Enabling Small-Scale Enterprise and Microfinance

This paper offers a conceptual framework and a set of programmatic approaches to the area of enterprise development in fragile states. It combines a literature review with insights from a pilot program carried out by the IRIS Center and its partners in the Academy for Educational Development (AED) consortium on the USAID FIELD-Leader with Associates agreement. The next section looks briefly at what constitutes a fragile state, and the causes and consequences of fragility. Part III examines the more specific impacts on small-scale enterprise and microfinance, along with their responses and relevant aspects of the broader economic picture. Part IV then reviews the experiences and lessons arising from the efforts of policymakers and aid donors to grapple with the institutional environment for small-scale enterprise and financial services in fragile settings. Part V brings these themes together into a framework for analysis and a set of programmatic guidelines for USAID and others. The annexes provide further background including summaries of the three pilot activities that IRIS carried out with its partners – World Vision in Angola, CARE in Mozambique, and Save the Children in Nepal.