USAID Recognized for Microfinance Program in Haiti
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2003-063
FOR IMMEDIATE RELEASE
July 14, 2003
Contact: USAID Press Office
WASHINGTON, DC - The Consultative Group to Assist the Poor (CGAP), the microfinance arm of the World Bank, has chosen the US Agency for International Development (USAID) to be recognized in its Microfinance Donor Good Practices case-study series for USAID's support of the microfinance sector in Haiti. USAID supports this initiative through the Financial Services Network for Entrepreneurial Empowerment (FINNET) project. USAID and its partner, Development Alternatives, Inc., designed the project to build microfinance industry infrastructure, such as credit information exchange mechanisms and external audit services, and to improve information flows, networking opportunities, and coordination within the industry. The goal is to expand access for low-income entrepreneurs to these services.
In Haiti, interest rate ceilings designed to protect poor people actually deterred banks from making loans to poor entrepreneurs. FINNET "gave a jump start to the microfinance industry," according to CGAP Director Elizabeth Littlefield. Making market interest rates for microlending a precondition for assistance transformed loans to poor people into a competitive commercial niche. Targeting technical assistance to the most promising microfinance institutions helped build their capacity and lay the foundation for the broader industry.
"The program in Haiti is just one example of how USAID missions around the world proactively develop diverse financial services for poor entrepreneurs and their households," says Kate McKee, Director of Microenterprise Development at USAID. "FINNET demonstrates the value of a broad, industry-building approach. Microenterprise development programs from Armenia to Morocco to Uganda are expanding poor people's opportunities, helping microenterprises integrate into formal economies and transforming key commercial sectors in which micros are particularly active."
In 2001, USAID's microenterprise funding totaled over $158 million. Its partner lending institutions reached 2.9 million clients worldwide, the vast majority of whom were women and the very poor. In addition to making loans, USAID's partners advocate policy reforms on behalf of microenterprise institutions and microentrepreneurs and help business owners gain access to business development services.
CGAP is a consortium of 29 bilateral and multilateral donor agencies that support microfinance and seek to improve the capacity of microfinance institutions to deliver flexible, high-quality financial services to the very poor on a sustainable basis, including the Australian Agency for International Development (AusAID), the U.K. Department for International Development (DFID), and the U.N. Development Program. The CGAP Donor Good Practices case studies highlight examples of donor good practices in microfinance. The case studies, designed to draw out lessons on how donors' decisions and actions contribute to successful projects, can be found on-line at http://www.cgap.org/direct/resources/case_studies.html.
The U.S. Agency for International Development has provided economic and humanitarian assistance worldwide for more than 40 years.
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