Supporting Micro Entrepreneurship For Women's Empowerment

Grant Assistance Report
Project Number: 43158-01

April 2010
Proposed Grant Assistance

India: Supporting Microentrepreneurship for Women's
Empowerment
(Financed by the Japan Fund for Poverty Reduction)
CURRENCY EQUIVALENTS
(as of March 2010)
Currency Unit – Indian rupee/s (Re/Rs)

Re1.00 = $0.021
$1.00 = Rs45.59
ABBREVIATIONS
ADB – Asian Development Bank

CGTMSE – Credit Guarantee Fund Trust for Micro and Small
Enterprises
CPS – country partnership strategy
JFPR – Japan Fund for Poverty Reduction
JICA – Japan International Cooperation Agency
M&E – monitoring and evaluation
MFI – microfinance institution
MIS – management information system
NBFC – nonbanking financial company
NGO – nongovernment organization
SARD – South Asia Department
SFMC – SIDBI Foundation for Microcredit
SIDBI – Small Industries Development Bank of India
SMEs – small and medium-sized enterprises
SMERA – Small and Medium Enterprises Rating Agency
SOE – statement of expenditure
TA – technical assistance
NOTES
(i) The fiscal year (FY) of the Government of India and its agencies ends on 31
March. FY before a calendar year denotes the year in which the fiscal year ends,
e.g., FY 2009 ends on 31 March 2009.
(ii) In this report, "$" refers to US dollars.
Vice President X. Zhao, Operations 1

Director General S. H. Rahman, South Asia Department (SARD)
Director A. Sharma, Financial Sector, Public Management and Trade Division,
SARD
Team leader F. Tornieri, Social Development Specialist (Gender and Development),
SARD
Team members S. Chakravarti, Senior Programs Officer, India Resident Mission, SARD
P. Marro, Senior Investment Specialist, SARD
In preparing any country program or strategy, financing any project, or by making any
designation of or reference to a particular territory or geographic area in this document, the
Asian Development Bank does not intend to make any judgments as to the legal or other status
of any territory or area.
JAPAN FUND FOR POVERTY REDUCTION (JFPR)
JFPR Grant Proposal
I. Basic Data
Supporting Microentrepreneurship for Women's
Name of Proposed Activity
Empowerment
Country India
Grant Amount Requested $3,000,000
Grant Duration 36 months
Regional Grant  Yes /  No
Grant Type  Project /  Capacity building
II. Grant Development Objective(s) and Expected Key Performance Indicators

Grant Development Objectives:
The primary objective of the grant is to help low-income female microentrepreneurs access financial
resources, services, and market opportunities in selected Indian states (i.e., Madhya Pradesh,
1
Maharashtra, Orissa, Rajasthan, and Uttar Pradesh). The grant will (i) assess existing gender policies,
strategies, and practices—including institutional arrangements—adopted by the Small Industries
Development Bank of India (SIDBI) and SIDBI Foundation for Micro Credit (SFMC), its partner
microfinance institutions (MFIs), and banks (including cooperative banks); (ii) organize training targeting
the specific needs of female microentrepreneurs for SIDBI partner MFIs, nonbanking financial
companies (NBFCs), and banks; (iii) support SIDBI retailers in addressing the specific needs and
constraints faced by low-income female microentrepreneurs in accessing financial services; and (iv)
establish a monitoring and evaluation (M&E) system to assess the results of financed activities under
this grant.
Expected Key Performance Indicators:
Better quality of life for low-income female microentrepreneurs in the grant areas (20% increase at grant
end compared to 2010 baseline).
Increase in successful applications by low-income female entrepreneurs at SIDBI branches in selected
states (20% increase at grant end compared to 2010 baseline).
Increase in new female entrants in micro and small and medium-sized enterprises (SMEs) assisted by
the grant (20% increase at grant end compared to 2010 baseline).
III. Grant Categories of Expenditure, Amounts, and Percentage of Expenditures

Amount of Grant Allocated Percentage of
Category ($) Expenditures
1. Training (including workshops, seminars, and
lateral learning) 1,188,800 40
2. Consulting services (including livelihood
enterprise learning advisors) 812,500 27
3. Project management 684,889 22
4. Direct intervention (financial services for the poor) 144,000 5
5. Contingencies 169,811 6
Total 3,000,000 100
1
The five proposed states have been selected based on criteria including (i) high incidence of poverty, low
socioeconomic status, and gender indicators, gathered by comparing state and national data; (ii) those with which
the Asian Development Bank (ADB) has engagement; (iii) existence of Small Industries Development Bank (SIDBI)
and SIDBI Foundation for Micro Credit (SFMC) branches; (iv) sufficient number of committed financial partners
willing to engage with SIDBI in the grant activities; and (v) underserved status in availability of credit and other
financial services targeting the ―missing middle‖ segment. Considering the pilot nature of the grant, SIDBI
requested to extend the pilots to five states to capture a broader spectrum of low-income female entrepreneurs
from diverse socioeconomic contexts. This will add to the richness of the grant, increase options for lateral
learning, and generate best practices for replication and scaling up.
2
JAPAN FUND FOR POVERTY REDUCTION
JFPR Grant Proposal

Background Information
A. Other Data
Date of Submission of 20 October 2009
Application
Project Officer F. Tornieri, Social Development Specialist (Gender and
Development)
Project Officer’s Division, Office of the Director General, South Asia Department (SARD)
E-mail, Phone ftornieri@adb.org, +632 632 5983
Other Staff Members Who Will S. Chakravarti, Senior Programs Officer, India Resident Mission,
Need Access to Edit and/or SARD
Review the Report P. Marro, Senior Investment Specialist, SARD
Sector (subsector) Industry and trade (SME development)
Themes (subthemes) Economic growth (widening access to markets and economic
opportunities), gender equity (economic opportunities), private
sector development (private sector investment), capacity
development (organizational development)
Targeting Classification General intervention
Was JFPR seed money used to Yes [  ] No [ ]
prepare this grant proposal?
Have Staff Review Committee Yes [  ] No [ ]
(SRC) comments been reflected
in the proposal?
2
Name of Associated Asian Micro, Small, and Medium-Sized Enterprise Development Project
Development Bank (ADB)
Financed Operation(s)
Executing Agency Ministry of Finance
Grant Implementing Agency Small Industries Development Bank of India
SIDBI Foundation for Micro Credit
SIDBI Tower 15, Ashok Marg, Lucknow, Uttar Pradesh 226001
Tel.: +91 522 228 8547/48/49/50
E-mail: sfmc@sidbi.in
B. Details of the Proposed Grant
1. Description of the Components, Monitorable Deliverables and/or

Outcomes, and Implementation Timetable
Component A
Component Name Institutionalization of Gender-Related Policies, Strategies, and
Programs
2
This JPFR grant is attached to the Micro, Small, and Medium Enterprise Development Project, which supports
micro and SME access to term finance through (i) a partial credit guarantee facility of up to $250 million without
government counterindemnity, to assist India’s public sector banks with sizeable micro and SME business in
raising long-term funding in international capital markets through the launch of a financial instrument partially
guaranteed by ADB; and (ii) a loan up to $50 million to SIDBI with a sovereign counterguarantee for onlending to
micro and SMEs, with 30% of the credit line to be targeted to female entrepreneurs. The JPFR grant will
complement the Micro, Small, and Medium-Sized Enterprise Development Project’s proposed approach by
providing much-needed capacity-building support to low-income female entrepreneurs in the unorganized sector.
ADB. 2010. Report and Recommendation of the President to the Board of Directors: Proposed Loan and Partial
Credit Guarantee to India for the Micro, Small, and Medium Enterprise Development Project. Manila (approved on
26 February).
3
Cost ($) $130,900

Component Description This component will strengthen the ability of SIDBI and its retailers to
incorporate gender and social inclusion approaches into the
3
development of policies, strategies, and programs. More
specifically, this will include
(i) assessing existing gender policies and practices adopted
by SIDBI, its partner MFIs, NBFCs, and banks to promote
4
gender equality and female empowerment;
(ii) reviewing gender-sensitive and -inclusive programs of
wholesalers and retailers to identify gaps, through
workshops with heads of organizations and/or senior
managers of SIDBI and its retailers;
(iii) revising policies and practices, and reformatting relevant
loan processing forms as needed, to incorporate best
practice standards; and
(iv) organizing initial consultations and exchange and lateral
learning initiatives among SIDBI, its partner MFIs, NBFCs,
and banks to disseminate results and help institutionalize
such practices (including business development, reporting,
M&E, and gender equality), for highlighting considerations
of poverty, social inclusion, and gender equity.
Monitorable Deliverables and/or Gender-related practices in SIDBI, partner MFIs, NBFCs, and banks
Outputs documented through workshops with heads and senior management
of the organizations.
Improved methods to institutionalize gender and socially inclusive
approaches adopted, as needed.
Exchange and lateral learning initiatives carried out among SIDBI
partners through seminars and dissemination workshops.
Number of months for grant 6 months
activities
Component B
Component Name Training of Stakeholders Involved in Female Entrepreneurship
Cost ($) $1,269,300
Component Description SIDBI will organize training and capacity development that targets (i)
the needs of SIDBI partner MFIs, NBFCs, and banks; and (ii) low-
5
income female microentrepreneurs in the unorganized sector. This
3
The mission of SFMC explicitly addresses the needs of women in poverty. The foundation’s aim is to create a
national network of strong, viable, and sustainable MFIs from the informal and formal financial sectors to provide
microfinance services to the poor, especially women. Furthermore, 80% of beneficiaries of SIDBI and its retailers
are women. To institutionalize the intent to address needs of poor women more systematically, SIDBI is now
committed to adopting a social inclusion and gender policy, which will be developed through the interventions
proposed in this grant.
4
NBFCs carry out financing activities, but their resources are not directly obtained from the savers as debt. Instead,
these institutions mobilize public savings for rendering other financial services, including investment. All such
institutions are financial intermediaries, and when they lend, are known as nonbanking financial intermediaries or
investment institutions. In addition, retailers are organizations that onlend to clients; thus, banks are retailers.
Wholesalers are institutions that lend to retailers. SIDBI is both a wholesaler and a retailer. As a wholesaler, SIDBI
lends to partner organizations. As a retailer, it operates through its microcredit branches across India.
5
For the purpose of this grant, ‖low-income‖ female microentrepreneurs are defined as women from households that
are just above the poverty line, as defined by the Government of India. The "unorganized sector" as defined by the
National Commission for Enterprises in the Unorganized Sectors (NCEUS), is all unincorporated private
enterprises owned by individuals or households engaged in the sale and production of goods and services
operated on a proprietary or partnership basis and with less than ten total workers. The baseline data collection will
4
will involve (i) targeting women new to microentrepreneurship as well

6
as those already informed, using microfinance models, to enhance
the viability of their enterprises and their ability to access financial
resources and markets through leadership and communication
training, financial literacy for microentrepreneurs, and business
development services; and (ii) supporting their participation in trade
fairs, exhibitions, buyer–seller meets, seminars, and workshops to
promote marketing of their products.
On the demand side for female microentrepreneurs, capacity

development will involve
(i) Financial literacy for microentrepreneurs. This training
will involve money management; effectively using credit;
understanding the flexibility of money; choosing between
different credit sources; and the value of financial discipline,
risk management, and investment planning. It will help
transition women into mainstream financial markets where
they may access banking services. The training will also
demonstrate the importance of financial services such as
savings, insurance, remittances, and pensions. Increasing
financial literacy will also tend to convert an existing need
into demand by female microentrepreneurs willing to pay an
appropriate market-set price for a financial service that
supports their enterprise and their role in the market
economy. The translation of the need into demand will be
documented through the methodology of the grant’s M&E.
(ii) Leadership and communication. This training will help
female entrepreneurs participate in mainstream markets and
engage with different stakeholders. Training will include
basic computer literacy, communication skills, confidence
building, negotiating in public spaces, and taking a lead in
the community in building a culture of entrepreneurship. The
modules will focus on developing leadership so that the
women transition from being sole workers within their
businesses to being employers and leaders. This training will
include elements of self-management (e.g., handling stress
and maintaining physical and mental health) that highlight
the value of female entrepreneurs as assets in their own
enterprises. Socialization leads women to view themselves
as being in the service of the household, and their
participation in market-related activities forms part of this
perception. Hence, the training will include the building of
skills to manage the challenges that they face in their
multiple roles within the household and their
microenterprises.
(iii) Business development training. This training will develop
the business management skills of female
follow a mixed methodology of quantitative and qualitative data using selective sampling that is representative of all
the models and retailer types. Secondary data from sources pertinent to the states and primary data using survey
methodology for socioeconomic profiling as well as interviews will be used. Control groups in each state will be
selected from female microentrepreneur clients of nonparticipating organizations.
6
In India, MFIs adopt different methods of delivering financial services through joint liability groups, which comprise
five to seven women; self-help groups, which comprise 15–20 women; Grameen groups, which comprise around
five to seven women; activists for social alternatives groups, which comprise around 15 women; and individual
lending. The Grameen and activists for social alternatives models are replications of models in Bangladesh. In this
document, where reference is made to MFIs, it includes a variety of microfinance models.
5
microentrepreneurs and will help them use the loans and

