USAID Impact Photo Credit: USAID and Partners

Archives for Economic Growth

Sweet Rewards for Peruvian Farmers Who Trade Coca for Chocolate

A close up of recently harvested red and green cacao pods

Cacao pods ready for processing/USAID

I always enjoy the chance to take Washington visitors out of the vibrant capital city of Lima and into the Amazon. There they see first-hand the complex challenges that Peru faces, including the presence of transnational criminal organizations and the coca fields that dot the landscape. But they also see the bravery and enthusiasm of rural farmers who have turned away from coca farming and are now growing coffee and some of the world’s best cacao, used by chocolate producers in the United States and around the world.

Peru remains a leading producer of cocaine, an illegal industry that enriches criminal organizations, fuels violence and perpetuates poverty in rural communities. Peruvian cocaine can be found on the streets of the United States and Europe. And the criminal networks that produce and sell cocaine in Peru threaten the security of the entire hemisphere.

Farmers like Rolando Herrera, who decide to grow coca, are often at the mercy of these cartels. And while coca generates income, it does not lead to development. Banks, pharmacies and farm suppliers do not want to set up shop in narco-trafficking zones. Schools and health clinics cannot recruit teachers and nurses to such areas. As one farmer told me, “coca gives you work, but doesn’t give you a future.” As a result, like Rolando, many communities are agreeing to abandon coca farming and join the licit economy.

The U.S. Government works closely with the Government of Peru in its efforts to disrupt the operations of criminal networks, eradicate coca and help farmers like Rolando develop lucrative, legal crops. USAID Administrator Mark Green recently visited Peru and saw first-hand this dynamic and the way the Agency partners with Peruvian officials and citizens to reduce this transnational scourge.

A woman (Irene Chamalla), left, and a man (USAID Peru Mission Director Lawrrence Rubey), right, stand outdoors holding a tray of unprocessed cacao pods

USAID Peru Mission Director Lawrence Rubey and Irene Chamalla, cacao farmer and representative of the Colpa de Loros Cooperative in a cacao farm in Campo Verde, Ucayali. / USAID

USAID works in partnership with both the Peruvian Commission for Development and Life Without Drugs (DEVIDA) and the private sector to connect farmers to national and international markets. This model works.

Data from the United Nations Office on Drugs and Crime show that in areas where coca eradication was paired with sustained assistance to farmers and greater investment in infrastructure and social services by the Peruvian government, coca cultivation decreased by nearly 90 percent from 2011-2016. Most importantly, communities that were mired in a poverty trap because of coca now have a much brighter future.

Much of this success is because of the Government of Peru’s growing commitment to invest its own resources to stop the production and trafficking of cocaine.

The government has dramatically increased its counter-narcotics budget from $145 million in 2012 to $214 million in 2017. And in 2013, Peru expanded the role of DEVIDA from a coordinating and policymaking agency to one with a field presence that works directly with communities to improve government services and create economic opportunities. Today, DEVIDA’s budget is over $45 million, up from just $4 million in 2010.

A large group of men and women pose in lines among trees

USAID Peru Mission Director Lawrence Rubey in a cacao farm in Ucayali together with a group of farmers benefited from the Peru Cacao Alliance, a public-private partnership sponsored by USAID. / USAID

A perfect example of DEVIDA’s success is the former coca stronghold of the Monzon Valley, which once held about 10,000 hectares of coca. Here, the average income in 2013 was $1.89 per person per day, well below Peru’s extreme poverty line of $2.20 per person per day. With DEVIDA’s assistance, households saw a 53 percent increase in income from 2012 to 2016, and the percentage of extremely poor families dropped by 55 to 30 percent.

USAID is committed to helping Peruvians and their government. Our partnership is more cost-effective than ever as it leverages more external resources every year. Peru’s national production of high-quality, exportable cacao is expected to more than double by 2021, helping to feed the growing demand for dark chocolate and supply the $35 billion U.S. confectionery industry that employs 55,000 workers. In 2015, USAID leveraged $11 million from the private sector to generate $48 million in total sales of legal crops.

There is certainly more work to be done, but Peru is clearly gaining traction against the criminal organizations that operate in the rural Amazon. Given the commitment of the Peruvian Government, I am confident that progress will continue. And Rolando and thousands of other former coca farmers seeking a more secure future will see to it.

ABOUT THE AUTHOR

Lawrence Rubey is the director of USAID’s mission in Peru.

When it Comes to Small Businesses, USAID Sees Big Benefits

Hello Tractor, an innovative small business whose founder hails from Ohio, received funding from USAID. The business provides services to farmers in Nigeria.

Photo courtesy of Hello Tractor

USAID is racking up big benefits around the globe when it comes to partnering with small businesses in the United States.

Once again, preliminary federal data indicate we have exceeded our worldwide ​goal for the fiscal year that ended in September, awarding $620 million in contracts to U.S. small businesses, the most ever in a single year for us and a high point on a five-year upward trend.

Small businesses received just over 13 percent of the contracts we awarded, an almost 2 percentage point increase over the last fiscal year when USAID’s percentage of small business contracts compared favorably—and even surpassed—similar-sized and larger U.S. government agencies.

But the figures only tell part of the story as the country is set to mark Small Business Saturday.

