Despite the challenges in the Somali financial system, the private sector, primarily driven by MSMEs, has remained the cornerstone of the ongoing economic recovery efforts. These efforts have significantly boosted job creation and revitalized economic activities in Somalia. However, the sector remains limited in size, simple in structure, and faces barriers to accessing the global financial system. Numerous initiatives have been launched to support MSMEs in Somalia, but they have often targeted various aspects of economic empowerment and skill development without a unified strategy.
In 2019, the Federal Government of Somalia through the Ministry of Finance, incorporated an apex development financing institution, Gargaara. It has the sole goal of mobilizing socio-economic development by performing a financial intermediation function to promote and facilitate entrepreneurship, employment, and broad-based economic empowerment by funding MSMEs. Gargaara leverages private capital to encourage entrepreneurship and support job creation through high-growth MSMEs and improved access to finance.
This project works with Gargaara to support partner financial institutions to enhance their capacity to serve MSME’s banking capabilities. This is expected to increase capital for MSMEs and support the creation of sustainable quality jobs. As the lead contractor, DT Global provides consultancy and technical assistance to strengthen Gargaara's role in Somalia's financial sector.
This project addresses the challenges faced by women- and youth-led MSMEs in Somalia, who struggle to access capital due to stringent loan conditions, limited grace periods, and a narrow range of financial products tailored for them. Despite their significant role in the sector, these groups remain underserved. The project creates and sustains jobs by improving access to financial services, formalizing and modernizing Somalia’s financial sector, and providing loans based on transparent and economically sound criteria.
To achieve these objectives, the project focuses on:
Procurement and Contract Management: Ensuring efficient and transparent processes.
Establishment and Management of Disposition Funds: Facilitating access to capital for MSMEs.
Capacity Building for Stakeholders: Strengthening the skills of financial institutions and MSMEs.
Implementation, Monitoring, and Evaluation: Tracking progress and impact.
Environmental and Social Monitoring: Ensuring sustainable and inclusive development.
The project supports Somalia’s national goal of increasing women-led businesses registrations to 30% by 2025, fostering economic empowerment and growth.
The key deliverables of the project are:
Development of procurement plan for Gargaara.
Development of operations manual for partner financial institutions.
Procurement and development of Gargaara’s strategic plan.
Capacity building within Gargaara.
Development of Environmental and Social monitoring system.
Development and monitoring of banking and MIS platform.
Establishment and management of disposition fund.
