PEM is completing an exit assessment and impact evaluation of the European Union’s (EU’s) support to the Nordic Horn of Africa Opportunities Fund (NHAOF), commissioned by the Impact Fund Denmark (formerly IFU). The Fund provides Sharia-compliant loans to small and medium-sized enterprises (SMEs) in Somalia— where access to capital remains extremely limited and the business environment poses significant challenges. The Fund seeks to foster local economic growth through private sector development, improve access to essential goods and services, create jobs and income-generating opportunities, and promote gender equality, with a particular focus on empowering women-owned and youth-owned enterprises.
PEM’s evaluation assessed the Fund’s impact, efficiency and effectiveness, with special attention given to development outcomes and beneficiary experiences, the Fund’s contribution to observed changes, potential risks and unintended effects, its influence on Somalia’s financial markets, and the additional value created—especially at the enterprise level and in terms of employment. Gender and youth inclusion were central themes throughout the evaluation process. The evaluation findings offer valuable lessons and recommendations for Impact Fund Denmark, the EU and other development partners considering further support for SME finance in Somalia or similar fragile and conflict-affected contexts.