Working with U.S. small businesses means that farmers in Nigeria can now use their mobile phones to punch up Hello Tractor, whose founder grew up in Ohio. The service provides on-demand tractors—in the model of an Uber or a Lyft—so farmers who cannot afford to buy the expensive equipment can nonetheless harvest crops and earn a living. Tractor operators/drivers also benefit.

Then there’s Maryland-based A Joint Venture, whose architectural design work ensures Liberia’s university students—and next-generation leaders—have comfortable, modern classrooms for study.

Hello Tractor

Credit: State Dept./Doug Thompson


U.S.-based small businesses are also helping us find innovative solutions to irrigate crops in regions where water is scarce and combat illegal wildlife trafficking (find out more about the inspiring veteran who runs this business in this story). In fact, U.S. small businesses are a big part of the work we do in more than 80 countries today.

That wasn’t always the case, but we are changing.

When USAID was created 56 years ago, nearly 80 percent of the financial flows between us and the developing world were in the form of U.S. government dollars. Today, that figure is closer to 9 percent.

Charitable contributions and remittances from expats have taken up some of what U.S. taxpayer dollars formerly covered. But the real contributor in helping developing countries reach their potential is commerce and investment.

We’re partnering with these businesses in new ways, collaborating, co-financing and co-designing projects to have the biggest impact we can make to improve lives and livelihoods. And we are expanding our efforts in the United States and at our overseas missions.

USAID is proud of its role as the world’s leading humanitarian and development organization. But we know we can do more—and stretch taxpayer dollars—by embracing the entrepreneurship, creativity and innovation that small businesses provide.

We believe the purpose of development assistance is to end its need to exist. But we’re realistic; we can’t do it alone. We want smart ideas from new partners—including the world’s small business entrepreneurs—to help us meet our goals.

So while U.S. small businesses celebrate Small Business Saturday tomorrow with deals for shoppers, we’ll celebrate the work they do to boost the economies in their local communities and in communities around the world.

RELATED LINKS:

Ensuring Effective Development

Jospeh Ebwalu, and family, beneficiaries of Village Enterprise’s skills building course. Credit: Village Enterprise.

Jospeh Ebwalu, and family, beneficiaries of Village Enterprise’s skills building course. Credit: Village Enterprise.

USAID is taking steps to ensure we make the most out of our investments, and one way we are doing so is by experimenting with a range of “pay-for-results” models.

“Pay for results” is an umbrella term for initiatives that pay out only after specified results have been achieved, rather than paying for the efforts to work toward those results.

It is seen as a disruptor that encourages innovation and attracts new funding sources. It can align interests and risk sharing among funders and implementers toward achieving evidence-based outcomes.

Interest in using these strategies in development has risen sharply in recent years, in line with growing attention to aid effectiveness and the need to use scarce resources efficiently.

But how exactly does this work? Let’s take the story of Joseph Ebwalu as an example.

Joseph, a farmer in Maaga village, Uganda, used to only grow enough cassava, millet and ground nuts to feed his eight children. Aside from the few extra cups he sold for profit, Joseph relied on local government support to provide for his family and lacked the financial history necessary to take out loans for a business of his own.

A few years later, things look quite different for Joseph and his family, thanks to a skills building course offered by the nonprofit Village Enterprise. The organization’s one-year poverty graduation program provided Joseph and fellow entrepreneurs with the business skills, economic stability and starting capital to not only get on their feet, but to stay standing.

Joseph now runs his own goat-rearing business with his two Village Enterprise group members. The profits he’s earned allowed him to move beyond subsistence farming to providing his family with three meals a day and sending all of his children to school. He’s now a role model for others in his community.

USAID provides support to the organization Instiglio to develop, with Village Enterprise and other donors, a development impact bond to scale Village Enterprise’s poverty graduation model in Kenya and Uganda. In this specific example, USAID and other donors agreed to pay a certain rate for rigorously verified outcomes from Village Enterprise—like increases in Joseph’s net assets and the number of meals his family eats.

Village Enterprise gets funding upfront from socially-motivated investors and free reign to deliver services as they see fit. This way, if the poverty graduation model doesn’t work in Kenya and Uganda, the donors wouldn’t have to pay. However, if Village Enterprise does meet its target and successfully helps more people like Joseph, then the nonprofit unlocks more funding from USAID and its partners.

USAID uses a few other pay-for-results structures, as well. Outcomes-based grants and contracts are agreements between a funder and a partner. In these relationships, after an initial transfer of money to launch or improve a project, the partner must meet agreed upon outcomes-based milestones or forfeit further payment.

An example is the Development Innovation Ventures program, under which grants are based on outcomes milestones, ensuring that both the funder and the grantee are incentivized by the same goals around results.

Data Driven Farming Prize: Teams get feedback on their proposed solutions during a Haat Bazaar in Katmandu. Credit: Kathaharu Studio.

Data Driven Farming Prize: Teams get feedback on their proposed solutions during a Haat Bazaar in Katmandu. Credit: Kathaharu Studio.

USAID also uses results-based incentive prizes to create open competitions that incentivize a wide range of organizations and individuals to accelerate a solution or achieve a specific outcome, while remaining open to innovation and out-of-the-box ideas on how to get there.

