Investment Components
Component 2: Rural Economic Transformation
The second component, representing approximately USD
13.5 million of Programme investment, comprises three sub-components:
(i) Production/Market Support for Agricultural, Livestock and Forestry
Development; (ii) Rural Enterprise Development; and (iii) Rural Financial
Services.
Sub- Component 2-a: Support for Agricultural,
Livestock and Forest Development (USD 8.8 million)
A number of principles have guided the redesign of the
original project component, ‘On-farm Development Support’.
• Focus on association/group development to create
necessary ‘critical mass’ of trained and capacitated community-based
organizations.
• Adoption of a more market-oriented, commercial approach to farming/livestock
rearing – and to the provision of technical services – that
starts with what can be profitably grown/raised and marketed.
• Utilization of commodity chain analysis (‘approche filière’)
to allow for more effective targeting of technical and financial support
in response to identified constraints and opportunities.
The sub-component comprises four elements: (i) market-oriented
technical support services, (ii) support for group enterprises and market-based
initiatives, (iii) livestock production and commercialisation and (iv)
forest management.
Market-Oriented Technical Support Services.
These services combine extension, demonstration and client-responsive
adaptive research and builds on the experience gained during the first
phase The principles applied then are relevant now and are in line with
national policy and focus on the development of an extension service with
minimal government involvement and use of farmers’ own resources,
capacity and opportunities to tackle constraints identified through PRAs
and commodity chain analysis. It will involve deepening the partnership
between ISAR/DALF and the Programme with the two organizations building
on the experience gained in the first phase but with greater demonstrated
accountable for performance and impact of the activities undertaken on
behalf of the Programme.
The basis for extension and demonstrations will be the
formation and training of some 80 extension groups, one in each sector.
The members will be selected by their communities, based on their farming
skills and capacity, in such a way that all groups are represented and
that there is a gender and age group balance. The focus will be on: (i)
commodity chain analysis, (ii) demonstrations of improved technologies;
(iii) organisational and technical empowerment of the farming community;
(iv) follow-up PRAs and performance evaluation workshops; and (iv) strengthening
the capacity DALF and ISAR.
Support for Group Enterprises and Market-based
Initiatives. This second activity responds to the need to assist
farmers to form enterprise groups to facilitate purchase of inputs and
market of their production. The programme will focus the establishment
of small-scale group businesses. To facilitate this, a financing facility
would be created to fund a number of activities to support the development
of group initiatives.
Livestock Production and Commercialisation.
The third activity will be used to promote: (i) Support for Development
of Livestock Owners Associations (LOAs), (ii) Strengthening the Milk Commodity
Chain and (iii) Animal Heath Initiatives. All three will be private sector
based and market oriented.
The Programme would form and train LOAs as the focus
for Programme interventions in the livestock sector. By creating well
trained and informed business-oriented groups, it will be possible for
the livestock owners to better access technology, business opportunities
and financial services. The initial LOAs would be formed around a specific
activity or business development opportunity – such as a milk collection
centre – that would provide a clear direction and motivation for
the livestock owners to work together.
Programme initiatives in support of the milk commodity
chain during the second phase are:
• Milk Collection Centres. A series of milk collection
centres will be financed with the exact number will be conditional on
negotiations with PADEBL – a national AfDB-financed livestock development
project that also includes funding for milk collection centres.
• Nyagatare Milk Processing Plant. Including the cost of financing
the rehabilitation and equipping of the plant under the second phase of
UCRIDP.
• Improvement of fodder resources. Establishment of demonstration
plots by ISAR/DALF adjacent to the milk collection centres.
• Improvement of Local Breed Productivity. to contribute to the
quantity of milk available and to the return to the farmers/livestock
owners supplying the milk.
With experience from the first phase, the Programme will
expand the programme of animal health initiatives to other districts and
over the four years increase the number of community animal health agents
trained and made operational by 120 to 160. Complementary initiatives
include: veterinary drugs and outbreak emergency revolving funds, control
of tsetse fly animal diagnostic and crush pens.
Forest Management. Support for forest
management is divided into three main investment activities:
• District Forest Plantations, involving the establishment
of some 3 200 ha in four years.
• Social Forestry, involving some 2 400 ha of households’
plantations.
