Microenterprise Development

Market in Democratic Republic of Congo
In the village of Masimanimba, Democratic Republic of Congo, this woman sets out her wares for the upcoming trading day. USAID projects are working to create the conditions necessary for people like this woman to make a living.
Eve Thompson

Ensuring economic growth is broad based and reduces poverty has become a fundamental development challenge.  In many countries, poor people cannot fully participate in, or enjoy the benefits of, economic growth. 

Poor people, particularly poor women, in the developing world often lack access to safe places to keep their savings.  They cannot obtain credit to start businesses or to grow their businesses or farms. 

The poor often do not have basic services like insurance to protect themselves against drought and natural disasters.  Small and very small firms owned by the poor often have little help in getting access to new technologies or business networks that could improve opportunities to sell their products.

USAID programs enhance poor people’s access to financial services such as savings accounts and credit.  These programs seek to:

  • Improve the quality and affordability of financial services.
  • Extend access to excluded populations such as women, the disabled, and those living in remote areas.
  • Assist smallholder farmers and small business entrepreneurs in selling their products by linking them with buyers and suppliers of good and services. 

These programs also help small businesses access new inputs, technology and services that lead to improved products that bigger businesses are looking to purchase. 

USAID microenterprise programs improve the lives of the very poor, helping them to: recover from shocks such as a flood or death in the family; protect themselves against risks such as illness or drought; and steady home food and family purchases so that they have the ‘breathing space’ that allows them to work to graduate themselves out of poverty.

Additionally, USAID works to broaden microfinancing product offerings to include health, education, and energy, to meet the needs of the mass market.  In USAID's experience, microfinance, when offered with other services, improves household earnings.

Another major area of focus is expanding poor people’s access to financial services through mobile phone technology.  Mobile money services help the poor reduce the cost of banking transactions and have been shown to increase savings.  Along with developing these services, the Agency is working to support a robust regulatory environment to ensure users’ money is not put at risk.

Results achieved include:

  • Connecting smallholder farmers to technology and markets to improve their crop productivity and income.  For example, in Kenya, USAID’s work with 370,000 smallholder farmers nearly quadrupled maize production and significantly increased incomes.
  • In partnership with the Bill and Melinda Gates Foundation, USAID is working to extend mobile financial services to remote areas in Haiti.  As of December 2011, the partnership has connected more than 500,000 people living in rural communities to financial services via their mobile phone.

USAID supports the award winning Microlinks website which hosts a number of innovative, interactive learning tools and events, as well as thousands of resources on microfinance and microenterprise development.  Microlinks also serves as USAID’s principal means for linking to the global community of development partners.

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