|
|
|
|
|
|
|
|
|
|
  |
 |
  |
Center For Economic Growth and Agricultural Development
>> Return to Home Page >> Central Programs >> Global Programs >> Economic Growth and Agricultural Development ACTIVITY DATA SHEET
PROGRAM: Central Programs
TITLE AND NUMBER: Access to economic opportunities for the poor expanded, 933-010*
STATUS: New
PROPOSED FY 2002 OBLIGATION AND FUNDING SOURCE: $5,050,000 DA
INITIAL OBLIGATION: FY 1995; ESTIMATED COMPLETION DATE: FY 2010Summary: The Global Bureau Center for Economic Growth and Agricultural Development (the Center) will expand its search for approaches that will facilitate the participation of poor people in the broader processes of sustainable economic growth. We will undertake programs that afford poor people greater access to meaningful opportunities to increase their incomes, raise their standards of living and/or reduce their vulnerability to economic downturns and earnings shortfalls.
The Center's strategic approach to achieve these results will be to: fund innovative, poverty-reducing programs that deliver sustainable and replicable financial and business development services to microentrepreneurs and small businesses; identify and disseminate best practices for service delivery in poor countries and middle-income countries with high concentrations of poverty and of populations vulnerable to food- and health-insecurity; and foster policy and institutional innovations that will support Mission policy dialogues with host-country government and civil society organizations in an effort to assure that economic opportunities are available to all. These efforts will lead to policy frameworks to spark and sustain economic growth and generate increased economic opportunities for the poor.
The Center's program will target business constraints to productivity and devise ways to lower risks that could threaten the micro- and small enterprises' survival. The program will also tackle policy and institutional constraints inhibiting poor peoples' access to the economic opportunities that will help them permanently escape poverty. Finally, the program will continue to use the credit tools pioneered under the Micro and Small Enterprises Development (MSED) program to expand the supply of loanable capital for micro- and small entrepreneurs.
Key Results: Past results of the Agency-wide Microenterprise Initiative have been impressive, especially in extending microfinance services. In FY 1999, a record 4.5 million poor clients, 2.5 million in Indonesia alone, had active loans from USAID-supported institutions. The loans were valued at $1.5 billion. Sixty-nine percent of the two million borrowers outside Indonesia were below the Congressionally designated line for poverty lending -- $300 in Africa, Asia and the Near East, $400 in South America and the Caribbean, and $1,000 in Europe and Eurasia. Women currently constitute 70% of worldwide micro-finance clients. Loan repayment rates average 95%.
In the future, microfinance activities will emphasize expanding the number of sustainable intermediaries assisted, expanding their client base to include more and poorer clients, and broadening the range of services (insurance, savings, transfers, etc.) they provide to clients. In the business development services (BDS) area, efforts will focus on energizing BDS markets to provide more and better services to smaller enterprises and poorer entrepreneurs in both urban and rural areas. This should result in increased household incomes, employment and assets. Activities will improve the laws, regulations, and public-sector programs that play the greatest role in shaping poor households' economic opportunities.
Performance and Prospects: The program will expand the number of sustainable financial intermediaries that provide loans, savings accounts and other financial services to microenterprises, the self-employed and poor households. During FY 2002, USAID will conduct a series of seminars, evaluations and studies that will help to define USAID's microfinance intervention agenda over the period 2003 to 2010. It will seek ways to open financial markets to the rural poor. The program will use financial technology and automation to reduce transaction costs in service delivery; develop new products (e.g. insurance, more flexible terms) for existing clients and those in disaster-prone areas; and seek alternative approaches to regulation and supervision for larger networks of microfinance institutions.
Complementing its microfinance activities, the program will expand the availability of appropriate business development services (BDS) such as technical and management skills training, marketing services, and productivity-enhancing technology. Priority interventions will strengthen private-sector BDS vendors to better serve the needs of urban and rural microenterprises. The program will promote market research to better understand customer priorities; facilitate new demand-driven services; replicate viable business models for urban and rural service provision; strengthen the cost-effective delivery of BDS through indigenous professional business associations and networks; and increase customer awareness, effective demand and willingness to acquire BDS on a commercial basis. A key priority will be rural agricultural service markets that not only support production but also those value-added enterprises that generate a thriving rural economy.
The program will work to shape the policy and regulatory environment by exploring policy adjustments that are cost-effective, fiscally responsible and politically feasible, but that explicitly encourage the self-help efforts of the poor and expand their access to jobs and incomes.
Possible Adjustments to Plans: There may be opportunities, through the Global Development Alliance, to expand efforts to link the non-governmental microfinance institutions more closely with the larger-scale commercial lending community.
Other Donor Programs: Supported by USAID's leadership, the microenterprise field is continuing to receive substantial attention from donors, international organizations and NGOs. Donors such as the Inter-American Development Bank, the World Bank, Japan, Great Britain, Canada, Australia, and the European Union are increasing their participation in microenterprise development. The Consultative Group to Assist the Poorest (CGAP), a multi?donor effort that USAID founded, now numbers 27 donors and has established a strong program of global microenterprise development. USAID is now spearheading creation of a CGAP working group on market research and product development and is in the lead to establish donor coordination through CGAP to strengthen African programs. The latter is consistent with the Africa: Seeds of Hope Act. USAID has also played a leadership role in promoting market-driven BDS for microenterprises, coordinating this work through the Donors' Committee on Small Enterprise Development. This effort has resulted in set of draft guiding principles for donor engagement in BDS. Many donors are engaged in complementary efforts to promote better policies and tools, including the World Bank and other multilateral institutions and bilateral agencies.
Principal Contractors, Grantees or Agencies: Implementing partners include non-governmental organizations, credit unions, private firms, banks and others that provide financial and business services to microentrepreneurs and their families, as well as research and policy institutes engaged in identifying and disseminating best practices and pro-poor policy measures.
* Formerly titled the "Improved access to financial and business development services, particularly to the microenterprises of the poor" in the FY 2001 Budget Justification, Annex V, pages 35-37. The Program has substantially changed.
U.S. Financing
(In thousands of dollars)
Obligations Expenditures Unliquidated Through September 30, 1999 0 DA 0 DA 0 DA 0 CSD 0 CSD 0 CSD 0 ESF 0 ESF 0 ESF 0 SEED 0 SEED 0 SEED 0 FSA 0 FSA 0 FSA 0 DFA 0 DFA 0 DFA Fiscal Year 2000 0 DA 0 DA 0 CSD 0 CSD 0 ESF 0 ESF 0 SEED 0 SEED 0 FSA 0 FSA 0 DFA 0 DFA Through September 30, 2000 0 DA 0 DA 0 DA 0 CSD 0 CSD 0 CSD 0 ESF 0 ESF 0 ESF 0 SEED 0 SEED 0 SEED 0 FSA 0 FSA 0 FSA 0 DFA 0 DFA 0 DFA Prior Year Unobligated Funds 0 DA 0 CSD 0 ESF 0 SEED 0 FSA 0 DFA Planned Fiscal Year 2001 NOA 0 DA 0 CSD 0 ESF 0 SEED 0 FSA 0 DFA Total Planned Fiscal Year 2001 0 DA 0 CSD 0 ESF 0 SEED 0 FSA 0 DFA Future Obligations Est. Total Cost Proposed Fiscal Year 2002 NOA * 5,050 DA 209,800 DA 214,850 DA 0 CSD 0 CSD 0 CSD 0 ESF 0 ESF 0 ESF 0 SEED 0 SEED 0 SEED 0 FSA 0 FSA 0 FSA 0 DFA 0 DFA 0 DFA
 |
|||
Last Updated on: May 29, 2002 |