USAID has used results-based incentive prizes to award cash to competition winners that best achieve the specific outcomes or hit predetermined targets, stimulating the market to develop or improve solutions as diverse as small-scale desalination technologies, household refrigerators that function with off-grid energy systems and data solutions to enable decision making for smallholder farmers.

In lean financial times, USAID needs to continue to increase cost-effectiveness while also encouraging innovation. By integrating these practices into our everyday work, we have the potential to cut costs, make smart decisions, and transform international development.

Together with our partners, we are taking a step toward a future where our funding is more directly linked to results. And we do not expect the trend toward outcomes-based programs to slow.

To learn how to design for outcomes and integrate pay-for-results approaches into your work, reach out to us at labinnovation@usaid.gov or visit USAID.gov/globaldevlab.

Seema Patel is the Division Chief of the Innovation Design and Advisory Team in the U.S. Global Development Lab, Anne Healy is the Division Chief for the Source and Test Team in the U.S. Global Development Lab

RELATED LINKS:

  • Follow all the action of #GlobalInnovationWeek at http://giw2017.org/

Putting Cranes Back to Work

USAID’s technical assistance to the National Bank of Serbia (2003-2006) laid the foundation for a strong banking sector that is now healthy, solvent and enjoys the trust of its citizens. More recently, USAID worked with Serbia’s Ministry of Construction to reform construction permitting to make it easier for businesses to invest. Not too long ago, few people believed these changes were possible.

Back in 2002, in my early 30s, I decided to invest in my future and buy an apartment in Belgrade. But times were difficult. After a decade of civil war, the banking sector was in shambles and getting a loan was nearly impossible. A stagnant economy and a depressed construction sector artificially inflated real estate prices.

Finding good quality furniture at reasonable prices also proved challenging. The lack of competition among local furniture retailers and absence of foreign retailers kept furniture prices unreasonably high. Many of us traveled over 250 miles, to either Zagreb or Budapest, to reach one of the closest IKEA stores that sold everything one needed at reasonable prices.

The Swedish furniture giant IKEA made its first attempt to enter the Serbian market 25 years ago, but was thwarted by the civil war. Their second attempt in 2008 failed because of an unmanageable construction permitting process and unresolved land ownership issues. However, in 2015 IKEA became the first foreign investor in Serbia to receive an electronic construction permit. This was made possible by a new e-permitting system – introduced with the assistance of USAID. The IKEA investment in Serbia is worth EUR 70 million and will create 300 jobs.

Vladislav Lalić, IKEA’s Southeast Europe director: “The dream that started 25 years ago finally became reality.” / Mirjana Vukša Zavišić, USAID

Vladislav Lalić, IKEA’s property and expansion manager for Southeast Europe: “The dream that started 25 years ago finally became reality.” / Mirjana Vukša Zavišić, USAID

“Since the very beginning we were looking for some kind of ‘unified’ procedure. To run from one institution to another costs time and money and is excessive. Now things look good — our first store in Belgrade will open in July 2017.” said Vladislav Lalić, the company’s property and expansion manager for Southeast Europe. “Our experience will be an incentive for other investors who are considering investing in Serbia.”

The construction permitting process used to take over 240 days and required about 52 interactions between the investor and 20 different public sector entities. It was widely seen as a hotbed of corruption and a source of various economic inefficiencies.

“The new system shifts the burden from citizens and investors to local governments and public institutions that need to coordinate their work and request the necessary documentation from one another through official channels,” said Ivana Blažić Sević, head of city planning in the town of Topola.

IKEA’s first store in Serbia will welcome customers in the summer of 2017. Works at the construction site are in full swing. / Mirjana Vukša Zavišić, USAID

IKEA’s first store in Serbia will welcome customers in the summer of 2017. Works at the construction site are in full swing. / Mirjana Vukša Zavišić, USAID

A comprehensive reform of this process started in 2011. Administrative procedures and charges related to construction permits were a key impediment to business development. At the time, Serbia ranked 176th of 183 counties in the World Bank’s Doing Business report in this category.

With assistance from USAID, a law enacted in December 2014 in Serbia shortened the time required to issue a license to 28 days. A few months later, the government launched a one-stop-shop consolidated procedure, and by January 2016, the e-permitting system came online. The new law also lowered administrative costs of construction, creating considerable savings for investors. Serbia now ranks 36th of 190 countries in the World Bank’s Doing Business report with respect to construction permitting—a jump of 103 places compared to 2016.

“The effects were immediate,” said said Joe Lowther, former Chief of Party of USAID’s Business Enabling project.  “In 2015, Serbia’s construction sector expanded by 20.5 percent, while the number of building permits issued rose by 36 percent relative to the preceding year. That also meant job creation – construction is a very employment-intensive industry with spillover effects to other industries.”

Before, there were hardly any cranes in Belgrade. By October 2016, there were 489 active construction sites, according to the city’s mayor. / USAID Serbia

Before, there were hardly any cranes in Belgrade. By October 2016, there were 489 active construction sites, according to the city’s mayor. / USAID Serbia

Moreover, new projects under construction are beneficial to Serbian citizens. The Clinical Center of Serbia, for example, received a permit under the new system and will soon start building  much-needed health care facilities.

