What is the Millennium Challenge Corporation (MCC)?
31-08-2023
12:36 PM
1 min read
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Overview:
Aiming to enhance the road and power transmission capacity of Nepal, the multimillion-dollar Millennium Challenge Corporation (MCC) pact recently started its work formally.
About Millennium Challenge Corporation
- MCC is an independent U.S. foreign assistance agency that has the goal of reducing poverty in developing countries.
- It was created by the U.S. Congress in 2004 to promote economic growth, open markets, and increased living standards in select countries.
- How does it work?
- MCC forms partnerships with countries that are committed to good governance, economic freedom and investing in their citizens.
- MCC provides selected countries with large-scale grants to fund projects for reducing poverty through sustainable economic growth.
- These projects include building infrastructure, reforming institutions, and promoting access to healthcare and education.
- MCC grants may complement other U.S. and international development programs.
- MCC utilizes two primary types of grants: compacts and threshold programs.
- Compacts are large, 5-year grants for countries that pass MCC’s eligibility criteria.
- Threshold Programs are smaller grants awarded to countries that come close to passing these criteria and are committed to improving their policy performance.
- Governing Body: The US Secretary of State, the Secretary of the Treasury, the U.S. Trade Representative, and the USAID Administrator serve on the MCC board along with four private sector representatives.
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Q1) What is the difference between a Grant and a Loan?
A loan requires you to repay the money you borrow, whereas a grant does not. Grants are, essentially, a gift. In other words, they're non-repayable. Grants may be awarded by government departments, trusts, or corporations and given to individuals, businesses, educational institutions, or non-profits.
Source: Formal implementation of multi-million US Dollar MCC pact begins in Nepal