Operational program grant proposal for a project to support the establishment of the National Development Foundation of Belize and its programs to support micro-enterprises

Initially, PADF will focus on organizing the NDF/B, enlisting private sector representatives as members, and providing staff and management training. Loans will be initiated after 6-12 months, during which period potential borrowers will be recruited, loan policies adopted, and baseline data collected. The OPG includes a local currency component from USAID/B. Amendment (Grant of 9/18/86) authorizes a second phase of the project. NDF/B will continue to provide credit to micro- and small-scale entrepreneurs, targeting those who are denied access to commercial credit, have assets of less than BZ$25,000, and employ fewer than 10 people. Loans will be given in several categories of production, processing, and services, inter alia: garmentmaking, woodworking, crafts, food processing, retailing, and repairs. Most loans will be for BZ$4,000 or less, although the maximum loan size will be BZ$20,000. All enterprises which receive credit must also receive TA/training in such areas as management, marketing, and production. The amendment will also support NDF"s continued institutional development via short-term consultancies and in-country and external seminars/workshops. NDF/B will enhance its resource base by soliciting funds from international donors and lending institutions, developing financial ties with the Belizean business community, and possibly increasing interest rates or charging for TA. Since resources are limited, NDF/B will attempt to develop joint ventures with other Belizean organizations. Finally, the Board of Directors will be strengthened to provide strong leadership for NDF/B. (PD-AAZ-862) Amendment (grant of 3/27/90) authorizes Phase III (FY"s 1990- 92). A major objective is to help the NDF/B achieve sustainability without loss to its capacity to serve the small and micro enterprise (SME) sector. During Phase III, NDF/B expects to provide 400 loans, valued at $1 million, annually. This will enable NDF/B over a 3-year period to directly assist 1,500 SME"s, protect or save 2,400 jobs, and create 375 new jobs. Some 25% of these direct beneficiaries or borrowers will be women. NDF/B will increase lending to SME"s with slightly larger assets and greater credit requirements than usual, but with only limited access to banking institutions. This will result in an increase in average loan size (from $1,921 to $2,500) and lower cost per dollar loaned. By the end of Phase III, it is expected that the value of NDF/B"s portfolio will double to $2.368 million and that NDF/B"s income will cover 93% of expenditures, including 75% of TA and training costs. Income from the increasing loan portfolio value will enable NDF/B to cover operating expenses while lending at least $1 million annually after Phase III. (PD-KAS-510)