UNIDO facilitates credit facility for small-and medium-sized enterprises

MOGADISHU, August 25th 2020 — To unlock the economic development potential that Somali small-and medium-sized enterprises (SMEs) may represent for the growth of Somali economy, UNIDO has partnered with the International Bank of Somalia (IBS) in offering critical enterprise loans products to Somali private sector entities looking to diversify their operations, start-up a new venture or boost their productivity.

At present, the credit availability in Somalia is either for micro-enterprises, which are mostly in the business of trading and service, or larger businesses with higher ticket size credit. According to UNIDO, there is clearly a missing middle which had to be designed and developed targeting this segment, above micro-credit but lower than conventional larger loans for established businesses. This would have the potential to spur growth of production-based start-ups in the country. The new UNIDO-IBS credit facility offers two loan products: micro-enterprise loans ($500 to $5,000) and industrial investment loans ($5,000 to $100,000).

This initiative is part of the project ‘Agro-Technology Development for Economic Growth in South and Central Somalia,’ funded by the Italian Agency for Development Cooperation and implemented by UNIDO, in close cooperation with the federal Ministry of Commerce and Industry, the Jubaland Ministry of Commerce and Industry, and the South West State Ministry of Commerce and Industry. This support is twinned with the enterprise development support offered to the Somali network of Enterprise Development Units in Mogadishu, Kismayo and Baidoa.