Need to proactively monitor facility utilization. The need for effective monitoring was stressed in the RRP, but it was not carried our satisfactorily. Monitoring facility utilization was necessary to guide restructuring, realignment, and modifications, and, where required, to cancel allocations so ADB capital could be deployed more efficiently. ADB originally expected that over time, the PCG facility would allow PFIs to become familiar with SME risks and provide guarantees for a wider range of instruments, which would have prompted more PFIs to participate. This outcome would have required better and more proactive monitoring of the utilization of the facility, which would have prompted the inclusion of new PFIs and allowed for a wider set of clients and instruments to be tested. Although the PCG facility was approved and made available to partner banks for 8 years, ineffective monitoring led to cancellations rather than the reallocation of guarantees, availability periods, and tenors.
Small and Medium Enterprise Development Support Project