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THE DIVERSIFICATION OF MICROENTERPRISE PROGRAMS

USAID has supported microenterprise development for nearly 40 years. USAID’s work helped establish the 

microfinance industry, which currently conducts nearly $1 trillion a year in transactions and services around the 

world. It now supports financial inclusion as well as enterprise development through new financial products and 

services beyond credit—housing loans, health insurance, and mobile or digital payments. Such support has 

become part of many USAID programs.

As recently as Fiscal Year (FY) 2010, all microenterprise obligations reported through Microenterprise Results 

Reporting (MRR) were categorized as economic growth activities. However, by FY 2013, economic growth 

activities represented only 28 percent of the MRR portfolio, and reached just 25 percent in 2016. 

In recent years, the majority of microenterprise activities were through programs supporting agriculture 

development: 69 percent in FY 2013; 52 percent in FY 2016. By FY 2016, USAID saw a significant increase in the 

percentage of activities that support microenterprise as part of programs under other categories, including:

counter-narcotics and conflict mitigation (10 percent), environment (8 percent) health (1 percent), and 

education (less than 1 percent).

Microenterprises have a role in reaching 16 of the 17 Sustainable Development Goals (SDGs)—from ending 

poverty to promoting peaceful and inclusive societies. Diversification of microenterprise programs is likely to be

continued.

FY 2016 RESULTS FOR MRAA REPORTING REQUIREMENTS

1) Funding: The number of grants, cooperative agreements, contracts, contributions, or other form of assistance

provided under section 252, with: A) The amount of each grant, cooperative agreement, contract, contribution,

or otherform of assistance; B) The name of each recipient and each developing country with respect to which

projects or activities underthe grant, cooperative agreement, contract, contribution, or otherform of assistance

were carried out; and C) A listing of the number of countries receiving assistance authorized by section 252.

In FY 2016, USAID invested $260 million in microenterprise activities across 31 countries and 93 projects. A full

listing of all microenterprise recipients is provided at <https://mrr.usaid.gov/>.

2) Central Mechanisms: The amount of assistance provided undersection 252 through central mechanisms.

There is no longer a need for a central mechanism dedicated to microenterprise development asmicroenterprise

development has been effectively incorporated in activities across many sectors and mechanisms in every region.

3) Development CreditAuthority: The name of each country that received assistance under section 256 and

the amount of such assistance.

USAID further expands the capital base for microenterprises through a partial credit guarantee program 

managed by its Office of Development Credit. Some of these guarantees encourage lenders (e.g., banks) to 

extend credit to microfinance institutions (MFIs) by mitigating a portion of the real or perceived risk. As a result, 

these guarantees help MFIs to expand their portfolios and to provide new products and services to 

microenterprise clients that would not be served otherwise. In other partnerships, USAID guarantees a portion 

2016 MICROENTERPRISE RESULTS REPORT
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of the portfolio of micro-loans made by MFIs, which ultimately helps increase access to credit for microentrepreneurs.

USAID’s 92 active microfinance guarantees in FY 2016 have the potential to leverage up to $565 million in 

private sector capital. In FY 2016, USAID issued 13 new guarantees with the potential to leverage $109 million 

in private capital in support of microenterprises. A list of microfinance credit guarantees is provided at: 

https://catalog.data.gov/dataset/development-credit-authority-dca-guarantee-utilization-and-claims.

4) USAID Recipients: The level of funding provided through contracts, the level of funding provided through

grants, contracts, and cooperative agreements that is estimated to be sub-granted or sub-contracted, as the case

may be, to direct service providers, and an analysis of the comparative cost-effectiveness and sustainability of

projects carried out underthese mechanisms.

USAID supports microenterprise development through a wide array of implementing partners and funding

mechanisms. In addition, implementing partners often make sub-awards in the form of grants or contracts. These

types of awards enhance USAID’s ability to involve smaller partners and local organizationsthat offer valuable skills

and expertise without having to implement a large award. Of the $260 million in microenterprise development

funding recorded in FY 2016, USAID obligated 73 percent ($189 million) through contracts, and 27 percent ($71

million) through grants, cooperative agreements, DCAs, inter-agency agreements, awards to public international 

organizations, and support to host governments. In addition, 15 percent ($40 million) was obligated through

subcontracts and 10 percent ($27 million) through sub-grants and cooperative agreementsto directservice

providers. Out of the 33 projects reporting such assistance, 73 percent of USAID partners achieved financial 

sustainability.

5) MatchingAssistance: It is the sense of Congress that the report required by section 258 of the Foreign

Assistance Act of 1961 (as added by section 6 of this Act) should include a description of all matching assistance

provided for the prior year by recipients of microenterprise development assistance under such title. Matched

assistance is assistance from non-United States Governmentsources, including private donations, multi-lateral

funding, commercial and concessional borrowing, savings, and program income.

In addition to the DCA projects, 27 other USAID activities reported mobilizing over $34 million in private 

resources in FY 2016, with an average leverage of over 50 percent. 

