MENA Transition Fund Application Form

Date of Submission to Coordination Unit: January 25, 2013

A. GENERAL INFORMATION

1. Activity Name

Strengthening micro-entrepreneurship for disadvantaged youth in the informal sector

2. Requestor Information
Name: Mr Nizar Baraka Title: Minister of Economy and Finance
Organization and Address: Ministry of Economy and Finance, Mohammed V Avenue, chellah, Rabat
Telephone: 00212 5 37 76 06 61 Email: minister@finances.gov.ma

3. Recipient Entity
Name: Mr. Mohammed Ouzzine Title: Minister
Organization and Address: Ministère de la Jeunesse et des Sports, Avenue Ibn Sina – Agdal, Rabat
Telephone: 00 212 5 37 68 00 28 Email: ouzzine@mjs.gov.ma

4. ISA SC Representative
Name: Junaid Ahmad Title: Sector Director, MNA Sustainable Dev.
Department
Organization and Address: World Bank, 1818 H Street NW, Washington, DC 20433
Telephone: +1-202-458-8470 Email: Jahmad@worldbank.org

5. Type of Execution
√ Type Endorsements Justification
√ Country-Execution Attach written
endorsement from
designated ISA
Joint Country/ISA-Execution Attach written (Provide justification for ISA-Execution)
endorsement from
designated ISA
ISA-Execution for Country Attach written (Provide justification for ISA-Execution)
endorsement from
designated ISA
ISA-Execution for Parliaments Attach written
endorsements from
designated Ministry

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 and ISA

6. Geographic Focus
Individual country (name of country): Morocco
Regional or multiple countries (list countries): n/a

7. Amount Requested (USD)

Amount Requested for direct Project 5 million
Activities:
Amount Requested for ISA Indirect Costs: 0,5 million

Total Amount Requested: 5,5 million

8. Closing and Final Disbursement Date

Closing Date: September 30, 2017 Final Disbursement Date: January 31, 2018

9. Pillar(s) to which Activity Responds

Pillar Primary
(One only)
Secondary
(All that apply)
Pillar Primary
(One only)
Secondary
(All that apply)
Investing in Sustainable Growth. X Enhancing Economic Governance. X
This could include such topics as This could include areas such as
innovation and technology policy, transparency, anti-corruption and
enhancing the business environment accountability policies, asset recovery,
(including for small and medium-sized public financial management and
enterprises as well as for local and foreign oversight, public sector audit and
investment promotion), competition evaluation, integrity, procurement reform,
policy, private sector development regulatory quality and administrative
strategies, access to finance, addressing simplification, investor and consumer
urban congestion and energy intensity. protection, access to economic data and
information, management of
environmental and social impacts,
capacity building for local government and
decentralization, support for the Open
Government Partnership, creation of new
and innovative government agencies
related to new transitional reforms,
reform of public service delivery in the
social and infrastructure sectors, and
sound banking systems.

Inclusive Development and Job X Competitiveness and Integration.

Creation. This could include support of This could include such topics as logistics,
policies for integrating lagging regions, behind-the-border regulatory
skills and labor market policies, increasing convergence, trade strategy and
youth employability, enhancing female negotiations, planning and facilitation of
labor force participation, integrating cross-border infrastructure, and
people with disabilities, vocational promoting and facilitating infrastructure
training, pension reform, improving job projects, particularly in the areas of urban
conditions and regulations, financial infrastructure, transport, trade facilitation
inclusion, promoting equitable fiscal and private sector development.
policies and social safety net reform.

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 B. STRATEGIC CONTEXT

10. Country and Sector Issues

Despite Morocco’s strong economic performance over the past 10 years, young people have been
disproportionately affected by economic exclusion, with 51% of all 15-29 year olds being out of school
and out of work (World Bank 2012a). This lack of economic opportunities also has serious social
implications, as the inability to gain financial autonomy affects young people’s dignity and ability to start a
family. While unemployment rates are high among the more educated youth, the very vast majority of
young people suffering from a lack of economic opportunities are the low-skilled (69% of all youth have
less than a middle-school degree, and 20% are illiterate). In fact, low-skilled youth represent 63% of all
unemployed youth, and 78% of the discouraged. Girls are particularly vulnerable, with a staggering 82% of
those not in school being out of the labor force either for family reasons (63%) or discouragement (19%).
Moreover, even among those young people who are in employment, over 80% work in the informal sector,
often under precarious conditions. Despite this scenario, most policy interventions in Morocco have to date
focused on a minority of high-skilled unemployed youth, for example through the programs of the National
Employment Agency ANAPEC, while ill serving the less educated majority.

In order to enhance economic opportunities and inclusion, there is an increasing interest among
the government, civil society, and development partners to promote self-employment, including
among youth. While Morocco has maintained the highest rates of micro-credit in the MENA region,
starting and expanding a small business remains a serious challenge, especially for disadvantaged youth.
Obstacles include the lack of access to information, skills, finance, land and property rights, pre-/post-start
up orientation and business development support as well as administrative hurdles. Even where public and
NGO support services for self-employment exist, they are usually targeted to youth with a minimum of
completed middle-school (e.g. OFPPT) or even university level education (e.g. Moukawalati, Fondation
Banque Populaire pour la Création d’Entreprise). School drop-outs and youth working the informal sector,
on the other hand, currently have almost no opportunities to increase their productivity and expand their
existing income generating activities. Therefore, in order to enhance economic and social inclusion,
supporting vulnerable youth in the informal sector and tailoring the design and delivery of training and
enterprise support towards the particular needs of young informal workers has emerged as a key priority
that is currently unmet (see for example World Bank 2011).

