ADDIS ABABA (Mastercard Foundation)– Mastercard Foundation, in partnership with the Jobs Creation Commission and First Consult, has announced the creation of the Mastercard Foundation MSE’s Resilience Facility. This emergency program will support micro and small-sized enterprises (MSEs) and start-ups in Ethiopia during the economic downturn caused by the COVID-19 pandemic.
The program, with an initial commitment of approximately USD 24.8 million from the Mastercard Foundation COVID-19 Recovery and Resilience Program, will ensure MSEs remain solvent, retain their employees, and are able to create increasingly innovative work opportunities in the wake of COVID-19.
The Mastercard Foundation MSE’s Resilience Facility will focus on supporting MSEs and start-ups within the following two categories:
- High Vulnerability: Registered micro enterprises and informal firms that are self-employed.
- Moderate Vulnerability: Small enterprises facing extreme slowdown within service-related businesses and that are at risk of major interruption or cancellation of orders.
The Mastercard Foundation MSE’s Resilience Facility will provide financial assistance, in the form of grants and soft loans, via participating institutions – Banks, Microfinance, and Business Development Services – to eligible, qualified micro- and small-sized enterprises, both formal and informal. The amount and type of financial support provided will vary depending on the size of enterprise and their needs.
The program, to be implemented in Addis Ababa, is anticipated to achieve the following impact:
- Prevent 24,000 MSEs from going bankrupt and closing permanently.
- Prevent more than 50,000 employees from losing their jobs.
- Equip three financial institutions to effectively partner with MSEs through collateral free loans and increase their adoption rate of digitally based micro credit.
The creation of the Mastercard Foundation MSE’s Resilience Facility is aligned to the Foundation’s Young Africa Works strategy. Young Africa Works, developed in consultation with young people, policymakers, educators, and entrepreneurs, is Mastercard Foundation’s strategy that aims to enable 30 million young people in Africa, with 10 million in Ethiopia, to access dignified and fulfilling work over the next 10 years.
“Young Africa Works is about connecting young people to opportunity, enabling them to build and sustain their livelihoods. To move forward with that agenda, we first have to safeguard the opportunities that already exist but are threatened by COVID-19. We can then build on that foundation,” said Alemayehu Konde Koira, Country Head, Ethiopia, at the Mastercard Foundation.
Following the current spread of COVID-19 in Ethiopia, several containment measures are being undertaken which have economic implications and a forecasted loss of about 2% economic growth in this fiscal year. The economic crisis will lead to a high rate of job losses, increasing underemployment, and working poverty.
“There can’t be a better solution than keeping enterprises solvent and in business. The Jobs Creation Commission estimates that close to 1.4 million wage jobs are under threat and approximately 1.9 million people in vulnerable employment will lose their income due to the economic impact of COVID-19. Enterprises and informal businesses, that are least able to withstand this economic slowdown, will bear the brunt of these losses. The least served and vulnerable young people in our country will be impacted,” said Jobs Creation Commission Commissioner, Dr. Ephrem T Lamango.
Once participating institutions have been onboarded. First Consult will put out a call to MSEs and start-ups to apply for funding, which will be announced soon.
About the Mastercard Foundation
The Mastercard Foundation seeks a world where everyone has the opportunity to learn and prosper. Through its Young Africa Works strategy, Canadian EleV program, and the Mastercard Foundation Scholars Program, the Foundation works with partners to ensure that millions of young people, especially young women, access quality education, financial services, and dignified work. The Mastercard Foundation was established in 2006 through the generosity of Mastercard when it became a public company. The Foundation is independent with its own Board of Directors and CEO.
The Mastercard Foundation COVID-19 Recovery and Resilience Program has two main goals. First, to deliver emergency support for health workers, first responders, and students. Second, to strengthen the diverse institutions that are the first line of defense against the social and economic aftermath of this disease. These include universities, financial service providers, businesses, technology start-ups, incubators, government agencies, youth organizations, and non-governmental organizations.
For more information and to sign up for the Foundation’s newsletter, please visit www.mastercardfdn.org/. Follow the Foundation on Twitter at @MastercardFdn.
About the Jobs Creation Commission
The Jobs Creation Commission is established in 2018 under the regulation 435/2018 promulgated by the council of ministers mandated with the authority to lead the job creation agenda, coordinate stakeholders, monitor and evaluate performance with the vision of creating a country where all have access to decent and sustainable jobs. With a mission to drive job creation through innovation and action, the Commission aims to facilitate the creation of 3 million jobs by 2020, 14 million by 2025 and 20 million by 2030. Focusing on Policy & Strategies, Delivery assurance & Capacity building, Partnership & Investment, Innovation and Data analytics and system development; The commission has facilitated and supported the creation of 2.4 million jobs to date.
Follow JCC on: www.jobscommission.gov.et | twitter.com/Jobs_FDRE | facebook.com/JobsCommissionFDRE/
About First Consult
First Consult is a leading Ethiopian institution specialized in economic development in Ethiopia. With a focus on private sector, financial sector and human capital development since 2005, First Consult has built and worked with over 500 partnerships that spans the private sector, government and development community. By supporting and mobilizing strong local institutions with highly-capable individuals, we work to solve the most-critical development challenges of our time. Our core focus on youth development and women’s economic empowerment is central to our mission, which is to realize an inclusive and sustainable development that benefits all.
Source: Mastercard Foundation