Matching Grant Facility to Promote Business Development Service Providers in Lebanon

In January 2016, the Lebanese Ministry of Economy and Trade (MoET), Kafalat1, and the World Bank Group (WBG) launched a matching grant facility to improve the capacity of business development service (BDS) providers to prepare start-up firms to access early stage equity financing. Supported programs can be synthesized across three categories: a) expanding the ambition and scope of existing entrepreneurship support programs, particularly for women and youth, and b) improving data and technology platforms; and c) expanding new channels of investment for entrepreneurs.Out of the six applications, five were considered to have satisfactorily achieved stated results framework. The matching grant facilitated over 650 participants in various training and workshops with 270 Micro, Small, and Medium-Sized Enterprise (MSMEs) receiving capacity building services.There were explicit linkages to mobilizing early stage equity finance for young companies. The matching grant program helped reinforce financing and advisory support provided by the WBG and other donors to Lebanese authorities.Key success factors in the scheme include credible, responsive, and trusted implementing partners (Kafalat and MoET) able to effectively supervise the scheme and troubleshoot where necessary.The grant facility design explicitly encouraged informed risk-taking in technical design of proposals.With regards to points of improvement, further funding cycles of the matching grant should consider more specialized tracks, including more distinct funding windows for various regional and sectoral strategies.While the facility benefitted from Kafalat’s extensive knowledge of the early stage equity ecosystem as well as an industry launch event, more could have been done to ensure applications and interest from smaller organizations outside of Mt. Lebanon area.The program could have benefitted from explicit linkages with financing sources to ideally combine training/incubation with next stage funding opportunities.