With a more favorable business climate attracting investment, local government revenues increased by 18 percent in the first quarter of 2016 — which are key for the development of Serbia’s cities and municipalities, said Aleksandra Damjanović, State Secretary at Serbia’s Ministry of Construction. In addition, Serbia’s GDP expanded 3.5 percent in real terms in the first quarter of 2016; a significant part of this growth came from expansion in the construction sector.

“Before there were hardly any cranes in Belgrade—now we see them everywhere,” Damjanović said.

I was lucky the stars aligned in 2002 so I could make my first big step as an adult. Today, I am relieved that, largely thanks to USAID’s economic sector assistance programs in Serbia during the past 15 years, my son and future generations will have an easier start in life.

More than 4,000 permitting officials, who had not used any form of electronic communication in their work before, were trained in using the new online construction permitting application. / National Alliance for Local Economic Development Serbia

More than 4,000 permitting officials, who had not used any form of electronic communication in their work before, were trained in using the new online construction permitting application. / National Alliance for Local Economic Development Serbia

ABOUT THE AUTHOR

Mirjana Vukša Zavišić is a Development and Outreach and Communications Assistant at USAID Serbia who assists in the overall management of all public relations. Strahinja Mitovski is a Communication Manager at USAID Serbia’s Business Enabling project, Cardno Emerging Markets, USA.

Family Planning for the World’s Youth Promotes Peace, Health and Prosperity

A mother with her child at the Nhamatanda Health Center in Mozambique. / Arturo Sanabria, Photoshare

With close to 600 million girls growing up in developing countries, achieving global prosperity starts with educating and empowering these young women so they can be healthy, productive members of their communities and become agents of change.

This year’s World Population Day encourages us to “Invest in Teenage Girls.” Voluntary family planning is one tool that can both educate and empower young women worldwide.

Access to voluntary family planning and reproductive health services for everyone, including youth, is vital to the future of our planet. About half of pregnancies among adolescent women in the developing world are unintended, with about 23 million young women wishing to avoid pregnancy, but not using modern contraception. This puts them at high risk of unintended pregnancy.

As we observe World Population Day on July 11, we acknowledge that young people hold the key to determining the future of our planet and to ensuring we meet the Sustainable Development Goals (SDGs)17 goals focused on ending all forms of poverty, achieving social justice for all, and tackling climate change by 2030.

Voluntary family planning is an important intervention that cuts across the five themes of the SDGS: people, planet, prosperity, peace and partnership.

A nurse shows a client an implant rod, and explains how it works during a family planning outreach at a Nairobi informal settlement. / Tobin Jones, Jhpiego

Voluntary family planning affects people. It supports adolescents’ rights to information, and the rights of girls to remain unmarried and childless until they they are ready and desire to bear children.

Family planning saves lives. Today, pregnancy and childbirth are the leading causes of death for adolescent women. By helping young women time and space their pregnancies, family planning helps reduce the number of high-risk pregnancies, and allows women to properly feed, clothe and educate the children they decide to have. Studies show that by 2020, family planning could help avert approximately 7 million under-5 deaths and prevent 450,000 maternal deaths in USAID’s priority countries.

A poster in a Sare Bilaly health hut in the region of Kolda, Senegal. / Amy Fowler, USAID

Family planning impacts the planet. Access to family planning can slow global climate change and improve the health and environment of households and communities worldwide, and research shows that it already has. A 2013 report warns: “poor reproductive health outcomes and population growth exist hand-in-hand with poverty and unsustainable natural resource use.”

Family planning helps reduce poverty and contributes to economic growth and prosperity. Nearly 21 percent of the world’s population—some 1.5 billion people—still live on less than $1.25 per day. By slowing rapid population growth, family planning can help to decrease the sheer number of poor people.

Reducing adolescent fertility can contribute to a “demographic dividend” of rapid economic growth. Having fewer children per family leads to more household savings and increased investments in each child. In Korea and Thailand, governments aligned population policy and family planning services with human capital development policies, particularly girls’ education, to accelerate economic growth.

Voluntary family planning can contribute to peace. Studies show that a large “youth bulge” (defined as a high number of 15- to 29-year-olds) is associated with a high risk of civil conflict. The political impact of fertility decline is measureable: Research shows as a country’s population ages, the probability of attaining and maintaining a liberal democracy is increased.

Worldwide, more than 30 million adolescent women are not in school. Early and unintended pregnancy can be both a cause and a consequence of dropping out of school, so family planning can help women and girls stay in school, become literate, and achieve their educational and employment aspirations. All of these outcomes lead to more peaceful communities and societies.

IMG_5070

Health workers in Mali. / Jane Silcock, USAID

Family planning partnerships at the global and country level will be critical to achieving success as we work toward reaching a grand convergence between the developed and developing world in the next 15 years. As the largest bilateral donor for family planning assistance, USAID has played a crucial role in increasing access to modern contraception. And through our youth policy, USAID strives to integrate youth reproductive and sexual health needs into all of our programs and partnerships.

Young people today will decide our future. We need them to participate in the social, economic, political and cultural life of their communities to eliminate poverty and achieve our collective goals. We also need to recognize the diversity of need and experience of this age group when developing reproductive and sexual health programs and services. As we help youth to succeed, voluntary family planning will be an essential element of our long-term development strategies.

