Promoting the competitiveness and growth of small and medium-sized enterprises and capacity development in the microfinance sector

Programme description

Title: Promoting the competitiveness and growth of small and medium-sized enterprises and capacity development in the microfinance sector
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Senegal
Lead executing agency: Ministère de l’Economie et des Finances
Overall term: 2006 to 2015


Small and medium-sized enterprises (SMEs) are a key driver of growth in the Senegalese economy. However, these enterprises do not yet play a key role in driving economic development. Although 300,000 SMEs account for 90% of businesses in Senegal, they only account for 42% of total employment and just 33% of total value added. The private sector and SMEs must overcome a number of obstacles. An investment-hostile business climate leads to low investment, especially in the informal economy. It is also difficult to access needs-oriented (micro) financial services and chambers of commerce and crafts lack the required capacities to play an active role in driving the economy.


SMEs are competitive and operate in an environment that is conducive to growth, thanks to the availability of effective advisory services and an efficient microfinance sector.


The programme provides support principally to the Senegalese Ministry of Economy and Finance in implementing its national strategy to promote the competitiveness and growth of SMEs.

Key support inputs cover advisory services and further training as well as fact-finding missions and study trips. A limited amount of materials and equipment and local subsidies are being made available for development partnerships with the private sector and for partner organisations.

Support mainly revolves around promoting dialogue between the public and private sectors. Representatives from governmental organisations and professional associations are being advised on how to work together to solve the problems facing SMEs. Public and private business service providers develop needs-oriented advisory services that are designed to foster greater innovation, competitiveness and growth, with special consideration being given to the concerns of female entrepreneurs.

With the programme’s support, trade associations in Dakar have successfully launched a PPP approach for advising SMEs. With the assistance of the European Commission, this model is being extended to Kaolack, Saint-Louis, Thiès and Ziguinchor.

In the area of microfinance, the programme cooperates closely with the relevant ministry. It helps develop modules to teach borrowers basic financial concepts, to improve the public system for overseeing microfinance institutions and help their umbrella organisation, the APSFD, to develop its range of services.

Results achieved so far

Since 2010, the programme has helped almost 3,500 SMEs avail of business development services to improve their productivity and competitiveness. On the back of these services, 38% of those enterprises increased their turnover and 34% increased their profits. One in five participants doubled their number of employees.

Senegal. Senegalese businesswomen receiving further training in Thiès. Photo: Jacky LY © GIZ

The business climate has improved. Several jointly developed proposals have been incorporated into the new tax law. For example, VAT can now be paid quarterly rather than monthly. Filling station leaseholders receive tax incentives. Businesses are exempt from flat-rate taxation if they operate at a loss. Publishers of electronic books do not have to pay VAT.

The Microfinance Directorate launched a basic financial education programme for the microfinance sector in March 2012. This was developed jointly by the government and the APSFD with support from the programme.