Support to Economic Grass Roots Initiatives Project

Support to Economic Grass Roots Initiatives Project (AIEB)

This project had the long-term objectives of fostering a sustainable development dynamics in the rural sector, solving the unemployment problem and improving the income and living standard of the most disadvantaged rural families. In the short and medium terms, one of the objectives was also to reduce the rural exodus.

The project was based on two components: support for economic initiatives and rural finance. The strategy adopted was that of diversifying economic activities in rural areas through the creation of non-agricultural microenterprises and mobilizing local savings to fund these initiatives.

Despite the difficulties faced by the project (four loan suspensions, the longest of which lasted 23 months between 1998 and 2000, then the restarting and strategic reorientation of the project in the same year), its activities had a considerable impact on development of the microfinance sector, with the creation of the Comoros Savings and Credit Associations (MECKs). This network of decentralized institutions, located in 12 semi-urban centres, covers the whole of the country today and has a wider geographical coverage than commercial banks, although its penetration rate is still poor. It now has 30,000 members and a capital of US$15.0 million in savings.

Results in the microenterprise sector were also satisfactory: more than 880 microentrepreneurs were supported by the project and 130 microenterprises were set up, generating more than 300 jobs in rural areas.

Source: IFAD