Remittances as a development tool Remittances play an important role in the fight against poverty in some of the poorest parts of the world. While the amounts are often small, remittances put money directly into the hands of millions of poor people, many of whom reside in rural areas beyond the reach of the formal financial system. The potential development impact of remittance is dramatically enhanced when these flows are linked to financial services such as savings, insurance and loans. Promoting inclusive financial systems and innovative partnerships between rural financial institutions and remittance operators can generate significant benefits in terms of competition and reducing costs, thereby offering more resources to the poor and increased options for millions of families to use their capital profitably. The Financing Facility for Remittances (FFR) was established in 2006 to promote such systems and partnerships. Financing facility for remittances The FFR builds on the successful experience of the joint Programme for Rural Development through Remittances, which was launched in 2004 by the Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB) and the International Fund for Agricultural Development (IFAD). The facility aims to scale up and replicate the lessons learned worldwide. To date, this multi-donor facility enjoys the support of various co-financing partners, including the Consultative Group to Assist the Poor, the European Commission, the Government of Luxembourg, the Ministry of Foreign Affairs and Cooperation, Spain, and the United Nations Capital Development Fund. In order to maximize outreach to other regions in which remittances play a crucial role in rural economic and social development, the FFR now funds projects for countries in Africa, Asia, Europe, Latin America and the Caribbean, and the Near East. The goal of the FFR is to reduce poverty by leveraging remittances and migrant capital for development of rural areas in developing countries. More specifically, it aims to (i) reduce the transfer costs of remittances to rural areas; (ii) promote institutional partnerships; (iii) bank the ”unbanked” rural population; (iv) promote innovative remittance and financial services; and (v) further productive rural investment of migrants in their countries of origin. To achieve these objectives, the FFR launches competitive calls for proposals and selects and finances the most innovative and promising projects submitted. In the 2008 Call for proposals innovation and experimentation are strongly encouraged, with the aim of developing replicable business models and expanding the frontiers of remittance delivery and related financial services. In addition, proposals that demonstrate significant leverage will be given priority. Financing windows and objectives of 2008 call for proposals The FFR will fund proposals that meet at least one of the objectives within the following FFR windows. Although, proposals may address objectives from more than a window, applicants should select the window of activity that overall is most relevant to their proposal. For projects in the LAC region, initiatives targeting the EU/LAC remittance or migration corridor will be favoured. Window I. Improve remittance transmissions and access to remittance services in rural areas Specific objectives
Specific objectives
Window III. Develop innovative and productive rural investment channels and opportunities for migrants and community-based organizations Specific objective
General conditions and eligibility criteria Financial allocation and implementation period Individual grants under the FFR have a ceiling of US$250,000 per project. The implementation period should not exceed 24 months. General eligibility criteria: Eligible institutions Applicants eligible to receive grants from the FFR must have non-profit legal status (the non-profit private sector operators, civil society, governmental entities and multilateral institutions). These institutions include, but are not restricted to:
Applicants must:
Financial eligibility criteria Eligible expenditures Expenses can cover the entirety or a part of the following categories:
Ineligible expenditures
Counterpart financing Grantees of the FFR are required to provide a counterpart contribution equivalent to at least 20 per cent (10 per cent for migrant organization applicants) of the amount requested from the FFR. However, please note that for projects in the LAC region, a 30 per cent counterpart contribution is required from all institutions.* At least half of all counterpart contributions for the completion of the project must be in cash. Up to, but no more than half of all counterpart contributions can be in kind. An institution’s in-kind contribution may include internal fiscal resources, internal expertise, institution’s staff dedicated to the project, use of facilities and equipment, project sponsorship, among others, approved by the FFR. Fees generated by services offered through the project cannot serve as counterpart contributions. These should rather be viewed as a primary instrument for ensuring the long-term sustainability of the project. Other financial considerations Where eligible, institutions are invited to request a tax exemption from the respective government authorities for use of the Facility’s resources. Application modalities and selection process Procedures of the 2008 call for proposals comprise four (4) phases, allowing applicants to focus their resources in a constructive and incentive-driven manner. Upon satisfactory completion of each phase, applicants will be invited to submit further documentation to support their initiative. The phases of the call for proposals are structured as follows: (i) qualification – applicant fills out an online institutional eligibility questionnaire (ii) preselection – qualified applicant