Knowledge

Microfinance institutions (MFI) take various forms these days, among them: projects, credit union or village banking networks, savings and credit cooperatives and mutual institutions, associations, capital companies, etc.

The 2016 Rural Development Report focuses on inclusive rural transformation as a central element of the global efforts to eliminate poverty and hunger, and build inclusive and sustainable societies for all. It analyses global, regional and national pathways of rural transformation, and suggests four categories into which most countries and regions fall, each with distinct objectives for rural development strategies to promote inclusive rural transformation: to adapt, to amplify, to accelerate, and a combination of them.

Most of the world’s 1.2 billion very poor people live in precarious conditions, without the security of reliable income, shelter or food. Being able to save, receive, pay or borrow small amounts of money can make a big difference to their lives.

Since the introduction of a comprehensive set of economic reforms known as Đôi Mói (renovation) in 1986, Viet Nam’s economy has sustained strong economic growth. Over the last 20 years, GDP growth has averaged 7.2 per cent per annum, resulting in rapid poverty reduction. 

Since initiating its first project in the country in 1980, IFAD has provided a total of US$116.2 million in financing through eight loans and three grants for programmes and projects with a total cost of US$251.9 million. The investment has benefited 513,500 households. Operations were suspended during the civil war and resumed after it ended in 2002.

At that time, IFAD and the African Development Bank established a joint programme coordination unit to facilitate the management and increase the cost-effectiveness of operations in agriculture and the rural sector.

IFAD, paying special attention to the needs of disadvantaged groups such as women, youth and indigenous peoples, focuses on strengthening the capacities of rural organizations to assist smallholder farmers in developing profitable rural businesses and tools and strategies to help cope with the challenges posed by climate change.

To achieve this goal, IFAD, in partnership with the Government of Bolivia, designs programmes to develop the technical and business skills of rural organizations, introducing technological innovations to add value to agricultural products by improving their quality and helping smallholder producers to be more competitive.
Furthermore, IFAD-funded operations facilitate the development of public-private joint ventures that help smallholder producers to gain access to markets and value chains.

Remittances are the traditional means of financial support to family members back home.  This infographic illustrates the global flow of remittances.

Recent advances in technology and telecommunications have the potential to make financial services more accessible and affordable for smallholder households in rural areas. With digital platforms such as mobile phones, smallholders can now use financial services without having to visit a bank branch. 

Advances in digital technology and telecommunications are presenting new financial inclusion opportunities for smallholder farmers in rural areas.1 A growing number of payments, savings, credit and insurance products can be delivered digitally to address the financial needs of smallholder households. Smallholders
can especially benefit from mobile phone platforms, which offer immediate, safe access to government subsidies, cash transfers and remittances. The messaging features of mobile phones can complement digital financial services (DFSs) by offering timely information on weather conditions, farming tips, market
prices and potential buyers, which can help increase farming yields and profitability.