Manila, Jan 27, 2006 AEST (ABN Newswire) - Nongovernment organizations (NGOs) play a crucial role in ADB's (ASX: ATB) efforts to help rebuild lives destroyed by the December 2004 tsunami.
In Aceh, Indonesia, Mercy Corps was one of the first international NGOs to respond to the disaster, quickly developing programs that spanned food and non-food distribution, cash-for-work, community redevelopment and clean-up, and livelihood restoration. ADB, through its Earthquake and Tsunami Emergency Support Project (ETESP), is supporting Mercy Corps' efforts to restore livelihoods and promote economic recovery in hard hit communities in Aceh.
One of Mercy Corps' programs is to provide cash grants to communities, associations, local NGOs, and businesses to promote the economic recovery of hard hit communities, restore productivity, and replace microenterprises' income-generating assets destroyed during the disaster.
Cash grants are a form of compensation to victims of the tsunami who were almost entirely uninsured, helping people to take the critical first steps to rebuild their local economies, and paving the way for follow-on financial support in the form of sustainable microfinance.
"Cash grants are critical to kick-starting the largely informal, cash-based economy of Aceh," says Tom Moyes, ADB Credit Specialist. "The quick injection of capital goes to people who need it most, and who can be counted on to put it to work immediately."
In September 2005, ADB agreed to provide Mercy Corps with US$1 million to deliver as livelihood and community grants to those affected by the tsunami in Banda Aceh and Aceh Besar. Of this amount, 40% was earmarked for community cash grants and 60% for individual livelihood cash grants.
The project targeted householdsthat operated micro- and small-businesses prior to the tsunami. These largely informal businesses play the central role in the province's economy, comprising nearly 90% of all businesses in the pre-tsunami Aceh.
Mercy Corps supported six main sectors within its Livelihood Grants Program, namely, micro and small businesses, agriculture, livestock, forestry, fishing, and aquaculture. Many of these microenterprises are not yet capable of servicing a loan, even a very small one.
"Grants are a more appropriate way to help severely affected people get back on their feet and restore their livelihoods," Moyes adds. "Once lost assets are replaced, the microenterprise can restart, and begin generating cash."
With positive cash flow, microenterprises are able to service microloans, and can then access microcredit through local microfinance institutions. ADB and Mercy Corps are both also providing assistance to rebuild and expand the capacity and outreach of commercial microfinance providers.
Under the Community Grants Program, community proposals for livestock, crab farming, and crab-cage production, as well as fruit plantations, including mango, rambutan, and melimbing (starfruit), coconut, and mangroves, were funded.
About $800,000 of ADB's grant has already been given out by Mercy Corps, with the remaining funds to be disbursed in February. ADB and Mercy Corps are looking for new ways to cooperate in 2006.
Contact
Floyd Whaley
Email: fwhaley@adb.org
Tel:+632 632 6848; +63 9717 888 6848
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