submits an online Concept proposal for conceptual (iii) selection – selected applicants submit an online Full proposal for technical review (iv) approval – selected applicants are awarded grants. Grant agreements are elaborated, approved by both parties and signed prior to first disbursements For each phase, an FFR Review Committee (RC) will review proposals and approve them. At the approval phase, the FFR Investment Committee (IC) will provide final approval of projects. Qualification phase Prior to submitting their Concept proposals, all respondents to the 2008 call for proposals shall register online and submit basic organization information (see sample in annex I). Upon successful registration, they will be provided with a username and password to access the call for proposals 2008 interface. Preselection phase If eligible, the applicant will initiate the preselection phase and will be able to access a personalized online folder, which contains all the applicant’s submitted information and a template of a Concept proposal (annex II) before the deadline of the call for Concept proposals on: The personalized folder will be accessible for multiple downloading and uploading of the applicant’s data and a template of the Concept proposal until the deadline of the call for Concept proposals. Prior to the deadline, all Concept proposals shall be electronically uploaded using the format provided at the time of registration. A sample of these templates can be found in annex II and may also be accessed online or requested by e-mail at remittances@ifad.org. It is strongly recommended that applicants upload their Concept proposal with sufficient lead time prior to the deadline. Only proposals submitted through the online templates will be considered. Applicants who experience technical problems in accessing our online submission tool should contact remittances@ifad.org, or call +39-06-5459-2852, as soon as practicable before the deadline of the call for proposals. Selection phase The review period for Concept proposals is estimated at one month (which could be extended depending on the number of proposals received). Concept proposals selected based on criteria outlined in chapter 5, will be requested to present a Full proposal (see annex III which contains the full template). The Full proposal template requires a more detailed level of information. Therefore, selected applicants will have a one (1) month period to submit the following documents:
Complete Full proposals are required to be electronically uploaded before: 14 August 2008 Approval phase
2008 Call for proposals review criteria Concept and Full proposals will be selected based on the general criteria described below. Concept proposal review criteria Concept proposals will be reviewed in terms of:
Full proposal review criteria The selection of the full proposals will be based on the following criteria (overall percentile weights of these criteria are indicated within brackets): 1) Relevance to the goal and objectives of the FFR. Are the problems that the project seeks to address relevant to the overall goal and objectives of the FFR? Does the proposal address remittance and/or migration issues relevant for the development of rural areas in the target area/country of operation? [15%] 2) Innovation. Degree of innovation proposed by the project. Is the proposal’s solution developing new ways to address the problems that have been identified? Are issues specific to the remittance market and/or migration trends in the proposed target area/country of operation taken into account? [20%] 3) Sustainability. Financial and organizational sustainability; the economic benefit of the proposal in terms of revenue and profits; project continuity and financial viability after the FFR support ends. Is the proposal’s plan to ensure financial and organizational sustainability viable? [20%] 4) Potential impact and added value of FFR financing. Beneficiaries and project impact in terms of improved remittance transfer and access; greater links between remittances and financial services; the development of productive rural investment opportunities for migrants and community-based organizations. To what extent are FFR resources needed to carry out the project? What is the added value of FFR support? [15%] 5) Capacity. Institutional, financial and technical capacity of the applicant organization (when applicable, also through the alliance established for the project) to carry out the proposed plan; applicants’ degree of experience in project execution and in working with remittances and/or migration issues in the region. [15%] 6) Implementation arrangements and resources. Technical and financial project plans: feasibility and consistency of the project activities, project plan and its proposed budget; appropriateness of the implementation arrangements and resources to be mobilized for the project; overall quality of the proposal documents (form and content). [15%] FFR Review Committee members will assign between 0 and 5 points to the above-mentioned criteria according to the following assessment: 0 – fails or missing/incomplete information A percentile weight is assigned to each pre-selection criterion, which will determine, in conjunction with the average points assigned by the evaluators, the overall score and ranking of the proposals. The FFR Review Committee may determine a threshold for each selection criteria and for the overall score below which submitted proposals will be disqualified. Please note that the quality of the presentation, in terms of conceptual layout of the proposal, language, and visual impact is a factor in the judgment of any evaluator. Also remember that proposals that exceed the limits of text established by the application form may be excluded from the review process. |
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