Rural Financial Services and Agribusiness Development Project
The Independent Office of Evaluation of IFAD has prepared a performance evaluation report on the "Rural Financial Services and Agribusiness Development Project" in the Republic of Moldova. The project, implemented between 2011 and 2016, responded to important challenges in the country's rural sector. The main goal was to provide credit and develop value chains for small and medium-sized enterprises, thereby indirectly benefiting the poor through increased and decent employment opportunities.
The evaluation found improved access for both small and medium-sized enterprises and new target groups such as young entrepreneurs and microentrepreneurs thereby addressing an existing financing gap. The project was less successful in improving pro-poor value chains because of mistrust between buyers and producers and volatile market prices, which resulted in contracts not being adhered to.
The report highlights the need for explicit targeting strategies as well as careful ex ante examination of the assumed "trickle down" effects. It also notes that projects should monitor the linkages between investments in enterprises and the direct and indirect benefits, to ensure they help reach poor farmers. IFAD has successfully provided loans through lines of credit to small and medium-sized enterprises, however, there is a need to strengthen the savings culture, which is currently not very strong in Moldova.
Finally, this evaluation recommends that future IFAD projects focus on agribusiness and agro-processing development for smallholders. This would enable them to add value to their primary products, build their capacity to deal with different value chains, and shift swiftly from one value chain to another.
Read more: Approach paper