This document has the purpose of identifying and describing actions that could aid in facilitating the financing of Small and Medium Enterprises (SMEs) through instruments channeled via the capital markets.
... See More + By way of precedent, it is worthwhile to mention the document ‘Argentina capital market assessment and development prospects’ of the World Bank (October 2016) where a diagnosis was performed (along with certain recommendations) of the Argentine capital markets in general and including sectoral aspects within which Small and Medium Enterprises (SMEs) and the capital market were analyzed. The structure of the document comprises the following sections: (a) characteristics of SME financing and the main obstacles they face; (b) analysis of proposals; (c) key players; (d) main conclusions; and (e) annexes including comparative country cases.
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Working Paper 117055 JUN 28, 2017
.org;; 000012349:John Daniel Pollner:jpollner@worldbankDisclosed
Argentina’s improved sovereign credit rating has helped to spur the recent sub-sovereign and corporate bond issues. In early April 2016, Standard & Poor’s upgraded Argentina’s sovereign ratings for local and foreign currency debt to B from B-.
... See More + This follows the ratings upgrade from Moody’s which raised Argentina’s sovereign rating for foreign currency denominated debt from C1 to B3 in 2016. This rating was re-affirmed by Moody’s in March 2017. Since Argentina’s re-entry into the international capital markets in early 2016, there has been USD 8.4 billion and USD 4.4 billion of bonds issued by sub-sovereign and corporate entities which is being used, in part, being used to support infrastructure projects. Although investor appetite has been relatively strong, it is difficult to ascertain the level of liquidity for sub-sovereign debt over the long-term. The potential level of involvement of foreign and local banks in the financing of infrastructure is still to be determined once Public-Private Partnerships (PPP) projects are tendered. Going forward, the issues that will impact the participation of lenders are: (i) the timing for completing and implementing the underlying regulatory framework for PPPs; (ii) the development of a project pipeline and subsequent tenders; (ii) macroeconomic conditions. The ability of the renewable energy projects under the RenovAR program to obtain bank financing will serve as useful benchmark for the rest of the PPP program. Although the enactment of the capital markets law is intended to reduce market inefficiencies, additional legislation, regulation and policies are needed to deepen and widen local capital markets. This law, which is still under legislative review, may not go far enough to develop the institutional investor base needed to provide long-term financing for infrastructure. Provisions could be added or new legislation could be developed which will: (a) encourage insurance companies to offer new types of products; (b) rebuild private pension systems by incentivizing the establishment of asset management companies; (c) providing preferential tax treatment for closed end mutual funds or value capture adjacent to real estate; (d) supporting the establishment of REITs; (e) reviewing the governance structure, mission, and investment strategy of the FGS; (f) support the development of long-term hedging instruments to manage currency risk through trusts or related mechanisms; and (g) promote the issuance of peso-linked bonds while developing a peso/dollar hedge market.
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Working Paper 117054 JUN 28, 2017
.org;; 000012349:John Daniel Pollner:jpollner@worldbankDisclosed
The Afghanistan New Market Development Project- Additional Financing (ANMD-AF) is an extension of the parent ANMDP that was launched as a pilot project in 2011 with the overall objective of transforming Afghanistan's major cities into strategic hubs of economic growth by supporting private sector development and attracting investments.
... See More + Some of the negative impacts and mitigation measures include: (i) ensure that carpet and weaving workers are provided safety kits (Personal Protection Equipment) at the facility and that they are trained in using it; (ii) ensure that all medical waste, including chemical residues, are properly disposed of at designated sites; (iii) proper disposal of hazardous materials at a designated site; (iv) incorporate fire safety into management plan, including means of warning and escape, internal fire spread, external fire spread, and access and facilities for the fire service; (v) ensure proper ventilation in the facility, if required for mining and mineral processing workers; (vi) earth roads should frequently be sprayed with water considering weather conditions and soil erodibility; (vii) all people within the vicinity of the factory site should use helmets and masks; (viii) ensure that the leftovers of a vaccination and other medical waste are properly disposed of at a designated site; (ix) proper signage should be in place in appropriate locations around the site to warn workers, visitors and other traffic; (x) the firm must comply with the Afghan Labor Law in not hiring underage children, particularly for work that may expose them to hazardous materials; (xi) if synthetic nylon or polyester materials are used in textile industries the waste must be properly managed and disposed of at a proper disposal site; and (xii) consider sand traps, silt fences, flushing programs, upstream reservoirs and cofferdams, intake design to enable sediment bypass, controlled dredging, physical bank stabilization, revegetation of erosive slopes.
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The development objective of the Nairobi Metropolitan Services Improvement Project for Kenya is to strengthen urban services and infrastructure in the Nairobi metropolitan region.
... See More + Some of the negative impacts and mitigation measures include: (1) cash compensation of all immoveable developments on the affected land, such as structures; (2) replacement of lost land by agricultural land of similar potential under similar customary tenure arrangements - cash compensation for land or non - cash compensation of land; (3) resettlement house of similar or better quality on a resettlement plot and cash compensation of the lost house per Kenyan law at full replacement value; and (4) cash compensation of standing perennial crops at replacement value and of non-perennial crops at market value.
