Rural Finance and Community Initiatives Project

Rural Finance and Community Initiatives Project

Supervised directly by IFAD and financed mainly by an IFAD loan, the project has the objective of improving household food security and the incomes of rural poor people whose ability to produce their own food or to sell farm products to buy food has declined significantly. Over recent decades, both cropped areas and average yields have stagnated while the population has doubled. Farmers lack information and basic social and productive infrastructure.

The project provides a way to fill critical gaps through a development process designed to boost food production and income-generation in a sustainable manner. Rural finance is a key to this process. The project works to consolidate and expand rural financial services in line with the government’s policy of providing a favourable economic and regulatory environment for private financial institutions.

To meet rural demand for credit, the project financed more than 40 new village savings and credit associations (VISACAs), strengthening and expanding the microfinance network introduced   under the IFAD-funded Jahaly and Pacharr Smallholder Project. Partner NGOs provided training and technical assistance in rural finance on a continuous basis, and the Central Bank was strengthened to fulfill its mandate of monitoring and supervising rural finance activities.

The project also assists traditional, village-based men’s and women’s groups to increase crop and livestock production in an environmentally sound manner. It introduces new technologies and promotes participation, empowering the groups to identify and implement their own development priorities. It adopts a voucher-based system to remunerate extension agents who provide effective extension services to farming communities in particular.

Source: IFAD