Access to Finance in Output-Based Aid [electronic resource] / Geeta Kumar.
Material type: TextSeries: Other papers | World Bank e-LibraryPublication details: Washington, D.C. : The World Bank, 2010Subject(s): Access to Finance | Accountability | Affordability | Capacity Building | Capital Costs | Capital Expenditures | Capital Requirements | Collateral | Commercial Banks | Communications Technology | Cooperatives | Debt | Developing Countries | Development Economics & Aid Effectiveness | Economic Development | Expenditures | Finance and Financial Sector Development | Financial Crisis | Financial Institutions | Governance | Hospitals | Household Income | Immunizations | Interest Rates | International Finance | International Financial Institutions | International Governmental Organizations | Letters of Credit | Macroeconomics and Economic Growth | Microfinance Institutions | Microinsurance | Savings | Small Businesses | Technical Assistance | Trade Finance | Transparency | Transport | Urban Development | User Fees | Villages | Water SupplyOnline resources: Click here to access online Abstract: Output-Based Aid (OBA) and other results-based financing mechanisms are gaining popularity in the development context for many reasons, in particular, the desire to link scarce public funding with actual results on the ground. But withholding disbursements until the delivery of 'results' or 'outputs' requires that the service providers delivering the results must have access to finance (A2F) to pay for the 'inputs' in the first place. Such finance is not always available or affordable. The purpose of this working paper is to outline some of the key issues related to OBA and A2F. The analysis focuses on the energy, water, and health sectors. Micro, small and medium enterprise (MSME) financing is the main topic; however, OBA is ultimately about poor households affording access to basic services, and many OBA schemes attempt to address A2F for households, so some of these innovations are also described. The working paper is expected to support a consultative process between experts dealing with A2F challenges and experts on OBA. This process should help raise awareness of the OBA approach among potential financiers, and help consider solutions (instruments, partnerships, capacity building) so that OBA and other similar results-based financing mechanisms can be brought to scale and integrated into broader sector policy, where appropriate.Output-Based Aid (OBA) and other results-based financing mechanisms are gaining popularity in the development context for many reasons, in particular, the desire to link scarce public funding with actual results on the ground. But withholding disbursements until the delivery of 'results' or 'outputs' requires that the service providers delivering the results must have access to finance (A2F) to pay for the 'inputs' in the first place. Such finance is not always available or affordable. The purpose of this working paper is to outline some of the key issues related to OBA and A2F. The analysis focuses on the energy, water, and health sectors. Micro, small and medium enterprise (MSME) financing is the main topic; however, OBA is ultimately about poor households affording access to basic services, and many OBA schemes attempt to address A2F for households, so some of these innovations are also described. The working paper is expected to support a consultative process between experts dealing with A2F challenges and experts on OBA. This process should help raise awareness of the OBA approach among potential financiers, and help consider solutions (instruments, partnerships, capacity building) so that OBA and other similar results-based financing mechanisms can be brought to scale and integrated into broader sector policy, where appropriate.
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