11. Alignment with Transition Fund Objective

The proposed technical cooperation project directly responds to the Transition Fund Objective by
launching an innovative delivery sytem to create employment for disadvantaged youth, while also
advancing institutional reform to strengthen the ecosystem of entrepreneurship development services, and
generating new knowledge on self-employment support that will inform ministries, development partners,
and NGOs. As a result, the project is expected to have lasting institutional impact beyond the duration of the
proposed project.

The proposed technical assistance project fosters inclusive development and job creation for
underserved youth in Morocco over the short-and long-term – in line with one of the key pillars of
the Transition Fund. Since job creation for young people is an essential building block to achieving
inclusive, sustainable growth, the project will pioneer an innovative approach to provide low-skilled youth
with first time access to business skills and financial services. By unlocking barriers to entrepreneurship,
the project will contribute to employment generation and higher incomes, while also promoting young
people’s self-confidence and greater trust in institutions. The project will thereby make an important
contribution to enhancing economic and social inclusion, and fill a current gap in public service delivery
which is currently mostly targeted towards young Moroccans with higher educational levels. In addition, by
fostering human capital, facilitating access to finance and strengthening business development services
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targeted at youth-led micro-enterprises in the informal sector, the project is expected to contribute to
increasing productivity among micro-small Moroccan businesses, while encouraging their transition to the
formal economy.

By piloting the implementation of a national youth entrepreneurship program, the proposed

project contributes to advancing key policy and institutional reforms in the area of youth
employment. In particular, the project will create the institutional architecture and stakeholder capacity
to deliver self-employment support services to young people over the long-term. It will allow the Ministry
of Youth and Sports (MYS) become a new player in supporting youth economic opportunities by leveraging
its local youth-targeted services, broadening its outreach to more disadvantaged segments, and
contributing to more effective use of existing delivery channels that better respond to the needs of young
people. In addition, the intervention will strengthen the ability of civil society organizations to provide self-
employment supports services for disadvantaged youth, thereby nurturing the broader ecosystem for
youth entrepreneurship support in Morocco.

The project is expected to generate important new knowledge on how to successfully support
aspiring and existing entrepreneurs in Morocco. As the international evidence on supporting youth
entrepreneurship is still limited, and support to aspiring and existing micro-entrepreneurs from
disadvantaged backgrounds in Morocco is still in its infancy, the project will make an important
contribution to the knowledge base in this field. As such, the lessons learned from the project will not only
inform the MYS, but also other ministries and entities active in youth employment and microenterprise
development (e.g. Ministry of Employment and Professional Training, Ministry of General Affairs and
Governance, INDH), development partners, as well as local and international Non-Governmental
Organizations (NGOs). To this end, monitoring, evaluation and knowledge sharing will be a priority of the
project.

12. Alignment with Country’s National Strategy

The proposed project to strengthen micro-entrepreneurship for disadvantaged youth in the

informal sector responds to the high level directions outlined by Morocco’s 2011 Constitution that
calls for the “expansion of youth participation in social and economic development.” It also follows the
Government declaration of January 2012 that made improving the well-being of youth a national priority
and the King’s speech of August 2012 which highlighted the need for integrated and inter-sectoral
approaches to address the needs of young people, including improved access to employment.

The proposed project benefits from strong country ownership following an official request by the
Government of Morocco for Technical Assistance from the World Bank (letter from the Ministry of
Governance and General Affairs (MAGG) received on November 5, 2012) to support the implementation of
a new self-employment project targeted at disadvantaged youth through community-based services. A core
priority for the Ministry of Youth and Sports, the proposed project is a key component under the new
Integrated National Youth Strategy (also supported by the World Bank) that is currently under
development and aims directly at supporting the Strategy’s implementation. The National Strategy
identifies youth with lower levels of education (secondary or less) as a priority target group, and
strengthening youth economic opportunities a strategic axis of intervention. Hence, the proposed project
seeks to address the urgent need of providing job opportunities for disadvantaged youth while also
informing future reforms of publicly provided community-based services (e.g. MYS, Entraide Nationale,
INDH) to improve economic opportunities through self-employment.

The project is closely aligned with key national and sectoral initiatives seeking to strengthen
income-generating activities and very small enterprises. Through its focus on non-financial services,
the project naturally complements the second phase of the National Human Development Initiative (INDH,

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2011-2015) which seeks to expand income-generating activities and improve their viability. Concurrently,
the project supports efforts articulated in the National Strategy for Very Small Enterprises developed by
MAGG, which emphasizes formalizing informal enterprises and strengthening the availability of non-
financial support services to small businesses at the local level.

Finally, the proposed project is also fully aligned with the current World Bank Country Partnership
Strategy (FY10-13) and its recent progress report, highlighting the need for stepped up WB engagement
to address cross-sectoral issues, particularly strengthening inclusion of youth and women (under Pillar 2
“Service Delivery to Citizens”).