plan for sustainability and scalability. If female entrepreneurs
are encouraged to train other women as employees and
managers in their microenterprises, a positive spiral can be
created. Cluster-level business development training will
include building better quality and methods of production,
accessing production and markets, processing, storage, and
7
marketing.
On the supply side—SIDBI as wholesaler, and the retailers (SIDBI

branches, NBFCs, and banks)—training activities will be carried out
and include (i) gender, microfinance, and microentrepreneurship,
particularly for operations staff of wholesalers and retailers to
understand gender issues and challenges and how they affect
women’s access to financial services and their roles as
entrepreneurs; (ii) appropriate operations, to enable users (i.e.,
retailers) to identify suitable tools, methods, and financial products
addressing the needs of low-income female entrepreneurs; (iii)
technology training specific to M&E software, to enable users to
monitor the grant’s outputs, outcomes, and impacts; and (iv)
enterprise financing to present models and effective practices.
Monitorable Deliverables and/or Training initiatives organized across the five participating states.
Outputs Training module for SIDBI and its retailers developed.
About 1,200 low-income female entrepreneurs trained in financial
literacy for microenterprise, leadership and communication, and
business development services.
Retailers and participating MFIs trained in gender, microfinance and
microenterprise finance, technology and operations, and enterprise
financing.
activities
Component C
Component Name Development of Financial Services for Low-Income Female
Microentrepreneurs
Cost ($) $414,000
Component Description This component will support three initiatives targeting SIDBI partner
MFIs interested in implementing alternative collateral schemes that
address the specific needs and constraints faced by low-income
female microentrepreneurs in accessing financial services,
motivating financial institutions to explore new market segments, and
implementing management information system (MIS) software
specific for the grant. More specifically, this will include
(i) Credit guarantee fund. SIDBI, through its direct-lending
window, has been promoting collateral-free lending to all
eligible entrepreneurs by extending the credit guarantee
scheme of the Credit Guarantee Fund Trust for Micro and
Small Enterprises (CGTMSE). To demonstrate the viability
and efficacy of extending credit to deserving low-income
female entrepreneurs, the costs related to the credit
7
―Cluster‖ indicates a group of small firms from similar industries that team up and act as one body. Creating a
business cluster enables firms to enjoy economies of scale usually only available to bigger competitors. Marketing
costs can be shared, and goods can be bought more cheaply. There are also networking advantages, in which
small firms can share experiences and discuss business strategies.
6
guarantee for 1,200 low-income female entrepreneurs will be

covered. The CGTMSE will guarantee the loans on the basis
of the due diligence undertaken by SIDBI. SIDBI will advance
the costs of the credit guarantee fees, based on number of
beneficiaries, amount of loans, and repayment period. The
grant will reimburse SIDBI for the cost of the guarantee
8
fees.
(ii) Recruitment of livelihood enterprise learning advisors.
SIDBI will support partner MFIs to recruit women to act as
livelihood enterprise learning advisors and to meet the cost
of their salaries for 3 years. These female advisors will assist
in identifying female entrepreneurs for the grant. Thereafter,
the advisors will provide one-on-one personal guidance and
advice with respect to using the credit taken, operating the
enterprise, and repaying credit; they will mentor the female
entrepreneurs in their capacity development overall. There
will be one advisor per partner MFI. The presence of
advisors will ensure careful selection of the clients as well as
repayment and proper use of credit. Advisors will also build
relationships of trust with female entrepreneurs and obviate
the need for collateral on the part of the lender.
(iii) Development of grant-specific software for participating
retailers. MIS software will support SIDBI's retailers to
ascertain the use of credit for microenterprise and to collect
sex-disaggregated information. The software will be used to
track qualitative and quantitative deliverables under the
proposed JFPR grant for purposes of impact evaluation.
Monitorable Deliverables and/or Products and technologies to deliver sustained financial services to
Outputs the poor developed by SIDBI partners (i.e., retailers).
Business processes to reduce delivery costs of financial services to
the poor developed by SIDBI partners.
MIS software developed for retail lenders of microcredit for
microenterprise.
activities
8
The CGTMSE—set up by the government and SIDBI—aims to ensure that the lender gives importance to project
viability and secures the credit facility purely on the primary security of the assets financed (and not based on
separate collateral). If micro and small enterprises avail of a collateral-free credit facility and fail to repay the loan,
the CGTMSE will make good the loss incurred by the lender. Any collateral-free credit extended by member
lending institutions, to new as well as existing micro and small enterprises (including service enterprises), will be
eligible to be covered with a maximum credit ap of Rs10 million, subject to the due diligence by the CGTMSE. The
guarantee available under the scheme will be to the extent of 75%–80% of the sanctioned amount of the credit
facility, with a maximum guarantee cap of Rs6.25 million–Rs6.50 million. For microenterprises, the extent of
guarantee cover will be 85% for credit up to Rs500,000. The extent of guarantee cover will be 80% for micro and
small enterprises operated and/or owned by women. In case of default, the CGTMSE will settle the claim of the
amount with SIDBI and the other member lending institutions. Low-income female entrepreneurs will benefit in their
ability to access credit and the loan without collateral or third-party guarantees. At the moment, SIDBI’s prime
lending (as a retailer) is estimated at 11% for amounts up to Rs200,000.
7
Component D
Component Name Effective Monitoring and Evaluation of Results
Cost ($) $316,100
Component Description This component will support the establishment of an M&E system to
assess the social and gender equality results of financed activities
under this grant.
Monitoring and evaluation. M&E will be carried out using
(i) Documentation of changes in the lives of female
entrepreneurs with respect to mutually agreed upon
variables with SIDBI and participating retailers. The variables
will capture change in the levels of business operations and
the use of the credit and capacity development given to
female entrepreneurs.
(ii) Periodic surveys with female entrepreneurs for the capacity-
building training, which will be monitored for comprehension,
retention, and applicability.
(iii) Software to document the disbursement of loans to
microenterprises. Sex-disaggregated data will track the loans
given to women. The software will also capture the increase
in applications and the repayment rates of female
microentrepreneurs from baseline to grant end.
(iv) Application forms for the loans for microenterprise within the
grant. These will be aligned to the MIS software so that the
data can be collected, collated, and monitored.
Setting baseline and grant end data. This will include setting a
baseline (and collecting data) on a set of quantitative and qualitative
indicators agreed with SIDBI at grant onset, which will be effectively
monitored during grant implementation. It will include changes in the
number and percentage of female entrepreneurs who move into a
higher part of the value chain; changes in women or household
income, expenditure and consumption, and nutritional status; access
to medical facilities and health care; and changes in self-confidence.
An impact assessment consisting of primary data collection at
baseline and grant end will be conducted by a national research
institute.
(i) Baseline assessment. Samples to be taken from female
entrepreneurs will include (a) types of retailers from SIDBI
partners and banks; (b) models of microfinance such as joint
liability groups, self-help groups, Grameen groups, activists
for social alternatives groups, and individual lending; (c)
regions, i.e., rural, urban, and periurban; and (d) livelihood
clusters. A control group that does not participate in the grant
but includes clients of SIDBI partners will be taken from each
participating state. Quantitative methodology will include
baseline surveys that capture the socioeconomic profile of
the female entrepreneurs, and qualitative methodology will
include interviews. Participatory methods will also be used
with female microentrepreneurs to capture indicators of
empowerment such as women’s mobility, decision making in
households and microenterprises, education of children,
access to markets, access and control of income from
microenterprises, awareness of health and health-seeking
behaviors, access to banks, and use of banking services.
(ii) Grant end assessment. A quantitative survey will use the
same questions from the baseline of the sample and control
8
groups. Qualitative interviews and participatory methods will

capture shifts in empowerment indicators of the sample and
control groups. Based on innovative approaches and direct
intervention supported under the grant, a knowledge product
will be finalized and an option paper developed to assess
emerging practices and lessons learned for effective
provision of financial services to female entrepreneurs in
micro and small businesses. The outputs of the proposed
JFPR grant will be assessed, discussed, and reflected upon
9
during a series of state-specific and national seminars.
Establishment of rating system for microenterprises. With a view

to mainstreaming financing of the "missing middle" (defined as
microenterprise clients that are too small or unskilled to access more
conventional financing) and providing additional comfort to the
lending institutions, a rating system for microenterprises will be
developed, which is presently an untested area. Once developed and
tested, it could be used for rating at a fee. The costs of rating
targeted women’s microenterprises in the participating five states will
also be covered. The services of the Small and Medium Enterprises
Rating Agency (SMERA) will be retained in compliance with ADB's
Guidelines on Use of Consultants, 2007, as from time to time
10
amended, in accordance with the single source selection method.
Monitorable Deliverables and/or One quality knowledge product finalized on time.
Outputs A final consultation at the end of five project and state workshops
carried out to distribute grant findings and recommendations.
activities
Component E
Component Name Project Administration, Implementation Support, Monitoring, and
Auditing
Cost ($) $699,889
Component Description (i) Support operational costs of grant team,
(ii) provide cost of grant supervision,
(iii) engage the services of research institutes or capacity
development organizations to carry out training and publication
for the grant, and
(iv) meet institutional overheads of SIDBI.
Monitorable Deliverables and/or SIDBI-financed grant activities are made operational.
Outputs Monthly and quarterly monitoring reports and a final evaluation report
submitted to ADB and SIDBI for review and disclosure on the ADB
website.
9
This will build on SIDBI. 2008. Assessing Development Impact of Micro Finance Programs: Finding and Policy
Implications from a National Study of Indian Microfinance Sector. Lucknow. Under ADB. 2008. Technical
Assistance for Enterprise Development and the Challenge of Inclusive Growth. Manila. The ADB Economic
Research Department is carrying out technical assistance studies to assess the two types of economic policies and
strategies that are most effective in encouraging the transition of small, low-productivity enterprises into higher-
productivity ones. The relevant section of the ADB. 2009. Enterprises in Asia: Fostering Dynamism in SMEs.
Manila, will be used as reference in the initial stages of the project.
10
SMERA is a joint initiative by SIDBI, Dun & Bradstreet Information Services India, and several leading banks in
India. It is the country's first rating agency to focus primarily on the Indian micro and SME segment. SMERA's
primary objective is to provide ratings that are comprehensive, transparent, and reliable. This is critical to facilitate
greater and easier flow of credit from the banking sector to micro and SMEs.
9

activities
2. Financing Plan for Proposed Grant to be Supported by JFPR
Funding Source Amount

($)
JFPR 3,000,000
Government 108,000
Community contribution 106,700
Total 3,214,700
3. Background
1. Low-income female entrepreneurs in the unorganized sector are defined as

microborrowers whose businesses have grown too large for traditional microfinance support, but
whose activities are still too limited or who lack skills and capacity to access more conventional
bank financing. This grant identifies this target group—in relatively lagging states in India—as
having loan requirements of Rs50,000–Rs1,000,000.
2. In India, various financing schemes target microcredit to the SME sector, through which
poor individuals and households in the unorganized sector can access microcredit programs
and providers.11 However, MFIs are less capable of supporting their clients once the clients
reach a certain size, due to limited resources compared to mainstream financial institutions.
Because of the recent global economic crisis, the needs of those who have moved to the
missing middle segment must be addressed. Although the crisis has been felt by all segments
of the poor, the missing middle has suffered particularly. Evidence collected during the fact-
finding mission and discussions with various government agencies, the private sector, and
multilateral and bilateral donors indicates that the crisis has worsened the already acute
shortage of credit available to microentrepreneurs, who are predominantly female. A recent
study conducted by the Self Employed Women’s Association in Ahmadabad shows that the
crisis has led to a decline in the income of poor unorganized-sector workers.12 This is due to
closure of various small-scale industries, decline in wages, and reduction in working hours. The
crisis has also affected nutritional standards and health, increased livelihood insecurity, forced
sales of household small assets, and led to a high level of migration.
3. Thus, female microentrepreneurs who have reached the position of the missing middle
are in danger of losing recent gains in their incomes, their assets, and the enterprises that have
moved them beyond microcredit. Further, the crisis could shrink employment opportunities and
lead men to migrate away from their home areas in search of economic opportunities. Women
left behind would then have to shoulder the responsibility of the household, which may
negatively affect their enterprises if they have less time and fewer resources to devote to their
businesses. A backslide could cause closure of small and micro-sized businesses and migration
of female entrepreneurs themselves in search of employment (footnote 16).
11
―Microfinance‖ refers to the provision of financial services to low-income clients, including consumers and the
self-employed. A part of the field of microfinance, ―microcredit‖ is the provision of credit services to low-income
entrepreneurs.
12
Self Employed Women’s Association. 2009. Financial Crises and Employment Meltdown in Informal Economy:
SEWA’s Experience and Implications. Ahmadabad.
10
4. While it would be possible to collect further data on women entrepreneurs in the five
states within the grant, time is critical under these financial circumstances. Hence, it is proposed
instead to use this time to support and consolidate the gains of the women of the missing middle.
Under these circumstances, nurturing women’s microenterprises will lead to self-sufficiency that
can stabilize poor families.
5. However, credit alone will not assist women’s entrepreneurship or nurture its potential to
empower low-income women; it must be accompanied with adequate and sensitively designed
training programs. A study of the impact of training on women's microenterprise development
demonstrated the impact of training in four areas: income, access and control of resources,
status, and quality of life in Ethiopia, India, Peru, and Sudan.13 The findings showed that low-
income women need training to develop skills and self-confidence to operate and survive in the
unorganized sector. Consequently, the need to support capacity-development interventions was
discussed and agreed as critical through the finalization of this grant.
6. Rationale and assumption for the proposed gender focus 14 . In India, evidence
suggests that gender inequities hinder women's access to information, business, and financial
services. There is a growing realization that MFIs involved in the promotion of female
entrepreneurship should develop strategies to mainstream gender issues and approaches in
business development more forcefully. 15 Against this backdrop, the grant aims to work with
SIDBI in challenging the common erroneous assumptions that provision of credit alone can
produce successful microenterprises for women and that credit is the main financial service
needed by the poor. In fact, capacity development is essential, while the poor require financial
services tailored to facilitating highly desired and needed microsavings, microinsurance, and
micro-money transfer products.16
4. Innovation
7. The grant will have several innovative features, including

