The Aga Khan Foundation U.S.A. (AKF USA) has joined with the U.S. Agency for International Development (USAID) for Small and Medium Sized Enterprise Growth (SMEG) for Central Asia. The one-year, $1 million grant builds on previous investments by donors and the private sector in Central Asia.
Small and Medium Sized Enterprises (SMEs) are crucial for Central Asia’s economic growth but they face challenges in four key areas. The SMEG project addresses each of these:
- investment
- access to financing
- business support services
- enabling environment
Focusing on Tajikistan, the project studies these areas for ways to support and increase regional economic integration within Tajikistan and across Central Asia.
Better Financing Options for Small and Medium Sized Enterprises in Central Asia
The SMEG project combines the strengths of the Foundation and two other Aga Khan Development Network agencies: the University of Central Asia (UCA) and the First Microfinance Bank Tajikistan (FMFB-T). FMFB is conducting a study of market demand for loan products and business advisory services in urban and peri-urban areas, to better understand the needs of SMEs. That study will help the bank improve its loan products. The Mountain Societies Development Support Programme (MSDSP), an affiliate of the Aga Khan Foundation, is building the capabilities of micro-lending organizations, which reach enterprises too small to access financing from FMFB or its peers. MSDSP will provide an infusion of capital that will allow the micro-lending organizations to expand their loan portfolios.
MSDSP is also working to strengthen the Pamir Eco-Cultural Tourism Association (PECTA), which delivers business services to member organizations in the Pamir Mountains. UCA is developing a curriculum in Small and Medium Business Management to enhance the skills of business owners and training the instructors who will deliver the courses. Finally, UCA is conducting several research studies around constraints on the enabling environment for SMEs in Tajikistan that will inform policy dialogue at the national and regional levels.
Expanding Job Opportunities in Tajikistan
The project aims to add an estimated 900 jobs in Tajikistan and indirectly benefit more than 1,800 enterprises in the country through up- and downstream value-chain development. AKDN seeks to demonstrate how combining these interventions can multiply the impact, resulting in more rapid and expanded growth.