Source: DGP – RFA – Request for Applications No. M/OAA/GRO/EGAS-DGP-10-001
The DGP will support the following [under the Microenterprise sector of the USAID’s Development Grants Program]:
- Inclusive Financial Markets
- Policy Environment for Micro and Small Enterprises
- Microenterprise Productivity
USAID defines microenterprises as small-scale, often informally organized business activities undertaken by poor people with 10 or fewer workers including the microentrepreneur and any unpaid family workers. USAID supports three types of activities:
(1) improving access to financial services tailored to the needs of poor households, including credit, deposit services, insurance, and remittance and payment services;
- Increasing access to financial services among rural and remote populations. This may include, but is not limited to, credit, savings, insurance, remittances and payment services, such as sustainable, demand-driven mobile banking services;
- Developing appropriate products for the more vulnerable segments of the population which may include some of the examples listed above;
- Forging strategic partnerships with non-financial players to provide value-added services;
- Facilitating increased linkages between remittances and microfinance services like savings, insurance, or credit; and
- Increasing access to financial services in conflict and post-conflict environments.
(2) enterprise development, to improve productivity and market potential for microenterprises, and
- Facilitate links between microenterprises and larger firms, enabling or strengthening microenterprise participation in the value chain;
- Promote various forms of upgrading in the value chain through strategic direct technical assistance, expanded access to appropriate finance and other supporting services, and improved relationships between buyers and sellers, at both domestic and international levels;
- Support formal or informal linkages among microenterprises to agglomerate products for sale, add value, or increase bargaining power;
- Address financing constraints that limit microenterprise participation in value chains; and
- Adapt value-chain programming for conflict and post-conflict affected countries.
(3) strengthening the enabling environment through efforts to reduce regulatory, policy and administrative barriers that limit the opportunities of micro- and small firms. Since 2001, USAID has promoted an integrated approach to microenterprise development that reflects the inherent inter-connectedness between each of the Agency’s three microenterprise technical pillars.”
- Enabling environment and institution-level interventions for financial services might include:
- Advising central bank regulators on policies and regulations that promote competition, innovation, and financial inclusion;
- Building the capacity of national networks to advocate for reform;
- Strengthening the supervisory capacity of regulatory bodies;
- Continuing to support the further development of industry standards, such as ratings initiatives and credit bureaus, to increase financial transparency;
- Proposing innovative solutions, supported by appropriate regulation, to help close the “quality gap” in microfinance services by shifting focus away from increasing an MFI’s number of clients to focusing on the quality and range of services provided by the MFI; and
- Supporting initiatives that promote inclusion of Corporate Social Responsibility and Global Reporting Initiative principles.
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