Implementing the recommendations of the donor peer review As we look at the peer review recommendations into the context of IFAD work in rural finance, it is important to note the following: 1. The peer review recommendations underline a series of issues that are not new to IFAD. They reflect IFAD evolving experience in rural finance over the past 15 years. The action plan proposed below should therefore be seen as the expansion and further "operationalization" of a change process initiated in the past and recently expanded with the RF Policy Paper and the Decision Tools (DTs). 2. Some of the action steps proposed are linked to two recent initiatives discussed during the IFAD Board Meeting last December: "Measuring Results and Impact" and "Enhancing IFAD Field Presence". Several of the action steps from the peer review will therefore directly contribute to IFAD’s strategic change process and will have an institutional impact that goes beyond our work in rural finance. 3. The action steps below have been ranked, in order to help management prioritize which initiatives to tackle first. Once endorsed by management, the present action plan and the concrete
modalities to implement it will be further discussed in-house (with the
Rural Finance Thematic Group and the Geographic Divisions concerned),
as well as the peer review team members whom we should invite back to
IFAD for a brainstorming session. II Summary Action-Plan based on the Peer Review's Major Recommendations The recommendations from the peer review are for their most part very valid and important to our work in rural finance. However, four action steps stand out as particularly critical, due to the impact they would have in helping us to further improve the quality of our RF programs. They are highlighted below in Section A, as "high-priority" steps. The other ones, mentioned in Section B, may be undertaken at a later stage, and according to our workload and other commitments.
1. Peer review recommendation: “Develop common vocabulary and vision statement. Demonstrate leadership commitment to IFAD's strategic shift in rural finance”
Follow-up Action: PT with the RF Thematic Group will prepare a preliminary draft of such vision statement, that will be shared and discussed with management, before being finalized. 2. Peer review recommendation: “Establish 3-4 reporting indicators” IFAD could immediately start to address this recommendation. The DTs have a chapter on performance indicators, from which 3 to 4 key ones could be extracted for IFAD's particular attention in project monitoring reports. Moreover, a web-enabled data base system was recently set up (the Microfinance Information Exchange or MIX) that offers a simple and very cost-effective instrument1 that would enable IFAD RF partners to start reporting basic operation and performance data. Some of IFAD RF partners already avail themselves of this facility (i.e ACSI and DECSI institutions in Ethiopia). Taking immediate action on this recommendation will moreover represent a practical step regarding IFAD's commitment on "Measuring Results and Impact" discussed at the December Board. It will also be a concrete measure to start implementing the recently finalized IFAD Monitoring & Evaluation Guide. Follow-up Action: (i) PT to organize a presentation of the MIX system at IFAD (April 2003). (ii) Based on this presentation, management to decide that new projects (and when feasible existing ones) start using the MIX reporting facility, whenever possible and relevant2 (June 2003). (iii) Regional Divisions, with support from PT, to organize as needed training on using the MIX system in the field3 and in Rome: (on-going from June). 3. Strengthen IFAD monitoring capacity in the field This is another key recommendation from the peer review, which may be tackled in two manners:
Follow-up Action for IFAD: (i) Select the countries where the mechanism of teaming IFAD Cooperating Institution with a regional source of RF expertise could be tested. Assess additional monitoring cost and finalize an agreement with one IFAD’s CI, on a pilot basis. (July 2003). (ii) Select one or two RF experts on retainers, to be regionally based (timeframe: July 2003). 4. Enhance Technical Capacity internally and across all partners that work on IFAD-supported projects Building IFAD staff and field partners' technical capacity is the fourth major recommendation from the peer review. This should be done in a manner that meets the needs of IFAD various stakeholders. CPMs may benefit from some training on key rural finance concepts and on innovative models/ experiences. Field staff (PMU, implementing partners) may require more in-depth training on the technical issues they are facing in managing and monitoring RF programs. On this basis, the technical capacity building agenda could be developed through the three steps below: Follow-up action for IFAD5 (i) Step 1: Organize briefing sessions on specific rural finance models and innovations (SHG; impact; agriculture finance, product innovation etc…) for HQ staff. (on-going) (ii) Step 2: Facilitate access to existing technical workshops (such as the one-week UNCDF training for donors, CGAP-supported regional training hubs, Boulder training course etc…), for HQ and field staff (PMU) 6. (on-going). (iii) Step 3: Design specific training modules on key RF issues, derived from existing training initiatives or from the major chapters of the DTs. IFAD would select a technical partner with strong experience in developing and delivering training courses in rural finance (i.e. the German-based Bankakademie). After designing a basic curriculum on specific and carefully selected rural finance issues, IFAD would finalize a training plan spanning the next 2 to 3 years, with related budget. Considering the growing interest from other donors on rural finance, this may be developed in cooperation with other donors. B Other Action Steps 1. Peer review recommendation: “Undertake Portfolio Reviews” Follow-up action for IFAD This is not new to IFAD, who undertook very useful portfolio reviews in West and Eastern Africa, and has an on-going RF thematic review in Central Europe and the CIS. Building on the experience gained so far within IFAD, PT will, in close coordination with OE, support Geographic Divisions in planning and organizing rural finance portfolio reviews, according to their needs. (on-going)7. 