(i) encouraging collateral-free lending to female microentrepreneurs;
(ii) developing an integrated approach to microenterprise development through the
identification of livelihood opportunities, selection and motivation of female
microentrepreneurs, provision of business and technical training, and
establishment of market links for inputs and outputs; and
(iii) developing a cadre of female enterprise promoters and developers known as
livelihood enterprise learning advisors.
5. Sustainability
8. The grant aims to facilitate access by poor female microentrepreneurs to an appropriate

range of information and services that support microcredit. On the demand side, the grant will
13
F. Leach et al. 2000. The Impact of Training on Women's Micro-Enterprise Development. London: Department for
International Development of the United Kingdom. Also available:
http://www.microfinancegateway.org/p/site/m/template.rc/1.9.30939/
14
Based on the highly specialized nature of the assignments, the quality-based selection method is proposed to be
used for the selection of national research, resource, and training institutes. Technical proposals will be first
assessed by SIDBI, and negotiation of the financial proposal and the contract will be carried out with the consultant
who submits the highest-ranked technical proposal.
15
J. Deshmukh-Ranadive. 2008. From Transactions to Transformations in Microfinance: Collapsing the Divide
between the Economic and the Social. Ahmadabad: Indian School of Microfinance for Women.
16
See Twine. 2009. Vijay Mahajan speaks about new economics and microfinance. http://www.twine.com/
item/1272bdy42-7v/vijay-mahajan-speaks-about-new-economics-and-micro-finance.
11
institutionalize—and therefore introduce on a long-term, sustainable basis—gender-related

policies for microfinance. On the supply side, it would introduce sustainable improvements
through capacity development by developing financial literacy, leadership and communication
skills, and business development training for the target microentrepreneurs. The proposed
intervention would be a very innovative program, combining lending and grant methods, and
dovetailing it with gender- and poverty-focused capacity development for some of the poorest
and most vulnerable women.
6. Participatory Approach
9. The grant will be implemented in consultation with relevant central and state government
agencies and through iterative consultations with the gender and/or women's sections of
relevant industry associations, chambers of commerce, and—on the national level—
nongovernment organizations (NGOs). A national research institute will be subcontracted by
SIDBI to develop a baseline, collect and analyze relevant information and data in the selected
states, and support SIDBI in monitoring the set of agreed targets. Training and capacity-building
organizations will be subcontracted by SIDBI to carry out the range of financial literacy,
business development services, and other related training activities to be financed under the
grant. In this respect, consultation and/or possible involvement of ADB Economics and
Research Department will be sought in developing the M&E component.
10. The ADB team met with the Embassy of Japan and the Japan International Cooperation
Agency (JICA) during the fact-finding mission for the Micro, Small, and Medium-Sized
Enterprises Development Project (footnote 2) on 2 September and 21 October 2009.
Representatives of both the Embassy of Japan and JICA supported the rationale for the
proposed JFPR grant; its pro-poor, gender, and capacity-building focus; and its target of low-
income female entrepreneurs in the unorganized sector. Useful feedback was provided by the
Embassy of Japan on the current impact of the global economic crisis in India, and consensus
was reached on the need to limit the proposed interventions to the selected five lagging states.
JICA shared useful information on the six lines of credit provided to SIDBI in the past and
relevant information on impact assessments carried out by JICA on SIDBI-implemented projects.
All of these issues are reflected in the design of the proposed JFPR grant.
Primary Beneficiaries and Other Affected Groups Other Key Stakeholders and
and Relevant Description Brief Description
17
Low-income women microentrepreneurs. The The Ministry of Micro, Small, and Medium
primary beneficiaries will be low-income female Enterprises has been implementing trade-related
entrepreneurs. The proposed JFPR grant will target entrepreneurship assistance and development
the specific needs and constraints faced by the schemes to develop women's entrepreneurial
missing middle of low-income beneficiaries who want skills, with a focus on nonfarm activities. This
to graduate from MFI support and move into the model provides an interesting approach, which
formal finance sector. Training and capacity-building will be assessed during implementation of the
initiatives will benefit: proposed JFPR grant.
Estimated numbers (training and capacity
development): 1,200
Estimated numbers (credit guarantee scheme):
1,200.
17
As part of ADB's Micro, Small and Medium Enterprise Development Project, the number of low-income female
microentrepreneurs ranges from 25,000 beneficiaries (estimated loan amounts of Rs100,000 each), 20,000
beneficiaries (estimated loan amounts of Rs200,000 each), and 10,000 beneficiaries (estimated loan amount of
Rs400,000 each).
12
Household members. Families remain at the center The Ministry of Women and Child Development
of a female entrepreneur’s household. Families (National Credit Fund for Women or Rashtriya
contribute to household income by doing collective Mahila Kosh) provides for microfinance services
agricultural work on the land of the household, by and consumption and production loans, without
engaging in expenditure-saving activities, and in collateral requirements, to low-income women for
microenterprise work. livelihood activities, housing, family needs, and
microenterprise.
In turn, female-initiated enterprises benefit entire
households, as women are primarily responsible for
providing the family's system of care. Thus, the
proposed JFPR grant builds on supporting female
entrepreneurship that will result in supplemental
family income, reduced drudgery, and women's
economic empowerment.
Estimated numbers: 1,200 (5 members or

households * 1,200) = 6,000
Small Industries Development Bank of India. The Ministry of Finance will be the executing
SIDBI is one of the largest government-owned banks agency for the proposed JFPR grant, which will
in India, established to promote the growth and be implemented through SFMC.
development of micro and SMEs including provision
of direct credit to the sector. SFMC will work in close
collaboration with other government agencies for
appropriate dissemination of best practices and
lesson learning and replication. SFMC will engage as
needed with the Ministry of Micro, Small, and Medium
Enterprises.
Estimated numbers (initial consultations, training,

and capacity development): 20 senior- and
middle-level staff members
Retailers and microfinance institutions. These are
existing SIDBI partner organizations that onlend to
clients. They will be involved in the initial stocktaking
exercise and participate in capacity-development
initiatives of SIDBI. Gender-sensitivity training will be
carried out for operations staff, and institutions will
agree to adopt international best practices in gender
equity, women's empowerment, and enterprise
development. Exchange and lateral learning
initiatives will help support the institutionalization of
promising gender-related results among participating
retailers and MFIs.
Estimated numbers: 25 retailers or MFIs (2 staff

members * 25) = 50
NGOs and national resource organizations and
research and training institute(s). These will be
involved in collecting and documenting emerging
gender-related practices in SIDBI, partner MFIs, and
banks; setting baseline database of the selected
locations; tracking the implementation of the gender-
related activities; carrying out an analysis of the
proposed JFPR grant results; and carrying out
gender-related capacity-development initiatives. They
will be subcontracted by SIDBI and will interact with
13
relevant government, civil society, and NGOs in the

performance of their duties.
Estimated numbers: 3 institutes (10 staff

members * 3) = 30
Livelihood enterprise learning advisors (20). They
will assist in identifying the female entrepreneurs for
the proposed JFPR grant. They will provide
participants with one-on-one personal guidance and
advice with respect to the use of the credit taken,
operation of enterprises, and repayment of credit, and
will mentor the entrepreneurs in their capacity-
building overall. There will be one advisor per partner
MFI.
Estimated numbers: 20
Estimated household members: 20 (5 household
members * 20) = 100
7. Coordination
11. Based on a series of discussions with relevant stakeholders (i.e., the government, donor
partners, and chambers of commerce), it is clear that despite several programs targeted at the
micro and SME sector, the sector continues to face severe challenges. Its unmet needs in
access to reasonable and timely finance, business development services, capacity development,
and awareness building, as well as satisfactory infrastructure, remain significant. Moreover, the
sector has suffered as a result of the global economic crisis. As a collaborative effort, the grant
will be implemented in close consultation with the donor community that has actively supported
the sector in India for the past several years.
12. The largest program among these is the World Bank-led multidonor SME Financing and
Development Project for $120 million, which was approved in 2004. The project aims to improve
access of SMEs to finance (including term finance) and business development services. Its
three main components are a credit facility, a risk-sharing facility, and a policy and institutional
development technical assistance (TA) program. The Department for International Development
of the United Kingdom, and German development cooperation through KfW and GTZ, provided
substantial grant assistance to reinforce the capacity development and institutional reforms
components of this project. For example, the Department for International Development-funded
TA supported the creation of a credit bureau and an SME rating agency, and it helped build
capacity at SIDBI. Given the good performance of the project, the World Bank approved an
additional $400 million in supplemental assistance, in April 2009, to extend the project to more
states. The World Bank is also proposing a further $300 million loan to assist the microfinance
sector.
13. Over the years, JICA has extended six credit lines amounting to nearly $2 billion to
SIDBI for onlending to the micro and SME sector. The current project provides a line of credit of
$300 million to SIDBI for encouraging micro and SMEs to undertake energy-saving investments
in plant and machinery and in production processes. This would not only help enhance energy
efficiency and lower carbon dioxide emissions, but would also improve their profitability in the
14
long run. The project is also being supported by German development cooperation through
KfW and GTZ, who are also seeking to encourage SMEs in enhancing their energy efficiency.18
14. United Nations Industrial Development Organization activities have focused on raising
the competitiveness of industrial enterprises, especially SMEs, through industrial policy advice,
investment, and technology promotion, with a view to increasing productivity, quality, energy
efficiency, and environmental sustainability. Its current consolidated project for SME
development in India combines traditional United Nations Industrial Development Organization
approaches such as cluster development, investment, and technology promotion with innovative
credit delivery mechanisms for SMEs, such as mutual credit guarantee schemes, private equity,
and venture capital.
15. While the International Finance Corporation has been helping the private sector,
including SMEs, through its various business lines—improving access to finance, creating an
enabling environment, providing corporate advice, aiding infrastructure development, and
improving environmental and social sustainability—its most recent initiative involves providing a
combination of equity-like financing, business mentoring, and capacity-building support for the
Bharatiya Yuva Shakti Trust growth fund, which will assist socially disadvantaged entrepreneurs
in the micro and small enterprises sector.
8. Detailed Cost Table
16. Please refer to Appendix 2 for summary of cost estimates, Appendix 3 for detailed cost
estimates, and Appendix 4 for the fund flow arrangement.
C. Link to ADB Strategy and ADB-Financed Operations
1. Link to ADB Strategy
Document Date of
Number Last
Document Discussion Objective(s)
ADB country CPS-IND March 2009 Support for inclusive growth and catalyzing investment
partnership 2009–2012 through innovative financing methods are two of the
strategy (CPS), strategic pillars of the CPS. The CPS emphasizes the
2009–2012 need to promote financial sector and SME development
and to support gender equity issues. With respect to
SME development, the CPS explicitly states that (i) the
provision of information, markets, technology, and
business development services should include
mechanisms to promote participation of women and
their enterprises; and (ii) gender-based barriers to
19
access finance should be analyzed and addressed.
Government of 2007 The goal of the five-year plan is to increase gross
India, Planning domestic product growth to 10%, increase agricultural
Commission. gross domestic product growth to 4% per year to ensure
Eleventh Five- a wider spread of benefits, and create 70 million new
18
The training and capacity development initiatives under the project could have an indirect effect, in partially using
JICA’s credit line for energy efficiency (2009), by enabling low-income women (and other beneficiaries) to be better
equipped to undertake and set up enterprises that could be possibly eligible under JICA financed credit lines to
SIDBI.
19
ADB. 2009. Country Partnership Strategy: India, 2009–2012. Manila (p. 106).
15
Year Plan. work opportunities. The grant’s goals are in line with the
(2007-2012) priorities of the government, which considers the micro
and SME sector's important role in facilitating income
and employment generation, and more specifically, the
commitment to support women's issues and
empowerment in the Prime Minister's 15-point program
and in other flagship schemes of the government.
2. Link to Specific ADB-Financed Operation
Project Name Micro, Small, and Medium-Sized Enterprise Development Project

