IFAD Policy on rural enterprise

The reduction of poverty in the rural areas is increasingly linked to the ability of poor rural people – especially rural women and unemployed/underemployed youth - to diversify and complement their sources of income through off-farm micro and small enterprises (MSEs) (processing, trading, manufacturing and services, etc.). Nonetheless, any effort to develop sustainable MSEs in rural areas calls for a proactive strategy to reduce constraints on the entrepreneurial poor and provide them with, among other things, suitable business-related services.

The purpose of the present paper is to contribute to the debate on the conditions and modalities for developing micro and small off-farm entrepreneurship among the rural poor. MSEs contribute to the achievement of IFAD’s strategic objective of reducing rural poverty by empowering the poor and strengthening their organizations, thereby increasing their access to markets and to inputs for enterprise development — financial resources, skills training and technology and raw material. The first section shows how MSEs can reduce poverty and summarizes IFAD’s achievements in this field of activity to date.