Local Business Support
Thriving small and medium sized businesses are essential for local economic development.
Oxfam Novib was one of the first NGOs to see the importance of microcredit as a tool for poverty reduction. We now invest in many entrepreneurs around the world to enable them to build a sustainable livelihood.
Apart from microfinance, we are also innovating in the area of SME finance, realising the positive impact of small businesson employment and inequality. We particularly focus on young and/or female entrepreneurs and SMEs that develop products and services that benefit people living in poverty.
Oxfam Novib has supported small household businesses through micro-finance for many years and we plan to continue to do so in the future. These enterprises typically provide a service to a community – tailoring or a food stall - and bring in additional income for a family, usually in poor rural areas.
Oxfam Novib provides loans to local micro finance institutions (MFIs), who in turn give out credit to individual or group lenders. The huge potential for MFIs as growth engines for local economies is far from being realised. Few viable MFIs currently exist, particularly in Africa. We are changing this dynamic and scaling up our work in search of opportunities to develop MFIs to tailor their services to the needs of people living in poverty. At the same time we are supporting MFIs to cater for new market needs, such as the increasing demand for finance for small and medium sized enterprises (SMEs).
Oxfam Novib believes SMEs have the potential to contribute to sustainable growth, through increased employment, higher income and relevant products and services for people living in poverty, particularly for small farmers, youth and women. To support SMEs in Africa and Asia to live up to their potential, Oxfam Novib supports them directly with growth finance (loans and equity) and business development services (training, market linkages etc). We select businesses based on an assessment of their plans and financial potential and on the social impact that they expect to deliver for their community. To ensure business deliver on the later, social impact is monitored consistently from the start and measured during the loan period. Read more about our support to SMEs through our Inclusive Impact Investments initiative.