One of the biggest challenges facing the microfinance industry today is developing financial products and methodologies for very poor or difficult-to-reach rural populations, reducing their vulnerability and increasing their economic well being. IFAD launched the CGAP/IFAD Rural Pro-Poor Innovation Challenge (RPPIC) at the MicroCredit Summit in New York, November 2002. This Fund gives flexible awards up to USD50,000 to microfinance organizations that have developed innovative methodologies to deepen rural poverty outreach and impact. Of particular interest are microfinance providers that implement new and innovative services or that work with clients who are marginalized in geographic, economic, or other ways. CGAP and IFAD jointly selected the winners based on the following criteria: depth of outreach; innovation and effectiveness in client identification; delivery methodology; product/service design; and demonstrated commitment to both the proposed project and eventual sustainability. Rural innovation was the particular, although not exclusive, focus of this funding round. Below are listed the 10 winners of the 1st round: RPPIC Round 1 Awardees International Justice Mission (India) works to reverse the exploitation of bonded labor. RPPIC funds will allow IJM to obtain the legal release of individual victims and facilitate prevention by offering microfinance and microenterprise opportunities, through local finance institutions, to formerly bonded laborers and those at risk. PRIMSA (Peru) is a microcredit NGO that uses Community Banks and Solidarity Groups and is developing a Risk Management Rural Credit Pilot Program for Small Farmers. The RPPIC funds would be used as seed capital for a contingency fund for the producer associations. Honduras: Asociacion PILARH (Proyectos y Iniciativas Locales para el Autodesarrollo Regional de Honduras) offers loans and social services to family-owned small businesses, primarily in agriculture. All clients must live below the poverty line and rely on the business as their principal source of income. RPPIC funds will go towards extending access to land for the very poorest of families. Conservation Coffee Program with Conservation International (Mexico) offers credit services, business programs, and sustainable agricultural education to small-scale coffee farmers, all of whom live below the poverty line. RRPIC funds will allow the program, Eterno-Verde, to be replicated in Colombia via the Colombian Coffee Federation. Small Farmer Cooperatives Ltd (Nepal) is a system of innovative cooperatives with a range of savings, insurance, and credit products designed to fit agricultural activities. RPPIC funds will be used to establish a trust fund at the Small Farmers Development Bank to support the replication of Small Farmer Cooperatives in remote areas of Nepal. Bai Tushum Financial Foundation (Kyrgyzstan) targets rural businesses from disadvantaged segments of the population that are engaged in agriculture or service industries. The RPPIC award will be used in the development of a new product targeting disadvantaged women working in the diary industry, providing loans to individual women to purchase milk cows and to groups of women to buy equipment necessary to successful operation in the dairy industry. Kyrgyz Agricultural Finance Corporation (Kyrgyzstan) has an extensive branch network that will be used, with RPPIC support, to offer a new product, microsavings. KAFC also plans to work with NGOs to better reach more of the poor and to educate the poor about the benefits of savings. MAFF (Albania) provides financial services to those in remote highland areas with little access to financial institutions, by targeting isolated villages and adapting services to the needs of the people. The RPPIC award will be used to expand their geographical outreach, and to support the provision of a more diversified range of products. Moldova Microfinance Alliance (Moldova) operates in small, rural villages, establishing and supporting Savings and Credit Associations. RPPIC funds will be used to extend these associations into three new locations, and to install cash machines the 20 best-performing SCAs linked to their partner commercial bank. Association pour la Promotion des Groupements Agricoles (Togo) targets groups of low-income women. The RPPIC funds will be used to support the weekly credit programs that help expand and diversify clients’ activities.
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