2. Peer review recommendation: “Develop questions for rural finance components and projects (using IFAD DTs and CGAP’s 12 Frequently Asked Questions)”. Follow-up action for IFAD PT to prepare a series of one-page “Questions for Rural Finance”, being derived from the key chapters of the DTs and other sources (complementing CGAP’s Donor Fact Sheets). These could be presented in the form of a small compendium, easy to consult for CPMs and consultants. (November 2003). 3. Strengthen Mechanisms to Facilitate Learning8 Follow-up action for IFAD9 Further develop on-going initiatives to expand IFAD learning agenda: i.e. assessment of our experience with the SHG – Bank linkage model and the FSA model. PT to develop efforts for leveraging donor funding for on-going initiatives (agriculture microfinance action research agenda, Rural Pro-Poor Innovation Challenge). Interactive Website: IFAD to put the Decision Tools on its website, with a link to existing consultant rosters (the CGAP Gateway one and others). Decide then on further developments, as feasible and needed.
1/ Access to MIX is presently free. Small fees may be introduced at a later stage for cost-recovery purposes. 2/ This decision would be applied pragmatically, in line with the development stage of our rural finance partners. The MIX offers several options in that context, from basic to more comprehensive reporting systems. Certain models may also require some adaptation in their reporting requirement, due to their specific characteristics (i.e: self-help group – bank linkage model in South Asia). 3/ During regional divisional meetings for example. 4/ Recruiting this expertise would represent 12 to 15 man/day work per year, at least during the first years of implementation. 5/ Whereas step 1 requires very little funding, steps 2 and 3 would require a specific budget allocation. The peer review therefore recommends a grant facility for training / capacity building in RF at HQ and in the field. Currently this would have to be considered within the "Other Research, Training and Capacity Development” TAG budget line. 6/ This is already happening in an ad hoc fashion, but it could be further expanded and systematized. 7/ Support from external partners could be mobilized as needed for such exercises. CGAP is currently providing advice to UNDP in organizing a portfolio review of their microfinance programs. 8/ The Peer Review recommendations related to this issue are: "Continue to leverage relationships with others / Write internal success case studies / Take greater advantage of the RF Thematic Group / Develop an interactive website / Establish a small grant based flexible fund to support innovations”. 9/ As mentioned in the Memo to Management dated 16 December 2002, IFAD is already actively engaged in several areas highlighted in the review: Development of an active action-research and learning agenda in RF: i.e. (i) Agriculture Finance with CIRAD and CGAP, (ii) Rural Finance conference planned in June 2003 with USAID, (iii) Grant funding mechanism for innovative RF approaches with the "Rural Pro-Poor Innovation Challenge", (iv) assessment of internal success stories (i.e. Self-Help Group model with GTZ and CGAP), (v) leveraging our resources and technical capacities with other donors etc…. 10/ This is a very tentative estimate. Moreover, the RF expert would most likely replace a member of the Cooperating Institution team. This would therefore not be a net additional cost. 11/ IFAD to investigate whether Trust Fund resources may be available for this. Italian Trust Fund may be a possibility (setting up a technical support fund was discussed as one priority area during the seminar with Italian NGOs on 14th January 2002. 12/ Considering the growing interest from other donors on rural finance, this could certainly be developed in cooperation with other donors. 13/ To be broken in the following steps: (i) Training partner selection and identification of the training curriculum: Summer 2003 / (ii) Finalization of a training action plan spanning the next 3 years: End 2003. 14/ These are not formal evaluations, but rather reviews
that would aim at capitalizing on IFAD (and other donors') experiences
with those models. This reflects the Peer Review recommendation to better
document our success stories (as well as shortcomings and failures). OE
would obviously be closely involved in those exercises.
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Although
this vision exists in the Policy Paper (including with its operational
implications in the DTs), the review team felt that in-house perceptions
of what rural finance means for IFAD in operational terms were still quite
varied. The proposed vision statement will help us clarify what is, in
concrete and operational terms, our vision of rural finance and what we
mean by the terms of microfinance, rural finance, rural microfinance etc…
It will also help clarify the concrete options we have when developing
rural finance interventions. This vision statement will be short (1 to
2 pages maximum) and will directly build upon IFAD' s evolving experience
over the past fifteen years, the Rural Finance Policy Paper and the Decision
Tools.