Introduction about the MSE project
Initiated in 2000, the project’s main objective has been to expand the knowledge on this sector in the Middle East and North Africa (MENA) region, with the ultimate aim of designing relevant policies and specific programs to help this sector fulfill its enormous growth potentials.
Constituting an average of 95% of the number of enterprises in the region, it is presumed that promoting this sector will have a positive spill-over effect on the economies of the region. Discussions on the results of the project have pointed to an emerging consensus that it will be filling a knowledge gap related to the micro and small enterprises sector in the MENA region. Policies and
strategies designed to promote this sector have not been adequately targeting their needs, and thus this project is considered to be of great relevance to the policy making process.
Specifically, the main contributions may be summarized as follows:
- The database gathered through the project based on field surveys is considered unique, as to the number of enterprises covered (18,000), and the information produced, including information on the enterprise, the entrepreneur and the household. A special focus on women entrepreneurs have been made throughout the survey. This mine of data will undoubtedly provide background
information that enables policy makers to design relevant policies.
- The “Policy Briefs” gives a concise summary of the outcome of each country study and highlights
the recommendations reached based on the analysis.
- The current Country reports series is prepared based on the findings of the surveys, detailed
information about the performance of the enterprises, determinants of success and prospects for the future are given. Special focus on the status of women entrepreneurs is also made.
- The Synthesis report will have a comparative analytical approach of the case studies of the four
countries. This report will asses the MSE sector in the four countries and will draw relevant
policy recommendations for the region.
- It has been evidently shown that promoting this sector could contribute to the solution of the
increasing unemployment problem in the region, and a means to alleviate poverty through income generation. The spillover effects that this sector if properly developed will positively affect the development of the countries concerned.
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This is the first country report carried out under the project on “Promoting Competitiveness in Micro
and Small Enterprises” (MSE). ERF has selected the MSE report of Lebanon to be the first produced in the series, to acknowledge the efforts by the country team to fulfill their obligations despite the progressing tension in the region. This is yet another testimony to the resilience of the Lebanese people.
This report on Lebanon represents the outcome of a large and long research process. The field survey gathered 3,000 micro and small enterprises and was performed under difficult conditions. The nonavailability of (or access to) the basic national database constituted one of several challenges that the Lebanese team have managed to overcome. I quote the comment of the Peer reviewer of the report: “I am particularly impressed with the careful design of the survey particularly in the absence of a stratified random sampling technique given that the survey had to develop the database of the components of the sector in the first place”. If anything, there is no doubt that the database gathered on the MSE sector in Lebanon will make a substantial contribution and would fill a gap at the national and regional level.
The analysis of data and the background research undertaken by the Lebanese team, under the supervision of Dr. Kamal Hamdan was the subject of a national debate during the Micro and Small
Enterprises final conference that took place in December 2005.
Representatives of the Lebanese government, private sector, academics, banking, social funds, consultants and media participated in the conference and expressed their interest in the outcome of the project and the database in particular.
This is the second country report carried out under the project on “Promoting Competitiveness in
Micro and Small Enterprises” (MSE). Being a candidate member to the European Union, Turkey has
undergone extensive reforms and adjustments programs that have been acknowledged. Still a lot need to be done before the country could adhere to all required standards and norms of the European acquis’ requirements but it is going in the right track. According to the European Commission’s latest report on Turkey, small and medium-size enterprises (SMEs) accounted for over 75% of employment but represent only 27% of value added. Steps need to be taken to formalize the sector, to improve its production and its contribution to the economy. Access to finance for SMEs improved as the banking sector expanded its lending activities but bank loans still only cover about 10% of SME’s financing needs. Access to credit is even lower in the case of Micro and Small enterprises. The EU report acknowledged the great potentials of this sector and described it to be “an important cornerstone of the economy, but their efficiency was often low and informality widespread”.
The report on Turkey represents the outcome of a large and extensive research process. The field
survey gathered 5,000 micro and small enterprises. According to the Principal investigator: “This research project is the first of its kind: for it is representative of enterprises in the urban areas in Turkey, and at the same time covers all sectors except agriculture. It concentrates not on small and
medium-sized enterprises but on micro and small enterprises, an area of the economy marked by the dearth of serious research. Moreover, it is a very timely project. In the process of adjusting to the EU norms, policy relevant knowledge on MSEs has become vital.”
Studying the MSE sector (1-49) in Turkey has been crucial in this sense, with a share of 99.4% of the
country’s total enterprises.
This is the third country report carried out under the project on “Promoting Competitiveness in Micro
and Small Enterprises” (MSE). In the past few years, Egypt has made substantive progress in ‘apprehending’ and ‘appreciating’ its MSE sector. Accounting for 97% of the enterprises in Egypt (formal and informal), the informal ones constitute 81% of this share. This sector employs 62% of formal and informal workers (where 88% are in the informal market). Given the considerable size of
this sector, it holds a great potentials, if special designed polices are put in place that would satisfy its needs.
This report on Egypt represents the outcome of a large and extensive research process. The field
survey gathered 5,000 micro and small enterprises. This study comes to fill this gap, and to shed some light on the basic needs of this sector in order to further enhance its growth. It is incontestable that promoting this sector, could be the solution of several economic and social problems, i.e. unemployment, illiteracy, low productivity, gender gap, women entrepreneur..etc.
The Government of Egypt has taken seriously the aim of promoting this sector evidenced by the
issuance of the new “Small Enterprise Development Law no. 141/2004” that has been considered as a “milestone in the development of Egypt’s small and micro enterprises”. The new law has defined the role of the Social Fund for Development to be the main institution responsible for the development of this sector in Egypt. It has also offered incentives and outlined the forms of support for start-up and existing small and micro enterprises. The law is an evidence of the country’s consent to promote this sector and to respond to the needs of this sector.
According to the national Implementation Report of Egypt: the Charter for Enterprise presented to the European Commission states that: “small projects have proven to be the most effective development tool in creating real and productive employment opportunities and triggering community and individual potential towards private investment and self-employment, thus reducing unemployment and also poverty. Small projects are particularly efficient in using local technology and materials, and employing semi-skilled as well as non-skilled labor, thus maximizing the economy’s benefit from these resources. They also serve directly and indirectly as a means for mobilizing domestic savings for developmental purposes. Thus, the promotion and support of small & micro enterprises allow for the realization of both economic as well as social development”