The Strengthening the Economic Resilience of Vulnerable Enterprises (SERVE)

Micro, small, and medium-sized enterprises (MSMEs) are the largest private-sector employers, and make up over 90% of registered businesses worldwide. They account for 50% of employment and up to 40% of national income (GDP) in emerging economies.

MSMEs are the foundation of economies and are essential for achieving the 2030 Sustainable Development Goals (SDGs) agenda. However, the outbreak of COVID-19 has caused MSMEs to fall short of their potential due to illiquid markets and difficulty accessing sustainable financing.

SERVE program was introduced in 2020 under the umbrella of the IsDB Strategic Preparedness and Response Program (SPRP) to help in protecting and creating jobs provided by MSMEs, which are the backbone of all economies including in particular the developing economies in IsDB Member Countries. In OIC member countries, there are 53.2 MSMEs per 1,000 people, which is more than double the world average of 25.2%. This shows how important MSMEs are to MCs economies.

Lockdowns around the world put a lot of strain on MSMEs. Many MSMEs in different sectors had to close their businesses during the crisis. Even though they had no revenue, they still had to pay operating costs like rent and salaries.

Program Objectives

The program’s objective is to build the resilience of affected MSMEs to overcome the pandemic crisis by providing the needed liquidity for business continuity and job preservation in the IsDB’s priority member countries. It helps governments reduce the impact of COVID-19 on their economies. The goal is to make MSMEs more resilient to the pandemic crisis by providing them with the cash flow they need to stay in business and keep their employees.

This will eventually contribute to the efforts made by the governments to achieve their key goals, which are aligned with Sustainable Development Goals SDGs 8: "Decent Work and Economic Growth."

It will also contribute to Sustainable Development Goals:

• SDGs 1 "No Poverty",
• SDGs 10 "Reduced Inequalities",
• SDGs 5 "Gender Equality", and
• SDGs 2 "Zero Hunger".

ISFD Contribution

ISFD has contributed US$69 million of concessional financing through eight approved projects in seven member countries including Chad, Djibouti, Jordan, Morocco, Palestine, Uganda, and Uzbekistan, matching with IsDB, Governments, and counterpart financing. The total cost of the approved projects reached up to $539.7 million, where the concessional financing provided by ISFD will reduce the cost of financing for Islamic microfinance institutions.