Project Number 43158-01
Date of Board Approval 1 December 2009
Loan Amount ($ million) $50,000,000
3. Development Objective of the Associated ADB-Financed Operation
17. In support of the CPS outcome, the impact will be directed toward helping SMEs realize
their full potential, and contributing to economic growth and poverty reduction. The immediate
outcome will be improved SME access to term finance through participating financial institutions,
thereby fostering SME growth, competitiveness, and employment creation.
4. Main Components of the Associated ADB-Financed Operation
No. Component Name Brief Description

1. Public Sector Loan The project will provide $50 million long-term financing to public and
private sector commercial banks to increase their lending and to provide
additional liquidity to the domestic financing markets to channel debt
financing to the SME sector.
2. Partial Credit This component involves the use of a $250 million guarantee facility
Guarantee Facility allocated to SARD to assist participating financial institutions in raising
long-term funding from the market and to enable them to provide credit
lines to SMEs in India on market-based terms. The ADB-guaranteed
financial instrument will be subject to conditions precedent to the
disbursement such as receiving all necessary governmental, creditor, and
shareholder approvals, consents, and financial arrangements satisfactory
to ADB. The proceeds from the loan backed by a partial credit guarantee
must be used by the participating financial institutions to provide funding to
their SME clients in India.
5. Rationale for Grant Funding Versus ADB Lending
18. There is an existing ADB lending component for SMEs in India, but financing for the
other needs of SMEs, including microenterprises, is inadequate to meet the needs of
government programs, especially in view of the global economic crisis. Currently, ADB's
ordinary capital resources loan would enable SIDBI to extend its credit and business
development services to the missing middle of microentrepreneurs, which is not the direct focus
of any of the current donor-supported projects. In parallel, the JPFR grant will specifically target
a sizeable representation of female microentrepreneurs among the beneficiaries, enabling not
only access to credit, but also assistance in training to ensure that these recipients will be able
to manage the numerous social and gender-related constraints that they face, and actually set
up sustainable and productive enterprises over time. The grant will directly help train female-led
16
micro and small enterprises, strengthening the gender-related policies and programs of SIDBI,
developing and pilot testing innovative financial solutions for low-income women, and
establishing an M&E system to assess the social and gender results of the activities to be
supported under the grant. None of the existing donor programs for SMEs, or even the SIDBI
programs, have TA specifically targeting gender equity and women’s empowerment.
D. Implementation of the Proposed Grant
1. Implementing SIDBI
Agency
2. Risks Affecting Grant Implementation
19. As the activities will focus mostly on strengthening the capacity of female
microentrepreneurs to access financial resources, services, and market opportunities, there will
be no social or environmental safeguard issues.
Type of Risk Brief Description Measures to Mitigate Risks

Selection of female Because female entrepreneurs SIDBI will support partners to recruit women to
microentrepreneurs are less educated, there is a act as livelihood enterprise learning advisors to
as client beneficiaries lack of confidence in female assist in identifying the female entrepreneurs
of retail lenders entrepreneurs, particularly under this grant. The advisors will provide one-
among formal banks and other on-one personal guidance and advice with
financial institutions. respect to using the credit taken, operating the
enterprise, and repaying credit, and will mentor
the entrepreneurs in their capacity development.
There will be one advisor per partner MFI. The
presence of these advisors will lead to careful
selection of the client and ensure repayment and
proper use of credit. The advisors will also build
relationships of trust with the female
entrepreneurs and will eliminate the need for
collateral on the part of the lender.
Separately, the grant will develop MIS software

for participating retailers, which will allow them
to ascertain the use of credit for microenterprise
and to collect sex-disaggregated information.
Additional measures to further ensure alternative
collateral schemes include building the financial
discipline of clients through orientation and
through the financial literacy initiatives financed
under the grant.
Quality of services Due to the prevailing high The selection of national research, resource,
provided by the demand for services of good and training institutes will be through the
research institute, institutes and/or organizations, quality-based selection method, whereby
resource they try to accept all technical proposals will be first assessed by
organization, and assignments and engage the SIDBI, and negotiation of the financial proposal
training institutes services of inexperienced staff and the contract will be carried out with the
members who are not properly consultant who submits the highest-ranked
remunerated. As such, the technical proposal. The identity and
desired degree of commitment qualifications of each proposed national
and dedication cannot be consultant will need to be detailed by each
expected. This may lead to short-listed institute and/or organization in its
17
unsatisfactory and disputable proposal, as this aspect will be given significant

performance and quality. weight in evaluation of such proposals.
3. Incremental ADB Costs
Component Incremental Bank Cost

Amount requested $0
Justification Not Applicable
Type of work to be rendered by ADB Not Applicable
4. Monitoring and Evaluation
Key Performance Indicator Reporting Mechanism Plan and Timetable for M&E
Gender-related policies, Technical reports, toolkits, Quarterly reports from SIDBI
strategies, and programs checklists, guidelines, and/or incorporating inputs from the
institutionalized any other tool national research institute, national
Exchange and lateral learning resource organization, and training
reports institutes
Female microentrepreneurs Progress reports
trained Baseline information and data Quarterly review missions by ADB
reports, training and capacity
needs assessment reports
Financial services for Financial services, progress
low-income women developed reports
in rural, urban and periurban
areas
Effective M&E results Knowledge product option paper
National seminars (3)
State workshop proceedings
5. Estimated Disbursement Schedule
Fiscal Year (FY) Amount

($)
FY2010 1,000,000
FY2011 1,000,000
FY2012 1,000,000
Total Disbursements 3,000,000
18
Appendixes
1. Design and Monitoring Framework

2. Summary of Cost Estimates
3. Detailed Cost Estimates
4. Fund Flow Arrangement
5. Implementation Arrangements
6. Summary Poverty Reduction and Social Strategy
7. Outline of Terms of Reference
Appendix 1 19
DESIGN AND MONITORING FRAMEWORK
Design Summary Performance Targets and/or Data Sources Assumptions

Indicators and/or Reporting and/or Risks
Mechanisms
Impact
Enhanced gender Improvement in the quality of life of Grant-specific
equity and women's low-income female entrepreneurs in information and data
empowerment by the grant areas defined through a
creating a culture of set of gender and women’s Grant impact
entrepreneurship empowerment related targets and assessment
1
among women in the indicators (20% increase from 2010
grant areas baseline) Other information
and data from
government,
development
partners, and civil
society
Outcome Assumption
Greater capacity of Number of successful applications Information and data Commitment of
low-income female by low-income female entrepreneurs SIDBI and SIDBI
microentrepreneurs at SIDBI branches in selected states Proceedings from partners to advance
to access financial increased (20% increase from 2010 national- and state- gender and socially
resources, services, baseline) level workshops inclusive
and market approaches
opportunities in the Number of new micro and SME
grant areas entrants assisted by the grant,
disaggregated by sex (20% increase
from 2010 baseline)
Percentage of ownership of
businesses by sector disaggregated
by sex
Outputs Assumption
1. Gender-related Methods to institutionalize gender Technical reports, Effective and timely
policies, approaches assessed and revised, tool kits, checklists, collaboration of
strategies, and as needed guidelines, and/or relevant government
programs any other tools stakeholders, SIDBI,
institutionalized Number of gender-sensitive policies and SIDBI partners
and strategies adopted by SIDBI, Exchange and lateral
partner MFIs, NBFCs, and banks in learning reports Risk
areas related to female Staff changes in
entrepreneurship executing agency or
2. Stakeholders Number of SIDBI staff members (25) Baseline information implementing
involved in female and retailers (at most 50) trained in and data reports agency weaken
entrepreneurship gender in microfinance and coordination of grant
trained entrepreneurship Training and capacity activities.
needs assessment
Number of low-income female reports
entrepreneurs (1,200) trained in
financial literacy, leadership,
communication, and business
development services
Number of retailers (at most 50)

20 Appendix 1

Mechanisms
trained in technology and
appropriate operations
Number of SIDBI staff members (25)

trained in enterprise financing
3. Financial services Financial contribution provided to Financial services
for low-income SIDBI's credit guarantee scheme to
female micro- reduce the costs of borrowing for Business processes
entrepreneurs selected low-income female
developed microentrepreneurs (1,200)
MIS software for participating

retailers developed
Development of cadre of livelihood

enterprise learning advisors (20),
one at each participating partner
MFI (25).
4. Effective Baseline data collected and Knowledge product
monitoring and analyzed on a set of quantitative and
evaluation of qualitative indicators agreed at grant Option paper
results onset and effectively monitored
during grant implementation Proceedings of
national seminars
Quality knowledge product finalized and state workshops
on time (1)
Quality option paper on financing

modalities for low-income women
entrepreneurs finalized on time and
cleared by the government
National seminar (1) and state

workshops (6) carried out to
distribute grant findings and
recommendations
Activities with Milestones Inputs
1. Institutionalize gender-related policies, strategies, and programs
1.1 Document gender-related policies, strategies, and programs related to the JFPR grant:
promotion of female entrepreneurship in SIDBI, partner MFIs, NBFCs, and $3,000,000
banks (months 3–6).
1.2. Assess and revise modalities to institutionalize gender approaches 1,023.5 person-
(months 6–9). months of national
1.3. Exchange and lateral learning initiatives among SIDBI partners organized consultants
in the selected states (months 9–34).
2. Train stakeholders involved in women's entrepreneurship
2.1. Develop a training program and modules about gender in microfinance
and entrepreneurship, targeting SIDBI, partner MFIs (retailers) (months 6–
34).
2.2. Develop training program and modules in (a) financial literacy, leadership,
communication, and business development services; (b) technology and
appropriate operations; and (c) enterprise financing (months 6–36).
Appendix 1 21

Mechanisms
Activities with Milestones
3. Develop financial services for low-income female microentrepreneurs
(i) Provide financial contribution to SIDBI's credit guarantee scheme to reduce
the costs of borrowing for selected low-income women microentrepreneurs
(months 6–34).
(ii) Develop MIS software for participating retailers (months 12–24).
4. Effective monitoring and evaluation of results
(i) Collect and analyze baseline data on a set of quantitative and qualitative
indicators and effectively monitor them during grant implementation.
(ii) Assess the results of the activities in outputs 2 and 3 (months 1–3 and
34–36).
(iii) Disseminate findings and lessons learned from grant activities at national
and/or state-level workshops (months 24–34).
(iv) Plan follow-up activities (month 36).
JFPR = Japan Fund for Poverty Reduction, MFI = microfinance institution, MIS = management information system,
NBFC = nonbanking financial company, SIDBI = Small Industries Development Bank of India, SME = small or
medium-sized enterprise.
1
Gender and women’s empowerment impact indicators will include—but not be limited to—women’s economic
status (e.g., increased access to banking services, ownership, and control of assets), women’s sociocultural status
(e.g., education and health-seeking behaviors and access to education and health facilities and services), and
political status (e.g., participation in decision making at household and community levels, and ability to influence
gender norms and altering gender division of labor within the household).
Source: Asian Development Bank.
SUMMARY OF COST ESTIMATES
22
Appendix 2
Component A: Component B:
Component C: Component D: Component E:
Grant Components Institutionalization of Training of Stakeholders
Financial Services for Effective Monitoring and Project Administration, Total
Gender-related Policies, Involved in Women's Percent
Low Income Evaluation of Results Implementation Support, (Input)
Inputs / Expenditure Category Strategies and Programs Entrepreneurship
Microentrepreneurs Monitoring and Auditing
1. Training, (incl. Workshops, Seminars, and Lateral Learning) 90,900 1,031,800 66,100 1,188,800 39.6%
2. Consulting Services (including Livelihood Enterprise Learning Advisors) 40,000 237,500 270,000 250,000 15,000 812,500 27.1%
3. Project Management 684,889 684,889 22.8%
4. Direct Interventions (financial services for the poor) 144,000 144,000 4.8%
5. Contingencies 7,854 76,158 24,840 18,966 41,993 169,811 5.7%
Subtotal JFPR Grant Financed1 138,754 1,345,458 438,840 335,066 741,882 3,000,000 100.0%
Government contribution 108,000 108,000
Beneficiaries' contributions 15,000 86,700 5,000 106,700
Total Estimated Costs 153,754 1,432,158 438,840 340,066 849,882 3,214,700