C. PROJECT DESCRIPTION

13. Project Objective

The overall development objective of the proposed pilot project is to increase the skills,
productivity and income potential of today’s and tomorrow’s underserved youth in peri-urban and
rural areas, by testing cost-effective and scalable market-based solutions to strengthen micro-
entrepreneurship opportunities, and to build the institutional infrastructure for future interventions in
this area.

Specifically, over the course of four years, the proposed project seeks to provide 5000
disadvantaged young men and women between the ages of 15-29 years with access to business
development services.1 In addition, the project focuses on: a) strengthening the institutional capacity of
national and local stakeholders to provide assistance to youth in starting and growing their micro-
enterprises; and b) supporting rigorous learning about the effectiveness of comprehensive self-
employment support to disadvantaged youth in view of facilitating an informed scaling-up.

Through its strong focus on capacity building, the project will benefit public officials at the central and
provincial level who are part of program delivery as well as youth professionals in implementing NGOs and
facilities of the MYS (Youth and Women Centers), INDH (community animation teams), and Entraide
Nationale (vocational training centers). Lessons from this project will inform the National Youth Strategy
and the National Strategy for Very Small Enterprises, as well as potentially offer scalable approaches to
address youth-oriented economic empowerment. As such, the project is expected to provide the foundation
for a nation-wide program to support youth self-employment locally.

14. Project Components

To achieve its objectives, and in line with Morocco’s ongoing regionalization efforts that seek to
strengthen sub-national service delivery, the proposed project will adopt a locally-based approach
to provide non-financial support services to young informal sector workers and other disadvantaged
youth along the life-cycle of a micro-enterprise, thereby enhancing their ability to access existing financial
services and increase the viability of their income-generating activities. Specifically, the locally-based
approach involves bringing together local civil society champions (NGOs and Community-Based
Organizations (CBOs)), private sector players and local governments with the relevant public sector
institutions that have a strong local presence, such as the MYS (through its “Maisons de Jeunes” and “Foyers
Féminins”), Entraide Nationale (through its “Centres d’Education et Formation” and “Centres de Formation

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Similar projects in other countries have an average cost per beneficiary between US$500-2000. Taking into account start-
up costs, institutional capacity building and impact evaluation costs of the proposed project, an approximate unit cost of
$1000 is envisioned. This cost is expected to fall below US$800 after the pilot period as institutional arrangements will be in
place and capacity building and other costs no longer needed.
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par Apprentissage”), and INDH (through its community animation teams). In doing so, the project will
foster local public-private-NGO-partnerships that can provide the integrated support model at local level
tailored to young people, thereby addressing the multiple barriers young people face to start and expand
their income-generating activities. More broadly, this support model aims at ensuring that youth services
become more appealing to young people than those currently offered, which rely predominantly on public
providers.

The project’s geographic scope would include four target regions of Morocco following the
government’s demand for cross-country coverage, i.e. Agadir (South), Oujda (East), Tangier (North),
and Fes-Meknes (Center). Within those regions, the project will select a subset of communes and
neighborhoods targeted by the INDH on the basis of poverty and youth exclusion, that respond to the
following additional criteria : a) demonstrated market potential, based, for example, on priority sectors
defined by the Regional Investment Centers (CRI) and Regional Artisan Plans (PRDA), and b) locations with
a conducive enabling environment, i.e. the presence and capacity of local civil society, private sector and
microfinance organizations (e.g. Al Barid Bank), as well as relevant public institutions (i.e. MYS, Entraide
Nationale, provincial governments, etc.).

COMPONENT 1 : Integrated micro-entrepreneurship support for disadvantaged youth

This component provides a menu of non-financial support services designed to facilitate the start-up and
expansion of local youth-led micro-entrepreneurship. These services will be calibrated to fit the
heterogeneous needs of youth at the local level and streamlined during the early stages of the project.
Specific delivery arrangements will be made to ensure the participation of young girls (e.g. through female
only groups). The project will benefit disadvantaged youth, such as those i) with secondary education or
less, ii) working in the informal sector, and iii) unemployed or discouraged.

The component will be implemented under the coordination of the Ministry of Youth and Sports through
carefully selected local implementing organizations, including community-based organizations, NGOs, and
private sector providers, who will be responsible for delivering the self-employment support services
locally needed. Necessary equipment will be provided by the project to ensure service delivery to a critical
mass of beneficiaries.

Sub-Component 1.1) Market assessment

Private sector providers will carry out local/regional market assessments to identify the key sectors
offering promising livelihood opportunities (as well as saturated markets), constraints of existing
businesses and trades, and possibilities for creating new and upgrading existing micro-enterprises — for
example, by fostering value chain integration or exploring stronger distribution channels. The assessments
will guide the business development support services, allowing them to specialize in strategic sectors and
professions. The assessments will also allow identifying opportunities for non-traditional economic
activities, especially for women, thereby broadening the scope for income-generating activities beyond the
traditional sex-stereotypes that tend to restrict employment and income opportunities for women. In
addition, a rapid local community appraisal will help identify local youth needs and existing community-
based institutions which can be leveraged to attract youth and offer the required services.

