Client name: Australian Department of Foreign Affairs and Trade (DFAT)

Duration: July 2007 – October 2013

Location: Cambodia, Fiji, Indonesia, Laos, Papua New Guinea, Southern Philippines, Solomon Islands, Timor Leste, Vanuatu


Increasing incomes and access to goods and services for poor people through private sector development across Asia and the Pacific.  

Situation

Private sector development is essential for sustainable economic development and underpins the Australian Government’s goal of reducing poverty in the Pacific and South East Asia. Innovative private sector projects in these countries often fail to attract financial backing not because of low returns, but because of weaknesses in financial markets and the ‘public good’, rather than the economic nature of some of their benefits. 

Solution

The Enterprise Challenge Fund (ECF) was established to address this important area and was a six-year A$20.5 million Australian Government initiative, matching grants to private sector enterprises in nine countries. It aimed to contribute to poverty alleviation by creating income generating opportunities and access to goods and services with a positive economic benefit for poor people.

Over the past six years, challenging the private sector to propose development solutions has led to innovative outcomes. Projects funded new products and services specifically designed for the poor and opened opportunities to develop industry in which rural and remote communities could participate. Private sector businesses applying for ECF grants had to demonstrate that the grant was crucial to the project being implemented and that it would satisfy the assessment criteria in three key areas – commercial sustainability, benefits to disadvantaged communities and likelihood of broader impacts in the wider market and economic development. 

Result

At the project’s end in October 2013, more than A$11 million had been approved by the Enterprise Challenge Fund for 21 projects, positively impacting the lives of more than 75,000 of the poorest people of the region. The combined impact of projects had an outreach to 497,512 poor people.

From 2010 to 2013 incomes of the poor and small business had increased to $8.179 million or 50% of the full program costs. This will rise in coming years and by 2015 it estimated that the full cost of ECF will have been converted into incomes for the poor.

Examples include:

WING, Cambodia (grant value A$1.5 million) is a provider of mobile phone payment services and allows customers to transfer, store and cash-out their money using a mobile phone. WING was awarded an ECF grant to support expanding these services to rural provinces of Cambodia. WING used the ECF funding to create a strong network for rural customers, develop targeted marketing campaigns and embark on financial literacy campaigns for rural users and has reached more than 400,000 customers in rural areas, with 34% female customers.

Sarami Plantation, Vanuatu (grant value A$1,375,000) used an ECF grant to work with small holder cattle farmers to improve beef production in Vanuatu. Sarami purchases cattle from small holder farmers in Santo at higher prices and sell to the two abattoirs in Vanuatu for eventual local consumption and export.

An independent review (Marlow 2013) found that between 2010 and 2012, Sarami purchased more than 2,000 cattle from 241 small suppliers at a total value of more than A$600,000 - earning suppliers an average of around A$150 for each beast and increasing total income for suppliers by approximately A$300,000 over the two years.