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CARE International

international. care japan. care australia. care netherlands. care thailand. care norway. care canada. care denmark. care austria. care germany. care uk. care usa. care france. CARE International. Effective ways to reach smallholders Value chain financing 18th October 2007

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CARE International

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  1. international care japan care australia care netherlands care thailand care norway care canada care denmark care austria care germany care uk care usa care france CARE International Effective ways to reach smallholders Value chain financing 18th October 2007 By George Odo The CARE Africa Venture Fund “We seek a world of hope, tolerance and social justice, where poverty has been overcome & people live in dignity & security”

  2. Presentation Content • Introduction to CARE • Background • Identifying the problem • The Issues & proposed solutions • Some Examples • Key Learnings

  3. Introduction to CARE – The Federation ‘CI’ CARE International (secretariat in Brussels) ‘National members’ & ‘Lead members’ CARE National Members (12) – Australia, Austria,Canada,Denmark, France, Germany, Japan, Netherlands, Norway, UK,USA & Thailand* CARE country offices - Peru, India, Kenya, Indonesia, etc (67 world-wide) ‘Country offices’

  4. Introduction to CARE – Vital stats • One of the largest NGOs in the world • 14,800 staff globally • About 1169 projects in 16 sectors reaching 48 million people in 67 countries & 60 Country Offices • Board of 12 ‘National’ members with secretariat in Geneva • About US $ 700 million annual budget with 43% spent in Africa, 34 in Asia, 17% in Latin America and 6% Middle East and Europe • Works in both development and emergency situations • Key Sectors - ANR (14%), SEAD (6%), WATSAN (8%), Emergency (4%), Nutrition (4%), HIV/AIDS (8%), Maternal (4%) & Child health (4%)

  5. Introduction to CARE - How we spend our funds Less than 10% Administration costs!

  6. Background - GDP in relation to Poverty

  7. Background- NGOs role in the ‘Fourth’ position STATE MARKET The fourth position CIVIL SOCIETY • Fourth Position Goals and Tasks • Ensuring entitlements by: • reduction and re-distribution of risk • exacting compliance from duty-holders • reducing costs of compliance • Fourth Position NGDO Roles • Negotiator/mediator • Validator • Watchdog • Innovator/demonstrator : Rights-based principles NGDO GROUNDED IN 'AXIOMATIC‘ETHICS AND VALUES Source: Alan Fowler, NGO Futures – Beyond Aid

  8. Identifying the Problem – CARE’s Making markets work for the poor approach • CARE’s MMWTP strategy was published in 2004 in response to UN Commission on the Private Sector and Development • The commission’s final report Unleashing Entrepreneurship: Making Business Work for the Poor (2004) recognized that: • SMEs in developing countries can drive job creation, innovation and economic growth. BUT • Entrepreneurs operating in the informal economy lacked access to the legal systems (enabling environment), financial services & BDS

  9. Identifying the Problem – The three pillars of Enterprise development

  10. Spectrum of Financial Service Providers Underserved in theBOP Development Financial Institutions Internal Savings & Loan schemes, Money lenders, NFP MFIs Commercial banks, Private Equity & Venture Capital Funds FP MFIs, Cooperatives, Revolving Input loan & guarantee funds SME Funds, Social Venture Funds, MFI Banks Internal Savings & Loans Small Economic Activities Small & Medium Enterprises Large commercial enterprises & new ventures National & Regional Investments & Infrastructure $ 1, 000 to $ 10,000 up to $ 50,000 $ 100,000 to $ 1,000,000 $ 1,000,000 to $ 5,000,000 & above $100 loans

  11. Access to Financial Services

  12. Proposed Solution

  13. CARE’s approach – Integrating smallholders Inputs Goods Aggregator Produce “Start with the market….and work backwards” Aggregation of the smallholders demand for goods or services Inputs/cash advances on credit pre financed By Aggregator/Exporters/buyers Market Demand Market ‘contracts’ as collateral Aggregation of the smallholders goods

  14. Examples – Village savings and Loans S&L Term ends & distribution to members Also known as Internal Savings & Loans, based upon ROSCAs ‘Merry go round’ model Savings Lending & repayments Group organization Savings Lending & repayments Regular modest Savings Investments into Micro enterprises like smallholder farming & consumption Savings & Lending

  15. Examples - Aggregation of production

  16. Examples - Aggregation of livestock production

  17. Examples - Aggregation of demand

  18. Key Learnings • ‘Mimic’ the real world….smart subsidies...’Aid for Trade’…’Market Aid’ • Avoid distortion • Sustainability • Private sector integration • Traditional grant funding and traditional development models don’t work • Blend commercial and grant mechanisms

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