Sub-Component 1.2) Entrepreneurship training

Local implementing organizations (e.g. CBOs, NGOs, private sector) will provide a combination of skills
needed to start and grow a business, including:
a) Financial literacy (how to manage money and the use of financial services, such as savings and
credit),
b) Behavioral and life skills (communication, goal setting and achievement, decision making, etc.), and

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 c) Business skills (market research, budgeting, etc.).

As part of the training, the project will also orient beneficiaries in the start-up/expansion process, in
particular by preparing them to apply to local microfinance institutions (MFIs) and existing grant
mechanisms such as INDH.

Sub-Component 1.3) Post-creation business development support

A sub-set of participants will be eligible for ongoing business development services from local
implementing organizations to help them sustain and grow their business (see beneficiary selection further
below). The business development support will entail a subset or combination of the following services,
based on the needs of the sector, product, and trade. These will include:

a) Coaching/mentoring for 12-24 months after a project receives financing,

b) Access to physical space that can be used by for production and/or distribution by a group of
micro-entrepreneurs within a same sector,
c) Product development & quality control to assist with improving production and service, and
d) Supporting access to markets by supporting youth-led businesses in increasing their exposure and
expanding their distribution networks, integrating or moving up local value chains, and accessing
new distribution channels.

The project will take targeted measures to encourage significant female participation in the
program. First, the project will directly target female participants of the MYS’s “Foyers Féminins”, and
students of the Entraide Nationale’s female-only “Centres d’Education et Formation” as well as its “Centres
de Formation par Apprentissage” which have a strong female participation in areas of training of
traditional female occupations. In addition, the project will offer girls-only training by female trainers as
needed and engage with female mentors for female entrepreneurs. Other measures include targeted
outreach to young women and their families (parents, husbands), flexible training hours to accommodate
household responsibilities, and possible support for transportation and child-care arrangements. Finally,
the project will benefit from the outreach capabilities of INDH’s community animation teams that already
have established relations and experience in targeting female-focused community associations (see
partnerships section).

Beneficiary selection will be based on a 3-stage process. The first stage will be a pre-screening
consisting of trust-building and training activities over a one week period (boot-camp) to sort out those
who really do want the program from those who do not. Psychometric testing may also be applied to
determine potential entrepreneurial aptitude. In the second stage, those who demonstrate strong interest
during the pre-screening are then eligible for the entrepreneurship training. Finally, a subset of youth will
be selected to receive post-creation support based on the potential viability of their new or existing self-
employment project (third stage). The selection will be based on the project/business plans developed as
part of the training which will be assessed by program staff and members of the local private sector,
including MFIs.

Box 1: Summary of lessons learned from global and national experience

 Global evidence-base: The proposed project is informed by rigorous evidence stemming

from entrepreneurship interventions across the world (Cunningham et al. 2008,
McKenzie and Woodruff 2012; Cho and Honorati 2012). “Comprehensive” programs,
containing an integrated package of training, financing, and ongoing coaching/mentoring,
perform better, since they address the multiple barriers youth are facing in starting or
expanding a business. The project therefore explicitly offers non-financial services while
connecting beneficiaries to existing financial services such as micro-credit. Moreover,
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 program effects tend to be higher when they are implemented through local
organizations, NGOs or the private sector rather than government agencies alone. This
finding suggests that programs work better when delivered by providers which have
strong connection with the beneficiaries and are familiar with local contexts. The project
therefore leverages public-private-NGO partnerships through which local NGOs and
private sector are mainly responsible for the implementation of activities, while the lead
government agency (MYS) provides the enabling environment.

 Experience in Morocco: The proposed activities also incorporate the lessons learned from
the national experience in supporting income-generating activities, especially in the
context of INDH. A study by the European Union and the evaluation of INDH 1 (EU 2011,
World Bank 2012b) have highlighted several limitations of existing efforts, including the
lack of diversification of the projects due to a limited understanding of the market, the
lack of encouraging new production techniques, and limited orientation and follow-up
provided to the projects. Another important lesson is that establishing viable micro-
enterprises takes time and requires continuous support and technical assistance to
beneficiaries beyond the initial set-up stage. The recommendations, including those
regarding better coordination of the institutions involved, the need for in-depth local
market analysis, stronger emphasis on marketing and project profitability, better linkages
to micro-finance institutions, and the need for technical assistance beyond the initial set-
up stage have all been taken into account under the proposed components. Additional
lessons from other projects, such as Foundation Zakoura Microcredit’s “Linking Youth
with Knowledge and Opportunities in Microfinance” project (Conklin et al. 2008) and an
impact evaluation of a micro-credit program in rural Morocco (Crepon et al 2011) have
also been addressed, by providing capacity building services (thereby strengthening
existing service providers), partnering with financial institutions that offer youth-specific
financial services, involving families in program outreach, and including existing
entrepreneurs among the target group.

COMPONENT 2 : Institutional capacity building

This component provides all the auxiliary support services necessary to successfully implement Component 1,
including product and curricula development, strengthening institutional capacity for service delivery, and
capacity building to recipient agencies and local entities. It will also enhance project sustainability by
strengthening stakeholders at the national and local level. The institutional capacity building will be provided
through competitively selected local and/or international service providers (NGO and/or private sector) under
the coordination of the recipient agency and the project management unit.

