updated: 4 August, 2008
Rural finance
International Fund for Agricultural Development


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

  • Develop and test innovative mechanisms to increase the efficiency of the transmission of international/domestic remittances between financial institutions and/or money transfer operators in both remittance-sending and remittance-receiving countries.
  • Increase access to remittances in rural areas by enabling local financial institutions to provide remittance services, either directly or as the agent of commercial banks and money transfer operators.
Window II. Link remittances to financial services and products in rural areas

Specific objectives

  • Support financial institutions in the creation of innovative financial services linked to remittances in order to (i) promote financial inclusion of “unbanked” remittance senders and/or beneficiaries in the financial sector, and (ii) expand access to financial services such as savings, credit, loans and insurance.
  • Promote innovative partnerships between hometown associations and formal financial institutions (e.g. commercial banks; cooperatives), microfinance operators and specialized NGOs, in order to link remittances to other financial services.

Window III. Develop innovative and productive rural investment channels and opportunities for migrants and community-based organizations

Specific objective

  • Establish partnerships and mechanisms that offer incentives for investment in productive activities in migrants' countries of origin by facilitating links between migrant associations and their communities of origin and supporting entrepreneurial development and related training for remittance recipients.

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:

  • specialized formal financial institutions such as:
  • microfinance institutions
  • credit unions and credit cooperatives
  • postal offices
  • service providers of insurance, housing or education financing
  • NGOs, foundations and other non-profit organizations providing business development support in rural areas
  • immigrant philanthropic associations working to support their home countries
  • academic institutions
  • local and municipal governments and other public institutions may also be eligible, provided they present a joint project with the private sector
  • regional international organizations are also eligible to apply for funding for transnational initiatives

Applicants must:

  • belong to an IFAD and/or IDB member country, or at least one of the parties involved in the proposal must be based in a member country (IFAD member countries; IDB member countries)
  • ensure that at least one of the countries in the project is a developing country
  • have the capacity to enter into financial and legal agreements with IFAD, and/or the IDB (if submitting a proposal for Latin America and the Caribbean), and comply with the procurement guidelines of IFAD and/or the IDB if necessary (see IFAD procurement guidelines; IDB procurement guidelines, which can also be found on the websites of the respective institutions)
  • not act as an intermediary, but be directly responsible for the preparation and management of the proposal
  • posses reliable experience in the field of remittances (migrants or migration field for window III), unless the proposal is jointly presented with at least one relevant partner with significant experience in the required field
  • present audited financial statements for at least one previous year (two or more preferred)
  • provide procurement procedures for goods and services and competitive procedures for human resources hiring
  • submit a proposal with a clear operational output in their main activity (i.e. studies submitted should be demonstrate a clear application of results and planned impact; technological platforms should include clear testing and application phases)

Financial eligibility criteria

Eligible expenditures
Eligible costs under the FFR are those undertaken by applicants during project implementation and that are essential to the work defined by the project in the grant agreement with the FFR.

Expenses can cover the entirety or a part of the following categories:

  • consulting services
  • workshops and seminars
  • trainers or facilitators
  • development of training materials
  • acquisition of licenses and software
  • purchase of computer equipment or technology platforms
  • travel

Ineligible expenditures
FFR funds cannot be spent on the following:

  • investment in physical infrastructure (construction, land property and durable equipment such as heavy machinery)
  • direct credit to target clients
  • raw materials
  • subsidies or monetary compensation for existing personnel of beneficiary institutions
  • operational costs of the beneficiary institution (the FFR will not finance current staff; however, staff costs can be included as in-kind counterpart contributions)

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.

Respondents to the call for proposals become applicants by proceeding to the qualification phase and completing an online automatic eligibility questionnaire, which ensures that they meet the basic eligibility criteria (see sample in annex I).

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:
30 May 2008

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 proposal
  • logical framework
  • detailed budget form
  • detailed workplan
  • financial and legal information:

(i) audited financial statements of the recipient for the last year, including an audit report signed and dated by an external auditor (in PDF format and subsequently in hard copy if the proposal is approved for financing)

(ii)  procurement guidelines of the recipient to cover goods, services and human resources, including consultants

(iii) evidence of the legal status of the recipient (or confirm the availability of this status and send evidence prior to finalization of the grant agreement)

(iv) for financial institutions submitting proposals: presentation of financial and operational indicators for the last two (2) years is also required

Complete Full proposals are required to be electronically uploaded before: 14 August 2008

Approval phase
Full proposals will be selected following a technical review according to criteria specified in the 2008 Call for proposals review criteria (chapter 5). The Investment Committee of the FFR will approve and recommend grant awards to the finalists. A performance-based grant agreement will be prepared in accordance with existing formats and will be finalized with the applicant. Project implementation begins upon signature of the agreement by both parties.

Timetable for FFR 2008 call for proposals process
(Dates are subject to change)

Qualification process phase

Launch of FFR 2008 call for Concept proposals

4 April

Submission period for Concept proposals

8 weeks

Deadline for online submission of Concept proposals


30 May

Preselection process phase

FFR announcement of preselected Concept proposals and call for Full proposals

11 July

Submission period for Full proposals

4 weeks

Deadline for submission of Full proposals

14 August

Selection process phase

FFR announcement to applicants of proposals selected

16 September

Approval process phase

Preparation of grant agreements for approved projects

(6-8 weeks)

Project approval and signing of grant agreements

by 30 November

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:

  • relevance to the goal and objectives of the FFR
  • degree of innovation proposed by the project
  • sustainability of project objectives beyond financing period
  • potential impact and value added of FFR financing
  • institutional, financial and technical capacity of the applicant
  • implementation arrangements and resources

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
1 – poor
2 – fair
3 – good
4 – very good
5 – excellent

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.

* Depending on the country, counterpart percentages may be set at the discretion of the IDB’s Multilateral Investment Fund.

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Contact information
  • For proposals related to
    African, Asian, European and Near-eastern countries:
    Pedro de Vasconcelos
    Programme Coordinator, FFR
    International Fund for Agricultural Development
    Via del Serafico 107
    00142 Rome, Italy
    +39 0654592012
  • For proposals related to
    Latin American and Caribbean countries:
    Natasha Bajuk
    Remittances Coordinator
    Multilateral Investment Fund
    Inter-American Development Bank
    1300 New York Ave. NW
    Washington, D.C. 20577
    +1 202 623 2104
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