Decision Tools for Rural Finance reflects IFAD’s decision to translate into concrete operational recommendations the broad directions given in the paper “IFAD Rural Finance Policy”. It also incorporates the thrusts of the Strategic Framework for IFAD 2002-2006, and its subsequent elaboration into regional strategies. The manual has been specifically designed to support programme and project formulation and monitoring. It is hoped that it will be a useful reference tool for country portfolio managers (CPMs), programme and project staff and consultants seeking advice on technical operational issues related to rural finance.

Decision Tools is the result of an intensive consultative process, both internal and external to IFAD. Its contents were discussed and reviewed with the Thematic Group on Rural Finance. A questionnaire was then sent to all CPMs asking what they considered to be the main constraints, issues and potential of IFAD’s rural finance interventions; its comparative advantage in rural finance; and the key issues that needed to be reflected in the manual. Subsequently interviews were organized with management and CPMs at divisional level, where the specific characteristics of regional rural finance strategies and programmes were discussed (those regional contexts are analysed in Part III of the present document). Finally, the draft manual was reviewed and discussed with management and staff during a two-day workshop in May 2002.

The manual is published in a reader-friendly format, facilitating readers’ access to the conceptual analysis and practical operational guidance they require. Moreover, since Decision Tools cannot provide in-depth responses to all questions raised, each section has links to relevant websites where more detailed references, papers and case studies can be found. Furthermore, should the Fund decide to put the manual on its website, its contents will be accessible through keyword searches.

Finally, this is a ‘living document’, which will be updated and improved as the rural finance field evolves and as new principles and practices emerge. The manual will also be expanded with technical annexes on lessons learned from IFAD-specific rural finance models, reflecting IFAD’s focus on knowledge management development.