ABOUT THE AUTHOR

Ellen H. Starbird is the director of the Office of Population and Reproductive Health at USAID. Get updates about USAID’s Family Planning work via @USAIDGH.


RELATED LINKS

Loans in Bangladesh: Stories of Change

Somer Ali, Bashir Gazi and Shahinur Rahman have several things in common.  They live in Bangladesh, they work in the agricultural sector, and they’ve all struggled with the lack of available credit.

In Bangladesh, banks are often reluctant to lend money to poorer borrowers in the agricultural sector — where nearly half of the population earns its income — preferring to restrict their business to more financially stable clients.  However, this practice excludes most farmers from a vital source of credit, and prevents them from expanding or making the investments necessary to break out of poverty and build better lives.

Local bank and USAID staff with Somer Ali near his rice milling operation. / USAID Bangladesh

Local bank and USAID staff with Somer Ali near his rice milling operation. / USAID Bangladesh

Fortunately, Somer, Bashir and Shahinur also share something else in common. All three are transforming their lives because they gained access to loans through USAID’s Development Credit Authority.

Somer Ali has been running a rice mill and dairy business for the past eight years.  He has 30 employees and a stable livelihood, but because he could not get a loan from a bank, he was never able to buy the land he farmed. Instead, he rented the land month by month.

Bashir Gazi earns an income by raising 8,000 chickens in a single story chicken coop.  Although Bashir is proud of his brood, he dreams of expanding his business. He approached a bank for a loan, but was turned away. Bashir had never received a loan before and did not have a credit history. Without a credit history, banks perceived him as a high-risk borrower.

 Bashir Gazi’s new three story poultry building financed through a DCA-supported loan. / Christine Ryan, USAID

Bashir Gazi’s new three story poultry building
financed through a DCA-supported loan. / Christine Ryan, USAID

Even for Shahinur Rahman, who employs 21 people on his carp farm, banks were unwilling to open up their purse strings to offer a loan. After 16 years in operation, Rahman’s business was not only well-established, but also expanding. Many other promising small entrepreneurs like Rahman also face closed doors from banks.

Opening doors to credit

That’s where USAID comes in. Partnering with Bangladeshi banks, USAID encourages local banks to make loans and financing more available to poor farmers.

Thanks to those efforts, Somer has been able to purchase the land where his rice mill and dairy business are. He now no longer needs to worry about the instability of renting, and hopes to receive a larger loan to continue expanding his business. Shahinur, too, received his first loan to grow his carp farm.

 Shahinur Rahman with his award from the local government for the quality of his fish. / Christine Ryan, USAID

Shahinur Rahman with his award
from the local government for the quality of his fish. / Christine Ryan, USAID

Bashir shares a similar story. Thanks to USAID’s partnership with his local bank, he’s expanding his chicken business by more than 500 percent. He will soon have the capacity to house 45,000 chickens. This exponential business growth means a major boost in revenue, and for Bashir, it’s just the beginning.

Somer, Bashir and Shahinur are three of 239 agricultural workers in Bangladesh who gained access to financing through USAID’s partnerships with local banks since 2013. Each of these 239 individuals has their own story — their own families, hardships, ambitions and passions. But their stories have a common thread: one of the creation of possibilities where there once were none.

Through our partnerships with local Bangladeshi banks, we’ve mobilized $8 million in credit since 2003 — for every dollar that we’ve spent, $15 of private sector financing has been made available for lending. And USAID’s work in Bangladesh is only a small part of the picture. Since 1999, USAID’s Development Credit Authority program has mobilized $4.3 billion across 75 countries in support of development objectives.

Each loan granted offers new opportunities, and gives minds room to dream. And for every agricultural worker like Somer, Bashir and Shahinur that are empowered through access to finance, we are one step closer to a better, more prosperous world.

ABOUT THE AUTHOR

Megan Phelps provides communications support to USAID’s Development Credit Authority.

USAID Seeds Innovation: 15 Social Entrepreneurs Making a Difference

Mathew, a field engineer, stress tests the Smart Tractor at a test farm in Kaduna as kids from a nearby village watch. / Jehiel Oliver.

Mathew, a field engineer, stress tests the Smart Tractor at a test farm in Kaduna as kids from a nearby village watch. / Jehiel Oliver

Picture this: A farmer in Nigeria needs to plow her field, but does not have laborers to do it. Using her mobile phone, she sends an SMS message, and within days, a tractor arrives. She can now plow her field 40 times faster than manual labor, and at one third of the cost. And the tractor owner earns a profit as well.

This “sharing economy” platform is more than a great idea; it is a startup called Hello Tractor, founded by Jehiel Oliver – a recipient of a global fellowship from Echoing Green, sponsored by USAID’s U.S. Global Development Lab.

Through a partnership, the Lab has funded two classes of Echoing Green’s Global Fellows. The goal is to “prime the pump” for global social entrepreneurship by supporting individual entrepreneurs working in developing countries.

Over two years, fellows receive up to $90,000 in funding to realize and advance their innovations. Fellows also participate in leadership development events and receive mentoring from leading business professionals. To date, the Lab has supported more than 29 Global Fellows from 20 organizations.