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Ratings for the Enhancing Spatial Data for Flood Risk Management Project for Mozambique were as follows: outcomes were moderately unsatisfactory, the risk to development outcome was moderate, the Bank performance was moderately unatisfactory, and the Borrower performance was also moderately satisfactory.
... See More + Some lessons learned included: Indicators and targets should be better aligned with the project activities despite having a broader impact on programmatic results.The extension of training opportunities far beyond the direct beneficiary institutioncontributes to increasing the ‘value for money’ of the Lidar data.Although sector driven, Lidar projects should contemplate the capacity building inside key government institution for remote sensing. Maximizing reach of data into the public domain remains a challenge.
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Implementation Completion and Results Report ICR4056 JUN 16, 2017
Firms that provide on-the-job training do so when it is critical to their productivity—and when productivity is critical to their survival. This paper begins by confirming a significant and positive return from on-the-job training on wages and productivity, as well as the presence of positive externalities from on-the-job training, while discussing the methodological considerations at play.
... See More + The paper then reviews and validates the presence of market failures such as information asymmetries within the firm as a result of low-quality management practices that dampen firm demand for on-the-job training. Lack of competition in the firm's external environment appears to undermine adoption of on-the-job training and other complementary productivity-enhancing activities within the firm. The literature suggests that for most firms, a comprehensive policy approach that resolves external constraints to becoming more productive is likely to have a positive impact on the provision of on-the-job training and adoption of complementary policies. More direct forms of firm-level support to improve management capabilities could also alleviate under-provision of on-the-job training. Where societies have improved welfare as a goal, public policy measures would be needed to complement on-the-job training for some specific groups of workers (older, less educated, women). In essence, the paper highlights the importance of demand-side constraints for firms, rather than supply-side constraints, for the provision of on-the-job training.
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Policy Research Working Paper WPS8090 JUN 07, 2017
All over the world, women have less access to credit than men. Because of both discriminatory property laws and unwritten social customs, women are less likely than men to own high-value assets that can be used as collateral to secure loans.
... See More + Financial institutions in developing countries rely on heavy collateral requirements because they don’t have enough information about their borrowers. New technologies - many emerging from financial technology (fintech) startups in the Silicon Valley - have the potential to generate data on borrowers that can replace traditional collateral requirements, and unlock finance for women. In Ethiopia, the authors explored introducing fintech that can harness the data that financial institutions are already sitting on. The technology focuses on digitizing hard-copy loan application files of previous borrowers to identify trends and characteristics associated with repayment, and predict creditworthiness of new borrowers. Fintech solutions can viably address the collateral constraint for women borrowers, and can work even in low tech environments. But technology adoption isn’t easy, and assessing the readiness of financial institutions to adopt fintech and embark on technological change is a critical first step.
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There is relatively little systematic evidence on the links between procurement systems and outcomes such as competition and corruption levels.
... See More + This paper adds to the evidence base, using data on almost 34,000 firms from the World Bank’s Enterprise Surveys, in 88 countries that also have procurement systems data from Public Expenditure and Financial Accountability (PEFA) assessments. The analysis finds that in countries with more transparent procurement systems, where exceptions to open competition in tendering must be explicitly justified, firms are more likely to participate in public procurement markets. Moreover, firms report paying fewer and smaller kickbacks to officials in countries with more transparent procurement systems, effective and independent complaint mechanisms, and more effective external auditing systems. These findings—particularly on kickbacks—are robust to the inclusion of many controls and to a range of sensitivity tests. The study finds evidence that better procurement systems matter more for smaller firms’ participation in procurement markets and payment of kickbacks to obtain contracts, consistent with the view that information and transactions costs that are incurred in learning about bidding opportunities and fulfilling bidding requirements are more onerous for smaller firms. Falsification tests show that other, non-procurement indicators from the PEFA assessments are not associated with procurement outcomes, and that the PEFA procurement indicators are not strongly associated with other “governance”-related outcomes in firm surveys that are unrelated to procurement.
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Policy Research Working Paper WPS8078 MAY 30, 2017
South Asia has a huge need to create more and better jobs for a growing population – especially in the manufacturing industries where it is underperforming as compared to East Asia.
... See More + The report examines three critical and relatively understudied drivers of competitiveness: Economies of agglomeration: firms and workers accrue benefits from locating close together in cities or clusters through urbanization and localization. Participation in global value chains: stronger competitive pressures weed out least productive firms while others improve by gaining access to new knowledge and better inputs. Firm capabilities: in order to operate close to what would be considered optimum efficiency levels given the prevailing factor prices and thus employ South Asia’s abundant labor.The report entails four case studies of critical industries: apparel (based on the “Stitches to Riches” World Bank report), automotive, electronics and agribusiness. The report also draws on relevant good practices from around the world.The report shows that South Asia has great untapped competitiveness potential (including in all four industries studied). Realizing this potential would require the governments in the region to pursue second generation trade policy reforms for firms to better contribute to and benefit from global value chains (e.g. facilitating imports for exporters), to facilitate the development of industrial clusters in secondary cities (cheaper and less congested than the metros) as well as to deploy policies to improve the capabilities of firms, especially SMEs.
