Second Small and Microfinance Development Project

Monitoring and analysis of the MSE (micro and small enterprise) sector would benefit from estimates of the credit gap to confirm additionality of ADB FILs (financial intermediation loans). This could also help ensure that private sector funds are not displaced given the features of sovereign loans. How FILs catalyze the entry of new funds into the market needs to be better documented, and FILs' ability to move participants to more market-based finance needs to be improved.