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.

The SERVE program was launched in 2020 as part of the IsDB Strategic Preparedness and Response Program (SPRP). Its primary objective is to safeguard and foster job creation within the Micro, Small, and Medium Enterprises (MSMEs) sector, recognized as the cornerstone of all economies, particularly in developing IsDB Member Countries.

IsDB member countries have a high density of MSMEs, with 53.2 per 1,000 people, significantly exceeding the global average of 25.2%. This highlights the crucial role MSMEs play in driving economic growth and development within these countries.

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 provided US$69 million in concessional financing through eight approved projects in seven member countries: Chad, Djibouti, Jordan, Morocco, Palestine, Uganda, and Uzbekistan. This financing is complemented by contributions from the Islamic Development Bank (IsDB), governments, and other sources. The total cost of these approved projects amounts to US$539.7 million. ISFD's concessional financing will help reduce the cost of financing for Islamic microfinance institutions.