With interests that range from “Uber for tractors” to rights for the visually impaired, the innovations from this year’s Echoing Green Global Fellows provide essential services, create jobs and reduce poverty — often through market-based solutions.

I recently spent time with a number of fellows at a retreat, listening to their stories about the inspiring work they engage in around the world.

Wendell and Etienne

Global Fellows Etienne Mashuli and Wendell Adjetety used their personal experiences as motivation to help post-conflict African youth through the Tujenge Africa Foundation they established in Burundi.

Female farmers are trained on the Smart Tractor at a farm settlement in Federal Capital territory. / Jehiel Oliver

Female farmers are trained on the Smart Tractor at a farm settlement in Federal Capital territory. / Jehiel Oliver

Having survived the Rwandan civil war and genocide, Etienne escaped a cycle of poverty thanks to quality education later in life. “I remember the first time I did really well in school,” Etienne said. “My father was so proud, he gave me a loaf of bread.”

But school became struggle for Etienne after his uncle was shot. He managed to overcome this setback, getting a full ride to a college in Illinois and later earning a master’s degree from Yale.

To help other youth in similar situations, Wendell and Etienne began the foundation to strengthen education, leadership and peacebuilding in Burundi, South Sudan, Central African Republic and the Democratic Republic of the Congo.

Afzal and Sabrina

After seeing the dire conditions in the informal baby care centers of Nairobi’s slums, Sabrina Premji established Kidogo with Afzal Habib.“The smell was the first thing I noticed,” said Sabrina. “As I walked forward into a dark room, I felt something brush my foot, and when I reached down, I saw it was an infant. There were at least a dozen infants in one small room.”

Faith, 11 years old, carries baby Richard to a Kidogo Center in Kangemi enabling her to go to school / Sabrina Premji, Kidogo

Faith, 11 years old, carries baby Richard to a Kidogo Center in Kangemi enabling her to go to school / Sabrina Premji, Kidogo

The experience drove her to find a way to provide high-quality and affordable early childhood care. She teamed up with Afzal, who applies his background in management consulting to lead the organization’s strategy and finances.

Afzal and Sabrina launched Kidogo last year to transform the trajectory of children living in urban slums by providing care and education.

This year, USAID is funding 15 Global Fellows who are sparking change in communities around the world. Other fellows include:

  • Aleem AhmedLove Grain—connects Ethiopian teff farmers with international markets by building partnerships with farmer cooperatives and supporting supply chains.
  • Katy Ashe and Edith ElliottNoora Health—trains and educates marginalized families in India with simple, low-risk health skills to improve clinical outcomes, provide care and save lives.
  • Sara Leedom and Julienne OylerAfrican Entrepreneur Collective—works with incubators, accelerators and investment funds to support young entrepreneurs in Africa by providing capacity building, mentorship and direct financing to grow their enterprises.
  • Mohammed Dalwai and Yaseen KhanThe Open Medicine Project—saves lives in under-resourced communities in South Africa, India and Pakistan by providing healthcare workers with free and open access to critical health information using mobile technology.
  • Sara MinkaraEmpowerment Through Integration—empowers blind youth in Lebanon and Nicaragua by providing life skills and emotional support through inclusive education and recreational programs.
  • Matt AlexanderSuyo—unlocks the transformational impact of secure property rights by making it easier and more affordable for low-income families in Latin America to formally register their property.
  • Pranav BudhathokiLocal Interventions Group—creates efficient feedback loops between governments in South Asia and citizens demanding better services.

Within the Lab, we believe good ideas can come from anywhere, but innovators need the resources and opportunities to thrive. There is no doubt that social entrepreneurs will continue to change communities, economies and nations for the better, and we are committed to enabling promising ideas worldwide.

ABOUT THE AUTHOR

Tahalia Barrett is a global partnerships advisor in the Center for Transformational Partnerships within the U.S. Global Development Lab at USAID, working on entrepreneurship and diaspora engagement.

First Time Loans Give Grassroots Farmers a Chance to Grow

Carlos Sigue, an agribusiness owner in Mozambique, with his 15-hectare plot where he grows several vegetables, including potatoes, cabbage, and cucumbers. / Scott Haller, USAID

Carlos Sigue, an agribusiness owner in Mozambique, with his 15-hectare plot where he grows several vegetables, including potatoes, cabbage, and cucumbers. / Scott Haller, USAID

Carlos João Tovela Sigue, a small farmer in Maputo, Mozambique, had bigger dreams than the small plot of land where he eked out a living for himself and his family by cultivating potatoes, cabbage, cucumbers and other vegetables.

He dreamed of improving his lot in life by expanding his small farm, but he had to put this dream on hold when he discovered a roadblock ahead. “It is difficult to expand production without a bank loan,” Carlos says.

For many small farmers like Carlos, accessing a loan to buy seeds, fertilizer and other supplies to expand their businesses can be difficult. Most banks assume that lending to farmers like Carlos is very risky, so they often offer limited finance on undesirable terms.

Fortunately for Carlos, he discovered a USAID program that provides a partial guarantee on loans for small farmers through the Agency’s Development Credit Authority (DCA) to reduce risks and encourage local banks to lend to underserved borrowers.

