How OPIC-supported projects improve lives by creating jobs
At a time when about half the world’s population lives on the equivalent of $2 a day, creating more jobs and opportunity is essential to advancing development and improving the lives of the world’s poorest people. When 193 United Nations members gathered in Addis Ababa last summer for theFinancing for Development conference, they included “full and productive employment and decent work for all” among the 17 Sustainable Development goals that comprise the 2030 Agenda for Sustainable Development. In reality, jobs and opportunity are key to many of these development goals, from eliminating hunger and poverty to advancing gender equality.
How are jobs created in underdeveloped places with limited business infrastructure? A look at OPIC’s 2015 portfolio provides some insights. The projects that OPIC committed to last year are projected to support the creation of 20,000 jobs. These are some of the projects expected to support the most new jobs.
Support for subsistence farmers in Africa. The majority of Africa’s poor are subsistence farmers, who often cannot earn a decent living from the food they produce. OPIC committed a $10 million loan to One Acre Fund, which combines financing to small farmers with training on advanced farming techniques and help reaching markets so they are able to produce more food and earn income from the food they produce. One Acre supports farmers in Burundi, Kenya, Rwanda and Tanzania.
Expanding access to financial services in Ghana. An estimated 2 billion people worldwide – the majority of them in developing countries – lack access to financial services, limiting their ability not only to save for the future, but also to start and expand their businesses. OPIC committed a $20 million loan to Ghana’s GN Bank to help it expand its network of bank branches and its mobile banking services to reach more of the underserved population.
Introducing franchise restaurants in Mongolia. OPIC committed a $7.25 million loan to Tavan Bogd Foods Inc. to introduce Kentucky Fried Chicken and Pizza Hut restaurants in Mongolia’s capital, Ulaanbaatar. In addition to expanding access to food, such franchise operations are significant job creators and provide valuable training in safe food preparation practices.
Support for private equity investments in African agriculture. One of the key ways OPIC supports development is by providing financing to emerging market private equity funds, which often have deep expertise in the local markets in which they invest. One of the funds OPIC supports is the Silverlands Fund, which invests in agricultural businesses in Africa. Last year, Silverland’s investments included two farms in Tanzania, adding irrigation equipment, storage silos, and other equipment to help improve efficiency and yields.
Investing in small businesses in Asia. OPIC committed $12.5 million to Unitus Impact Partners Livelihood Impact Fund, which is investing in a variety of small businesses in Asia, from food producers in India to shopkeepers in Vietnam, to help them create jobs and increase the incomes of the working poor.