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Mid-term evaluations (MTEs) of credit projects in Sri Lanka (219 SR) and Indonesia (215 ID) and a thematic evaluation in Nepal (166 NE) have highlighted several community development activities, undertaken by groups formed for the purpose of taking credit, and have underlined the development potential that was being lost by the narrow credit focus of these projects.
The precursors of the IFAD credit projects for the small farmers and landless in Nepal and Indonesia were FAO projects that formed groups as a means of participation, and raised awareness and development of the poor, with credit as an additional benefit. The process had four aims, as follows:
- social mobilization, awareness raising, training and empowerment of the poor (groups of the poor were seen as vehicles for development and not purely as guarantors of credit);
- self-reliance of the poor;
- develoopment of the groups as receiving/utilization mechanisms for improving their access to government services, thereby also creating a demand-led change in the local service delivery systems for the poor; and
- group action for the creation of assets and local production infrastructure (e.g. riverbed land reclamation and community irrigation systems in the Nepal project) and general community development action by the groups (Indonesia).
Although
IFAD projects were not based on these wide-ranging precepts, they often
developed an internal dynamic of their own, resulting in wider development
gains. In Nepal, group members donated their labour, cash and materials
to undertake the construction of schools, roads and drinking water supplies,
with "thousands of members participating in hundreds of such projects
since the inception of the programme" (MTE). In Sri Lanka (219 SR),
where there had not been a previous FAO project and the IFAD project was
formulated for the distribution of credit only, significant social mobilization
and empowerment was noted in the MTE: Many groups had undertaken general
social welfare and community development work in their villages, such
as cleaning hospitals, renovating roads, school buildings, etc. Thus,
IFAD aimed at credit for income generation; but also achieved: (i) genuine
beneficiary participation; (ii) the creation of potentially sustainable
mechanisms for the participation of the marginalized poor; and (iii) other
rural development goals which could be as important as the credit flow
or the incomes generated by it.
This shows the possible opportunity-cost for focusing on credit alone to increase incomes only.
- Mobilization of the poor, their organization in groups and the provision of training should not be seen in the narrow focus, mainly as a means/mechanism for the granting of credit without collateral, but should be envisaged and encouraged as a genuine method of participatory development.
- Once the institutional means have been created for beneficiary participation, these means (social mobilization, group formation and training) can also be used for promoting not only the immediate objective of credit guarantee and income generation but also other poverty alleviation initiatives, as the supply/utilization of safe drinking water, environmental sanitation, nutrition education programmes and community development work.
Select any of the following related project profiles for background information: 166 NE.