1
includes duties and taxes
JFPR = Japan Fund for Poverty Reduction.
DETAILED COST ESTIMATES
COSTS CONTRIBUTIONS
Code Supplies and Services Rendered Unit Quantity Cost TOTAL
JFPR Government Other Donors Communities*
Units Per Unit US$
Method of
Amount
Procurement
Component A: Institutionalization of Gender-related Policies, Strategies and Programs Subtotal 145,900 130,900 15,000
1.1 Recruitment of National Resource Organization (NRO) QBS
1.1.1 Stocktaking of gender-related policies, strategies and programs
person-month
Consulting services (developing, imparting, collecting feedback/impact assessment) 4 10,000 40,000 40,000
(lump sum)
1.1.2 Initital Consultations
1.1.2.1 Initial stocktaking workshop [3 days, 20 persons/each]
5,000 5,000
Lodge and boarding (100/day), 10 middle-level staff day 3 1,000 3,000 3,000
Lodge and boarding (150/day), 10 senior level staff day 3 1,500 4,500 4,500
Transportation costs (100/person) trip 20 100 2,000 2,000
Rental of rooms (200/day, 3 days) day 3 200 600 600
1.1.2.2 Stocktaking results dissemination workshop [3 days/workshop (5), 20 persons/each] 5,000 5,000
Rental of rooms (200/day) day 15 200 3,000 3,000
Exchange and lateral learning initiatives among SIDBI retailers in selected states
1.1.3 5,000 5,000
[3 days/workshops (3), 20 people/each]
Rental of workshop rooms [200/day, 3 days, 3 workshops] day 9 200 1,800 1,800
Component B: Training of Stakeholders involved in Women's Entrepreneurship Subtotal 1,345,200 1,269,300 75,900
Recruitment of Training Institute (TI, 1)
2.1 Gender in Microfinance and Microentrepreneurship, 3 days (incl. 1 travel) 73,100 65,600
2.1.1 Recruitment of Training Institute QBS
person-month
(lump sum)
2.1.2 SIDBI/SFMC (wholesaler) 2,500 2,500
Lodge and boarding (100/day), 20 middle-level staff, 4 days day 4 2,000 8,000
Rental of workshop rooms (100/day, 3 days) day 3 100 300
25 retailers
2.1.3 Retailers (25) 5,000 5,000
(2/each)
Lodge and boarding (100/day), 50 middle-level staff, 4 days day 4 5,000 20,000
Recruitment of Training Institute (TI, 2)
Financial literacy for microentrepreneurs, leadership, and communication, 3 days
2.2
(incl. 1 travel)
2.2.1 Recruitment of Training Institute 539,100 517,500 QBS
Consulting services (developing, imparting training, collecting feedback):
recruitment of a team of 3 senior consultants (10 person-months/each), 250 person-month
30 2,500 75,000 75,000
women/State, 5 training sessions/State = 50 training sessions (3 years), 50 (lump sum)
women/session, $20/day
2.2.2 Phase 1 (3 States): Training of 5 groups (50 women/group) from participating retailers 10,800 10,800
Lodge and boarding ($20/day), 3 days day 45 5,000 225,000
Transportation costs (50/person) person 750 50 37,500 265,500
Appendix 3
Rental of workshop rooms (100/day, 2 days) day 30 100 3,000
Phase 2 (2 states): Training of 5 groups (50 women/group) from participating
2.2.3 10,800 10,800
retailers/state
Recruitment of Training Institute (TI, 3) 465,800 455,000
2.3 Business Development Services (BDS) - Cluster Specific
2.3.1 Recruitment of Training Institute
23
Consulting services (developing, imparting, collecting feedback): 250 women/state, 5 person-month QBS or
5 2,500 12,500 12,500
training sessions/State (5) = 25 training sessions, 50 women/session, $20/day (lump sum) individual
COSTS CONTRIBUTIONS
24
Units Per Unit US$
Method of
Amount
Appendix 3
Procurement
2.3.2 Phase 2 (2 states): Training of 5 groups (50 women/group) from participating retailers 10,800 10,800
2.4 Technology and Appropriate Operations
person-month
(lump sum)
25 retailers
2.4.2 Technology (specific to M&E software), 4 days 100 9,000 9,000
(2/each)
Lodge and boarding (100/day), 50 middle-level staff day 4 5,000 20,000
Rental of rooms (100/day, 3 day) day 3 100 300
25 retailers
2.4.3 Appropriate Operations (participating retailers), 4 days 100 9,000
(2/each) 9,000
Rental of workshop rooms (100/day, 3 day) day 3 100 300

2.5 Enterprise Financing
Consulting services (developing, imparting, collecting feedback/impact assessment) person-month 6 10,000 60,000 60,000
2.5.2 Enterprise financing, 4 days
2.5.2.1 Enterprise financing (targeting SIDBI) (wholesaler) 50 staff 50 9,000 9,000
25 retailers
2.5.2.2 Enterprise financing (retailers), 4 days 50 9,000
(2/each) 9,000
Component C: Development of Financial Services for Low-Income Microentrepreneurs Subtotal 414,000 414,000
3.1 Credit Guarantee Fund
Estimated number of loans: 1,200/year, $40/year, 3 years small loans 3,600 40 144,000 144,000
3.2 Women Livelihoods Enterprise and Learning Advisers (LELA)
Consulting services (developing, imparting, collecting feedback/impact person-month
600 400 240,000 240,000
assessment), 4 LELAs/State (20), (30 person-months/each), $400/month (lump sum)
person-month
3.3 Recruitment of IT/Software Consultant for Project-Specific Software 3 10,000 30,000 30,000
(lump sum)
COSTS CONTRIBUTIONS
Units Per Unit US$
Method of
Amount
Procurement
Component D: Effective Monitoring and Evaluation of Results Subtotal 321,100 316,100 5,000
4.1 Recruitment of National Research Institute (NRI) QBS
4.1.1 Conceptualization meeting organized by SIDBI/SFMC with NRI (10 persons), 3 days
Lodge and boarding (100/day, 3 days/each) day 3 1,000 3,000 3,000
Transportation costs (5000/trip) trip 1 5,000 5,000 5,000
Consulting services (developing, imparting, collecting feedback/impact person-month
8
assessment) (lump sum) 10,000 80,000 80,000
4.1.2 Setting and collection of baseline data/information
(a) Recruitment of senior consultant (1) person-month 4 10,000 40,000 40,000
Consultant [1 data collector/State = 5 (4 months)] person-month 20 1,000 20,000 20,000
(b) Endline data/information collection, report writing and production
Recruitment of senior consultant (1) person-month 4 10,000 40,000 40,000
Consultant [data collector/State = 5 (4 months)] person-month 20 1,000 20,000 20,000
4.2 Establishment of Rating System for Microenterprises
Single Source
Consulting services lump-sum 1 50,000 50,000 50,000
Selection
Final Consultations Organized by SIDBI/SFMC with NRO, Retailers, Government,
4.3 5,000
Donors and Other Stakeholders [3 days, 125 persons] 5,000
Rental of workshop rooms [200/day, 3 days] day 3 200 600 600
Component E: Project Administration, Implementation Support, Monitoring, and Auditing Subtotal 807,889 699,889 108,000
5.1 Project Management Cost month 36 2,000 71,089 71,089
5.2 Meetings of Project Advisory Board [quarterly (9) [5 persons/each] lump-sum 9 2,000 18,000 18,000
Individual
5.3 Consulting Fees and Field Supervision Costs
consultant
5.3.1 Project director person-month 36 1,500 54,000 54,000
Lodge and boarding (100/day), 10 days/month day 360 100 36,000 36,000
Transportation costs (250/month) month 36 250 9,000 9,000
Individual
5.3.2 Training and capacity development specialist (GAD) person-month 36 850 30,600 30,600
consultant
Transportation costs (100/person) month 36 100 3,600 3,600
Individual
5.3.3 Communications and outreach specialist person-month 36 850 30,600 30,600
consultant
Individual
5.3.4 Procurement and consulting service specialist person-month 36 850 30,600 30,600
consultant
Individual
5.3.5 IT specialist person-month 36 850 30,600 30,600
consultant
Individual
5.3.6 State project M&E coordinators (5) person-month 180 500 90,000 90,000
consultant
Lodge and boarding (80/day), 10 days/month day 1,800 80 144,000 144,000
Individual
5.3.7 Appointment of auditor
consultant
Consulting services lump-sum 1.5 15,000 15,000 15,000
5.4 Equipment and supplies
Office building and services (incl. office space, computers/printer, urban city
5.4.1 unit 36 3,000 108,000 0 108,000
transport and communication costs)
Appendix 3
Components A to E = Subtotal Subtotal 3,034,089 2,830,189 108,000 95,900
Contingency (Maximum 10% of total JFPR Contribution) 169,811 169,811
Total Grant Costs Total 3,203,900 3,000,000 108,000 95,900
*These amounts indicate the contribution of participants in workshops and/or trainings calculated in terms of opportunity costs (30/day for SIDBI/SFMC staff and 10/day for women
entrepreneurs.
BDS = business development services, IT = Information technology, JFPR = Japan Fund for Poverty Reduction, LELA = livelihoods enterprise and learning advisers, M&E = monitoring
and evaluation, MFI = microfinance institution, NRI = national research institute, NRO = national resource organization, NTI = national training institute, QBS = quality based selection,
25
SIDBI = Small Industries Bank of India, SFMC = SIDBI Foundation for Microcredit, TI = training institute.
26 Appendix 4
FUND FLOW ARRANGEMENT
1. For this grant, the Asian Development Bank (ADB) will channel the Japan Fund for
Poverty Reduction (JFPR) funds directly to a JFPR imprest account, which will be established,
managed, replenished, and liquidated by the Small Industries Development Bank of India
(SIDBI) in accordance with ADB’s Loan Disbursement Handbook (2007, as amended from time
to time) and detailed arrangements agreed upon between the Government of India and ADB.
The implementing agency will adopt an imprest fund procedure, wherein ADB makes an
advance disbursement from the grant account for deposit to an imprest account at a commercial
bank acceptable to ADB, to be used exclusively for ADB’s share of eligible expenditures. The
amount to be deposited into the imprest account will not exceed 10% of the grant amount or
6-month estimated expenditures, whichever is lower. The statement of expenditures (SOE)
procedure may be used for reimbursement of eligible expenditures and to liquidate advances
provided into the imprest account, provided that each individual payment does not exceed the
equivalent of $10,000. The payments in excess of the SOE ceiling will be replenished based on
full supporting documentation. SIDBI has established financial management capacity to institute
adequate accounting procedures and controls to administer the imprest fund and SOE
procedure.1
2. Detailed implementation arrangements, such as the flow, replenishment, and

administrative procedures, will be detailed in the grant administration memorandum and
established through the JFPR letter of agreement.2 Furthermore, SIDBI will (i) maintain separate
accounts for the JFPR grant; (ii) have such accounts and related financial statements audited
annually, in accordance with appropriate auditing standards, by an independent auditors
acceptable to ADB; (iii) furnish as soon as available, but in any event not later than 6 months
after the end of the fiscal year, certified copies of these audited accounts, financial statement,
and the report of the auditors relating thereto, including auditor’s opinion on the use of the JFPR
funds as well as on the use of the JFPR imprest account and SOE procedure provided under
the grant; and (iv) furnish to ADB such other information concerning such accounts and financial
statements and the audit thereof as ADB requests.
1
As indicated in the Financial Management Assessment of SIDBI, attached to ADB. 2009. Report and
Recommendation of the President to the Board of Directors: Proposed Loan and Partial Credit Guarantee to India
for the Micro, Small, and Medium-Sized Enterprise Development Project. Manila.
2
Interest earned on the JFPR imprest accounts can be used for grant activities, subject to ADB's approval, within
the approved total amount of the grant. Upon completion of the grant and before closing of the JFPR imprest
account, any unused interest will be returned to the JFPR fund account maintained at ADB. If the remittance fee
and other bank charges are higher than the amount of interest earned, there will be no need to return such interest
to the JFPR account maintained at ADB.
Appendix 4 27
3. The funds flow arrangements are shown in Figure A4.
Figure A4: Fund Flow Arrangement
ADB Imprest Account

held at SIDBI
$438,840 Component C:
Component A: $138,754 Development of
Institutionalization of
Financial Services for
Gender-Related
Low-Income Women
Policies, Strategies, and
Microentrepreneurs
Programs
$1,345,458 $335,066 Component D:

Component B: Effective Monitoring and
Training of Evaluation of Results
Stakeholders Involved
in Women's
Entrepreneurship $741,882 Component E:
Project Administration,
Implementation Support,
Monitoring, and Auditing
ADB = Asian Development Bank; SIDBI = Small Industries Bank of India.

