Announcement of Artisan and Small and Medium Scale Enterprise Project in Upper Volta on December 23, 1977

-Norld Bank 1818 H Street, N.W., Washington. D.C. 20433, U.S.A. • Telephone: (202) 393-6360 IDA NE\~S RELEASE NO. 78/29 DECEMBER 23, 1977 ARTISftN AND SMALL AND MEDIUM SCALE ENTERPRISE PROJECT IN UPPER VOLiA The International Development Association (IDA), an affiliate of the World Bank, ~as approved a credit of $4 mi Ilion to the Republic of Upper Volta, to help finance a project for artisans and small and medium scale enterprises. Three of Upper Volta's primary institutions - the beneficiaries of the project - are forming a committee to ensure coordination of the activities envisaged. The National Development Bank (BNO) wi 11 ~e provided with a line of credit by the Government to finance medium and Jong term investments in manufacturing, construction and agro-industries. Upper Volta's Office for the Prorrotion of Enterprises (OPEV) and the National Center for Rural Artisans (CIPAR) will be expanded and provided with in- creased technical assistance in support of artisans and entrepreneurs. Upper Volta is one of the world's most rural economies, with over 90 percent of its labor force working in the primary sector. The country's economy is facing a number of d velo~ment constraints, and extreme deprivation is causing an acceleration in rural-urban 7 , , g rat I on • . _ • In spite of the limited potential for industrialization, there are feasible possibi li- ties for industrial deve1oprr.ent and employment creation, which the present project seeks to exploit. In addition to the provision of technical assistance, the project provides credit for small and medium scale investments for manufacturing, and services for the local market. Other features include the expansion and diversifying of training opportunities for entrepreneurs and an enlarg~d credit-in-kind program in support of rural and urban artisans. lmpleml!?nting organizations include the Banque Nationale de Developpement (BND), B.P. 148, Ouagadougou, Upper Volta, a majority Government-owned bank which provides commercial banking services as well as financing for industry, agriculture and housing. The other implementing organizations a re OPEV, B. P ~· 94, Cuagadougou, Upper Vo 1ta, and CNPAR, B.P. 367, Ouagadougou, Upper Volta. The provision of financial and technical support is designed to generate off-farm employment .. Artisans, entrepreneurs and their employees will benefit under the project which is exp~cted to create some 750 jobs in the modern sector and about 1,500 in the trad it i ona 1 sec tor. The $4 million credit to the Republic of Upper Volta is for a 50-year term, including 10 years of grace. It is interest free but will carry a service charge of! 3/4 of one percent to cover IDA 1 s administrative costs. The Governrrent wi 11 re lend $2. 7 mill ion of the proceeds of the credit to-6ND at 7.9%, for 15 years including 3 years of grace . The on-lending rate to sub-borrowers wi 11 be 11.5%, with flexible te~ms of a maximum of • 15 years and a minimum of 2 years. NOTE: Money figures are expressed in U.S. dollar equivalents.