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74 into a “fund for inclusive finance” that manages the resources with oversight from the Central Bank and assistance from UNCDF advisers. Within such a fund, development partners can jointly… (a) Tailor investment packages to draw upon their comparative advantages; (b) Issue and review requests for proposals from financial service providers; (c) Utilize standard performance-based agreements and reporting formats with financial service providers; (d) Supervise the technical assistance provided; and (e) Conduct M&E exercises. UNCDF has developed a global mechanism to support UN Joint Programmes for the development of inclusive financial sectors, and its MicroLead Facility promotes South- South cooperation. The MicroLead Facility has a special post-conflict window, and most of its approved proposals are in post-conflict countries. Capacity development support is central to livelihoods and economic recovery programming for the financial sector. Central Banks may need strengthened regulatory and supervisory capacity. Support for institutional capacity development of the local audit industry can enhance transparency and help to attract commercial sources of funds. Development of the capacity of credit bureaux can help to reduce transaction costs. Capacity at the retail level is especially important for reaching crisis-affected communities and businesses. Financial service providers—commercial banks, non-bank financial institutions, microfinance institutions, credit unions, and village savings and loans—often Box 4.6. Microfinance development in Sierra Leone: Lessons learned UNCDF and UNDP, with complementary funding from KfW and Cordaid, supported a project to build an inclusive financial sector in Sierra Leone between 2004 and 2009. With initial funding of US$ 15 million, the Microfinance Investment and Technical Assistance Facility (MITAF) focused on building an inclusive financial sector. A National Micro-Finance Policy, developed through a participatory process, represented a shared vision that provided a solid foundation for the project. Microfinance training at the Boulder Institute of Microfinance in the U.S. was a useful investment in terms of developing the capacity of industry leaders. The final evaluation found that MITAF was instrumental in building an inclusive financial sector in Sierra Leone and that it successfully improved institutional capacity at the micro, meso, and macro levels. At the time of the evaluation, the lending institutions financed by MITAF were serving nearly 120,000 clients and had achieved broad geographic coverage, which was “particularly impressive considering the difficulty of reaching rural areas.” The project had limitations, however, and yielded many important lessons. The sustainability of project results was challenged by weaknesses in the operating environment and internal capacity. Only one of the lending institutions covered a major part of the country itself. The principal lessons learned included the following: 1. Microfinance activities can be effective when introduced soon after stability is achieved as long as separate institutions deliver grants and loans and the grant or loan conditions are communicated clearly. 2. Only institutions with the capacity to ensure repayment should provide loans; otherwise, the credit culture can be undermined. 3. The potential for resistance to the entry of new financial service providers into the market by existing local providers should be factored into the programme design. 4. Lengthy conflicts deplete in-country human capacities and limit the ability to rebuild with local talent. To ensure that poor and conflict-affected individuals receive financial services as quickly as possible, external management support for financial service providers may be required, using South-South cooperation, while local capacity is developed. 5. The external capacity of microfinance institutions (measured by outreach to clients) and their internal capacity (measured by internal systems) are equally important. A project’s targets should not focus excessively on outreach. 6. Microfinance is not for everyone, especially in its early stages, and has the greatest effect when available broadly to low-income people. Targeting specific groups can slow down the process. In particular, many young people have insufficient experience to manage debt, and credit officers may fear following up on loan collections when the borrower is an ex-combatant. Grants and training may provide more effective livelihood assistance options for youth and ex-combatants. Livelihoods & Economic Recovery in Crisis Situations
75 require support to broaden their variety of products and services and to expand into underserved areas. Capacity development support may take the form of training, technical assistance, international visits, and South-South cooperation. Business development services. 46 Based on the needs of enterprises and entrepreneurs identified during the assessment stage, interventions can be designed (a) to directly provide business development services, where necessary, and (b) to strengthen private sector entry and engagement in the provision of business development services. Interventions may include, for example, support for business registration, market analysis, branding, quality assurance, and pooling of risk. Business development services can contribute to local economic development most effectively when they support a range of enterprises in various sectors. Awareness-raising efforts are likely to be needed at the community level vis-à-vis the nature and benefits of these services. UNDP has supported a variety of entities for the delivery of business development services. These organizations include business support centers, business incubators, information and communication technology (ICT) centres, and youth enterprise centres. When appropriately managed, these delivery mechanisms can help to build a sense of community ownership and can lead to sustainable community management of business development services. Experience indicates that the following features are important for delivery: Box 4.7. Entrepreneurial training and business development services in Kenya UNDP and the Government of Kenya have developed two complementary programmes to empower crisis-affected and unemployed youth to start businesses and/or provide business advisory services in all districts of the country. The Business Skills and Entrepreneurship Development (BSED) programme aims to transform young people from job seekers to job creators, to create a new range of enterprises operated by new entrepreneurs, to stimulate micro, small, and medium enterprise development, and to generate new employment. BSED provides training that builds upon participants’ existing skills in accordance with market demand. BSED participants conduct feasibility studies to identify and profile business opportunities, and they prepare business plans. The training sessions are provided over periods of 1-6 weeks. While BSED training focuses on