Sub-Component 2.1) Product/curricula development

Based on national and international training curricula and other micro-enterprise support tools, this
subcomponent establishes minimum standards for the delivery of the services offered under component 1
and support the adaptation of existing materials to make them suitable for the proposed project. It will
further refine and adapt tools and materials that can subsequently be used and adapted in each site of
implementation. The product/curriculum development will be an iterative process, seeking to continuously
integrate the local experience to improve the offered services, and share that experience across
implementation organizations.

Sub-Component 2.2) Institutional capacity building for service delivery

This sub-component provides technical assistance and strategic advice to NGOs and youth-friendly services
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on the local level so that they can deliver the integrated services efficiently and effectively. Based on the
quality standards established for project delivery, it will ensure that staff in implementing organizations is
fully qualified to deliver the support services. This includes capacity building on the content, curricula, and
methods of the training and post-creation support provided, strengthening organizational functions of local
organizations (Budgeting, Reporting, Financing, etc.), and enhancing the capacity of civil servants in Youth
and Women Centers managed by the MYS on outreach and programming.

Sub-Component 2.3) Capacity building to recipient agency and local governments

In order to increase the effectiveness and sustainability of the project, this sub-component will target
public officials at central and provincial levels (especially civil servants of the Ministry of Youth and Sports,
INDH, and provincial governments) to strengthen institutional capacity and enhance overall planning and
management of youth-targeted services. In particular, it will provide training on territorial planning and
outreach of youth-focused programs, support the participation in specialized trainings and workshops on
youth employment and entrepreneurship (such as the ILO’s Training Center in Turin) and support the
integration of lessons for future scaling up, for example through the National Youth Strategy and provicial
development plans.

COMPONENT 3 : Project Management and Monitoring and Evaluation

Sub-Component 3.1) Project Management

A Project Management Unit (PMU) will be responsible for overall coordination and implementation of the
project. Key responsibilities will include national and regional coordination, procurement, financial
management, monitoring and evaluation (M&E), communication and knowledge management, formalizing
partnerships, as well as the selection and oversight of local implementing organizations and service
providers. (see further detail under section 17)

Sub-Component 3.2) Monitoring and Evaluation

This subcomponent will entail all the activities necessary for the monitoring and evaluation of the
proposed project, including the development of a detailed M&E plan, the development of survey
instruments, data collection & analysis, etc. The project’s M&E system will use different types of M&E tools
for different purposes (monitoring, process evaluation, impact evaluation), while generally following a
mixed-method approach. (see further detail under section 18)

15. Key Indicators Linked to Objectives

1. Direct project beneficiaries (number), of which female (number, %), who attend entrepreneurship
training.
2. Direct project beneficiaries (number), of which female (number, %), who receive certification upon
successful completion of the entrepreneurship training, which is based on an evaluation of the
business skills of each participant.
3. Youth micro-entrepreneurs supported by the project who receive post-creation follow-up support
for at least 12 months (number), of which female (number, %).

As part of the monitoring and evaluation system, there will be also be an effort to assess the success and
viability of business activities supported by the project, as well as track income changes of young
beneficiaries and their access to finance as a result of the project.

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 D. IMPLEMENTATION

16. Partnership Arrangements (if applicable)

The project will engage in targeted partnerships to ensure a close connection between the non-financial
services provided through the project and the financial services available through other institutions,
thereby maximizing impact on the ground.

INDH: The project will leverage its complementarities with the provincial INDH grant funds for income-
generating-activities, which represent an important source of financing for project beneficiaries. INDH will
make available its “community animation teams” to reach out to the disadvantaged youth as well as
support the training activities by providing information about the grant program and application
requirements/procedures. INDH also plans to provide in-kind support to the Project Management Unit
through one of its experts on income-generating activities. In turn, INDH will benefit from the project’s
support in the development of strong proposals, follow-up support for youth receiving INDH financing, and
capacity building for local staff. The project will thereby contribute to address current challenges faced by
INDH in supporting income generating activities, namely the lack of a sufficient number of quality
proposals and the limited viability of supported IGAs.

Silatech & local microfinance institutions: The project will also partner with two of Morocco’s key
microfinance institutions (Attawfiq Microfinance and Al Barid Bank) which are supported by Silatech (a
Qatar based social enterprise supporting youth employment and entrepreneurship) in the design of
dedicated youth microfinance products and marketing approaches (youth-specific loan and savings
products) that are expected to be launched nationally in early 2013. The partnership will ensure that
project beneficiaries have access to dedicated youth credit and savings products in combination with the
non-financial services offered through the program.

17. Coordination with Country-led Mechanism/Donor Implemented Activities

At the policy level, the project is a key component of the Integrated National Youth Strategy and aims at
supporting the Strategy’s pillar on strengthening young people’s economic opportunities. The project
further operates within the broader framework of the National Strategy for Promoting Very Small
Enterprises currently developed by the Ministry of General Affairs and Governance (MAGG), and
supported by GIZ. As indicated in the official request to the World Bank for Technical Assistance, the MAGG
has agreed with the Ministry of Youth and Sports that the proposed project should target the less educated
youth who are currently not served by other programs, thereby complementing other efforts targeted at
strengthening the ecosystem for small enterprise creation in the country.

