Resource Library

The Resource Library serves as a broad resource hub, including over 1000 documents, training materials, wikis, and curated reports to increase readers' awareness, understanding, and proficiency of several topics in market systems development. Users have access to proposals, evaluation materials, and USAID policy updates, as well as training modules and wikis to boost skills and knowledge.

These resources are bolstered by the inclusion of curated USAID reports published on the USAID Development Experience Clearinghouse (DEC) which serves as a repository of reports from completed or ongoing USAID development projects around the globe. The full USAID Development Clearinghouse website can be accessed here.

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4.2.1. Provide Training on Lending and Loan Administration (e.g. share lending toolkits)

DESCRIPTION Fund training and/or provide direct technical assistance to investors to help them expand into new markets or increase their activity in existing markets through support with fundraising, market research, strategic planning, and/or staff development.As part of this intervention, USAID may consider producing and sharing a lending toolkit with financial intermediaries (FIs). Lending toolkits contain a collection of policies, templates, tools, manuals, and guidelines for FIs.

4.2.2. Provide Concessional Capital, Including First Loss

DESCRIPTION Blended capital is the combination of concessional funding (usually public or philanthropic funds) with impact or full-return private capital in a way which lowers the overall funding cost, or conversely, increases the yield for private capital. It can directly change the risk-return equation. Since the “concessional” capital requires a lower (sometimes zero) return, a higher return can be paid by the borrower to the private for-profit finance provider.

4.2.3. Catastrophe Bond (CAT Bond)

DESCRIPTION A catastrophe (CAT) bond is a high-yield debt instrument that is usually linked to insurance intended to raise money in case of a catastrophe. CAT bonds will provide a payout to the insurance company if a defined event occurs, such as total loss greater than a specific amount or an earthquake of a certain magnitude or greater (Source: Mobilizing Private Finance for Development: A Comprehensive Introduction).

4.2.4. Crop/Life Insurance

DESCRIPTION Crop insurance is purchased by agricultural producers, including farmers, ranchers and others to protect against either the loss of their crops due to natural disasters, or the loss of revenue due to declines in the prices of agricultural commodities. There are two major types of crop insurance: multiple peril crop insurance (MPCI) and crop-hail insurance (Source: Understanding Crop Insurance). CONSTRAINTS ADDRESSED Ability to resolve bankruptcies in a timely manner

4.2.5. Train MFIs to Prepare for Natural Disasters and Catastrophes

DESCRIPTION Natural disasters can quickly wipe out a community’s homes, crops, livestock, and businesses. In the aftermath, affected populations often need money—accessed through savings or loans—to rebuild their lives and livelihoods. In many disaster-prone countries, however, getting cash is not as easy as walking into a neighborhood bank. Around the world, low-income households and small business owners frequently cannot access regular banks. Rather, they rely on various types of microfinance providers, from local savings-and-credit groups to credit unions and cooperatives.

4.2.6. DCA Loan Portfolio Guarantees for Financial Intermediaries

DESCRIPTION The USAID Development Credit Authority (DCA) uses partial credit guarantees to mobilize local financing in developing countries. Guarantee agreements encourage private lenders to extend financing to underserved borrowers. A bank interested in financing multiple projects may submit qualifying portfolios through USAID’s Credit Management System, and USAID responds by guaranteeing up to 60% of the bank’s loan, should the portfolio be approved.

2.4.3. Examples of Successful Horizontal Linkages

Similar commercial orientation, knowledge and productive resources of members – Smallholder burley tobacco farmers in Malawi formed clubs, which then banded together to form NASFAM, [1] an association that was able to take advantage of new legislation allowing small farmers to market their crop directly rather than through middlemen. Internal trust and social capital – When the Malawi government’s Smallholder Tea Authority

3.2.6. Value Chain Analysis Table

Value Chain Analysis Table This exercise is best conducted on two levels: one with the value chain team and the other at the vetting workshop. Looking at the value chain through the framework lens helps us to identify:

2.4.4. Lessons from the Field

Introduction Participation in value chains does not necessarily translate into increased benefits for MSEs—producers must also be able to access higher-value markets and more profitable functions within the chains. In many cases, upgrading is key to profitable and sustainable MSE participation and horizontal linkages can provide opportunities for upgrading through collective learning, cost and risk sharing, enhanced management capacity and better access to support services.

3.2.5. Value Chain Mapping Process

It is recommended that value chain mapping be conducted in two phases; a) an initial basic map after the collection of initial data illustrating participants and functions, and b) adjusted mapping, which is conducted following additional and follow-on interviews.

3.3.2. Upgrading Plan

The industry upgrading plan follows the development of a common vision by industry actors. It addresses what needs to be done to achieve the vision for competitiveness, particularly through fostering investments and sharing information.

3.4.8. Direct Intervention

Traditional enterprise development projects often take the route of direct intervention in response to value chain constraints. Either the development agency directly delivers the services that are required for MSE upgrading or they subsidize private-sector service providers to provide these services to MSEs.

5.2.15. Lessons Learned in Value Chain Finance

Opportunities There are opportunities for leverage within many value chains to reduce costs, manage risk and build trust. Three examples are: Increasing Leverage Examples of how to increase leverage include: (i) expanding on existing credit-oriented relationships and (ii) delivering services or products through key ‘points of contact’; and (iii) utilizing enabling environments to create more complex types of value chain finance.

3.4.1. Industry Pathway

An industry pathway is a management tool that integrates the incremental behavior changes required to make an industry more competitive with the project process.

3.4.2. Knowledge Management System

Developing a knowledge management system that can deliver both the reporting requirements and real time knowledge of behavior change to inform resource allocation decisions is essential and requires a combination of data capture techniques and staff management methods.

3.4.5. Plan for Scaling Up

A value chain facilitation approach looks at scaling up in a different way. It refers to greater depth and breadth of behaviors that are critical to achieving sustainable competitiveness.

3.4.3. Program Design Process

Value chain program design should address systemic constraints to sustaining competitiveness. Underlying systemic constraints are incentives that limit the quality and types of inter-firm relationships, reduce the value placed on innovation and learning, and maintain inequitable benefit distributions.

3.4.4. Leverage Points

Leverage is the process of targeting an intervention at points in a system that can generate broad change throughout the value chain.