Ethiopia: USAID, CARE Launch PSNP PLUS to Improve Micro-Finance and Market Linkages

Mar 2009
Addis Ababa, Ethiopia, March, 17 2009 - Today USAID, CARE, and a host of consortium partners, launched PSNP PLUS, a new nationwide development project that will assist poor, rural households in food insecure areas that benefit from the Government of Ethiopia’s Productive Safety Net Program (PSNP). This three year project will move households towards graduation from PSNP through market-driven approaches to diversify their livelihoods, build assets and link to financial services and markets.

Glenn Anders, USAID Mission Director, joined Ato Mitiku Kassa, State Minister for the Disaster Management and Food Security Sector, Ministry of Agriculture and Rural Development, CARE and consortium members participated in the official ceremony held at Hilton Hotel. “The new PSNP PLUS program is a perfect complement to the innovative safety net program led by the Government of Ethiopia. Our additional support will strengthen the financial skills and resources of vulnerable Ethiopians and, most importantly, lift them from a life of poverty,” Glenn Anders said.

The Government of Ethiopia’s PSNP provides food and financial resources to 7.4 million chronically food insecure and most vulnerable people to help stabilize their income and assets. In operation since 2004, the PSNP works to support rural transformation, prevent asset depletion, encourage household level production and investment, and promote market development. PSNP receives financial support from seven international donors, including USAID.

While food aid distribution and community level public works projects make people more resilient to food shortages, they are not enough to permanently graduate people from the safety net program. The PSNP PLUS project is designed, therefore, to assist poor households by linking them to micro finance services and functioning markets, a necessary step to lift people out of dependence on the PSNP.

The PSNP PLUS project will work with micro finance institutions to develop products and services which will increase the financial assets of PSNP beneficiaries, as well as strengthening the financial literacy and business skills of the PSNP beneficiaries themselves to promote savings. The project will target four agricultural products – honey, haricot beans, livestock fattening, and cereal production – to increase farmer’s incomes. Information on the entire value chain within each enterprise will be shared with farmers to help them improve their product, market linkages, and income. Overall, the project aims to help more than 212,000 Ethiopians in four regions, including Amhara, Oromiya, Tigray and parts of the rural Dire Dawa Administration.

The PSNP PLUS project is being implemented by a consortium of national and international NGOs. CARE is responsible for overall consortium management and implementation in collaboration with Catholic Relief Service (CRS), the Relief Society of Tigray (REST) and Save the Children UK (SC-UK). Technical assistance will be provided by SNV for value chain development; Feinstein International Center of Tufts University for impact assessment; and CARE for microfinance.

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