Source: Asian Development Bank estimates.
28 Appendix 5
IMPLEMENTATION ARRANGEMENTS
A. Executing and Implementing Agencies
1. The Ministry of Finance will be the executing agency for this grant, which will be
implemented by the Small Industries Development Bank of India (SIDBI) through the SIDBI
Foundation for Micro Credit (SFMC). The implementing agency must work in close collaboration
with other government agencies for appropriate dissemination of best practices and lesson
learning or replication. SIDBI will also engage as needed with the Ministry of Micro, Small, and
Medium Enterprises and the Ministry of Women and Child Development. The grant will finance
the recruitment of the following additional staff members to be based at SIDBI office in Lucknow:
(i) a project director, (ii) a training and capacity development specialist, (iii) a communication and
outreach specialist, (iv) a procurement and consulting service specialist, (v) six state project
monitoring and evaluation (M&E) coordinators to be based in the participating states; and (vi) 20
livelihood enterprise and learning advisors for women.
2. Project advisory committee. A project advisory committee composed of technical sector

experts will be established to oversee grant implementation. It will comprise the executive director
of SIDBI, the chief general manager of SFMC, and a representative from the ADB India Resident
Mission, as well as technical sector experts invited on an ad hoc basis to advise the committee on
current trends and/or actions to be taken to ensure the achievement of the proposed objectives of
the grant. The committee will meet quarterly, and outside experts will be provided a sitting fee. It
will also provide guidance to the project director in the implementation of the grant-funded
activities and be informed on progress in carrying out grant activities.
B. Coordination with Other Development Partners
3. The grant will be implemented in consultation with relevant government agencies (at
central and state levels) and through iterative consultations with the gender or women's sections
of relevant industry associations, chambers of commerce, and, on a national level,
nongovernment organizations. The Agence Française de Développement, Department for
International Development of the United Kingdom, GTZ, International Finance Corporation, Japan
International Cooperation Agency (JICA), KfW, and World Bank have all been involved in the
promotion of micro, small, and medium-sized enterprises, but with no specific gender focus
and/or targeting of low-income female entrepreneurs.
4. The team met with the Embassy of Japan (Daiki Suemistu, first secretary [finance]) and
JICA (Keiji Katai, representative) during the fact-finding mission for the Micro, Small, and
Medium-Sized Enterprises Development Project on 2 September and 21 October. 1
Representatives of both the Embassy of Japan and JICA supported the rationale for the grant, its
pro-poor, gender and capacity-building focus, and its target of low-income women entrepreneurs
in the unorganized sector. Useful feedback was provided by the Embassy of Japan on the current
impact of the global economic crisis in India, and consensus was reached on the need to limit the
proposed intervention to selected five lagging states. JICA shared useful information on the six
lines of credit provided to SIDBI in the past and shared with the team relevant information on
impact assessments carried out by JICA on SIDBI-implemented projects.
1
Credit Guarantee to India for the Micro, Small, and Medium-Sized Enterprise Development Project. Manila.
Appendix 5 29
C. Implementation Schedule
5. The grant is to be implemented over a period of 36 months. An inception mission will

finalize the grant administration memorandum, and review and endorse the proposed schedule of
activities. All disbursements under the grant will be implemented within this period.
FigureA5:
Figure A5:Schematic
Schematic Implementation
Implementation Arrangement
Arrangement
Ministry of
SIDBI
Finance
National Resource
Organization
National Research Institute
National Training Institutes
Microfinance NBFC Banks (including

institutions (MFIs) cooperative banks)
LELAs
Women Microentrepreneurs
Source: Supporting microentrepreneurship for women's empowerment in selected states.
LELA = Livelihoods Enterprise & Learning Advisers; MFI = microfinance institution; NBFC = nonbanking financial
company; SIDBI = Small Industries Bank of India.
Source: Supporting Microentrepreneurship for Women's Empowerment.
30 Appendix 5
D. Procurement and Consulting Services
6. All procurement under the grant will be in accordance with ADB's Procurement Guidelines
(2007, as amended from time to time). SFMC will select and subcontract national resource
organizations and research and training institutes in compliance with ADB's Guidelines on the
Use of Consultants (2007, as amended from time to time), in accordance with the quality-based
selection method. The terms of reference for consulting services are given in Appendix 7. The
services of the Small and Medium Enterprises Rating Agency (SMERA) will be retained in
accordance with the single source selection method.
E. Environmental and Social Safeguards
7. As the activities will focus on strengthening the capacity of female microentrepreneurs to

access financial resources, services, and market opportunities, there will be no social or
environmental safeguard issues.2
F. Monitoring and Supervision
8. The implementing agency will establish an M&E system to assess the social and gender
equality results of financed activities of this grant. In particular, the implementing agency will be
responsible for documentation of changes in the lives of female entrepreneurs with respect to
mutually agreed upon variables with SIDBI and participating retailers; capacity-building training to
monitor comprehension, retention, and application through periodic surveys with women
entrepreneurs; and software to document the disbursement of loans to microenterprises using
sex-disaggregated data and to capture increase in applications and repayment rates of female
microentrepreneurs from baseline to grant end.
9. The baseline and grant end data will include quantitative and qualitative indicators agreed
with SIDBI at grant onset and effectively monitored during project implementation, including
changes in number and percentage of entrepreneurs who move into a higher part of the value
chain, change in women's or household income, expenditure, consumption, and nutritional status;
access to medical facilities and health care; and self-confidence. An impact assessment
consisting of primary data collection at baseline and grant end will be conducted by the national
research institute.
10. With a view to mainstreaming financing of the "missing middle" and providing additional
comfort to the lending institutions, the rating of microenterprises will be developed. The Small and
Medium Enterprises Rating Agency (SMERA) will be recruited to develop, test, and implement a
rating module targeting the specific needs of microenterprises. Once developed and tested, it
could be used for rating at a fee. The costs of rating of some of the targeted female
microenterprises in the identified five states will also be covered.
2
An environmental appraisal of SFMC activities was carried out by the Society for Participatory Research in Asia,
Delhi, covering areas such as identifying environmental risks associated with some of the most relevant activities
funded through the SFMC microfinance route, developing a format for identifying these risks, and drawing up some
simple guidelines on risk mitigation. The appraisal covered 15 partner microfinance institutions (MFIs) of the bank
located in and around Bhubaneswar, Chennai, Hyderabad, and Kolkata. The same has been advised to all SFMC
partner MFIs, and it has been impressed upon them to implement the same in the larger interests of the sector. The
items that form the restrictive list for general financing under the guidelines of the bank include: chemical dyes and
dye intermediates, industrial oxygen, distilleries, and industries consuming or producing ozone-depleting substances.
As an additional safeguard, SIDBI and its partner MFIs will apply the ADB-prohibited investment activity list to screen
loan applications from microentrepreneurs.
Appendix 5 31
G. Reporting Requirements
11. The implementing agency will prepare brief bimonthly progress reports addressing grant
implementation progress, issues, and concerns. The reports should be concise and kept to a
maximum of 5 pages. Reports should be circulated by email to the executing agencies, the
Ministry of Finance, and ADB. ADB requires that a semiannual JFPR status report be submitted.
SIDBI has a comprehensive internal audit system as well as a statutory audit conducted by
external auditors as mandated by the SIDBI Act. ADB Internal Audit Department undertakes on a
periodic basis the operational and management audit of ADB’s operations pertaining to all
departments, including SFMC. The Reserve Bank of India, the central bank of the country, also
undertakes audits of SIDBI’s operations from time to time. The financial statements of SIDBI as at
the end of the financial year are audited by the statutory auditors.
32 Appendix 6
SUMMARY POVERTY REDUCTION AND SOCIAL STRATEGY
India: Supporting Microentrepreneurship for Women's Empowerment in Selected States

Japan Fund for South Asia Department/
Lending/Financing Poverty Reduction Department/ Financial Sector, Public Management
Modality: Project Division: and Trade Division
I. POVERTY ANALYSIS AND STRATEGY
A. Link to the National Poverty Reduction Strategy and Country Partnership Strategy
Despite recent rapid economic growth, poverty in India is widespread, with the nation estimated to have
one of the largest concentrations of poor people in the world and to house one third of the world's poor.
According to the criterion used by the Planning Commission of India, 27.5% of the population (or nearly
302 million people) were living below the poverty line in 2004–2005, down from 51.3% in 1977–1978,
1
and 36% in 1993–1994, marking a pace of reduction less than 1% per year. About 221 million people
(72% of the poor) live in rural areas, and most depend on subsistence farming for their livelihood.
Among them, 59% are small landholders, marginal farmers, and landless labors; two thirds of
agricultural laborers are women. Rural poverty was 28.3% and urban poverty was 25.7% in 2004–2005.
An estimated 34.3% of the people lived on less than $1 per day in 2004–2005, with 80.4% of people
2
living on less than $2 per day. According to the World Bank's new estimates based on purchasing
power parity exchange rates and domestic prices for 2005, 42% of the population lived on less than
$1.25 per day in 2005 compared with 49.9% in 1993–1994. The new estimate also shows that 75.6%
3
people lived on less than $2 per day in 2005.
Poverty in India is partly attributed to the overconcentration of the workforce in agriculture, with
corresponding low productivity. In 2007, about 56% of the total population depended on agriculture,
while agriculture contributed 18% to the gross national product. It is anticipated that the slowdown of the
growth momentum will have implications for poverty. The proposed Japan Fund for Poverty Reduction
(JFPR) grant is in line with the priorities set out by the government in its 11th five-year plan, which
considers the micro and small and medium-sized enterprise (SME) sector and, more specifically, the
importance assigned to the support for women’s empowerment in the Prime Minister’s 15-point program
4
and in other flagship schemes of the government.
Support for inclusive growth and catalyzing investment through innovative financing modalities are two
of the strategic pillars of the India country partnership strategy (CPS, footnote d). The CPS emphasizes
the need for promoting financial sector and SME development and supporting gender equity issues and
concerns. With respect to SME development, the CPS explicitly states that (i) the provision of
information, markets, technology, and business development services should include mechanisms to
promote women's and their enterprises' participation; and (ii) gender-based barriers to access finance
should be analyzed and addressed (footnote a, p. 203). The grant responds to the commitment to
gender-inclusive financial sector and SME development set out in the CPS by engaging with Small
Industries Development Bank of India (SIDBI) and its partner microfinance institutions (MFIs) in further
advancing their commitment to pro-poor, social, gender-inclusive focus of their operations while at the
same time addressing the specific needs and constraints faced by low-income female entrepreneurs.
The grant is attached to the (upcoming) Micro, Small, and Medium-Sized Enterprise Development
Project, which supports micro and SME access to term finance. The grant will complement the proposed
approach under the project by providing much-needed capacity development support to low-income
5
women entrepreneurs in the unorganized sector.
B. Poverty Analysis: Targeting Classification: General intervention
1. Key Issues
The micro and SME sector is a microcosm of all vulnerabilities—it touches upon the lives of minorities,
women belonging to castes and tribes in the villages and in the urban slums, and in the deprived
pockets of flourishing towns and cities. For many families, it is the only source of livelihood. For others, it
supplements family income. Women are mostly found in the unregistered sector—food-processing
enterprises, manufacturing enterprises, and weaving—and often work part-time in family enterprises.
Female-led enterprises are micro- and small-scale enterprises managed by one or more women as a
proprietary concern, or in which she or they individually or jointly have a share capital of not less than
Appendix 6 33
51% as partners, shareholders, directors of a private limited company, or as members of a cooperative

