Support for the Improvement of the Competitiveness and Commercial Capacity of MSMEs and Cooperatives
Despite the importance of MSMEs and cooperatives for the Guatemalan economy, inclusive growth and long-term competitiveness has been constrained by low levels of productivity and limited capacities to compete in the market. Companies used to face obstacles such as high transport costs and weak logistics, low levels of innovation, lack of information on market opportunities and limited administrative and technical management skills, as well as weak compliance with international regulations, quality standards and Sanitary and Phytosanitary Measures (SPS).
In order to strengthen the competitiveness of MSMEs and cooperatives, the program has taken into account the main lessons learned from monitoring and evaluation of similar programs, namely: (i) the importance of private sector involvement; (ii) the integration of MSMEs into national, regional and international value chains; (iii) strengthening public-private dialogue and alliances; (iv) better coordination between ongoing EU regional programs and projects implemented by other donors, (v) institutional strengthening; and (vi) program design with a holistic approach.
The program has been designed to achieve two main goals:
(i) Strengthening public institutions (e.g. the national quality system and responsible MSF institutions) in order to comply with market requirements, and business environment and trade facilitation for MSMEs and cooperatives
(ii) Strengthening MSMEs and cooperatives to improve their competitiveness and commercial capacity in areas where the Program may have a high impact potential and have strong synergies with other interventions.
To achieve these goals, the Program comprised four objectives:
- Improved capacity of national quality institutions and SPS for greater compliance with formal market requirements by MSMEs and cooperatives;
- Enhanced capacity of MINECO to support the competitiveness of MSMEs and cooperatives to access formal markets and link value chains;
- Improved public-private dialogue at the local level to support the competitiveness of MSMEs and cooperatives in prioritized sectors;
- Competitiveness and improved commercial capacity of MSMEs and cooperatives to access formal markets and link value chains.
The objective of this result was to support MSMEs and cooperatives for certain sectors/products/services in priority areas. The implementation of these activities has been delegated to intermediary business organizations. For this purpose, a Call for Proposals has been envisaged and supported as part of the Program, using market demand as the decisive criterion.
The objective of this assignment was to support the capabilities of MINECO in the start-up phase of the implementation of the project "Support to improve the competitiveness and commercial capacity of MSMEs and cooperatives", strengthening it in the aspects of technical and financial planning (according to EC procedures) and supporting all the institutions involved in the programming of prioritized activities.
An overview of 26 Intermediary Business Organization has been established on basis of their administrative, financial, and technical capacity, while also providing an overview of the main projects implemented and conclusions in regard of the Call for Proposals. These findings have been used to develop the technical guidelines for the preparation of a Guide for the Call for Proposals to support the competitive and commercial improvement of MSMEs.
The following indicators have been proposed:
- Increase in employment generated by MSMEs and supported cooperatives
- Increase in the number of MSMEs and cooperatives that are selling in new markets (national, regional and international)
- Increase in the value of sales of MSMEs and supported cooperatives
- Increase in the number of MSMEs and cooperatives of women supported
- Number of MSMEs and certified cooperatives
An analysis of sectors / products / services in priority territories based on market demand and access to the market has also been carried out. In order to do so, a review and analysis of the main secondary sources in the country and abroad has been conducted. The initial work plan has been extended to scrutinize the found characteristics and to include the main conclusions for preparation of the Guide.
The deliverables have been complemented by an overview of the approval process of legislative reforms in the competitiveness sector and the political and institutional context.