Through a partnership between USAID and the Swedish International Development Cooperation Agency (Sida), two banks in Mozambique received DCA guarantees to encourage lending to farmers and entrepreneurs, the main populations that local banks often overlook.

Since receiving a loan backed by USAID and Sida two years ago, Carlos’s farm grew from 3 to 15 hectares. With this financing, Carlos mechanized his farming processes and upgraded his irrigation system. This loan also allowed Carlos to hire more seasonal workers.

Harvesting a return on investment

Carlos Sigue received a loan from Banco Terra with the backing of USAID and Sweden’s development agency. He used the funds to grow a thriving business that won awards for its success. / Scott Haller, USAID

Carlos Sigue received a loan from Banco Terra with the backing of USAID and Sweden’s development agency. He used the funds to grow a thriving business that won awards for its success. / Scott Haller, USAID

Carlos paid off his entire first loan and took out a larger second loan to help him reach bigger goals and greater financial security. With this credit, he plans to farm 350 hectares of family land, accumulate 700 cows, and buy a larger truck for taking crops for sale to the market.

When small businesses and entrepreneurs can access credit, they can create a better economic future for themselves and their communities. Carlos is a case study in success and the Government of Mozambique recognized his excellence in agricultural entrepreneurship with multiple awards.

Many other farmers like Carlos are accessing credit for the first time because of the DCA guarantee program. Since 2006, the DCA program in Mozambique has helped to guarantee 795 loans.

When these borrowers were surveyed regarding the performance of the DCA guarantees in Mozambique, the results were positive. Most borrowers reported that this was their first experience with a financial institution, and about one-third of these first-time borrowers were women. Borrowers said the guaranteed loans helped them expand their businesses, create jobs, and improve the quality of their lives.

“In all interviews, farmers who benefited from the loans mentioned increasing the area [of land] cultivated and…productivity.”

“All farmers mentioned having financial means through the loan to hire additional labor, [which included] mostly women as seasonal labor…more food for the family and having [a] surplus for commercialization purposes.”

—ELIM Serviços Lda, the organization that led the independent evaluation

Everyone wins when development agencies partner with banks to bring financing to promising entrepreneurs. While USAID and Sida continue unlocking private capital for hundreds of borrowers like Carlos in Mozambique, similar DCA partnerships are providing over 160,000 borrowers in 74 countries across the world with much-needed financing.

Scott Haller, a USAID Development Credit Authority portfolio manager, and USAID Communications and Evaluations Analyst Beth Pappas contributed to this story.

ABOUT THE AUTHOR

Claire Everhart is the communications specialist for USAID’s Development Credit Authority.

Sustainable Finance Key to Health Equity

A newborn in Nigeria. USAID is intensifying efforts to develop, test and scale up simple, low-cost approaches to preventing newborn deaths in lower-income countries. / Amy Fowler, USAID

A newborn in Nigeria. USAID is intensifying efforts to develop, test and scale up simple, low-cost approaches to preventing newborn deaths in lower-income countries. / Amy Fowler, USAID

The world faces an alarming shortfall of funding needed to transform global health. If the world is to end preventable child, adolescent and maternal deaths, we need new forms of development finance to close a $33.3 billion annual funding gap.

A new financing platform announced this week at the Conference on Financing for Development in Addis Ababa, Ethiopia aims to do just that. The Global Financing Facility (GFF) is a country-driven financing partnership to accelerate efforts to end preventable maternal, newborn, child and adolescent deaths by 2030.

The launch of the financing platform brings together $12 billion from public and private partners, both domestic and international, to scale up national strategies in four countries particularly in need: the Democratic Republic of the Congo (DRC), Ethiopia, Kenya, and Tanzania.

Their five-year strategies include life-saving interventions based on evidence of what works best that will be expanded to reach those that are most in need.

Why is this financing platform important?

Donor resources alone are not sufficient to reach our targets and meet the Sustainable Development Goals. We need innovative approaches to financing, with increased domestic commitment from countries and regional development banks, as well as more involvement from the private sector. Our core intent is to support countries as they work to provide for the health of their own citizens, and help them along the pathway to sustainable financing.

How is this different from business as usual?

As a financing mechanism, the GFF is an example of how to use official development assistance to catalyze additional private sector funding. The GFF is partnering with the World Bank to raise money from capital markets for countries with significant funding gaps for child, adolescent and maternal survival.

Every $1 invested into the GFF is expected to mobilize between $3 and $5 from the private capital markets. The investments in the GFF are designed to help countries transition to self-financing for maternal and child survival programs.

Who is contributing money?

USAID is investing $50 million, subject to Congressional approval, into the financing platform at the country level to scale up national strategies to end child and maternal deaths in the DRC, Ethiopia, Kenya, and Tanzania.

Other donors include Canada, Japan, multilateral organizations, host governments, civil society, and the private sector.

Is it working?

Tanzania is one example of the increased focus on women and children that the GFF can help bring about in country. By blending some of our grant funding through the GFF, we have enabled the Government of Tanzania to significantly increase financing for women’s and children’s survival and health.

A mother in Rwanda with her ​newborn ​daughter. Investing in survival & health can lead to greater individual and national productivity and growth. / Amy Fowler, USAID

A mother in Rwanda with her ​newborn ​daughter. Investing in survival & health can lead to greater individual and national productivity and growth. / Amy Fowler, USAID

Why just these four countries?

