Feed the Future
This project is part of the U.S. Government's global hunger and food security initiative.

Cross-cutting Issues

Youth

Recent estimates suggest that developing countries are home to 1.3 billion of the world's 1.5 billion youth aged 15-24. While the youth population continues to grow rapidly, economic opportunities in the form of access to education, employment, or entrepreneurship are not growing at a proportional rate. Unemployment rates are much higher for youth than for adults, in some countries up to 7 times as high. According to the 2007 World Development Report, "youth make up 25 percent of the working population worldwide, but 47 percent of the unemployed."

Demographic shifts caused by the rural exodus to urban areas, stagnant literacy rates, and static numbers of higher education opportunities all contribute to the need for greater attention to youth and their economic prospects. In many countries, unemployment, underemployment and dubious informal sector employment leave much insecurity. All of these factors are leading to heightened concerns about the potential for disaffected and idle youth to participate in potentially destabilizing or destructive activities.

USAID is committed to supporting innovative approaches to tackling this complex challenge. USAID's Microenterprise Development office (MD) is also committed to ensuring that development programs have the best possible outcomes and impact on youth. MD contributes through funding events, evaluation and other research; through the development of promising practices and guidelines; and through direct project funding. Through these efforts, MD helps create sustainable economic opportunities for youth.

HIV/AIDS

Approximately 39 million people worldwide currently live with HIV/AIDS, with 4.1 million more infected annually. Each year, about 2.8 million die due to HIV/AIDS-related illnesses, leaving behind 15.2 million orphans. Increasingly, this pandemic is being recognized as a major economic development challenge, posing serious socioeconomic consequences at national, community, and household levels. Poor households and communities are the hardest hit, facing increased vulnerability to HIV/AIDS and few means of protection against economic crises.

Microenterprise development can help families and communities address the economic challenges of HIV & AIDS in several ways including:

  • Helping families develop more profitable or diverse income sources to increase and stabilize family income.
  • Stabilizing family cash flow through microfinance programs such as savings, credit, insurance, and remittance services.
  • Developing physical, human, financial, and social assets.

Working together, AIDS Support Organizations (ASOs) and microfinance institutions (MFIs) can play an important role in mitigating the devastating effects of HIV/AIDS on poor households and communities.

Conflict

Due to the increasing prevalence of conflict, especially in and among the world's poorest nations, there is a growing need to design and implement effective economic development strategies for rebuilding conflict-affected communities. Although microcredit is now widely considered an important component in rebuilding and sustaining economic recovery, the potential of other microfinance products and services to assist in such rebuilding efforts has not yet been realized.

Studies show that countries recovering from civil war are more likely to return to conflict if economic growth efforts do not succeed within the first five years. Recent experiences demonstrate that incorporating a more market-friendly approach in conflict-affected countries sooner can achieve greater impact than phasing it in at a later date. Given the short timeline available to achieve results and deter a country's return to conflict, meeting basic needs first is simply not enough. Delaying efforts to improve livelihoods and access to finance only increases a country's fragility and potential to revert to conflict. To avoid potential setbacks, the aid community is challenged to address economic development effectively and immediately after conflict ceases.

USAID's Microenterprise Development office (MD) seeks to understand and develop policies, programs, and responses that appropriately address immediate and long-term economic needs in conflict areas, disseminate information and learning on the topic to practitioners and donors, and advance best practices in conflict-affected environments.

Disaster

After a natural disaster, microfinance clients need capital infusions to meet emergency cash requirements, replace productive assets, or rebuild their houses. Access to capital speeds up the pace of re-establishing livelihoods and income-earning activities, enabling clients to recover from the disaster as well as meet their obligations of repaying new loans and rescheduled old loans. New loans also can help a microfinance institutions (MFI) retain good clients and protect its future portfolio through regular repayments.

Three types of loans have typically been extended to clients in good standing after a disaster:

  • Emergency loans
  • Housing loans
  • Asset replacement loans

After a natural disaster, MFIs may make new loans only to clients in good standing. In the case of small emergency loans, the MFI may make them to their entire clientele. In deciding whether or not to extend new loans, MFIs consider whether clients would be better served by rescheduling their current payments and/or by providing access to compulsory savings accounts.