Shortly after midnight on May 20, Taur Matan Ruak was sworn in as Timor-Leste’s new president, taking over the role from José Ramos-Horta, the Nobel Peace Prize-winning former leader of the country’s independence movement. The ceremony, witnessed by tens of thousands of people proudly waving Timor-Leste’s red, yellow, and black flag, kicked off nationwide celebrations marking a decade of independence.
With that, this young, half-island nation of just over one million people enters another period of transition. Parliamentary elections are set for July and United Nations peacekeepers tasked to help keep the peace in this conflict-scarred country over the past six years are scheduled to leave at the end of the year.
At the same time, Timor-Leste’s economy is striding forward. According to the World Bank, Timor-Leste has averaged 12 percent growth annually over the last five years and is expected to maintain strong growth in the years to come. And IFC is stepping up its support to a growing private sector to help create the jobs and services that are vital for Timor-Leste’s future.
IFC is planning to sign its first Access to Finance program agreement with the country’s leading microfinance organization Moris Rasik, and is working closely with the government to establish a one-stop shop that would make it easier for entrepreneurs to do business.
Improving Women’s Access to Credit Moris Rasik (“Independent Life” in the local Tetun language), an established financier in Timor-Leste, provides credit to many women entrepreneurs in rural districts. For these women, finding the cash to start a market stall or corner shop is difficult. In many cases they lack collateral and business registration documents needed to apply for bank loans. Often, funding comes from their small savings, which limits their ability to expand.
IFC recognizes the crucial role Moris Rasik plays and is advising the organization on how to improve their reach and develop new products and services for the growing small business sector. IFC is supporting their transformation from a nongovernmental organization into a commercial entity – a change that will help attract new investment to expand their activities across the country.
With IFC’s help, Moris Rasik aims to grow its customer base by 45 percent to 16,000 and increase deposit accounts by 5,000 over the next three years.
“This project will assist us to transform and strengthen our operations,” says Lola dos Reis, Managing Director of Moris Rasik. “It will help us fulfill our vision of becoming a sustainable microfinance provider that will be here for the long term in Timor-Leste.”
Easing Business Start-up Together with increased access to financing for small businesses, IFC is also working with the government to make it easier for entrepreneurs to register their businesses. The government has approved IFC’s proposal to set up a one-stop shop for business license, tax, and registration applications, sparing entrepreneurs multiple trips (on average 17 times) to three different government ministries. Once the one-stop shop is launched, Timorese entrepreneurs would be able to process business application paperwork in one day – an improvement that could spur economic growth and create jobs and essential services in the country.
“Timor-Leste has made great progress in the last 10 years, but there is still some ways to go with more than a third of the population still living in poverty,” says Milissa Day, IFC’s Resident Representative. “As Timor’s focus increasingly shifts to economic growth, IFC will play an ever more important role in contributing to the country’s future by investing in businesses directly and offering our advice and support to create the right conditions for businesses to thrive, create jobs, and opportunities for the Timorese people.”