Private Enterprise and Financial Markets > Micro, Small and Medium Enterprise
Microenterprise Development Strategy
By SDS/MSM (02/97, MIC-103, En, Es)
This strategy (GN-1938-3) was formally considered by the Board of Executive Directors and the management of the IDB on February 19, 1997.
This document puts forward the rationale, objective and main components of the Bank's microenterprise strategy. It outlines the problems that the Bank is seeking to address, the strategic directions for Bank investment and other activities in the sector, and presents a concrete program of action to carry out the strategy over the next five years.
Objective
The overall goal of the Bank's Microenterprise Development Strategy is to expand economic opportunities in Latin America and the Caribbean through sustainable, dynamic microenterprise development. The objective is to promote the conditions necessary for the growth and development of the microenterprise sector in the region: a favorable policy and regulatory environment; strong, sustainable institutions providing financial and nonfinancial services to meet the demand of microenterprises; improved access of low-income and disadvantaged microentrepreneurs (including women and indigenous peoples) to financial and business services; and expanded, continuous and permanent flows of resources for investment in microenterprise.
Strategy
A five-year program, MICRO 2001, will promote policy and regulatory reform to create an enabling environment for microenterprise development, and support the creation and strengthening of formal and nonformal institutions that provide business development and financial services to microenterprises on a sustainable basis. Particular attention will be given to strengthening institutional capacities to provide services to low-income and disadvantaged microentrepreneurs efficiently and effectively. A key element of the strategy is the use of Bank resources to catalyze the infusion of private investment in microenterprise development by linking NGO and commercial investors and promoting the formalization of microenterprises. The strategy for microenterprise development will be tailored to the situation of each country, based on a comprehensive analysis of obstacles and opportunities that confront the microenterprise sector in the country, and the adoption of mutually reinforcing actions in the areas cited above.
Implementation
The Bank's main operational instruments for supporting microenterprise development ? the Small Projects Program for non-profit organizations, and the global loans for microenterprise which create facilities to transfer resources to financial institutions ? will be central to the Bank's Program, but will require modifications to make them more effective in the current environment. Technical cooperation within these operations, and as separate operations, will directly support institution building and policy reform. The Multilateral Investment Fund will utilize innovative mechanisms such as equity investment to develop intermediaries providing services to microenterprise. The Bank will promote policy and regulatory reform through its programming process, research and dissemination activities and sectoral operations.
Resources
Since 1990, the Bank has financed 471 microenterprise operations for a total of US$452 million. During the period of implementation of the MICRO 2001 program, the Bank will increase its investment in microenterprise development, to the equivalent of US$500 million over five years. The Bank will develop this Program primarily using its own funds (mainly Ordinary Capital and Net Income of the Fund for Special Operations in Local Currency) and the Multilateral Investment Fund. Concessional funding will be more res-tricted than in the past.
Organization
A Microenterprise Network, coordinated by the Bank's Microenteprise Unit (SDS/MIC)will promote the strategy's implementation by facilitating sharing of information, experiences and technical know-how; technical assistance for projects; training activities and coordination between IDB and other organizations working in this field.
Last updated: 06/13/07
