The Mastercard Foundation MSE’s Resilience Facility to Support Businesses in Ethiopia Affected by COVID-19
Addis Ababa, June 4, 2020 – The Jobs Creation Commission of Ethiopia, the Mastercard Foundation and First Consult, announced the creation of the Mastercard Foundation MSE’s Resilience Facility. This is an emergency program that 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 implementation and monitoring of the Mastercard Foundation MSE’s Resilience Facility will be undertaken collaboratively by the three organizations. The provision of financial assistance, in the form of grants and soft loans, will take place 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 and 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 program, to be implemented in Addis Ababa, is anticipated to:
- 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.
Despite the risk mitigation efforts being implemented by the government and the financial sector 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 jobs being at risk, increase in underemployment, and working poverty.
“This intervention, by filling the critical gap needed to serve MSEs, will significantly enhance the government’s proactive measures to avert the impact of the pandemic and keep 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 burden of these losses. The least served and vulnerable young people in our country will be impacted, ” said Jobs Creation Commission Commissioner, Dr. Ephrem Tekle.
Once participating institutions have been onboarded, the Jobs Creation Commission and First Consult, a leading consulting firm specialising in the design and delivery of interventions that support private sector advancement and the overall economic development of Ethiopia, will put out a call to MSEs and start-ups to apply for funding, which will be announced soon.
Jobs Creation Commission
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About the Jobs Creation Commission
The Jobs Creation Commission (JCC) of the Federal Democratic Republic of Ethiopia is established under the Office of the Prime Minister to advance the government’s goal around employment and job creation. JCC is uniquely positioned to lead, govern and coordinate the jobs creation agenda at the national and subnational levels. It is committed to guide the investment of government, the private sector and development partners to high-growth sectors through policy analysis and innovation; and to align skills development with market needs.
Directly overseen by the Prime Minister’s office, JCC is mandated to Coordinate, Govern and Monitor all Government and Non-Government efforts in creating 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. The commission has facilitated and supported the creation of 2.4 million jobs to date.
Follow JCC on: https://www.jobscommission.gov.et
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.
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, the institution strives to solve the most-critical development challenges of our time. The core focus on youth development and women’s economic empowerment is central to the mission of First Consult, which is to realize an inclusive and sustainable development that benefits all.
Follow First Consult on: https://www.jobscommission.gov.et