The Multilateral Investment Fund (MIF) of the Inter-American Development Bank, a multilateral financial institution, recently approved grants for two technical cooperation projects in Peru and Ecuador, valued at USD 1.6 million and USD 1.5 million, respectively. In addition, each country will contribute approximately USD 1 million as counterpart financing. Both projects will aim to boost income and employment levels among low-income entrepreneurs, while also incorporating this market segment into private-sector business development.
More than 5,250 micro and small enterprises (MSEs) in Peru and 4,850 MSEs in Ecuador will receive technical assistance and training to enable them to participate in the value chains of seven anchor businesses in each country. The project will be executed by the Peruvian and Ecuadorian offices of SNV Netherlands Development Organization, a Dutch international development organization that aims to reduce poverty and improve governance by providing advisory services to local organizations in developing countries.
This project is one of the first launched by the MIF under IDB’s “Opportunities for the Majority” initiative, which supports business innovations and partnerships focused on improving income and quality of life among Latin America’s low-income communities. According to IDB team leader Daniel Shepherd, these initiatives help create inclusive economic opportunities by promoting market access for the “population at the bottom of the economic pyramid”. For information about this initiative, please click here.
The MIF is an autonomous fund administered by IDB, and is the leading source of technical assistance grants for micro and small enterprise (MSE) development in Latin America and the Caribbean. Since its creation in 1993, it has supported over 1,000 projects valued at over USD 2.2 billion through both grants and investments. The MIF has also contributed to the expansion and professionalization of microfinance in the region. Earlier this month, MicroCapital reported that the MIF granted USD 1.9 million to support microfinance development in the Caribbean.
The IDB is the oldest and largest regional bank in the world, established in 1959 to promote development in Latin America. According to its 2006 year-end financial report. it has total assets of USD 9.53 billion and a equity-to-loan-ratio of 40.8 percent. As recently reported by MicroCapital, the IDB sponsored Standard and Poor’s Ratings Service (S&P) in its pilot ratings program for microfinance institutions (MFIs) in Latin America and the Caribbean.
By Mary Fu
Additional Resources:
Inter-American Development Bank (IDB): “IDB Fund Supports Inclusive Business Development in Peru and Ecuador”
SNV Netherlands Development Organization: Home
Multilateral Investment Fund: About Us
MicroCapital Story, February 5, 2008: “IDB Grants $1.9m to Development of Microfinance in the Caribbean”
IDB: 2006 Annual Report
MicroCapital Story, February 7, 2008: “Standard and Poor’s to Launch Rating Program for Microfinance Institutions in Latin America”
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