USAID and Microenterprise Development
For the past three decades, support for microenterprise
development has been an important feature of U.S. foreign
assistance. In this era of globalization, generating economic
growth in developing countries while reducing poverty is a
fundamental development challenge. To ensure that the contribution
of microenterprises to key subsectors and national economies
is maximized, and to ensure that the poor are not left out
of market development, micro and small enterprises (MSEs)
need access to finance, business services, and improved inputs;
they also need a conducive enabling environment that facilitates
rather than inhibits their participation in markets. Therefore,
USAID focuses on three areas of strategic support: financial
services, business development services, and enabling environment.
USAID’S Vision for Microenterprise Development
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Repayment Time at a
Crecer Village
Bank Outside of El Alto, Bolivia |
To address these development challenges, USAID provides technical
assistance, training, program strategies and designs, and Mission-tailored
tools to help small producers and firms become established,
grow, and integrate into markets and value chains. This assistance
includes strategies to improve MSEs’ access to sustainable
sources of financial, business, and other upgrading services
needed to meet the demands of new markets, both domestic and
international. USAID offers technical assistance and training
in the areas of microfinance; rural, value-chain, and housing
finance; micro-insurance; remittances; microfinance in post-conflict
areas; value chain and cluster development; and trade and agribusiness
(including backward linkages to small firms and producers).
USAID has been developing an approach to enterprise development
that focuses on integrating micro and small firms into value
chains, while improving their bargaining power and their access
to business and financial services, and addressing their needs
for a conducive enabling environment. The aim of this work is
to enhance these firms’ access to markets and their capacity
to take advantage of market opportunities.
USAID’s vision for microenterprise development involves
addressing the needs of poor people within the context of globalization
and dynamic domestic and global markets to help them harness
the resources they need to participate meaningfully in markets
(often through market linkages to larger firms).
Microenterprise-focused activities are best incorporated
into broader initiatives to ensure that the poor majority
in developing countries benefit from U.S. development assistance.
The microLINKS website hosts a number of innovative, interactive learning tools and thousands of resources to serve a global community of practitioners by helping to link knowledge with practice. Discussion forums, e-conferences, communities of practice and easy access to specialists for problem solving are just some of the resources provided to users.
Please visit www.microLINKS.org to learn more or to share your views and experiences as we continue to deepen our understanding of what works, and broaden our reach to improve the lives of the poor majority through microenterprise development and economic growth.
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