This scoping study was undertaken to examine the key challenges, opportunities and effectiveness in funding small and medium enterprises (SMEs) and providing advisory support and business skills development in Afghanistan. This included an assessment of peer-reviewed and grey literature, including the official documents prepared by the Government of the Islamic Republic of Afghanistan (GIRoA) and the donors, conducting in-country research, and organising stakeholder meetings and interviews to identify gaps and potential opportunities in key agriculture and non-agriculture sectors.
Following the introduction, section 2 details the methodology for undertaking desk-based and in-country research, as well as the risk management approach. Section 3 reviews the findings from the literature review and desk research; and then in-country field research involving stakeholder engagements and informant interviews. Section 4 focuses on opportunities for donor-sponsored interventions. It discusses the criteria used when selecting options, provides a menu of options, and describes these options. The final section provides an overall conclusion to the study, based on the core findings and makes recommendations to DFID regarding the options it should consider for the future.
The five options recommended for further consideration are:
- Capacity building to existing or new Afghan institutions providing private sector development (PSD), financial sector development and business enabling environment support.
- Capacity support to Da Afghanistan Bank, with a focus on supervision and regulation of financial sector
- Support donor-managed and/or mutual guarantee schemes.
- Afghanistan Business Innovation Fund (ABIF) 2.
- Stocktaking exercise to understand needs of microenterprises and women.
Coffey International Development. Final Report. Scoping the Need for Improved Access to Funding, Advisory Support and Business Skills Development for SMEs in Afghanistan. Coffey International Development, London, UK (2014) 131 pp.