6) Percentage ofVery Poor: The percentage of assistance furnished under section 252 that was allocated to the

very poor based on the data collected using the certified methods required by section 254.

Thirty USAID activities reported that $57 million or 22 percent of funding supported the very poor. Five of the 30 

activities which reached the very poor reported using a Poverty Assessment Tool (PAT) or the Progress out of

Poverty Index (PPI) in FY 2016. 

7) Number ofVery Poor: The estimated number of the very poor reached with assistance provided under

section 252.

USAID estimates assistance reached 3,376,783 very poor beneficiaries.

8) PovertyAssessment Methods: The process of developing and applying poverty assessment procedures

required under section 254.

USAID continuesto support poverty assessment tools for 37 countries, as well as country guides, resources, an

implementation manual, and a help desk for implementing partners to help them assess their success in reaching

the poor and the very poor. “Very poor” is defined as being the poorest 50 percent of populations living below

the poverty line by a given country, or those living on less than $1.25 per day.1

 1 The International Poverty Line was updated to $1.90 in October 2015. The MRAA has not yet been updated to reflect this change.
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9) Victims ofTrafficking and Exploitation: Information on the efforts of the Agency to ensure that recipients

of United States microenterprise and microfinance development assistance work closely with nongovernmental

organizations and foreign governmentsto identify and assist victims or potential victims of severe forms of

trafficking in persons and women who are victims or susceptible to otherforms of exploitation and violence.

Financial inclusion and microenterprise development enable the most vulnerable and marginalized to contribute to

and benefit fromeconomic growth and stability. USAID’s microenterprise development has long supported victims

of human trafficking, potential victims, and women who are susceptible to other forms of exploitation and violence.

Such efforts span many sectors and activities. For example, Village Savings and Loan Associations (VSLA) programs

not only help those that lack access to formal financial services save and borrow, they often incorporate training in

literacy, numeracy, community action, as well as prevention of gender-based violence and trafficking.

In FY 2016, $73 million was reported as targeted towards victims and potential victims of human trafficking and

women who are victims of, or susceptible to, other forms of exploitation and violence.

10) Poverty and Race/Ethnicity:An estimate of the percentage of beneficiaries of assistance underthistitle in

countries where a strong relationship between poverty and race or ethnicity has been demonstrated.

Throughout much of the world, social exclusion because of race or ethnicity isstrongly associated with

socioeconomic status and economic opportunity. One pathway to advance economic well-being is through

microenterprise. In FY 2016, an estimated 40 percent of beneficiaries of USAID microenterprise development

activities lived in countries where there is a strong relationship between social exclusion because of race or ethnicity

and poverty, including in Ghana, Rwanda, South Africa, Tanzania, Uganda, Zimbabwe, Bangladesh, Indonesia, 

Azerbaijan, Kosovo, Colombia, Peru, and Pakistan.

11) Performance Monitoring System: The results of the monitoring system required undersection 253: A) 

The monitoring system shall include performance goalsfor the assistance and expresses such goals in an objective

and quantifiable form, to the extent feasible; B) Themonitoring system shall include performance indicators to be

used in measuring or assessing the achievement of the performance goals described in paragraph (a) and the

objectives of the assistance authorized under section 252; C) The monitoring system provides a basisfor

recommendations for adjustmentsto the assistance to enhance the sustainability and the impact of the assistance,

particularly the impact of such assistance on the very poor, particularly poor women; and D) The monitoring

system adopts the widespread use of proven and effective poverty assessment toolsto successfully identify the

very poor and ensure they receive adequate access to microenterprise loans, savings, and assistance.

Results reported in TABLE A, page 5.

12) Additional Information: Any additional information relating to the provision of assistance authorized by this

title, including the use of additional information on assistance provided by the United Statesto support

microenterprise development under this title or any other provision of law.

Thisreportrespondsto the annualreporting requirements of the Microenterprise Results and Accountability Act of

2004. To limit the report’s length and reduce costs, supporting data is available on-line at mrr.usaid.gov. The

website enables users to explore the data, access previous reports, and compare information across years.
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EXAMPLES OF FY 2016 USAID MICROENTERPRISE PROGRAMS

DCA Guarantees provides opportunities for women in Cambodia, the Philippines and Vietnam to access 

credit. The $15 million DCA guarantee, co-funded with Australia’s Department of Foreign Affairs and Trade,

supports the Women’s Livelihood Bond which will be traded on the world’s first social stock exchange. 

Proceeds from the bond will be lent to a limited number of microfinance institutions (MFIs) and impact 

enterprises focused on supporting women’s livelihood development through access to credit, income-generating 

assets, and vocational training.

