Somalia—Somali Business Catalytic Fund (SBCF)

Over the past 20 years, violent conflicts in various areas of the Somalia Peninsula have hindered lasting economic growth and stability in the entire region, with more than 70 percent of the population living below the poverty line today. Despite these difficult conditions, the Somali private sector has shown remarkable resiliency, with a variety of small businesses managing to prosper and create an environment for potential investment. However, key constraints such as weak infrastructure, limited access to finance, a lack of market information, and low levels of human capital impede the private-sector expansion crucial to reducing the country’s widespread poverty.

To help address these barriers and boost economic growth, the World Bank launched the Somali Business Catalytic Fund (SBCF) to invest in the establishment and expansion of profitable small and medium enterprises (SMEs). The SBCF worked across all areas of the Somali Peninsula to provide matching grants for businesses with proven track records working in key sectors as well as those demonstrating job creation capacity. Over its life, it disbursed more than $5.2 million in grant funding in the Somaliland, Puntland, and Mogadishu regions.

In managing the SBCF, DAI took a market-driven approach to building up a strong ecosystem for Somali SMEs. The SBCF supported companies to innovate and enhance their productivity, competitiveness against imported products, and overall profits, improving efficiency in the economy as a whole and increasing employment. In addition, SBCF provided grants targeted at developmental priority groups such as women-owned enterprises and youth employers.

Select Results

• Created a grants manual to establish guidelines for applicants to submit proposals and scoring criteria for reviewers evaluating submissions.
• Raised awareness about the fund program and advertise calls to submit grant proposals using a range of media channels such as newspapers, radio, and social media, as well as through roadshows and introductory workshops.
• Reviewed and scored proposals, invited promising organizations to attend proposal development workshops with regional business advisors.
• Provided grantees with follow-up site visits and mentoring from business advisors to support continued success and growth of new enterprises.