At the program level, the project will coordinate with the World Bank/IFC supported Micro, Small and
Medium Enterprise Technical Assistance Facility to ensure synergies between the capacity building efforts
for MSMEs that involve strengthening entrepreneur networks, mentoring, and business incubator-type
services, and the local entrepreneurship support services to disadvantaged youth supported by the
proposed project. The project will also collaborate with the IFC for the use of their Business Edge tool which
includes 32 modules for soft skills and entrepreneurship training in specific industries, such as tourism.
The tool can be integrated in the entrepreneurship curriculum offered through the program and training of
trainers is available from IFC.

There are several other initiatives on youth entrepreneurship in Morocco that are related to the proposed
project, including the Youth@Work project by the ILO, the AfDB’s technical assistance for the promotion of
young entrepreneurs in agricultre, and USAID’s Enhanced Opportunities for Moroccan Youth program.
Coordination and institutional knowledge sharing with project partners and other key stakeholders active

10
will be ensured through the project’s national and regional advisory committees, which will provide an
outlet for cross-institutional learning and the identification of synergies across public and donor-led efforts
(see implementation arrangements). In particular, the ILO has offered to contribute to the
product/curriculum development phase and become a key partner of the project.

At the program level, the project will coordinate with the World Bank/IFC supported Micro, Small and
Medium Enterprise Technical Assistance Facility to ensure synergies between the capacity building efforts
for MSMEs that involve strengthening entrepreneur networks, mentoring, and business incubator-type
services, and the local entrepreneurship support services to disadvantaged youth supported by the
proposed project. The project will also collaborate with the IFC for the use of their Business Edge tool
which includes 32 modules for soft skills and entrepreneurship training in specific industries, such as
tourism. The tool can be integrated in the entrepreneurship curriculum offered through the program and
training of trainers is available from IFC. Finally, the proposed project is also complementary to the
Morocco Microfinance Development Project (MMDP) that is being proposed for Transition Fund financing.
While the MMDP project seeks to strengthen the enabling environment for micro-finance and financial
inclusion through institutional reforms and market infrastructure, the Strengthening micro-
entrepreneurship for disadvantaged youth project pilots the provision of non-financial business
development services for an underserved target group. The latter can thereby benefit from the stronger
enabling environment for micro-enterprises and, in turn, provide lessons and experiences for the financial
inclusion strategy proposed through MMDP.

18. Institutional and Implementation Arrangements

The Ministry of Youth and Sports will be the responsible implementing agency for the project. As
youth-focused policies and programs in Morocco remain fragmented and suffer from limited reach and
quality, the MYS has been officially tasked with developing an integrated national youth strategy to address
these gaps and improve the efficiency and quality of services targeted to youth, particularly those for
disadvantaged and less educated youth from low-income backgrounds. The Ministry therefore has a strong
mandate to foster youth policy coordination and advance a multi-sector agenda in favor of young people.
Within the MYS, the Directorate for Youth, Children, and Feminine Affairs will be responsible for project
implementation.

A Project Management Unit established within the MYS will be responsible for the overall
coordination and oversight of project activities, including fiduciary responsibilities, such as financial
management and procurement, as well as all monitoring and evaluation. The PMU team will include
specialized consultants assigned to key areas who will work alongside a team of civil servants assigned by
the Ministry of Youth and Sports. In particular, the PMU consultants will include a full time Project
Manager, a communication and gender outreach officer, a procurement specialist, a financial management
specialist, and a monitoring and evaluation specialist.This arrangement will ensure that the project is
implemented effectively while at the same time enhancing the capacity of civil servants of the Ministry to
ensure sustainability.

Four regional antennas will be established to coordinate project activities on the ground. Led by
representatives of the MYS, the regional antennas will be staffed by dedicated consultants to support
project implementation at the local level and hosted by MYS delegations in Agadir, Oujda, Tangier and Fes-
Meknes. The regional teams will articulate and roll out the project at local level with a view to facilitating
the actual implementation of project activities on the ground. Their liaison role will link the national PMU
to representatives of the MYS at Provincial level and the MYS local facilities (see below) as well as the
relevant decentralized agencies in charge of financing micro-business and income generating activities.

At the local level, the MYS will make available to the project its local structures and facilities of

11
“Maisons de Jeunes” and “Foyers Féminins” for outreach and delivery of services, and provide
logistical support (physical space and some equipment) as needed. In addition, the INDH’s community
animation teams can also be leveraged for the project.

Project activities will be largely implemented by NGOs and private sector agencies. For component 1,
the project will competitively select qualified NGO and/or private service providers for each region based
on their track record in working with disadvantaged youth and their expertise in micro-enterprise
development. For component 2, the project will select an experienced institutional partner (e.g.
international NGO or private sector provider) that will provide technical assistance to stakeholders at the
national and local levels.

Advisory groups at the national and regional level will foster coordination with other relevant
stakeholders and enhance cross-institutional ownership of the project. A national advisory group will
be composed of representatives of the private sector, relevant donors and ministries, including for example
the Confederation of Moroccan Enterprises (CGEM), Attawfiq Microfinance Bank, Al Barid Bank,
International Labor Organization, Ministry of Employment and Professional Training, and INDH . This
advisory group will validate the project approach, support institutional mobilization of relevant entities,
and ensure that the project lessons are incorporated by different agencies beyond the life of the project. A
similar arrangement will be pursued at regional level, where advisory groups will be established with
provincial and local authorities, relevant public agencies, business associations, etc.. In addition to
providing an enabling environment for the project, the advisory groups will critically support the
engagement of the private sector for selected project activities (e.g. selection process of business
plans/ideas, mentoring, access to markets).

