Microenterprise: Laying the Foundation for Economic Development

This report discusses the critical role of USAID over the past two decades in:

• Creating and advancing an approach that meets the needs of individuals and entrepreneurs for financial and business development services,
• Promoting policy changes that facilitate the creation of an enabling environment for micro enterprise.

The paper argues that USAID's partnerships with U.S. private voluntary organizations (PVOs) and other micro enterprise practitioners have also demonstrated that these services can contribute to poverty alleviation in a commercially viable way.

The report states that:

• In 2002, 568 institutions had active micro enterprise agreements with USAID:
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  • Of these, 440 organizations reported data on their activities, which forms the basis for the findings presented in this report;
  • These 440 organizations included microfinance institutions, business development services (BDS) institutions and policy institutions.

• USAID's support for micro enterprise continues to rise:
  • Funding supports financial services, business development services and enabling environment activities in all four regions in which USAID operates.
• USAID microfinance support combines breadth and depth of outreach with an emphasis on sustainability;
• USIAD continues its strong support to PVOs and other direct service providers.

The report concludes by detailing results from USAID-supported micro enterprise institutions in 2002.