entrepreneurship and microenterprise development, the Business Advisory and Training Services (BATS) programme trains young people to become trainers and business consultants themselves. In this way, BATS aims to meet the demand for business development services that BSED helps to create. BATS methods are based on learning by doing, participatory exercises, and interactions with markets, enterprises, business associations, local government officials, and successful business consultants. Participants are expected to complete an apprenticeship, to prepare at least five business profiles to be assessed by a panel of professionals, and to conduct a BSED training session. Upon satisfactory completion of this process, trainees are accredited as trainer-consultants. (a) Clearly defined mandates, operational procedures, partnership agreements, and approaches to resource mobilization; (b) A dedicated team with well defined roles and areas of expertise; (c) A resource centre with reference materials, business profiles, and communications facilities; (d) A forum or platform for small business owners to exchange information, form connections, and express their policy views; and (e) Where possible, a pool of certified, community-based trainers and advisers who are strategically attached to vocational training institutions. 46 For business development services, UNDP uses the guidelines of the Donor Committee for Enterprise Development, Business Development Services for Small Enterprises: Guiding Principles for Donor Intervention, 2001. Livelihoods & Economic Recovery in Crisis Situations
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UNITED NATIONS DEVELOPMENT PROGRAMM
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UNITED NATIONS DEVELOPMENT PROGRAMM
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ii Table of Contents CHAPTER 1 READ
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iv Table of Contents BOXES 1.1 Area
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Kenyan Women Selling Products (Phot
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2 1.1 About this Guide 1.1.1 What t
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4 and local economies—contribute
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6 UNDP’s experience has shown tha
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8 1.3.2 Three-track approach to pro
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10 equality and women’s empowerme
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Community Meeting with Future Strat
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14 2.1 What information does a live
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16 Markets for goods and services
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18 tensions, access to resources an
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20 A livelihoods and economic recov
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22 face. Communities can agree with
Page 34 and 35: Crop Production for food security (
Page 36 and 37: 26 3.1 Emergency employment creatio
Page 38 and 39: 28 Figure 3.1 Flow chart for choosi
Page 40 and 41: 30 The implementing partner recruit
Page 42 and 43: 32 Figure 3.2(a) Matrix for calcula
Page 44 and 45: 34 groups and local authorities agr
Page 46 and 47: 36 Emergency employment projects pr
Page 48 and 49: 38 References and suggested further
Page 50 and 51: 40 big risks (reputational and secu
Page 52 and 53: 42 cially important when a financia
Page 54 and 55: 44 whose enterprises are to be supp
Page 56 and 57: 46 monitoring the number of enterpr
Page 60 and 61: 50 Assessment reports, where these
Page 62 and 63: 52 Box 3.5. Summary of timesaving a
Page 64 and 65: 54 tion and transportation infrastr
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Page 70 and 71: 60 4.1 VOCATIONAL AND SKILLS TRAINI
Page 72 and 73: 62 4.1.2 (b) Identification of targ
Page 74 and 75: 64 Apprenticeship opportunities sho
Page 76 and 77: 66 have a conflict of interest with
Page 78 and 79: 68 4.2 INCLUSIVE private sector dev
Page 80 and 81: 70 grant sources. UNCDF and UNDP ha
Page 82 and 83: 72 4.2.3 (b) Suggested intervention
Page 86 and 87: 76 4.2.3 (c) Monitoring and evaluat
Page 88 and 89: 78 legally binding agreements that
Page 90 and 91: 80 4.3 conditional cash transfers C
Page 92 and 93: Rehabilitation programme (photo by
Page 94 and 95: 84 5.1 capacity development Support
Page 96 and 97: 86 lawyers, prosecutors, and/or gov
Page 98 and 99: 88 enabled by a secure environment.
Page 100 and 101: 90 terms of foreign exchange; at th
Page 102 and 103: 92 government officials. Such decis
Page 104 and 105: 94 • Support to national justice
Page 106 and 107: 96 policy issues involve the protec
Page 108 and 109: 98 • Strengthening the capacity o
Page 110 and 111: Women Enterpreneurship in DRC (Phot
Page 112 and 113: 102 6.1 Gender Equality and Women
Page 114 and 115: 104 Gender and the assessment proce
Page 116 and 117: 106 Table 6.1. Example of outputs,
Page 118 and 119: 108 Conflict and disaster tend to w
Page 120 and 121: 110 example is the belief in some s
Page 122 and 123: 112 Box 6.3. Kenya National Youth T
Page 124 and 125: 114 6.3.2 Programming livelihoods f
Page 126 and 127: 116 Box 6.4. Profiling for Liveliho
Page 128 and 129: 118 in ways that do no harm—bears
Page 130 and 131: Ex-Combatant running a successful r
Page 132 and 133: 122 Box 7.1. Fundamental principles
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124 policymakers to support program
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126 References and suggested furthe
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128 References and suggested furthe
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130 mobilization. When formulating
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132 For outputs, including both pro
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Men and Women Cleaning the Rubble a
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136 GUIDE ON LIVELIHOODS AND ECONOM
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138 UNDP. “Role of UNDP in Crisis
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140 Community infrastructure consis
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142 Inclusive economic growth aims
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144 Payments for ecosystem services
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146 ACKNOWLEDGEMENTS The developmen
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148 • Inclusive Economic Growth a
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150 York; Casper Sonesson, Policy A
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152 DAC DCED DDR DEX DFID DIM DPA D
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154 POSC PPP PRA PRS PRSP PSD PSD P
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156 ANNEX: Discussion Papers on Liv
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Livelihoods & Economic Recovery in
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