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This Performance and Learning Review (PLR) assesses progress in implementing the FY15-18 World Bank Group (WBG) Country Partnership Strategy (CPS) for Tajikistan.
... See More + The CPS’s principal objectives and three broad areas of engagement—designed to lay the foundation for Tajikistan’s transition to a new more sustainable development and growth model are: (a) strengthening the role of the private sector; (b) social inclusion; and (c) regional connectivity. Anchored in the country’s long-term National Development Strategy (NDS) 2016-30, the CPS also supports the government’s Medium-Term Development Strategy (MTDS) 2016-20 and is aligned with the WBG’s twin goals of ending extreme poverty and boosting shared prosperity in a sustainable manner.
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Country Assistance Strategy Document 115002 MAY 18, 2017
This document is the Performance and Learning Review (PLR) of the World Bank Group’s (WBG’s) Country Partnership Strategy (CPS) FY15-19 for Pakistan.
... See More + The four results areas of the CPS - Energy, Private Sector Development, Inclusion, and Service Delivery – remain consistent with the Pakistan One Nation One Vision 2025, and are aligned with the WBG’s twin goals of eliminating extreme poverty and boosting shared prosperity. Gains have been made in many areas by the midpoint of the CPS period. Progress, albeit uneven, has been made in stabilizing the macroeconomic situation, reducing load shedding in the power sector, increasing tax collection as a share of GDP, improving doing business, and investing in disaster and climate resilience. This progress was largely supported by the completion of a successful IMF program, an accompanying series of development policy credits (DPCs), and a ramp-up of IFC long-term investments.All four of the CPS results areas remain relevant and largely on track with some changes proposed.The PLR proposes a one-year extension to the CPS to FY20 to align with the electoral cycle of the country and the IDA18 period.
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Country Assistance Strategy Document 113574 MAY 18, 2017
Occupational sector selection is an important determinant of returns for female entrepreneurs. If sectors that are traditionally male owned could provide an opportunity to earn higher returns, then what factors could encourage women to cross over into these sectors or prevent them from doing so?
... See More + To examine this question, this paper uses data from Ethiopia to compare the firm performance and characteristics of women in male-dominated sectors (crossovers) with women who are in female-concentrated sectors (noncrossovers). The findings show that female-owned enterprises in male-dominated sectors perform better on average than those in female-concentrated sectors, with firms achieving higher profits and having more employees. The descriptive results show that crossovers do not necessarily have more education or greater skills than noncrossovers. Rather, women’s relationships and networks, especially those provided through male relatives, and being opportunity-driven entrepreneurs appear to influence the likelihood of entering a more-profitable, male-dominated sector. The study explores the implications and challenges of encouraging female entrepreneurs to enter male-dominated sectors, in an effort to provide new insight into how the earning gap between male and female entrepreneurs can be closed.
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Policy Research Working Paper WPS8065 MAY 16, 2017
The development objective of the Business Environment and Entrepreneurship Development Policy Loan Project for Tunisia is to improve the business environment, and (ii) support entrepreneurship and deepen access to finance.
... See More + The proposed Business Environment and Entrepreneurship Development Policy Loan (BEE DPL), in the amount of Euro 457.2 million (US$500 million equivalent), is a standalone single-tranche operation aimed at supporting key areas of reform in the Government of Tunisia’s Five-Year Development Plan for 2016-2020. The DPL would help Tunisia achieve stronger and more inclusive growth and private sector-led job creation, particularly by stimulating entrepreneurship. The Government response to the employment and social challenges by raising public sector hiring and salaries has helped maintain social peace, but has also contributed to significant weakening of Tunisia’s fiscal situation. Going forward, job creation will require a sound macroeconomic framework, a dynamic private sector and a conducive business environment. Accelerating job creation and promoting inclusion and shared prosperity in Tunisia also entails supporting entrepreneurship and deepening access to finance.The proposed DPL is informed by the challenges and opportunities identified in the Systematic Country Diagnostic (SCD). The SCD identified three key development challenges for Tunisia: (a) macroeconomic stability: the macroeconomic and fiscal environment exhibits large vulnerabilities that, if not addressed through deep structural reforms, will prevent the country from achieving its full growth potential; (b) cohesion and security: restoring security and social cohesion are prerequisites for setting Tunisia on a new growth trajectory. Attaining longer-term stability and social cohesion require continuous measures to address the economic and social exclusion of large segments of the Tunisian society; and (c) improved governance: seven years after the revolution, there is still a clear need to increase accountability, improve service delivery and create more effective means for citizens to participate in policy design and implementation. The SCD also identified two key drivers for eradicating poverty and boosting shared prosperity in a sustainable manner: (a) promotion of private-sector-driven job creation, by simplifying regulations, creating a level playing field, improving access to credit and improving efficiency of the banking system; and (b) increased equality of opportunities through transparent policies that reduce skills mismatch, strengthen the social protection system, address spatial inequalities, and target institutional failures that generate unequal opportunities.
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