * Operational focus: with concrete initiatives ership supporting their delivery of a well-coordi- based on demonstrated client needs, well- nated World Bank Group-wide SME strategy. It defined deliverables, and an emphasis on strate- is one that will in turn closely involve great many gy and evaluation from the outset players worldwide: companies, financial institu- * Practical tools: helping shape the World Bank tions, governments, NGOs, foundations, business Group's evolving products in technical assis- schools, and others. tance, financial support, and policy reform relating to SMEs The department will help coordinate and develop * Mapping: agreeing on a World Bank Group- new SME work that will in most cases be carried wide agenda for SME work in each country out mainly by others. Whatever the country, based on careful upfront diagnostic work, with industry, or issue, the department must be able to the results hopefully becoming documents for identify needs, propose viable solutions, frame discussions on coordination with other agencies new ways to achieve them, and track progress * Niche emphasis: being selective, emphasizing toward the desired results. Thus it will stay close only those efforts where the World Bank Group to the industry's kcy knowledge centers world- and its partners can make an important incre- wide, pulling together key ideas from leading mental contribution. participants. The objective will be to turn them 2 7u- Li -Jd m. L .'m z'be7L What will the department actually do? T he department has assembled a group of pro- T fessionals with a wide range of expertise, * coordinate, promote, and monitor the World nationalities, and international and organizational Bank Group's SME activities experience. Here's who we are: * establish working partnerships with leading Harold Rosen is the director of the World Bank global players in areas such as microfinance, Group SME Department. A US SME direct lending and venture capital, busi- national, he joined the World ness development services, and Internet and e- Bank Group in 1978 through the commerce activities, then design and support Young Professionals Program. new initiatives with these partners His posts at IFC have included manager for financial planning * coordinate and foster World Bank Group work and policy (1989-91), where he with other multilateral and bilateral donors played an important part in rais- ing IFC's $1 billion capital increase. A member of * identify, disseminate, and encourage application the task force launching IFC's operations in the of knowledge about global best practices in former Soviet Union (1992), he was also instru- SME activities mental in starting IFC's operations in Vietnam and establishing the Mekong Project s develop, disseminate and apply better perform- Development Facility. He has served as a manag- ance and impact indicators for SME programs er in IFC's Asia Department (1992-97) and direc- tor of the Central and Southern Europe - strengthen the existing IFC-managed regional Department (1997-2000). In both East Asia and SME facilities and establish new such facilities Central and Eastern Europe, he developed a num- where these are feasible ber of new approaches and partnerships for SME development. The working structure of the department is organ- ized around lines of business such as monitoring Max Aitken is the department's manager respon- and evaluation, e-business, pilots and new prod- sible for new SME project facilities. ucts, donor relations, communications and knowl- Early in his career, Max joined the edge management, and others. Work areas will be World Bank through the Young kept under review, and these may be reshaped in Professionals Program, then had the light of experience. more than 10 years experience in the private sector in project man- agement, technology commercialization, start-up companies, and consulting before joining IFC in 1994. He has been actively involved with SME financing and technical assistance initiatives in the South Pacific, Mekong, and Balkan regions, as well as regular IFC investment operations. 3 Hany Assaad is the principal advisor to the million Mexico Knowledge and Innovation proj- department on micro, rural, and ect. Before joining the World Bank Group in small business. An Egyptian and 1992, he worked as business strategy consultant Canadian national, he has extensive with the London-based LjEIK Partnership. experience in environmental affairs and financial markets. From 1983 to Tom Davenport is the manager in the department 1986, he worked in Cairo as a senior responsible for existing IFC-managed member of Environmental Quality International, SME facilities. A Canadian and a large private Egyptian consulting firm. He British national, Tom joined IFC as joined the World Bank's Energy Efficiency and an investment officer in the Africa Strategy Division in 1986, moving the next year Project Development Facility in to IFC. Since then he has headed the Special 1993, in his first assignment opening Projects Unit in IFC's Environment Division, up and heading the Africa Project Development served as special assistant to the World Bank/IFC Facility's operations in Ghana. From 1996 to President James D. Wolfensohn, and managed 2000, he served in Hanoi as the first manager of IFC's financial markets team for South and the Mekong Project Development Facility. Before Southeast Asia. joining IFC, he worked on a number of private sector-related assignments in Africa and Asia Liz Bronder is an IFC manager in the depart- while with a consulting firm in Washington, D.C. ment overseeing the knowledge- He also served with the Canadian Foreign management/ communications and Service, based at the embassy in Washington, e-business teams and is part of the D.C. a group developing the Global Dcvclopment Gateway, a World Alexander Keyserlingk is general manager of Bank Group portal for the exchange IFC's special initiatives in Africa. A of development ideas and information across the Canadian national, Alex has also Internet. Previously she served as interim special served as manager of the Africa assistant to the executive vice president of IFC, Project Development Facility (APDF) first for Jannik Lindbaek, then for Peter Woicke. and CEO of the African Management A US citizen, she also helped establish the Services Company (AMSCO) based Pacific Islands Investment Fund and worked on in Amsterdam. An IFC staff member since 1971, the refunding of the South Pacific Project. he was part of the small group that pioneered the Before joining IFC, she worked at Morgan Corporation's SME work by helping draw up the Stanley in mergers and acquisitions and at original concepts for APDF and AMSCO in the Goldman Sachs in capital markets. mid-1980s. He has also served as the IFC's resi- dent representative in Frankfurt. He is a Canadian Daniel Crisafulli is a key collaborator in the chartered accountant and worked with Arthur department's work, responsible for Young and Price Waterhouse in Canada, Internet investment strategy and Venezuela, and Germany. business development in the World Bank Group's Global Information Michael Klein is director of World Bank and IFC and Communication Technologies private sector advisory services and a Department. There he has a particu- key collaborator with the department. lar focus on the application of information tech- Before returning to the World Bank nology to small business development. Earlier Group in January 2000, he served for responsibilities in the World Bank Group include three years as chief economist for the the conceptualization and execution of the $300 Royal Dutch/Shell Group in London. 4 .~ . -_ .- - j A German national, he worked at the World Bank Small Enterprise Development and a leader of the as an economist from 1982 to 1991, then joined World Bank's internal network on Rural and the Organization for Economic Cooperation and Micro Finance and Small Enterprise Development in Paris, and returned to the World Development. He taught economics at Vanderbilt Bank in 1993 as senior manager for private par- University (1970-79) and the University of Ghana ticipation in infrastructure. He has written widely (1972-73), served as an advisor to the African on issues of competition and bidding in infra- Development Bank (1979-83) and the Indonesia structure industries, project finance and guaran- National Planning Agency (1992-93), and has tees, and financial system architecture. published numerous books and articles on small enterprise development, informal financial mar- Peter Mousley is a senior private sector develop- kets, and industrial adjustment. ment specialist in the department, managing the country mapping and Leila Webster is a program manager in the business enabling environment pro- Department. Employed by the World grams. Employed by the Bank since Bank for 12 years, Leila is a US 1999, he is a Canadian national who national who has worked mainly in has worked principally in Sub- the World Bank in micro, small and Saharan Africa, the Middle East, and the Balkans. medium enterprise development, Before joining the World Bank Group, he worked focusing on issues of financial inter- for the Canadian International Development mediation and business development services. Agency, where his recent assignments included She has also focused intensively on issues associ- the management of Canada's programs with the ated with the emergence of private sectors in tran- multilateral development banks and the sition economies. Most recently a program man- Consultative Group to Assist the Poorest ager with the Mekong Project Development (CGAP), and before that Canada's bilateral coun- Facility in Hanoi, she has also worked mainly in try programs in West Africa. He has also had countries of the former Soviet Union and the field postings in West Africa and Sudan. Sahel region of Africa. She has also served for the past five years as co-chair of the Committee of Vincent Rague is the department's manager for Donor Agencies for Small Enterprise new products/pilots and financial Development. markets. A Kenyan national, he entered the World Bank Group Wendy Jagerson Teleki is a program officer in through the Young Professionals the department who has been in the Program and was IFC's first regional field of SME development for nearly representative in South Africa (1994- ten years. In addition to her six years 98). He later was manager/staff development and with the IFC and the World Bank, she secretariat in the World Bank's Knowledge and has worked with various financial Learning Council, then rejoined IFC as chief I institutions focusing on SME lending investment officer in the Central Asia, Middle and entrepreneurship in developing markets. East and North Africa department. During that time, she has managed several teams providing direct assistance in SME privatization William F. Steel is the lead specialist for micro- and capacity building in transitional economies. finance and small enterprise develop- Most recently, she worked in Indonesia, focusing ment in the Private Sector Group of on policy and finance issues related to SMEs in the Africa Region in the World Bank the aftermath of the East Asian financial crisis. and a key collaborator of the depart- ] ment. He is also co-chair of the Committee of Donor Agencies for 5