01. Enhancing Financial Inclusion and Resilience of MSMEs
The component will enhance financial inclusion through strengthening the delivery of efficient and reliable G2B digital services and improved access to financial services to facilitate the establishment and operation of new businesses and reduce the time and cost of regulatory compliance especially for MSMEs. It will also provide support for firms to be more resilient to shocks from climate, pandemic, and other natural disasters.
The component will include activities that support:
- optimizing the outcomes of investments in G2B digital systems and processes made under the PSCED2 Project, to strengthen inter-operability, efficiency, and impactful service delivery for businesses, particularly those receiving support under Component 2;
- improving financial access through upgrading the security and reliability of credit infrastructure and expanding access to digital financial services;
- instruments to expand financial resilience for businesses especially MSMEs to cope with disasters and other shocks to the economy. The component will finance technical assistance, goods, training and capacity building programs, recurrent expenditures and operating costs.
02. Scaling Support for Entrepreneurship and MSMEs
This component aims to strengthen the nascent entrepreneurial ecosystem and access to early-stage finance for start-ups and youth owned businesses, support the digitization of MSMEs, and facilitate private investment in high-potential value-chains including encourage upgrading of skills and adoption of sustainable production practices by businesses to enhance productivity and green growth.
The component will include activities that support:
- Establishing an Entrepreneurship Hub and Seed Financing Facility to increase the quality and scope of integrated start-up business support services and increase access to early-stage financing;
- scaling the current Lesotho Enterprise Assistance Programme (LEAP) focusing on supporting MSMEs to adopt digital and green technologies and upgrade their capabilities;
- facilitating investment into productive value chains that are linked to local MSMEs. The component will finance technical assistance, goods, training, recurring expenditures including operating costs, grants, and investments in a “seed financing facility.”
03. Project Management and Implementation Support
This component will provide support for the management and implementation of project-associated activities. Activities to be financed include salaries of Project Management Unit (PMU) staff/consultants in areas of:
- project management;
- project coordination;
- fiduciary specialists (e.g. procurement, financial management);
- a dedicated environment and social safeguards (E&S) specialist;
- project communication;
- citizen engagement
This component will also cover modest office equipment and independent audits and learning/training for the PMU and beneficiary agencies, through the official closing date of the project. It is expected that all consultant terms of reference (TORs) will clearly stipulate knowledge transfer and hands on training to ministry staff.
Special attention will be devoted to promoting equal participation of women in all decision-making bodies under the project and contributing to tackling barriers in recruitment, retention, and promotion.