Over the next five years, the ultimate goal for the global facility is to support 62 high-burden low- and lower-middle income countries through the GFF. The DRC, Ethiopia, Kenya, and Tanzania are part of the first wave of countries. Results from these nations will inform the best way forward for any continued U.S. government funding of the GFF.

The next group of eight countries eligible to benefit from the global trust fund will be Bangladesh, Cameroon, India, Liberia, Mozambique, Nigeria, Senegal and Uganda.

Why invest in global health?

In low-income countries, child mortality is 15 times higher than in high-income countries, and maternal mortality almost 30 times higher. Despite remarkable progress across global health, the brutal fact is the world’s poorest people still pay the most for things like clean water and basic health services.

There is substantial evidence on the “health-to-wealth” pathway, and how investing in survival and health can lead to greater individual and national productivity and growth. Increasing access to health services — especially for the poor – is a sound and sustainable investment that can command great economic returns. To put it simply, people who are healthy are more productive at work.

We have a clear and conclusive case to invest in health. Now we must summon the will to mobilize domestic resources and activate creative co-financing approaches that will transform societies.

ABOUT THE AUTHOR

Dr. Ariel Pablos-Méndez was appointed by President Barack Obama to lead the Global Health Bureau at USAID. He is also the Agency’s child and maternal survival coordinator.

Riding the Growth Bubble in an Increasingly Urban World

Did you know that more than half the world now lives in urban areas? And that in the next several decades nearly all population growth will be in urban areas? That’s equal to about 1.4 billion additional urban residents in developing countries from 2010-2030 alone—equivalent to a city the size of Chicago emerging every two weeks for the next 20 years. It doesn’t just stop there, either: The growth bubble gets even bigger after 2030.

To make matters worse, more and more urban residents are living in squalid, hazard-prone, unhealthy and crime-riddled environments, leaving them highly vulnerable to the devastating impacts of natural disasters. The living conditions depicted in films such as Slumdog Millionaire and the image below are everyday life for nearly one in six human beings on the planet. By 2030, it will be reality for nearly one in four.

Shanties hug the water in Manila’s slums. / United Nations University in Bonn

Shanties hug the water in Manila’s slums. / United Nations University in Bonn

The recent earthquake in Nepal, and its impacts on the capital Kathmandu, has laid bare the challenges of governance in the rapidly growing cities of developing countries, particularly with regard to urban planning and management. The risks and vulnerabilities of living in urban conditions like these are only exacerbated during crises. Additionally, the fastest urbanization is taking place in developing countries, which are already disaster-prone. This is why now, more than ever, we must take into consideration the rapidly growing urban bubble before us.

In the past, most plans to manage urban growth and reduce poverty were aspirational–or even inspirational–but almost never operational in terms of actually helping urban communities affected by disasters and crises. Acknowledging this and looking forward, we must focus on creating resilient living conditions in urban areas that are capable of withstanding the subsequent shocks of a disaster.

In Ravine Pintade, USAID worked with partners to remove rubble and help rebuild the neighborhood using two-story shelters. / Carol Han, USAID/OFDA

In Ravine Pintade, USAID worked with partners to remove rubble and help rebuild the neighborhood using two-story shelters. / Carol Han, USAID/OFDA

Take for example Haiti, where in 2010 a magnitude 7.0 earthquake rocked the city of Port-au-Prince, killing over 200,000 people and displacing 1.5 million more. The Ravine Pintade neighborhood was one of the hardest hit areas—nearly two-thirds of the 1,000 families living in the area were instantly made homeless. In the wake of this tragedy, USAID worked with the local community and partners, Project Concern International and Global Communities, to build back safer shelters and neighborhoods.

Ravine Pintade now has a range of disaster-resistant shelters, including what is thought to be the humanitarian community’s first-ever two-story shelters, 8,000 feet of drainage pipes, and improved access to clean water through water kiosks and rainwater harvesting systems for bathing and washing. With these risk reduction measures, Ravine Pintade is serving as a model of how to “Build Back Safer.”

Our work in hazard-prone urban areas reflects the lessons learned in Ravine Pintade. In Mixco, Guatemala, USAID and partners worked to develop the “Barrio Mio” (My Barrio) project, featuring neighborhood-level pre-disaster planning to address natural hazards and socioeconomic vulnerabilities. Thanks to that project, Mixco ended up with reconfigured neighborhoods that created a safer living space

If both humanitarian and development actors engage now and continue to work together toward operational solutions like these, then we can improve resilient living conditions in urban areas that will better withstand the shocks of future crises. We must manage the rising humanitarian risks in areas with rapid, unplanned urbanization and ensure that our humanitarian responses account for the challenges of rapid urban growth. The next time a disaster hits a densely populated city, this will ultimately help us save lives and reduce suffering.

Now is the time to make effective change and get ahead of the expanding global urban growth bubble. It is critical that the places where more and more of our species choose to live – cities – become better able to withstand the shocks of disasters and crises — making them better, safer places to live.

ABOUT THE AUTHOR

Charles Setchell is the Senior Shelter, Settlements, and Hazard Mitigation Advisor with USAID’s Office of U.S. Foreign Disaster Assistance.
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