• Fruit Tree Orchards, on some 3 000 ha of farmland.
• Training and Institutional Support, which includes: support to
ISAR and DALF for studies and training and backstopping.
Sub- Component 2-b: Rural Enterprise Development
(USD 1.8 million).
The implementation of the sub-component will be carried
out in conjunction with PPPMER, a national IFAD-financed project to support
the promotion of small and micro enterprise development. UCRIDP would
provide the funding, the oversight and would ensure coordination with
other Programme components. PPPMER would provide day-to-day management
of enterprise development activities in line with the approach used and
modalities of project implementation in the other areas of the country.
The sub-component comprises four main activities: (i)
promotion and support for rural enterprise development; (ii) support for
rural small and micro entrepreneurs; (iii) access to financial services;
and (iv) management support.
Promotion and Support for Rural Enterprise Development.
Support will be provided to promote a favourable environment for SME development,
including: (i) functional literacy training, (ii) gender-focused analysis
and initiatives; (iii) strengthening of SME associations and federations
so that they can defend their members' interests, negotiate with potential
partners and ultimately take over programme's responsibilities with regard
to providing support to their members; (iv) strengthening of solidarity
groups to facilitate access of the micro-enterprises to financial services;
and (v) capacity-building of district-based Rural Enterprise Advisers.
Support for Rural Small And Micro Entrepreneurs.
The activities will include: (i) technical and management training; (ii)
apprenticeship programmes and (iii) marketing support.
Access to Financial Services. A line
of credit will be created to fund: (i) small credit (FRw 15 000 to 200
000) for individuals and solidarity groups; (ii) ‘ordinary’
credit (FRw 150 000 to 1.5 million) for the purchase of equipment, constitution
of stocks, or financing of revolving funds; and (iii) investment credit
(over FRw 1.5 million) for larger enterprises. Participating financial
institutions are expected to include: MFIs – for small credit; Union
des Banques Populaires du Rwanda (UBPR) and major MFIs – for ‘ordinary’
credit; and Banque Rwandaise de Developpement (BRD) and commercial banks
– for investment credit.
Management Support. This will finance
a centre/antenne for promotion of rural enterprise activities in the province.
Sub- Component 2-c: Rural Financial Services
(USD 2.8 million).
The sub-component would have three main strategic thrusts:
(i) support to groups and individuals accessing rural financial services;
(ii) support for MFIs; (iii) provision of a line of credit; and (iv) technical
advisory services.
Support for Rural Groups to Access Financial
Services. The first activity, builds on the success during the
first phase in forming and training community-level savings and credit
groups. Support would be extended to include the full range of target
groups with which the Programme is working. The sub-component will also
work with enterprise groups and other groupings of rural entrepreneurs
to help them organize themselves to qualify for access to credit.
Support for MFIs. The Programme would
select a limited number of local MFIs with which to work and would assist
them to become viable/sustainable institutions. The contracts given to
the two MFIs in late 2003 – Duterimbere and CSC Ugama – will
provide a test case and allow the PCU to determine if they would be suitable
candidates for inclusion in the rural finance support programme during
the second phase. In addition to the direct support for MFIs, the programme
would provide technical assistance to the Rural Microfinance Forum to
contribute to the reinforcement of its capacities, particularly with regard
to the provision of advisory services and training to MFIs and the production
of manuals and other methodological tools.
Line of Credit. The Programme would
include a refinancing facility that could be accessed by a range of different
financing institutions, through:
• Credit Facility. These funds will be available
to MFIs contracted by UCRIDP.
• SME Credit Line. The SME credit line provided for in the twin
project will be maintained to finance medium-term loans for small and
medium entrepreneurs willing to invest in the province.
Technical Advisory Services. The allocation
included in the twin project to finance technical advisory services will
be maintained. It would be used to hire international and national consultants
to: (i) assess the lending market in the province; (ii) design the conditions
of utilisation of the credit line; (iii) assess the functioning and impact
of the credit line after two years of operation; (iv) study extended modalities
for the operation of the credit line; and (iv) provide other advisory
services to BRD in connection with the operation of the credit line. Included
under this initiative would be support for setting up a Microfinance Platform
to bring together rural finance stakeholders to promote networking, exchanging
information, solving problems and developing innovative solutions. |
