What is the Millennium Challenge Corporation (MCC)?

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What is the Millennium Challenge Corporation (MCC)? Blog Image


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 grantscompacts 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.


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