Regions and Countries

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p. 8 of 18 BACK | NEXT I. Country Performance Assessment II. Country Operational Strategy III. Sector Strategies A. Agriculture and Rural Development B. Infrastructure C. Social Infrastructure and Environment D. Governance Dimensions of ADB Operations E. Gender Dimensions of ADB Operations F. Private Sector Development IV. Regional Cooperation V. Donor Activities and Aid Coordination VI. Cofinancing and Catalyzing External Resources VII. ADB’s Operational Program VIII. Economic and Sector Work Program

Country Assistance Plans - East Timor : III. Sector Strategies

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A. Agriculture and Rural Development

1. Microfinance

27. Microfinance will be an effective way of assisting the poor to increase their income and standard of living. The need to provide microfinance services is particularly challenging and urgent in East Timor given the recent destruction of its economic infrastructure and the dismantling of support systems. A framework for financial services is required for sustainable economic management after the donor assistance has ended. At present, there appear to be few prospects for establishment of a viable microfinance institution either amongst the existing banks or through non-government organizations (NGOs). However, selected indicators on growth of credit unions over the past ten years suggest potential for further development. ADB has prepared a microfinance development project which will focus on: (i) rehabilitation and expansion of credit union operations through local initiatives; (ii) determining the scope for establishment of a specialized microfinance bank; (iii) helping the Government to develop a prudential framework and supervisory capacity for such institutions. In line with this strategy, ADB provided an SSTA in 2000 for a Microfinance Project. This project was approved in December 2000 and implementation will commence in January 2001 using the TFET.

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