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Project ID: 1280
Rural Finance Programme The Rural Finance Programme has been designed within the framework of Zambia's poverty reduction strategy and Financial Sector Development Plan. The programme is the first intervention under an intended commitment by IFAD to support long term rural financial services development. The programme will develop community-based financial institutions, expand rural banking services, intensify and expand contracted smallholder production and promote new financial services appropriate for rural areas, paying special attention to the requirements of the poorest people. These interventions will establish a basis for improving the institutional and policy framework for rural financial services. Direct beneficiaries will include (i) 30 000 poor rural households participating in savings and credit associations; (ii) 100 000 rural households and small enterprises accessing rural banking services, including 15 000 households and small enterprises accessing credit; (iii) medium- to large-scale enterprises intensifying or expanding a contract relationship with 60 000 rural households, some of whom will also be accessing rural banking services; and (iv) an unknown number of households benefiting from the programme's matching grants for financial services projects, including those specifically targeting poor rural people such as woman-headed households and households affected by HIV/AIDS. As many as 150 000 rural households could be direct programme beneficiaries. Savings and credit groups are a proven source of social empowerment, especially for women, bringing benefits to communities by enabling members to generate savings and access small loans. In addition, village banks enable members to access larger loans for investment in income generating activities. The successful recapitalization and development of the National Savings and Credit Bank will improve access to rural banking services for a major part of rural society. Its will do so domestically through household savings, money transfers and to a small extent loans, institutionally through money transfer for government bodies, and commercially through working capital, investment finance, secure deposit and money transfer facilities. The programme's credit facility for contracted small scale production will enable additional smallholders to commence contracted production activities, with higher returns than would otherwise be possible. The innovation and outreach facility will help develop new rural finance products including those accessible to female-headed households and HIV/AIDS-affected households. Loan Amount SDR 9.25 million (equivalent to approximately USD 13.81 million) on highly concessional terms Total programme cost: USD 17.43 million Cooperating Institution: United Nations Office for Project Services (UNOPS) |
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| Project ID: 1108
Smallholder Enterprise and Marketing Programme In the absence of well-functioning markets, the majority of Zambia's smallholders have few opportunities to produce anything other than traditional subsistence crops with minimal inputs; they are thus locked into a vicious circle of low income and food insecurity. This seven-year investment programme, to be directly supervised by the Fund, aims to create new opportunities for linking smallholders with input and output markets. A series of interrelated initiatives are designed to: - develop and strengthen smallholder enterprise groups and associations and build capacity in local institutions to be progressively able to provide such services; - promote a range of market linkage initiatives that capitalize on the synergies possible between the smallholder and the market intermediary; - develop new and complementary agricultural market opportunities and support the associated diversification in smallholder production; - improve rural road access through funding rehabi litation, developing maintenance capacity and training of local contractors; and - facilitate a positive policy/legislative environment for smallholder/private-sector market linkages. The target group consists of smallholders who live below the poverty line in the more densely populated parts of the country and have the potential to produce marketable surpluses. It is difficult to estimate the number of smallholders that will become involved in the programme, as they will be self-selected, and the precise location and mix of different interventions will be determined by participatory planning in focal areas. However, it is estimated that some 30 000 households will be involved in the group formation and strengthening, with some 50 000-60 000 households, or 250 000- 300 000 people, benefiting directly from the broader initiatives such as road improvement and other market-linkage mechanisms. Innovative Features: - The focus on the development of linkages between smallholder producers and markets is largely a new area of involvement for both IFAD and the Government. It reflects their recognition that this is the most important area for intervention if smallholder incomes and food security are to be improved. - While bringing farmers together in groups and associations is certainly not new, developing smallholder group enterprises along sound business lines is. If successful, this could be a major factor in transforming Zambian agriculture, facilitating many other market initiatives. - Outsourcing of large elements of programme implementation to contracted organizations will be a new approach for the Government; indeed, it is relatively new for IFAD. However, it will build upon experiences gained and lessons already learned under ongoing projects, permitting the Government to concentrate on its core functions and avoid direct involvement in activities better undertaken by the private sector. - The application of programme investment to two flexible funds is a flexible and robust way of managing a diverse range of activities in a rapidly changing environment, where there is a need to be able to respond to initiatives by other donor-funded programmes and changes in market signals. Loan Amount: SDR 11.6 million (approximately USD 15.9 million) on highly concessional terms. Total Programme Costs: Estimated at USD 18.4 million, of which USD 1.6 million will be provided by the Government and USD 836 000 by NGOs and market intermediaries. Cooperating Institution: The programme will be supervised directly by IFAD. |
| Project ID: 1039
Forest Resource Management Project Many of Zambia's poorest rural people live in close association with the country's extensive areas of natural forest. Increasing population pressure is already contributing to the decline in the forest resource base. Without the adoption of a sound natural resource management system, this process will eventually lead to falling incomes and increasingly insecure food supply for these communities. The main objectives of this six-year IFAD-initiated project are to increase the incomes and food security of poor people in the forest-dwelling communities in north-western and Luapula provinces. Specifically, this project will: - develop institutions and systems for the management and preservation of forest areas through communal or joint management arrangements; - assist existing and emerging producers and groups to develop sustainable income-generating activities through improved harvesting, processing and marketing of forest products; and - improve the living conditions of forest-dwelling communities by reducing their social and economic isolation through upgrading social infrastructure and local access roads. It is expected that about 40 000 households (approximately 200 000 people) could benefit from the project. Direct assistance will be given to more than 13 000 producers to develop sustainable income-generating activities based on forest products. Innovative Features: - The principal implementers will be NGOs and private-sector entities under contract with the Government. The small Project Facilitation Unit (PFU) will generate and manage these contracts, ensuring that complementary activities function smoothly together. The PFU will be a supernumerary and temporary arm of the Ministry of Environment and Natural Resources, whose sole purpose will be carrying out the agreed-upon activities. - The project has a clear "ex it route" for all interventions; support to each "working area" will be limited to three years. This will ensure that authentic institutions are created and developed at the village level, without need for perpetual subsidy. Improvements in the capacity of the Government and NGOs will be long-lasting, providing support to community management structures and producer groups. Loan Amount: SDR 9.2 million (approximately USD 12.6 million) on highly concessional terms. Total Project Costs: Estimated at USD 16.0 million, of which USD 1.7 million will be provided by the German Development Service, USD 123 000 by Ireland, USD 908 000 by the Government and USD 642 000 by the beneficiaries. Cooperating Institution: UNOPS. |