society. In India, rural enterprises owned by women are smaller, younger, and more likely to be informal
and home-based. Female entrepreneurs are less educated and have significantly less access to
medium- to long-term credit. Banks and other financial institutions generally prefer large enterprise
clients because of the lower transaction costs and greater availability of collateral. Some of the micro
and SMEs also fall outside the reach of microfinance schemes, and are thus compelled to depend more
on informal sources of funds at higher interest rates. The lack of positive attitude and confidence of loan
officers in female entrepreneurs' managerial skills further affects their access to credit. It has been
estimated that the limited credit availability for micro and SMEs in India resulted in the loss of 30 million
person-days of potential employment over a 5-year study period.
2. Design Features
The Micro, Small, and Medium-Sized Enterprise Development Project will ensure that different
segments of micro and SMEs are reached. The smaller and newer micro and small enterprises will be
targeted through the loan to SIDBI, while the larger medium-sized enterprises that have limited access
to bank finance will be targeted under the partial credit guarantee facility. The two financing methods
effectively complement each other. The partial credit guarantee component will not only help expose
India's public sector banks to the international capital markets and facilitate capital market development,
it will also bring in additional funds for the micro and SME sector, which has great potential to support
income and employment generation. The additionality is important, especially in the context of the
government's enhanced borrowing program—partly a result of its stimulus package—and the concerns
of crowding out that it has raised.
Evidence collected during the fact-finding mission and discussions with various government agencies,
private sector, and multilateral and bilateral donors suggests that the credit crunch arising from the
global economic crisis has accentuated the shortage of credit available to microentrepreneurs
(predominantly women) who want to graduate from MFI support and move into the formal (financial)
sector. With this backdrop, offering financing alone will not be sufficient to specifically help low-income
female entrepreneurs. Based on extensive interaction with government, nongovernment, and other civil
society organizations, the need to provide dedicated capacity development support to low-income
female microentrepreneurs was identified as critical. These needs will be addressed through proposed
technical assistance to be financed by JFPR. In addition to the stated capacity development initiatives,
the grant will support innovative approaches to promoting women's microentrepreneurship in selected
states with high poverty levels and weak capacity.
II. SOCIAL ANALYSIS AND STRATEGY
A. Findings of Social Analysis
The debate on financial services to poor and low-income households in India has revolved around the
rural population since the time that banks were first nationalized. Unlike rural financial intermediation,
flow of financial resources to urban populations was never a matter of serious debate in India. The
tendency among microfinance intermediaries to move toward urban centers came only after it was found
that rural markets were reaching a saturation point. Still now, the self-help groups’ bank linkage model
remains predominantly a rural phenomenon. The first targeted credit program with focus on enterprise
and a self-employment opportunity in urban areas was launched in 1989 during the 7th five-year plan
period (1985–1990). Various urban poverty alleviation schemes with a credit focus introduced in India
6
since 1989 reveal a top-down approach, broadly speaking. Credit flow from formal financial institutions
to urban population groups steadily increased in India since the 1970s, and this has come to be
concentrated in large cities and larger credit brackets. Though the social banking efforts of the central
bank and the government, financial intermediation in rural areas has also gone through a phase of
expansion; the low-income asset holding segments of urban areas have largely been bypassed by such
overall expansion in financial intermediation. While the state’s poverty alleviation approach has steadily
expanded from mere provision of basic amenities and services to facilitating creation of income earning
opportunities, it has failed to make any significant impact on the urban poor.
B. Consultation and Participation
1. Provide a summary of the consultation and participation (C&P) process during project
preparation
An initial stakeholder analysis was carried out by the ADB team, and stakeholders were identified
34 Appendix 6
through intensive consultation with relevant staff at ADB headquarters and the India Resident Mission.
At the government level, the SIDBI Foundation for Micro Credit is one of the most active and innovative
players involved in targeting the specific needs faced by women microentrepreneurs in India. In addition,
the Ministry of Agro and Rural Industries, Ministry of Small Scale Industries, and Ministry of Women and
Child Development have programs targeting the needs and constraints faced by women, making
available dedicated credit lines and a range of capacity-building initiatives. The Ministry of Women and
Child Development has also been implementing the National Credit Fund for Women (Rashtriya Mahila
Kosh) which provides microfinance services and consumption and production loans without collateral
requirements to low-income women for livelihood activities, housing, family needs, and microenterprise.
With respect to the private sector, confederations of industries have been active in supporting
capacity-building initiatives among their members. These include the Associated Chambers of
Commerce and Industry of India, Confederation of Indian Industry, Federation of Indian Chambers of
Commerce and Industry, Federation of Indian Micro and Small and Medium Enterprises, and Federation
of Small and Medium Industries. Among the nongovernment agencies, the team identified the Self
Employed Women's Association as one of the most relevant MFIs. In terms of training institutes, the
Indian School of Microfinance for Women has been implementing—among others—a range of rather
innovative programs with a strong gender focus. Agence Française de Développement, Department for
International Development of the United Kingdom, GTZ, International Finance Corporation, Japan
International Cooperation Agency, KfW, and World Bank have all been involved in the promotion of
micro and SMEs, but with no specific gender focus and/or targeting of low-income women
entrepreneurs.
2. What level of C&P is envisaged during the project implementation and monitoring?
Information sharing Consultation Collaborative decision making Empowerment
3. Was a C&P plan prepared? Yes No Please explain.

The grant will promote consultation among different stakeholders, which include the government (at both
central and state levels); staff from SIDBI, partner MFIs, nonbanking financial companies, and banks
(including cooperative banks); clients; women’s civil society nongovernment organizations; and
associations and networks of female entrepreneurs. C&P approaches will be mainstreamed in all
aspects of grant activities, which include stocktaking workshops and stocktaking results dissemination
workshops as well as exchange and lateral-learning initiatives among SIDBI retailers in selected states
(component A). A broad range of training and capacity development activities (component B) will also be
carried out and will use participatory approaches and methods. A communications and outreach
specialist will be recruited at SIDBI to ensure effective communication and outreach to SIDBI staff,
stakeholders and partners (component E). In this context, and considering that no negative safeguard
issues or any other negative social impacts will arise from the grant, there is no need to set up a C&P
plan. Participatory approaches will be mainstreamed in every aspect of the grant activities.
C. Gender and Development
1. Key Issues
Female enterprises are small-scale enterprises managed by one or more women as a proprietary
concern, or in which she or they individually or jointly have a share capital of not less than 51% as
partners, shareholders, directors of a private limited company, or members of a cooperative society.
Evidence collected during the fact-finding mission and discussions with various government agencies,
the private sector, and multilateral and bilateral donors suggest that the credit crunch arising from the
global economic crisis has accentuated the shortage of credit for low-income female
microentrepreneurs—especially located in urban and/or periurban settings—with severe repercussions
on livelihoods. Micro and SMEs benefit women both directly in terms of wages and indirectly by
supplementing family incomes, reducing drudgery, and providing sustainable social capital. In particular,
when women’s incomes increase, the entire household benefits. Hence, it makes sense to invest in the
economic empowerment of women.
Against this backdrop, offering financing alone will not be sufficient to target the specific needs and
constraints faced by low-income women entrepreneurs. The need to support capacity development
interventions was discussed and agreed as critical through the finalization of a grant-financed technical
Appendix 6 35
assistance for capacity development support to female entrepreneurs operating in the informal sector.
This aspect would be addressed through the establishment of a technical assistance facility that would
provide capacity development to women entrepreneurs in the unorganized sector.
2. Key Actions
Gender plan Other actions/measures No action/measure
The grant will adopt a two-pronged approach to address gender-related issues, as follows: (i) ordinary
capital resources loan, of which at least 30% will be earmarked for lending to qualified female
microentrepreneurs; and (ii) the JFPR grant, whereby a technical assistance facility would provide
capacity development to women entrepreneurs in the unorganized sector.
III. SOCIAL SAFEGUARD ISSUES AND OTHER SOCIAL RISKS
Issue Significant/Limited Strategy to Address Issue Plan or Other Measures
No Impact Included in Design
Involuntary No Impact No impact Full plan
Resettlement No involuntary Short plan
resettlement will be Resettlement
triggered. framework
No action
Indigenous Limited Impact No impact Plan
Peoples No adverse issues Other action
related to indigenous Indigenous peoples
peoples or ethnic framework
minorities are No action
anticipated. Rather,
female indigenous
peoples will benefit
from expanded
access to financial
resources and
services through the
target interventions to
female-led micro and
SMEs.
Labor The grant will No impact Plan
Employment promote greater Other action
opportunities access of women No action
Labor microentrepreneurs
retrenchment (mostly unorganized
Core labor sector workers) to
standards financial services.
Training and capacity
development
initiatives will
introduce notions of
gender awareness,
labor rights, and core
labor standards and
contribute to greater
knowledge and,
possibly, application
of such standards.
Affordability The grant will No impact Action
promote greater No action
access of female-led
micro and SMEs to
affordable financial
36 Appendix 6
resources and
services and thus
possibly to contribute
to reducing the costs
and prices of
manufactured goods
and services.
Other Risks and/or No other risks or No impact Plan
Vulnerabilities vulnerabilities have Other action
HIV/AIDS been identified. No action
Human
trafficking
Others
IV. MONITORING AND EVALUATION
Are social indicators included in the design and monitoring framework to facilitate monitoring of social
development activities and/or social impacts during project implementation? Yes No
1
Government of India. 2007. Eleventh Five-Year Plan, 2007-2012. Delhi.
2
United Nations Development Programme. 2007. Human Development Index. New York.
3
http://iresearch.worldbank.org/PovcalNet/jsp/index.jsp,
4
ADB. 2009. Country Partnership Strategy: India, 2009–2012. Manila (p. 106).
5
Credit Guarantee to India for the Micro, Small, and Medium-Sized Enterprise Development Project. Manila.
6
Swarna Jayanti Shahari Rozgar Yojana is the first such urban scheme launched by the government in which
community-based organizations, especially ones for poor urban women, were recognized as the critical points of
delivery of benefits.
Appendix 7 37
OUTLINE OF TERMS OF REFERENCE
1. The implementation team will be composed of SIDBI-based national consultants: (i) one
project director (36 person-months), (ii) one training and capacity development specialist (36
person-months), (iii) one advocacy and communications outreach specialist (36 person-months),
(iv) one contracting and procurement specialist (36 person-months), (v) five state project
coordinators (36 person-months each, or 180 person-months total), (vi) 20 women livelihood
enterprise learning advisors (30 person-months each, or 600 person-months), and (vii) one
information technology expert (36 person-months). SIDBI will also recruit: (a) one national
research institute [monitoring and evaluation expert (8 person-months) and data collectors (5, 8
person-months each or 40 person-months total]; (b) one national resource organization
[capacity development expert (4 person-months)]; (c) five training institutes [gender,
microfinance and microentrepreneurship experts (50 person-months)] to undertake needs
assessment, baseline research, develop M&E and implement capacity development activities of
partner MFIs. The identity and qualifications of each of the proposed consultants will be detailed
by each short-listed national resource organization and research and training institute in its
simplified technical proposal, as this will be given significant weight in evaluation of such
proposals. Finally, an accounting firm [auditor (1.5 person-months)] will be retained to carry out
the audit requirements of the Japan Fund for Poverty Reduction (JFPR). Specific terms of
reference are outlined below.
A. Project Director (36 person-months)
2. The project director will be responsible for the administration and management of all
activities under the grant. The consultant will manage the implementation team and be
responsible for ensuring the coordination of all initiatives under the grant, with emphasis on (i)
ensuring the timely engagement of all implementation team's consultants; (ii) managing the
consultants effectively through the promotion of teamwork, exchange, and cross-fertilization of
experience among team members; (iii) ensuring the timely and effective implementation of all
grant activities, with emphasis on adequate sequencing; (iv) documenting social and gender-
related results; and (v) promoting effective exchange of information among team members with
SIDBI at its headquarters in Lucknow, Delhi, and other relevant branches. The consultant will
report to the general manager of SIDBI Foundation for Micro Credit (SFMC) and/or any other
staff assigned by the SFMC chief general manager.
3. In addition, the project director will develop and maintain a good working relationship
with relevant agencies and function as the main contact between the grant, SIDBI, the Asian
Development Bank (ADB), and ADB's India Resident Mission, partner microfinance institutions
(MFIs), and banks. Main activities include overseeing the procurement of goods and services
and the recruitment of partnering research, resource, and training institutes. The consultant will
also be responsible for the withdrawal of funds to implement all grant-related activities. The
required qualifications are (i) an advanced university degree in public administration, economics,
and/or social sciences; (ii) at least 10 years of experience in managing team and stakeholder
relations; (iii) experience with international projects; (iv) a high degree of independence and
responsibility; (v) a result-oriented, fact-based management approach; and (vi) excellent
interpersonal and communication skills.
B. Training and Capacity Development Specialist (36 person-months)

4. The training and capacity development specialist will work under the overall supervision
of (and report to) the project director. The consultant will be responsible for the organization,
38 Appendix 7
sequencing, oversight, and management of all training activities financed under the grant,
through direct interaction with national resource organizations, research, and training institutes
that will be retained under the grant. The consultant will liaise with relevant staff members of
SIDBI, partner MFIs, and banks to ensure their full input in the finalization of the training
programs and modules, their information about available training opportunities, and their
information on available training modules; regularly update, solicit interest, and monitor the
availability of relevant staff before finalizing the training schedule; proactively support an
environment of knowledge sharing; and contribute to develop the attitudes needed to bring
about the desired organizational changes within SIDBI, partner MFIs and banks. The required
qualifications are (i) an advanced university degree in public administration, economics, and/or
social sciences; (ii) 5 years of relevant experience in capacity development of business
associations; (iii) an ability to organize own workload and work without constant supervision; (iv)
experience in supporting the capacity development of training staff; and (v) experience and/or a
good theoretical knowledge of MFI management and organizational structures.
Table A7: Training and Capacity Development Initiatives
Topic Target Participants Participants Total Days

