The Millennium Challenge Corporation, or MCC, is a bilateral, United States foreign aid agency that works with eligible countries to enable them to implement homegrown development projects.
The MCC forms partnerships with some of the world’s poorest countries, but only with those committed to good governance, economic freedom, and investments in their citizens. MCC provides such well-performing countries with large-scale grants, called compacts, to fund country-led solutions for alleviating poverty through sustainable economic growth. MCC also provides smaller threshold grants, which are meant to help a country to become compact eligible, and requires key policy and institutional reforms.
Honduras is one of MCC’s success stories. Two and a half years ago, the country completed a five-year MCC compact. As part of the program, more than 7,000 Honduran farmers were trained in better crop management, irrigation, business skills, and post-harvest handling.
In addition, more than 10,000 loans were extended to 5,800 farmers, agribusinesses and other producers, intended to support expanding their production and increasing their profits. The MCC compact also provided for the improvement of nearly 600 kilometers of roads in order to reduce transportation costs and travel time for people and goods to national, regional and global markets.
On March 14th, the MCC Board of Directors voted to make a further investment of up to 15.6 million dollars for a threshold program in Honduras. Honduras is the first country to qualify for a grant under MCC’s revised approach to the threshold program.
The grant will focus on improving public financial management, as well as the efficiency and transparency of public-private partnerships. In determining how best to use the funds, the Government of Honduras and the MCC worked closely with the private sector, government ministries, and civil society to identify the most serious constraints to economic growth in Honduras. They cited the lack of an efficient and transparent financial management system and crime and security. The activities in the threshold program focus on the lack of an efficient and transparent financial management system.
The United States congratulates the people and Government of Honduras for embracing a reform agenda. Through the MCC program, the United States and Honduras are continuing to build Honduras’s capacity for transformational change.