Formal, private finance is key to establishing responsible and economically viable artisanal and small-scale gold mining (ASGM) enterprises and creating a long-term, sustainable sector that realizes its full development potential
Worldwide, it is estimated that 100 million people rely on artisanal and small-scale gold mining (ASGM) either directly or indirectly for their livelihood, and the sector is growing. Due to its informality and its perception as a high-risk sector, ASGM has had limited access to formal finance, and has traditionally been financed by informal lenders. This informal financing typically supports ASGM technologies and practices that are less costly in the short term, but generally less efficient with greater environmental and health impacts.
The sector requires access to finance that will allow the deployment of cleaner and more efficient technology and sound environmental management practices, all conducted within an enabling policy environment, but strong barriers to formal finance remain.
A new issue brief from the GEF-supported planetGOLD programme, Improving Access to Formal Finance in Artisanal and Small-scale Gold Mining, reviews past experiences with delivering financial and allied services to ASGM and examines the barriers to attracting formal finance and investment in the sector. The brief concludes with recommended interventions for governments, donors and other allies to help improve ASGM’s access to formal finance in the future. These recommendations include actions for creating an enabling environment, targeting appropriate finance and building necessary skills and capacities among miners, the finance sector, and other important actors in the sector.
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Portions of the material contained in this issue brief were originally published in two in-depth planetGOLD reports, supplemented with additional information and background for further explanation and clarification.
Readers are encouraged to consult the original reports for more detailed information:
Authored by Abby Efua Hilson and Gavin Hilson, May 2020
Authored by Sarah Caven, Assheton Carter and Ed Bowie, March 2020