Ecuador – Local Business Development Project

Encouraging Licit Economic Opportunities in Border Regions

Ecuador, located between two of the world’s leading producers of coca and cocaine, is faced with the threat of a rapidly growing illicit drug economy. Although Ecuador has sound agricultural production, its high rural poverty levels necessitate targeted economic development that will help negate the effects of the narcoeconomy on rural populations.

To address these needs, ACDI/VOCA is implementing the two-year, USAID-funded Local Business Development program, or Programma de Desarrollo de Empresas Locales (PRODEL) as it is known locally. This program is implemented under AED’s Financial Integration, Economic Leveraging, Broad-Based Dissemination (FIELD-Support) Leader with Associates award in collaboration with CARE Ecuador. PRODEL will increase incomes and create employment for families along the northern and southern Ecuadorian border areas by facilitating the expansion of private enterprises and strengthening local private producer groups and associations. The program recognizes the importance of both private and public sector actors in overcoming obstacles to sustained growth, including such obstacles as physical isolation, lack of knowledge of end-market requirements, difficulty in accessing financing for working capital or investments, or difficulty in attaining economies of scale for profitable participation in value chains.

To achieve the program objectives, PRODEL uses a value chain approach, identifying and addressing major opportunities and constraints to growth while ensuring sustainable impact at the household level. Specifically, the program targets interventions at lead firms—or anchor firms—and the linkages within those firms’ specific business systems to address constraints to their ability to grow while facilitating the growth of suppliers and buyers. ACDI/VOCA provides market-driven technical assistance and financing packages to anchor firms as well as to suppliers and ancillary firms.

PRODEL works to promote a better private sector-enabling environment in the municipalities included in the program. The project helps to mobilize and stimulate the participation of the business community to help local governments establish more business-friendly registration procedures, licensing, fee and tax structures, and other incentives needed to accelerate PRODEL’s enterprise development objective.

PRODEL aims to create broad, sustainable impact in the target municipalities and populations and generate new and more lucrative opportunities for families to develop their own businesses or obtain jobs within the legal sectors of the economy. Ultimately, PRODEL will help develop a competitive private sector environment in Ecuador that can promote employment and income growth in the northern and southern border regions to combat the effects of the expanding drug economy in the country.

For more information, contact Lisa Kearns at Lkearns@acdivoca.org.

Updated: 3/08

PDF version of profile (1.1 MB)

Spanish PDF version of profile (1.1 MB)