Institutional Support for USAID DCA Credit Guarantee Programs
CLIENT: U.S. Agency for International Development Bureau for Economic Growth, Education, and Environment (E3)
PRACTICE AREA: Economic Growth through Regional and Local Economic Development Strategies, Business Development, Competitiveness, and Entrepreneurship
SUBCONTRACTORS: The QED Group
TIME PERIOD: 2016 to 2019
ME&A provided technical assistance and institutional support to USAID’s E3 Bureau to identify, design, and prepare Development Credit Authority (DCA) guarantees. DCA guarantees are risk-sharing agreements mobilizing local private capital to provide small businesses the loans they need to grow. USAID’s DCA credit guarantee programs also involves other activities designed to reduce risk, fraud, and corruption.
The USAID DCA program aims to promote financial market behavior change that will promote access to credit, transparency, accountability, and build capacity in the risk partner’s credit origination and monitoring practices in countries in development. It also includes activities designed to reduce risk, fraud, and corruption.
Whether it’s getting working capital to promising entrepreneurs or input financing to small farmers, DCA seeks to prove the commercial viability of underserved markets so that lending and investment continues after it exits. Through DCA, more than 400 transactions between financial institutions and USAID have made up to $3.7 billion in private financing available for more than 166,000 entrepreneurs around the world.
USAID awarded this $20.5 million task order to ME&A in September 2016 under the GSA Federal Supply Schedule 874 PSS/MOBIS Contract providing a full range of professional business services and related support products for consulting, facilitation, training, and program and project management.