Micro Enterprise Results Reporting 2007

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Microenterprise Results Reporting (MRR) Annual Reports summarize USAID’s investments and priorities in microfinance and microenterprise development. This Annual Report for Fiscal Year 2007 documents USAID funding for microenterprise development through more than 250 diverse implementing partners, ranging from private voluntary organizations (PVOs) and non-governmental organizations (NGOs) to for-profit banks and enterprise development service providers. This year’s data show strong Agency support for non-profit organizations (PVOs, NGOs, cooperatives, and credit unions), which as a group received 49 percent ($94 million) of overall obligations in FY 2007. The FY 2007 report reflects USAID’s continued commitment to leveraging its investments in microenterprise development. USAID helps strengthen the performance of increasingly commercial microfinance institutions (MFIs), allowing them to attract private investors and grow faster than if they relied solely on donor support. USAID also reduces some of the risk to private investors and lenders by offering partial credit guarantees and other enhancements. As of FY 2007, $3.4 million in USAID funding for credit guarantees was supporting up to $177 million in private sector lending to MFIs and microenterprises.
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    S FISCAL YEAR 2007 1   MICROENTERPRISE RESULTSREPORTING ANNUAL REPORT TO CONGRESS, FISCAL YEAR 2007 JUNE 2008    MICROENTERPRISE RESULTS REPORTING: ANNUAL REPORT TO CONGRESS FISCAL YEAR 2007 ii The cover photo depicts a village bank in Djiguinoune, Senegal, as women line up with account booklets and monthlysavings that help secure fresh loans to fuel their small businesses. PHOTO COURTESY OF R. NYBERG, AS PART OF THE USAID PHOTO COLLECTION      MICROENTERPRISE RESULTS REPORTING: ANNUAL REPORT TO CONGRESS FISCAL YEAR 2007 ii EXECUTIVE SUMMARY Microenterprise Results Reporting (MRR) AnnualReports summarize USAID’s investments andpriorities in microfinance and microenterprisedevelopment. This Annual Report for Fiscal Year2007 documents USAID funding for microenterprisedevelopment through more than 250 diverseimplementing partners, ranging from private voluntary organizations (PVOs) and non-governmentalorganizations (NGOs) to for-profit banks andenterprise development service providers. This year’sdata show strong Agency support for non-profitorganizations (PVOs, NGOs, cooperatives, and creditunions), which as a group received 49 percent($94 million) of overall obligations in FY 2007. The FY 2007 report reflects USAID’s continuedcommitment to leveraging its investments inmicroenterprise development. USAID helpsstrengthen the performance of increasingly commercial microfinance institutions (MFIs), allowing them to attract private investors and grow faster thanif they relied solely on donor support. USAID alsoreduces some of the risk to private investors andlenders by offering partial credit guarantees and otherenhancements. As of FY 2007, $3.4 million in USAIDfunding for credit guarantees was supporting up to$177 million in private sector lending to MFIs andmicroenterprises.For the FY 2007 MRR, USAID refined its datacollection surveys, both to improve the measurementof its microenterprise development activities and tobetter align with the Agency’s new accounting andprogram reporting system. Where practical, data validation tools have been updated and more optionshave been provided to deal with missing or partialdata. In addition, the poverty loan proxy thresholdshave been corrected for inflation since 1995, thusproviding a more accurate basis for reporting. Thefinancial services questionnaire now includes a moreeasily verifiable option for providing all financial datain local currency. This report fulfills the 12 reporting requirementsincluded in the Microenterprise Results and Accountability Act of 2004 (PL 108-484). Key findings include:1.   In FY 2007, USAID provided $193 million infunding for microenterprise developmentthrough 184 new and existing grants, coopera-tive agreements, and contracts in 61 countries.2.   USAID provided $21.5 million in funding through central mechanisms in FY 2007.3.   USAID provided $93 million in funding through contracts in FY 2007. Just under$45 million in microenterprise funding in FY 2007 was subgranted or subcontracted, withlocal institutions receiving 81 percent of thisfunding.4.   In FY 2007, USAID missions reported that$24 million in USAID funds were matched by an additional $6.2 million from sources outsidethe U.S. Government.5.   For the first time, 31 USAID-assisted partnersin 12 countries used USAID-certified poverty assessment tools to measure and report theshare of their clients who are “very poor”according to standards specified in recentlegislation. 1 Based on their reports, USAIDestimates that 19.1 percent of funds directly benefited “very poor” clients as defined in thatlegislation. 1 Amendments to the Microenterprise for Self-Reliance Act of 2000 define the “very poor” as people living on less than $1/day atpurchasing power parity, or those in the poorest 50 percent of those living below their country’s poverty line.    MICROENTERPRISE RESULTS REPORTING: ANNUAL REPORT TO CONGRESS FISCAL YEAR 2007 ii 6.    An estimated 1.44 million very poor peopledirectly benefited from USAID-supportedmicroenterprise programs in FY 2007, including microfinance clients and owners and employeesof microenterprises benefiting from enterprisedevelopment interventions. This estimateassumes that the percentage of very poor clientsreported by the 31 partner institutions cited inthe previous finding applies to the broader rangeof USAID-supported microenterprisedevelopment programs.7.   Funds benefiting the very poor were estimatedusing USAID-certified poverty assessment tools, which covered 17 countries when poverty datacollection began. In FY 2007 and early FY 2008, USAID continued to develop additionaltools. By the time the next round of poverty data collection begins, USAID expects to havecertified up to 26 tools, for countries receiving more than two-thirds of USAID microenterprisefunding excluding several countries wheresecurity conditions preclude developing orapplying poverty tools.8.    Approximately $6.7 million of USAID’smicroenterprise funding in FY 2007 assisted victims of trafficking in persons and women who are particularly vulnerable to other forms of exploitation and violence.9.   In FY 2007, 39 percent of borrowers, 39percent of savers, and 10 percent of enterprisedevelopment clients were located in countries where a relationship between poverty and raceor ethnicity has been demonstrated.10.   USAID exceeded most of its performance goalsrelating to microfinance, including numbers of borrowers and savers, percent of rural clients,and financial sustainability; USAID did not meetits goals for the percent of women clients andthe percent of funds benefiting the very poor.In the area of enterprise development,performance exceeded all goals except fundsbenefiting the very poor. The reasons for thisare discussed on pages 8-10.
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