Kyrgyz Republic - Private Enterprise Support Project

This paper presents the rating of the World Bank supported Private Enterprise Support Project (PESP) in Kyrgyz republic. The project had an objective of providing an integrated program of technical assistance and loans for working capital and investment to private enterprises to promote their successful adaptation to a market-based system.

The findings of the rating are:

• Outcome of the project, in view of its objective, was unsatisfactory;
• Performance of banks participating in the project was unsatisfactory;
• Impact of the project on institutional development was modest;
• On the positive side, the performance of the borrowers in the project was satisfactory;
• Sustainability of the project was likely.

The factors identified in the paper, which influenced PESP's performance are:

• Overestimation of credit demand;
• Improper understanding of demand for technical assistance;
• Deficiencies in the business environment adversely affecting private enterprise development;
• Frequent changes in program staff resulting in:
  • Disruption in project supervision;
  • Reduced institutional memory;
  • Frequent shifts in approaches and strategies.