Implementation Support Agency (World Bank):

The World Bank will provide overall technical support and quality control of the project in order to achieve
the desired outcomes. This will include technical and fiduciary oversight to ensure that the project is
implemented according to the grant agreement and that quality standards for the reporting on activities
and financial transactions are met. The World Bank will further work with the recipient agency and other
entities and partners to forge the institutional reforms necessary to a more effective provision of youth
services, including of the Maisons de Jeunes and Foyers Feminins managed by the Ministry of Youth and
Sports. In this context, the WB will also leverage its international experience to support to the institutional
capacity building efforts targeted at the local governance of youth services. The World Bank will carry out
regular supervision missions and will provide ongoing technical assistance as needed to ensure quality
implementation and impact evaluation. Finally, the Bank will facilitate close coordination with other
relevant sectoral ministries and the WB teams working on related interventions (e.g. INDH Phase 2).

19. Monitoring and Evaluation of Results

The PMU will put in place a robust M&E system to track progress and results. The project is
considered a learning project, making quality M&E a high priority. The project will therefore draw on
several complementary M&E tools in order to i) support project management, ii) ensure accountability, and
iii) foster knowledge generation. The results framework described in Section F provides the key indicators,
targets, and data collection arrangements that will provide the basis for all of the below M&E tools. A more
detailed M&E plan will be elaborated during project preparation. The World Bank will provide targeted
assistance in developing the detailed M&E framework during project preparation and lead the design and
implementation of an impact evaluation. Dedicated capacity building on M&E under component 2 will
further strenghthen M&E capacity at MYS and local implementing organizations.

Monitoring system & Process Evaluation: The PMU, together with the regional antennas, will be
responsible for day to day project monitoring and periodic reporting. Monitoring will be implemented

12
using an ICT tool which allows real-time monitoring of ongoing activities and to evaluate changes of
performance over time. For the capacity building activities under component 2, the project will adopt a
flexible approach including the monitoring of inputs and activities, as well as qualitative and quantitative
evaluations of the training sessions by the participants, in line with best-practice of workshop evaluation.
Standard monitoring will be complemented with targeted periodic assessments to assess the quality and
effective delivery of the services offered. For instance, this may include an analysis of the training content
and the post-creation assistance. These assessments would be carried out by independent consultants at
critical milestones of project implementation, for example after the first year, at mid-term, or when
problems are detected.

Impact Evaluation: An impact evaluation will be crucial to inform program expansion and future policies.
The main evaluation questions of interest relate to the project’s impact on beneficiaries’ income and
viability of businesses, the relative project effectiveness by age, gender, and other socio-demographic
factors, and whether the dosage and delivery method of different activities affect project effectiveness. The
impact evaluation will be carried out by an independent expert/firm who will work with the project team
to ensure that beneficiary selection and other implementation arrangements allow for a rigorous
methodology. The methodology will follow a randomized design which will include a randomization of
registered participants into different treatment arms. The treatment arms will be implemented in a delayed
fashion, following the established pipeline approach. This methodology avoids ethical dilemmas by
providing training to all registered participants while using the implementation of the project in phases to
create temporary comparison groups.

E. PROJECT BUDGETING AND FINANCING

20. Project Financing (including ISA Direct Costs2)

Cost by Component Transition Country Co- Other Co- Total

Fund Financing Financing (USD)
(USD) (USD) (USD)
Component 1: 2.956.400 496.000 3.452.400
(a) Sub-component 1.1: Market assessments 160.000
(b) Sub-component 1.2: Entrepreneurship training 1.481.000
(c) Sub-component 1.3: Post-creation BDS 1.315.400

Component 2: 813.300 - 1.163.300

(a) Sub-component 2.1: Product/curricula 132.000 150.000
development
(b) Sub-component 2.2: Capacity building for service 355.000 200,000
delivery
(c) Sub-component 2.3: Capacity building to recipient 162.000
agency and local government
(d) Sub-component 2.4: Capacity building M&E 164.300

Component 3: 1.043.000 304.000 1.347.000

(a) Sub-component 3.1: Project Management 810.000
(b) Sub-component 3.2: M&E 233.000

Contingencies 187.300 187.300

ISA Indirect Costs 500.000 500.000
Total Project Cost 5.500.000 800.000 350.000 6.650.000

2
ISA direct costs are those costs related to the ISA’s direct provision of technical assistance within the project.
13
Country co-financing will be provided in-kind through the Ministry of Youth and Sports. Contributions
cover time and salaries of provincial youth delegates, office space for the project’s regional coordinators,
the use of 32 youth centers and their equipment, as well as time and salaries for the directors of
participating youth centers.

Silatech will provide co-financing for curricula development and adaptation for Moroccan young
disadvantaged clients as well as capacity building for service delivery of selected modules related to
financial literacy and savings. The latter will be offered through Attawfiq Microfinance and Al Barid Bank.

