Linking the Poor to Opportunity: The Microenterprise Development Initiative

This paper describes US Agency for International Development's (USAID) microenterprise development strategy. It also includes highlights of the USAID support to microenterprise development in the financial year 2001.

The paper states that USAID is committed to pursuing a strategy that reflects the most pressing needs of the microenterprise development field. The approach focuses on:

• Linking microenterprises to greater opportunities for growth;
• Bringing the benefits of microfinance and business development services to poorer enterprises and households.

The paper details activities of USAID regarding three building blocks for successful microenterprise development:

• Microfinance
  • Scaling up microfinance programs;
  • Reaching out to poorer;
  • Improving the quality of services;
  • Accomplishing sustainable impacts.
• Business Development Services(BDS)
  • Back up services that increase microenterprise income;
  • Encouraging suitable services for poorer clients;
  • Supporting sustainable markets.
• Enabling environment for microenterprises
  • Reforming government laws, policies, and regulations.

The paper highlights the USAID-support to microenterprise in 2001:

• Financial support of $155 million;
• Benefits extended to 800,000 micro enterprises from the BDS programs;
• USAID supported MFIs offering innovative services;
• Major portion of funding directed to very poor entrepreneurs.

The document concludes by suggesting that:

• Both microfinance and BDS are financial tools that improve the microentrepreneurs, businesses and organizations that serve them;
• USAID is helping to build stronger, more democratic societies through its commitment to microenterprise development.