The Rural Finance Initiative (RFI) in Colombia uses milestone, performance-based grants to connect 

financial intermediaries with rural clients so they can invest in improving productivity. Since its inception in 

August 2015, the RFI has mobilized $198,195,150 in funds, and facilitated the approval of roughly 49,000 credit 

loans, 15,402 insurance policies, as well as the opening of more than 82,145 savings accounts benefiting 

approximately 146,000 people. Furthermore, 26 new banking correspondents and seven new branch offices have 

started operations thanks to RFI’s incentive grants. RFI has awarded incentive grants to eight financial institutions 

totaling $1,379,930, which were matched by an additional $4,374,833 of funds from the supported financial 

institutions.

A clean water social enterprise franchisee participating in USAID’s Partnering to Accelerate 

Entrepreneurship (PACE) provides ownership and support for its entrepreneur franchisees. By providing 

“business in a box” tools and systems, the company, Jibu, helps individuals own and operate their own 

businesses, while creating a distribution network of entrepreneurs providing permanent access to affordable 

water. USAID’s funding provided the working capital needed to purchase the equipment for its franchise 

expansion. Jibu ensures that its franchisees receive both the financing and the support they need to grow. As of 

January 2017, Jibu has created 426 jobs through 38 franchises and over 100 micro-franchises. It has sold more 

than 20.7 million liters of water to 312,000 customers, more than half of whom had previously been drinking 

unsafe water.

Financing Ghanaian Agriculture Project (FinGAP) took a two-prong, pay-for-performance approach to 

mobilizing investments in support of small holder farmers and others in agriculture-related value chains. FinGAP 

assembled Ghanaian business advisory services (BAS) providers to help identify investment opportunities critical 

to expanding and upgrading the value chain. It also supported financing for those investments by Ghanaian banks, 

MFIs, and investment funds, often through blended capital. Over $115 million in new financing has been 

disbursed for investments in targeted value chains, generating sub-award resource grants to BAS providers and 

capital providers of over $3 million. 
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TABLE A:Performance Goals and Results Estimates,FY 2016

FY 2016 Goals FY 2016 Results

Number of microenterprise clients who are borrowers (Out of 46 Projects)2 500,000 512,601

% Women 60% 77%

% Rural 40% 87%

Number of microenterprise clients who are savers (Out of 37 Projects ) 1,000,000 934,720

% Women 60% 64%

% Rural 40% 89%

Total number of microenterprise borrowers and savers 1,000,000 1,004,302

Number of microenterprisessupported directly by Partners(Out of 71 Projects) 400,000 1,438,235

% Women 40% 49%

% Rural 75% 96%

Total number of microenterprise employees 500,000 3,460,7443

Total number of microenterprise beneficiaries 2,650,000 11,644,080

% of USAID partners that achieved financialsustainability (Out of 45 Projects) 50% 56%

% of funds benefiting the very poor (representing $56 million in FY 2016 funding) 50% 22%

Estimated number of very poor reached 1,325,000 3,376,783

NewPerformance Goals and Results Estimates,FY 20164

Number of people trained in financial literacy, business management and/or sector-specific 

skills n/a 1,168,418

Number of people covered by digital, mobile or technologically-based financial service n/a 277,361

% Women n/a 39%

% Rural n/a 67%

Number of debt insurance holders among microenterprise beneficiaries n/a 313,542

Number of life/funeral insurance holders among microenterprise beneficiaries n/a 35,336

Number of agricultural insurance holders among microenterprise beneficiaries n/a 9,078

2Given the current diversity and evolution of microenterprise programming, not all projects report on each element. In addition to these categories, 20 

projects reported supporting microenterprise enabling environment, 25 reported supporting micro-insurance, 25 reported supporting catalyzing private 

investment for microenterprise, reported supporting digital and mobile finance, and 29 reported supporting Village Savings and Loan Associations.

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This shift from borrowers and savers to other support activities is the result of the inclusion of more activities which include a microenterprise

component,but are part of larger programs

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As these are new data points that capture financial services, goals were not set for FY 2016. Performance goals will be set for FY 2017.
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LIST OF ACRONYMS

BAS Business Advisory Services

DCA Development Credit Authority

E3 Bureau for Economic Growth, Education and Environment

FY Fiscal Year

MFI Microfinance Institution

MRR Microenterprise Results Reporting

MRAA Microenterprise Results and Accountability Act of 2004

MSME Micro, Small and Medium Enterprise

PACE Partnering to Accelerate Entrepreneurship

PAT Poverty Assessment Tool

PCM Office of Private Capital and Microenterprise

PPI Progress out of Poverty Index

RFI Rural Finance Initiative

SDG Sustainable Development Goals

USAID U.S. Agency for International Development

ABOUTTHE REPORT

The U.S. Agency for International Development (USAID) Fiscal Year (FY) 2016 Microenterprise Results Report

responds to the annualreporting requirements of theMicroenterprise Results and Accountability Act of 2004

(MRAA). See the legislation at:

<https://www.congress.gov/108/plaws/publ484/PLAW- 108publ484.pdf>

The report was compiled by the Office of Private Capital and Microenterprise (PCM) in the Bureau for

Economic Growth, Education and Environment (E3) utilizing a team of consultants with DevTech Systems.