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Outer Islands Credit Project

Outer Islands Credit Project

This project marked a shift in focus to the outer islands, which are more disadvantaged than the main island. Previous projects demonstrated that microcredit could make a significant difference in the living standards of the rural poor. In this project the goals were to expand availability of credit in the outer islands, offer more focused assistance to the poor and introduce group lending and other credit practices that might lower transaction costs and improve loan repayment. The target groups were smallholder farmers producing mainly cash crops and some livestock, and fishers engaged in inshore and offshore fishing around the coral reefs. Credit helped them increase production capacity through the purchase of fishing nets, outboard engines, small boats and aquaculture materials. Group loans also helped develop alternative sources of income. The project also benefited women's groups that produce handicrafts, especially traditional Tongan mats, and other small rural enterprises engaged in marketing and processing agricultural produce, and in carpentry, cottage industries and tourism.

Source: IFAD


Status: Closed

Country

Tonga

Approval Date

06 April 1993

Duration

1993 - 1999

Sector

Credit and Financial Services

Total Project Cost

US$ 6.73 million

IFAD Financing

US$ 2.96 million

Co-financiers (Domestic)

Domestic Financing Institutions US$ 3.25 million

Financing terms

Highly Concessional

Project ID

1100000327


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