THE PROJECT

Risks

Six risks that could compromise project performance have been identified: (i) difficulty in implementing a participatory approach and developing demand-responsive solutions; (ii) possible rivalry between local administrative authorities and professional institutions/federations, which could delay reaching a consensus in the elaboration process of the Participatory Planning Diagnostic Assessments and selecting eligible SMEs for project support; (iii) potential problems with the sustainable transfer of responsibilities for SME service delivery to professional organizations; (iv) possible inflexibility by the BNR in accepting the proposed mechanism for establishing and supporting local financial centres, especially regarding savings; (v) possible problems in the partnership with the UBPR to test the credit system and rural outlets; and (vi) inadequate collaboration between the banks and MFIs in the follow-up and establishment of a viable credit disbursement and loan recovery system. These risks have been taken into consideration in the design of project activities and approaches. The participatory approach and substantial training programmes are expected to attenuate some of the risks. Furthermore, the BNR has expressed its willingness to support the proposed approach and the creation of LFCs on a pilot basis and it will review and monitor performance during implementation.

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