To carry out its mandate to help poor rural people overcome poverty, IFAD needs to ensure that development funds reach them in the most efficient, effective and transparent manner possible. There is no room for fraud and corruption, which divert resources elsewhere.

In 2005 IFAD adopted an anticorruption policy. The policy's goal is to prevent fraud and corruption in IFAD-supported programmes and projects, and in contracts at the local, national, regional and international levels.The policy affirms that:

"For loan and grant activities:

The Fund shall apply a zero-tolerance policy where it has determined, through an investigation performed by the Fund, the borrower or another competent entity, that fraudulent, corrupt, collusive or coercive actions have occurred in projects financed through its loans and grants, and it shall enforce a range of sanctions in accordance with the provisions of applicable IFAD rules and regulations and legal instruments. 'Zero tolerance' means that IFAD will pursue all allegations falling under the scope of this policy and that appropriate sanctions will be applied where the allegations are substantiated.  This policy applies to IFAD-funded activities whether supervised directly by the Fund or by a cooperating institution. The Fund will continue to improve its internal controls, including controls inherent in or pertaining to its project activities, so as to ensure that it is effective in preventing, detecting and investigating fraudulent, corrupt, collusive and coercive practices. The Fund shall take all possible actions to protect from reprisals individuals who help reveal corrupt practices in its project or grant activities and individuals or entities subject to unfair or malicious allegations. This policy is in line with the policies adopted by the other international financial institutions.

For IFAD staff and individuals representing IFAD:

The Fund shall apply a zero-tolerance policy where it has determined through an investigative process that its staff, consultants or individuals acting as representatives of the Fund have engaged in fraudulent, corrupt, collusive or coercive practices.  'Zero tolerance' means that IFAD will pursue all allegations falling under the scope of this policy and that appropriate sanctions will be applied where the allegations are substantiated.  IFAD shall enforce a range of disciplinary measures and sanctions for all such cases, in accordance with applicable IFAD rules and regulations and contractual provisions.  Such measures will include referral to the competent national authorities where warranted.  Where such cases concern individuals employed by another entity, the Fund shall take all possible steps to ensure that the other entity takes appropriate actions in a manner consistent with this policy.  The Fund will continue to improve its internal controls so as to ensure that it is effective in preventing, detecting and investigating fraudulent, corrupt, collusive and coercive practices pertaining to its staff, consultants or its representatives.  It shall take all possible actions to protect from reprisals individuals who submit allegations of corrupt practices in its activities and operations and individuals subject to unfair or malicious allegations."

Fraud and corruption include, but are not limited to:

• corrupt practice - offering, giving, receiving, or soliciting, directly or indirectly, anything of value to influence improperly the actions of another party
• fraudulent practice - any act or omission, including a misrepresentation, that knowingly or recklessly misleads, or attempts to mislead, a party to obtain a financial or other benefit or to avoid an obligation
• collusive practice - an arrangement between two or more parties designed to achieve an improper purpose, including influencing improperly the actions of another party
• coercive practice - impairing or harming, or threatening to impair or harm, directly or indirectly, any party or the property of the party to influence improperly the actions of a party