21. Budget Breakdown of Indirect Costs Requested (USD)

Description Amount (USD)

For grant preparation, administration and implementation
support:
Staff time 250.000
Staff travel 80.000
Consultants 120.000
Consultants’ travel 50.000
Total Indirect Costs 500.000

14
 F. RESULTS FRAMEWORK AND MONITORING

Project Development Objective (PDO): The Project Development Objective is to provide disadvantaged young women and men between the ages of 15-29 years
with access to business development services.

Cumulative Target Values** Data Description

Source/ Responsibilit (indicator
Unit of Frequenc
PDO Level Results Indicators* Baseline y for Data definition etc.)
Measure y
YR 1 YR 2 YR3 YR 4 YR5 Methodolog Collection
y

Direct project beneficiaries Number 0 1000 3000 5000 5000 Quarterly Monitoring Implementin Defined as those
(number), of which female (%) (30%) (40%) (40%) (40%) Tool g who attend
organization entrepreneurship
training.

Direct project beneficiaries Number 0 900 2700 4500 4500 Quarterly Monitoring Implementin Based on an
(number), of which female (270, (1080, (1800, (1800 Tool g evaluation of the
(number, percent), who 30%) 40%) 40%) ,40%) organization business skills
receive certification upon and attendance
successful completion of the of each
entrepreneurship training participant.
(90%)
Youth micro-entrepreneurs Number 0 0 360 1080 1800 Quarterly Monitoring Implementin 40% of the
supported by the project who (110, (430, (720, Tool g certified youth
receive post-creation follow- 30%) 40%) 40%) organization are expected to
receive follow-up
up support for at least 12
support. Target
months (number), of which
for Yr1 is zero
female (number, %). since min. of 12
months of
support can only
be achieved by
2nd year.

INTERMEDIATE RESULTS

15
Intermediate Result (Component One): Youth beneficiaries receive entrepreneurship support services

Direct project beneficiaries Number 0 1200 4000 6000 6000 Quarterly Monitoring Implementin
(number) of which female (360, (1600, (2400 (2400 Tool g
(number, percent) who are 30%) 40%) ,40%) ,40%) organization
pre-identified

Direct project beneficiaries Number 0 900 2700 4500 4500 Quarterly Monitoring Implementin
(number), of which female, (270, (1080, (1800 (1800 Tool g
who complete a business plan 30%) 40%) ,40%) ,40%) organization
Participants who rate the Percent 0% 70% 80% 80% 80% Quarterly Monitoring Implementin
quality of the business Tool, g
development training as Evaluation organization
useful and very useful. Sheets
Beneficiaries who evaluate the Percent 0% 70% 80% 80% 80% Quarterly Monitoring Implementin
post-creation follow-up Tool, g
support as useful and very Evaluation organization
useful. Sheets
Intermediate Result (Component Two): Implementing organizations and public authorities participate in the institutional capacity building

Trained Youth Professionals at Number 0 40 70 90 100 Quarterly Monitoring Implementin

implementing NGOs/CBOs Tool g
providing training and support (50%) (50%) (50%) (50%) organization
to youth, of which female (%)

Public officials at the central Number 0 8 10 15 20 Bi-annual Participation Regional

level trained by the program sheets coordinators
Public officials at the Number 0 10 20 40 50 Bi-annual Participation Regional
provincial level trained by the sheets coordinators
program
Trained officials who rate the Percent 0% 70% 80% 80% 80% Quarterly Monitoring Implementin
quality of the training as Tool, g
useful and very useful. Evaluation organization
Sheets
Intermediate Result (Component Three): Quality project management and M&E in place

16
Timely submission of Yes/No 0 4 8 12 16 Quarterly Project PMU
monitoring reports records

Impact Evaluation carried out Yes/No Baseline Evaluatio Baselin Follo End of Baseline Household Survey Firm,
survey n and e w-up Project Survey Survey Data Principal
survey survey Tracki survey before Investigator
project
design report ng &
start
report

17
References

Cho and Honorati 2012. Entrepreneurship programs in developing countries: A meta regression
analysis. Washington DC.

Conklin et al. 2008. Linking Youth with Knowledge and Opportunities in Microfinance (LYKOM)
Project, Morocco. SEEP Network.

Crépon, B. et al. 2011. Impact of microcredit in rural areas of Morocco: Evidence from a randomized
evaluation. Working Paper.

EU 2011. Etude sur la dynamisation du tissu économique en milieu rural – Maroc. Landell Mills
Development Consultants.

Government of Morocco 2011. Stratégie Nationale de Promotion de la TPE – Rapport final.

Septembre 2011.

McKenzie and Woodruff 2012. What are we learning from business training and entrepreneurship
evaluations around the developing world?

World Bank 2011. Striving for Better Jobs: The Challenge of Informality in the Middle East and North
Africa Region. Washington DC.

World Bank 2012a. Kingdom of Morocco: Promoting Youth Opportunities and Participation.
Washington DC.

World Bank 2012b. Rapport d’achèvement et de résultats pour un projet d’appui à l’Initiative
Nationale Pour le Développement Humain (INDH). Washington DC.

World Bank 2012c. Bread, Freedom and Dignity: Jobs in the Middle East and North Africa. MENA
regional flagship. Mimeo. Washington DC.

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