Microenterprise Development Strategy

Washington, D.C.
February 1997 - No. MIC 103

Contents

Summary
I. Introduction
II. Microenterprise in Latin America and the Caribbean
III. IDB´s Experience in Microenterprise Development
IV. The IDB Strategy for Microenterprise Development
V. Implementation of the Bank´s Microenterprise Development Strategy

PREFACE

The following document builds on Bank efforts over the past year to define a strategy to carry out the mandates of the Eighth Replenishment in the area of micro and small enterprise development.

The Agreement for the Eighth Replenishment of the IDB's capital reiterated the Bank's commitment to microenterprise development stating that it had "become an integral part of Bank operations and will continue to be pursued during the Eighth Replenishment in all areas of Bank activity." The Agreement further highlighted the importance of Bank support to this sector in the context of strengthening the income-earning capacity of the poor, calling for "actions to boost the production capacity of small farmers and microenterprises," and emphasizing the need for job creation "particularly through the microenterprise and small business sectors" and modernization of production structures in the region. Specifically cited in this context were: technological upgrading of small and medium sized enterprises; creation of an environment in which small and medium sized business can flourish; financial sector reform to ensure access by all to financial services, especially micro, small, and medium-sized enterprises; and modernization of the agricultural sector.

The Microenterprise Development Strategy is the result of an extensive process of consultation with the governments of the region, the institutions dedicated to microenterprise support and donors interested in assisting the sector that also served define, together with these IDB partners, the elements of a Program for Microenterprise Development for the next five years. The consultative process culminated with the conference, "The IDB and Microenterprise: Promoting Growth with Equity," which took place at Bank headquarters in November 1995 with the participation of more than 300 participants from all the countries of the region and many nonregional countries as well.

The document is also the result of consultations with an interdepartmental microenterprise strategy group, chaired by SDS/MIC, and including representatives of the three regional departments, SDS/IFM, the Office of the Chief Economist, and the Multilateral Investment Fund (MIF). The Microenterprise Strategy draws heavily on important inputs from Bank work in this sector over the past two years. Complementing the Strategy paper, two additional documents are being prepared: a background paper on microenterprise development (which, in draft form, has provided the basis for the background section of the Strategy) and a proposal for the reform of the Small Projects Program, which will follow the principles laid out in the Strategy.

This document puts forward the rationale, objectives 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, entitled MICRO 2001, to carry out this strategy over the next five years.

Complete document pdf format: http://www.iadb.org/sds/mic/publication/publication_159_1_e.htm 

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