The Third Small and Medium Industry Bank Project will be used to help cover the foreign exchange requirements of subprojects to be financed by SMIB over the next two years. Apart from direct imports, the proceeds of the loan will be utilized by SMIB to finance the foreign exchange components of domestically produced capital goods (estimated at 60%). In order to ensure that a reasonable proportion of the loan will be directed towards small, labor-intensive projects, it is intended that $25 million of the proceeds of the loan be earmarked to finance: (a) enterprises with fixed assets not exceeding $300,000, or (b) projects generating employment at a fixed investment cost per job not greater than $8,500. The Third Small and Medium Industry Bank Project will assist SMIB in its efforts to support the Government's policy of increasing the regional dispersal of employment opportunities and of deepening the industrial structure. It will also assist SMIB in continuing its support of projects which will complement large-scale manufacturing enterprises through extensive subcontracting arrangements. There are no special risks associated with the project.