Recapitalizing Liberia: Principles for Providing Grants and Loans for Microenterprise Development

In previous post-conflict contexts, donors and practitioners have successfully provided grants and loans to affected populations to spur economic growth and reconstruction, promote the sustainable return of refugees and rehabilitate ex-combatants. However, recent experience demonstrates that if the provision of grants and loans is not well-managed, well-intentioned donors and practitioners can undermine the development of a healthy credit culture, delay the transition from relief to development and harm communities in the long run. This note is offered as a practical tool for donors and practitioners working in post-conflict situations to maximise the positive impact from both grant and loan programmes for microenterprise development. These principles, based on emerging best practices from development and post-conflict environments, are designed to promote rapid reconstruction while laying the foundation for economic growth. This note was developed by donors and practitioners for use in Liberia, as a test case to see if cooperation among stakeholders will lead to the proper use of grant and credit interventions.