A. Knowledge Generation, Management, and Dissemination
1. Initial consultations
Initial stocktaking workshop (1) SIDBI 20 participants 20 3
Stocktaking results dissemination SIDBI 20 participants 100 3
workshop (6)
2. Exchange and lateral learning (3) SIDBI (wholesaler) 20 participants/state 100 3
MFI (retailer)
3. Final consultations (1) SIDBI 30 125 3
Retailers 40
Government 20
Donors 20
Other stakeholders 15
B. Training and Capacity Development Initiatives
1. Gender in microfinance and SIDBI (wholesaler) 20 20 4
entrepreneurship (1) MFI (retailers) 2 participants each 50 3
retailer (25)
2. Financial literacy for Women 250 participants in 5 1,200 3
microentrepreneurs (6) microentrepreneurs selected States
3. Leadership and communication (6) Women 250 participants in 5 1,200 3
microentrepreneurs selected States
4. Business development services: Women 250 participants in 5 1,200 3
Cluster-specific (3 cluster microentrepreneurs selected States
training/state)
5. M&E software training (1) Participating 2 participants each 50 4
retailers Retailer (25)
6. Appropriate operations training (1) Participating 2 participants each 50 4
retailers Retailer (25)
7. Enterprise financing (1) SIDBI 50 50 3
Retailers 50 50 3
M&E = monitoring & evaluation; MFI = microfinance institution; SIDBI = Small Industries Development Bank of India.
Appendix 7 39
C. Advocacy and Communications Outreach Specialist (36 person-months)
5. The communications and outreach specialist will work under the overall supervision of
(and report to) the project director. The consultant will perform the following tasks: (i) assist the
project director and other team members in building partnerships with SIDBI, retail MFIs, and
banks, with emphasis on promoting greater awareness and access by partner MFIs to female
microentrepreneurs in the ―missing middle‖; (ii) develop the grant’s communication and outreach
strategy, with particular focus to each of the target groups; (iii) assist the implementation team in
increasing the awareness and commitment of decision makers to gender equity and women's
empowerment; (iv) assist in promoting public awareness on grant-related aspects through mass
media and communications; (v) participate in and oversee the elaboration of promotional
materials; (vi) handle information dissemination and awareness-raising activities; (vii) assist in
organization of all grant-related workshops and seminars; and (viii) organize and oversee public
awareness campaigns under the grant. The required qualifications are (i) an advanced
university degree in public administration, economics, and/or social sciences; (ii) 5 years of
relevant experience at the national or international level in public relations, communications, or
advocacy; (iii) previous experience with a multilateral or international organization; and (iv)
experience in the use of computers and office software packages, and good knowledge and
experience in handling of web-based management systems.
D. Contracting and Procurement Specialist (36 person-months)
6. The contracting and procurement specialist will work under the overall supervision of
(and report to) the project director. The consultant will be responsible for the financial
administration of the grant and provide the project director with budgetary, financial
management, accounting, and administrative services support by designing, implementing, and
supervising prerequisite budgetary, financial, accounting, and administrative systems in
conformity with the requirements of SIDBI, the comptroller and auditor general of India, ADB,
and JFPR. The consultant will draft terms of references for expert(s) and/or specialized service
provider(s) under the grant, participate in the selection process, and make arrangements to
obtain the necessary funds from the joint ADB–JFPR imprest account. The consultant will also
establish and maintain imprest and other accounts acceptable to the government and ADB,
ensure appropriate systems for financial control, and maintain checks and balances in respect
to all financial matters and expenditure items. He or she should prepare recurrent and capital
expenditure budgets for the grant in line with approved funding arrangements. The required
qualifications are (i) academic experience in accounting, business, finance, law, contracts,
purchasing, economics, industrial management, marketing, quantitative methods, or
organization and management; (ii) 5 years of relevant experience at the national or international
level in public relations, communications, or advocacy; (iii) previous experience with a
multilateral or international organization; and (iv) experience in the use of computers and office
software packages, and good knowledge and experience in handling of web-based
management systems.
E. State Project Coordinators (5, 36 person-months each or 180 person-months total)
7. The state project coordinators will work under the overall supervision of (and report to)
the project director. The consultants will be located in relevant SIDBI branches in participating
states. They will be responsible for (i) ensuring the adequate implementation of the grant at the
state level, through day-to-day interaction with the project director and implementation team; (ii)
liaising with all state partner MFIs and banks to ensure their full information and knowledge
about the training, capacity development, and innovative financial services provided under the
40 Appendix 7
grant; (iii) developing and updating procedural guidelines on livelihood programming, and
incorporating lessons learned during implementation; (iv) advising and facilitating strengthening
of collaborations at various levels with rights-based groups for their effective access to the
opportunities and benefits provided by the ADB loan and related grant and other financial
resources and services; (v) collecting and documenting promising practices; and (vi) interacting
with the livelihood enterprise learning advisors in all areas related to the performance of their
mandates. The required qualification is academic experience in accounting, business, finance,
law, contracts, purchasing, economics, industrial management, marketing, quantitative methods,
or organization and management.
F. Women Livelihood Enterprise and Learning Advisors (20, 30 person-months each or

600 person-months total)
8. The advisors (20 in partner MFIs) will be located in participating MFIs in the five selected
states. The responsibility of each will include (i) assisting in identifying the female
microentrepreneurs for the grant; (ii) helping them with respect to the use of the credit taken; (iii)
advising them on the running of their enterprise, and overseeing repayment of credit; and (iv)
helping them in their capacity development. The presence of the advisors will ensure careful
selection of the clients, repayment, and proper use of credit. The advisors will also build
relationships of trust with female entrepreneurs and obviate the need for collateral on the part of
the lenders. The required qualification is academic experience in social sciences, economics
and business, or finance (preferably with formal training on gender and development).
G. Information Technology Expert (36 person-months)
9. The information technology expert will have overall responsibility of all hardware and
software aspects of the proposed JFPR grant. The consultant will review the systems of the
participating institutions with a view to bringing uniformity in the technology used. The consultant
will provide support to the monitoring and evaluation expert in designing and supervision of
monitoring tools for tracking quantitative and qualitative deliverables under the grant and for
impact evaluation. The required qualification is academic experience in computer software and
management information systems development, and practical experience in project M&E.
H. Monitoring and Evaluation Expert (8 person-months) and Data Collectors (5, 8

person-months each or 40 person-months total)
10. A national research institute will be engaged to conduct monitoring and evaluation and
impact assessment of the grant. The Team will be composed of: (a) Monitoring and Evaluation
Specialist (8 person-months), with research capacities and experience in conducting high-
quality rigorous research, who will be responsible for preparing the monitoring framework in
consultation with SIDBI and other key stakeholders; and (b) Data Collectors (5, 8 person-
months/each), who will be carrying out the baseline and endline data collection, following proper
sampling procedures and undertaking the sample process in the entire survey. Included in the
framework is a list of qualitative and quantitative indicators and issues to be covered,
methodology for collecting data, and a schedule of execution. It will cover impacts such as
improvement in household income and expenditure, living conditions, access to health care
facilities, and changes in gender relations and well-being of target groups. The institute will also
carry out a baseline survey and prepare baseline and grant end data. Output from this task will
be the baseline and grant end data report, final consultations, and an impact assessment report.
To be eligible for funding, the institute must
Appendix 7 41
(i) be a not-for-profit organization, have operated for at least 5 years, and have a
thorough understanding of microfinance and microenterprise;
(ii) have published a wide range of social development and gender-related academic
research and action-research reports in local languages and/or in English, of
international quality;
(iii) have long-term presence and credibility within microfinance and microenterprise
groups and national gender networks, demonstrated by its contribution to
relevant publications and events; and
(iv) maintain a proper accounting and financial system and have been audited
annually.
I. Capacity Development Expert (4 person-months)
11. A national resource organization will be engaged to conduct a gender scan and
stocktaking exercise of SIDBI and its partner retailers, MFIs, and other stakeholders. An in-
house Capacity Development Expert (4 person-months) with research and/or training capacities
will be responsible for developing a methodology and conducting a gender-related capacity
needs assessment for the stocktaking, and will inform the design of initiatives set forth in
components A and B. The output from this task will be a report of stocktaking results from the
initial consultations and a capacity needs assessment to be used as reference for the capacity-
development initiatives of the grant. To be eligible for funding, the national resource
organization must:
(i) be a not-for-profit organization, have operated for at least 5 years, and have a
thorough understanding of microfinance and microenterprise;
(ii) have long-term presence and credibility within microfinance and microenterprise
groups and national gender networks;
(iii) have experience in vocational and skills training, with a demonstrated record in
gender programming;
(iv) have a track record of collaborative partnerships with national and possibly with
provincial or district government agencies in assessing the social and gender-
related aspects of development; and
(v) maintain a proper accounting and financial system and have been audited
annually.
J. Gender, Microfinance and Microentrepreneurship Experts (50 person-months)
12. A national training institute will be engaged to conduct activities set forth in component B.
The institute will have extensive training capacities and experience in conducting high-quality
training for microfinance and microenterprise institutions, with an ability to identify and attract
high-quality resource persons. The Team will be composed of: (a) Gender in microfinance and
microentrepreneurship expert (3 person-months); (b) Financial literacy for
microentrepreneurship, leadership and communication expert (30 person-months); (c) Business
Development Services' expert (5 person-months); and (d) Software and Microfinance Expert (6
person-months); and (e) Enterprise financing expert (6 person-months). Output from this task is
the completion of the five training initiatives organized across the five participating states. To be
eligible for funding, the institute must
(i) be a not-for-profit organization, have worked on microfinance and micro
enterprises for at least 5 years;
(ii) have experience in microfinance and microenterprise skills training with a
demonstrated record in gender programming;
42 Appendix 7
(iii) have long-term presence and credibility within microfinance and microenterprise
groups and national gender networks, demonstrated by its contribution to them;
(iv) have a track record of collaborative partnerships with national and possibly with
provincial or district government agencies in building the capacity of social and
gender-related aspects of development; and
(v) maintain a proper accounting and financial system and have been audited
annually.
13. In the interests of the gender-sensitivity training developed based upon the needs
assessment, the resource and training organization may be the same to ensure customization
and relevance to SIDBI and SIDBI partners. However, due to the possibility of a conflict of
interest, the research and training organizations must be different entities.
K. Auditor (1.5 months)
14. A public accounting firm will be engaged to conduct an annual internal audit of grant
accounts covering all operations at all levels. The key internal audit functions will be to ascertain
(i) whether the operating systems of internal checks and controls are effective, (ii) the reliability
of financial and physical reports, (iii) the extent to which the systems in place prevent misuse of
grant assets, and (iv) that the financial rules and procedures of ADB are followed. The auditors
will be required to provide a report to the implementation team highlighting findings of the audit.
The audit will be conducted in accordance with internationally accounting and auditing
standards and financial reporting systems. The scope of annual auditing should encompass the
examination and evaluation of the adequacy and effectiveness of the internal control system
and the quality of performance in carrying out assigned responsibilities. Annual auditors must (i)
review the reliability and integrity of financial and operating information and the means used to
identify, measure, classify, and report such information; (ii) review the grant accounts and
procurement procedures to check compliance with ADB and government guidelines; (iii) review
the means of safeguarding the assets, including civil works, goods, equipment, consultancy
services, and other aspects procured under the grant, and, as appropriate, verify the existence
of such assets; (iv) appraise the economy and efficiency with which grant resources are
employed; and (v) review the grant activities to ascertain whether results are consistent with
established objectives and targets and whether they are being carried out as planned. The
public accounting firm will submit reports annually, within 1 month after completion of the audit
at the end of each financial year, to the project director with a copy to the Ministry of Finance
and ADB’s India Resident Mission. The report should contain a letter indicating the purpose,
scope, results, and major findings of the audit, and an expression of the audit opinion.

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Grant Assistance Report

Project Number: 43158-01

Proposed Grant Assistance

Currency Unit – Indian rupee/s (Re/Rs)

ADB – Asian Development Bank

Vice President X. Zhao, Operations 1

II. Grant Development Objective(s) and Expected Key Performance Indicators

III. Grant Categories of Expenditure, Amounts, and Percentage of Expenditures

JAPAN FUND FOR POVERTY REDUCTION

JFPR Grant Proposal

B. Details of the Proposed Grant

1. Description of the Components, Monitorable Deliverables and/or

Cost ($) $130,900

will involve (i) targeting women new to microentrepreneurship as well

On the demand side for female microentrepreneurs, capacity

microentrepreneurs and will help them use the loans and

On the supply side—SIDBI as wholesaler, and the retailers (SIDBI

guarantee for 1,200 low-income female entrepreneurs will be

groups. Qualitative interviews and participatory methods will

Establishment of rating system for microenterprises. With a view

Number of months for grant 36 months

2. Financing Plan for Proposed Grant to be Supported by JFPR

Funding Source Amount

1. Low-income female entrepreneurs in the unorganized sector are defined as

7. The grant will have several innovative features, including

8. The grant aims to facilitate access by poor female microentrepreneurs to an appropriate

institutionalize—and therefore introduce on a long-term, sustainable basis—gender-related

Estimated numbers: 1,200 (5 members or

Estimated numbers (initial consultations, training,

Estimated numbers: 25 retailers or MFIs (2 staff

relevant government, civil society, and NGOs in the

Estimated numbers: 3 institutes (10 staff

8. Detailed Cost Table

C. Link to ADB Strategy and ADB-Financed Operations

1. Link to ADB Strategy

2. Link to Specific ADB-Financed Operation

Project Name Micro, Small, and Medium-Sized Enterprise Development Project

3. Development Objective of the Associated ADB-Financed Operation

No. Component Name Brief Description

5. Rationale for Grant Funding Versus ADB Lending

D. Implementation of the Proposed Grant

2. Risks Affecting Grant Implementation

Type of Risk Brief Description Measures to Mitigate Risks

Separately, the grant will develop MIS software

unsatisfactory and disputable proposal, as this aspect will be given significant

3. Incremental ADB Costs

Component Incremental Bank Cost

4. Monitoring and Evaluation

5. Estimated Disbursement Schedule

Fiscal Year (FY) Amount

1. Design and Monitoring Framework

DESIGN AND MONITORING FRAMEWORK

Design Summary Performance Targets and/or Data Sources Assumptions

Number of retailers (at most 50)

Design Summary Performance Targets and/or Data Sources Assumptions

Number of SIDBI staff members (25)

MIS software for participating

Development of cadre of livelihood

Quality option paper on financing

National seminar (1) and state

Design Summary Performance Targets and/or Data Sources Assumptions

3. Project Management 684,889 684,889 22.8%

5. Contingencies 7,854 76,158 24,840 18,966 41,993 169,811 5.7%