Note from Editors:
The creation of #jobs will be the focus at the Global Entrepreneurship Week in Kenya. To reduce poverty and improve the lives of the people, there is a need to create jobs with decent wages and social safety net essentials, such as health care and insurance.
by Elizabeth L. Littlefield
The spotlight in Kenya this week at the Global Entrepreneurship Summit will be on the creation of jobs, jobs and more jobs.
That is both wise and overdue, of course.
Job creation via #startup enterprises and small, early-stage, high-growth companies is essential to the ability of developing nations–indeed, all nations–to reduce poverty and improve lives. Today, this is recognized more than any time in modern history.
However, the issue is not just job creation per se. Precarious jobs beyond or on the fringes of the global economy are often little better than a life of subsistence. Our aspiration should be the creation of jobs with decent wages and social safety net essentials such as health care and insurance.
We have a very long way to go in the developing world. More than 800 million people around the world still live in extreme poverty, on less than $1.25 per day. Even those who migrate to cities find themselves with daunting prospects. The informal economy comprises half to three-quarters of all non-agricultural employment in developing countries, according to the International Labor Organization.
The United States, through its development finance institution, the Overseas Private Investment Corporation, is working to address this problem by ensuring that companies of all sizes–startup, high-growth, and maturing–get a fair shot at receiving the right kind of capital at the right stage of their evolution.
Families, friends and personal savings accounts are often the initial source of capital for the creation of enterprises. That is why OPIC has pushed so hard to advance #microfinance, which supports both financial inclusion and capital formation at the personal and family level.
More than $700 million of OPIC’s portfolio is devoted to microfinance–a 21 percent increase since 2011–and it is diversified across some 180 institutions across 50 developing nations. More important, a major portion of this is in post-conflict or conflict-affected nations, at a time when there are 60 million refugees worldwide.
Startup small and medium enterprises that create scores of jobs amid their early, make-or-break years often struggle to find commercial loans, investment partners or working capital for growth. The United States recognizes this distinct type of need in the economy. In Rwanda, for example, OPIC is supporting Musasa, a coffee cooperative that has grown from 300 to more than 1,800 members-among them many women who were made widows by the 1994 genocide. Today, many of Musasa’s key managers are women, and the cooperative is pioneering new business opportunities for its female members.
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