The Inter-American Development Bank’s Multilateral Investment Fund today announced the approval of a $3,285,000 grant for a program that will strengthen transnational links between Latin American immigrants and their homelands by financing small-scale productive projects in their communities of origin.
Under the program a grant fund will be established to support local economic development projects backed by partnerships involving Latin American diaspora groups and community organizations in high-migration regions of Argentina, Dominican Republic, El Salvador, Guatemala, Mexico and Nicaragua.
Hispanics in Philanthropy, a San Francisco, CA-based nonprofit organization that promotes links between philanthropic organizations and Latino communities, will carry out the program. HIP, which will contribute $4,060,000 to the program, has experience in capacity-building projects with local partners in the Dominican Republic and the Argentine province of Cordoba.
The program seeks to take advantage of the phenomenon of migration and remittances to generate alternative economic opportunities in communities that receive significant remittance flows. An additional facet of this program is its focus on the participation of philanthropic organizations as a means to strengthen the culture of philanthropy in participating countries.
“The Latin American diaspora represents an important source of knowledge, financing and access points for new markets for their communities and countries of origin. Tapping into this resource to support productive projects can forge an effective partnership for change,” commented MIF project team leader Daniel Shepherd.
The grant fund will support projects involving income-generating activities, including microenterprises, small businesses, cooperatives and local organizations backed by expatriate groups such as hometown associations. It will also finance cottage industries that export to diaspora markets and projects involving remittances or the transfer of skills and technologies to immigrants’ communities of origin.
In an effort to ensure that the program benefits low-income groups, priority will be given to projects presented by NGOs or other institutions serving traditionally excluded minorities such as Afro-descendents, indigenous communities, women and youths.
The fund will finance projects ranging from a minimum $50,000 to a maximum $250,000. MIF contributions to any project will be capped at $100,000. Local organizations will have to finance at least 20 percent of the total cost of their projects.
The MIF, an autonomous fund administered by the IDB, supports private sector development in Latin America and the Caribbean, with an emphasis on microenterprises and small businesses. Its Remittances as a Development Tool cluster of projects includes a partnership with the UN’s International Fund for Agriculture Development to promote rural financial services and ventures to sponsor entrepreneurial projects in Mexican states with high rates of migration.