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Republic of Yemen

Social Development Fund 

 

Loan No.: 350 Interest Rate: 3.0%
Beneficiary: Social Development Fund Grace Period: 7 years
Project Cost: KD 24.3 million Maturity: 25 years
Amount of Loan: KD 6.0 million Repayment: 37 semi-annual installments
Date of Loan Agreement: 07/05/1998 First Installment: 7 years following the first disbursement
Date of Effectiveness: -    

 

Objectives:

The project aims at the following:

  1. Alleviating poverty and unemployment through the creation of new job opportunities and enhancing social development by financing secondary projects in the area of infrastructure and services in order to benefit urban and rural areas and to enhance the living standard in these areas.

  2. Providing loans to production and service-oriented small and micro projects with an economic or social impact.

  3. Providing technical and institutional support to the Social Development Fund, other institutions implementing social development projects, small and micro projects, and labor- intensive activities.

Description:

The project, which is expected to be completed by the end of the year 2003, includes the following components:

  1. Social Development: Providing grants to local societies and NGO's in order to implement secondary projects, develop the infrastructure for local communities, improve health and educational conditions in these communities, and support training programs for workers.

  2. Small and micro projects: Providing secondary loans: (1) through financial institutions to individual investors in order to implement secondary projects establishing and expanding small corporations with between 5 and 100 workers and (2) through NGO's to individual project owners in order to implement secondary projects establishing micro projects with no more than 5 workers.

  3. Institutional Support: 

  1. Providing financial and technical support to develop and upgrade the Social Fund's institutional capabilities in order to enable it to implement the project.

  2. Supporting the NGO's, cooperatives, communities and the establishment for the design and implementation of: 1) small-scale developmental activities, 2) sustainable small establishment programs, 3) sustainable micro projects and 4) labor- intensive civil works.

  3. Preparation of studies related to the project's objectives.

Financing:

The Arab Fund loan represents 25% of the total cost. Other co-financiers include IDA with a loan of KD 9.1 million, the EU with a grant of KD 5.2 million and the Dutch Government, which is expected to contribute KD 2.5 million. The beneficiaries will contribute KD 1.3 million and the Yemeni Government, KD 0.2 million. The Yemeni Government will also finance the other costs should the need arise.

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