Hanoi, Vietnam, January 17, 2002
—Representatives of donor countries and institutions and the advisory board of the Mekong Project Development Facility (MPDF) are meeting in Hanoi, Vietnam (January 17-18) to review the results of its 2001 operations and discuss its action plan for 2002.
The MPDF is an IFC-managed multi-donor initiative for SME development in Vietnam, Cambodia, and Laos. It is funded by the Asian Development Bank (ADB), Australia, Canada, Finland, IFC, Japan, Norway, Sweden, Switzerland, and the United Kingdom.
On the direct Company Advisory Program, 40 projects were completed in 2001, five more than the target of 35. Of these, 27 involved financing assistance and 13 technical or advisory assistance. Total financing raised was $27.7 million, direct jobs created about 2,600, and foreign exchange earnings about $26 million per annum. The provision of technical and advisory assistance reflects MPDF’s new strategy to expand from the traditional finance raising assistance to meet the changing needs of local SMEs: businesses now find that they need help to improve various aspects of their operations, such as marketing, accounting, management information systems, technology, quality assurance, etc. Access to financing on the other hand has somewhat improved, with the generally more favorable environment for private enterprises, although it is still far from perfect.
Major progress was also achieved on the two core activities of the Business Development Services (BDS) Program: management training and bank training. Twelve new partner schools were signed up for the Management Training Program (MTP), enabling extension of the latter to secondary cities of Vietnam. The flexible learning pilot had a very encouraging start, with 38,000 workbooks sold and the books twice voted best-sellers in Vietnam. A total of about 5,000 companies were assisted through MPDF’s management and other training activities.
The Bank Training Center (BTC) became operational in 2001, with ten member joint-stock banks agreeing to invest $10,000 in equity capital. Seventeen courses were run in 2001, covering a broad range of subjects as required by the participating banks. Of these 11 were run in Vietnam, five in Cambodia and one in Laos. The BTC also began training local instructors and developing local course materials with a view to eventual self-sustainability.
Another milestone for MPDF in 2001 was the successful raising of $18 million for the Mekong Enterprise Fund (MEF), the first regional venture capital fund targeting domestic entrepreneurs. The MEF will fill an important gap in the institutional availability of risk capital for local enterprises.
“MPDF looks forward to building on these successes in 2002,” said Mario Fischel, General Manager of MPDF. It expects to continue providing assistance directly to SMEs, both in finance raising and advisory assistance of various sorts. More technical and advisory projects are planned to be undertaken, reflecting the evolution of enterprise needs. MPDF intends to work increasingly with local consultants in providing such services, building their capacity to meet market demand. An extension of the program for another five-year cycle will be discussed with the donors in the spring of 2002.
MPDF will also give full support to the Bank Training Center launched in 2001, while the flexible learning program will be extended to other materials and delivery modes. Other areas of activity will be support to business associations; trade promotion; linkages programs; and policy and enabling environment work.
In all these areas, MPDF will work closely with the World Bank Group SME Department—a source of worldwide experience and best practice in the area of SME development. The SME Department supports MPDF
inter alia
through access to its expertise, partners, and tools. This is particularly important in some of the newer areas, such as BDS development or linkages, where replicable models from other parts of the world can be adapted to the Mekong Region.
IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses. Since its founding in 1956 through the close of the last fiscal year on June 30, 2001, IFC committed more than $31 billion of its own funds and arranged $20 billion in syndications for 2,636 companies in 140 developing countries. IFC’s committed portfolio at the end of FY01 was $14.3 billion.
