Arab Republic of Egypt Country Strategy and Programme Evaluation
This evaluation covers the IFAD-supported country programme and strategy in Egypt for the period 2005 to 2016. Egypt is the largest borrower among the 22 countries in the Near East and North Africa region in which IFAD operates (15.8 per cent).
The country programme has achieved some notable impacts, especially in improving farming systems in the old lands, and improving water and land management practices in the new lands, which are certainly key to enabling poor rural farmers to increase their production and their productivity. The focus on similar rural development issues has held steady over a long period, but opportunities to learn from this long-term engagement have been missed.
During this period, the Government became more demanding in what it expects from increasingly expensive loans. Moreover, the scale of the challenges it needs to address will require more diverse and innovative solutions. For IFAD, this means that replicating well-tested approaches will not be sufficient. The Fund will need to sharpen its strategic focus, push for greater innovation, join forces with a wider range of partnerships, and ensure broad-based government ownership throughout its interventions.
2017 Annual Report on Results And Impact of IFAD operations
Every year, since 2003, the Independent Office of Evaluation of IFAD produces the Annual Report on Results and Impact of IFAD Operations (ARRI). This 15th edition of the ARRI highlights results, trends and issues based on independent evaluations conducted in 2016.
The ARRI finds that, overall, performance of IFAD operations shows improvement from 2009. Currently, 80 per cent or more projects assessed against the criteria of gender equality and women’s empowerment, innovation and scaling up, relevance and rural poverty impact were rated moderately satisfactory or better. Longstanding challenges are found in efficiency and sustainability of benefits.
Every year, the ARRI is focused around a learning theme so that evaluation can deepen the analysis on specific topics of interest and importance to IFAD operations. This year's learning theme focuses on financial management and fiduciary responsibilities in IFAD-supported operations. The report contains a chapter dedicated to this learning theme.
The 2017 ARRI recommends that IFAD rise above the current plateau in performance and achieve greater impact on the ground. IFAD needs to build on its strengths by raising its performance to satisfactory or better and address longstanding bottlenecks to maximize sustainable results. This requires a change in IFAD’s modus operandi that includes a new approach to programme design, which will enable IFAD operations to efficiently deliver more relevant and sustainable results.
Georgia: Agricultural Support Project
The overall objective of the Agricultural Support Project was to increase the incomes of the rural poor through commercially viable agricultural and rural enterprises. The project reached about 6,000 households in regions with high incidences of rural poverty but with high productive potential in agriculture.
The evaluation followed an ex post quasi-experimental approach and combined econometric and qualitative techniques to determine the impact of the project on its beneficiaries. It deployed two innovative approaches: (1) genetic matching method for matching the treatment group with the comparison group (a total sample size of 3,100 respondents was selected, which gave superior results as compared to the propensity score matching method); and, (2) satellite imagery to compute the normalized difference vegetation index for comparing the change in vegetation cover between treatment group farm plots and comparison group farm plots before and after the rehabilitation of irrigation schemes.
The project's activity of rehabilitating irrigation canals was successful in bringing irrigation water to the beneficiaries, although the regularity of the water supply remained an issue. The project has triggered revitalized interest in agriculture, encouraging other agencies such as the World Bank to scale up the neglected irrigation schemes. However, the impact evaluation demonstrated that interventions under the major project component, small-scale infrastructure rehabilitation, did not lead to statistically significant changes in the incomes, assets or food security of beneficiaries as compared to non-beneficiaries. The reasons range from the delayed start of the irrigation scheme rehabilitation to the lack of rehabilitation of all tertiary canals.
IFAD’s Country-level Policy Dialogue
The Independent Office of Evaluation of IFAD has just released the evaluation synthesis “IFAD’s Country-level Policy Dialogue”. The synthesis examines IFAD's engagement with partner governments and other country-level stakeholders.
The evaluation synthesis confirms that policy dialogue is an essential dimension of IFAD's mission as it serves two critical purposes: (i) helping to create an enabling environment for project implementation and for achieving project impact; and (ii) contributing to creating the conditions for large numbers of rural people to move out of poverty. From a global perspective, the 2030 Agenda for Sustainable Development calls for the empowerment of vulnerable people by removing the barriers and obstacles they face. This means rooting poverty eradication in the principle of inclusion and the recognition of poor and other excluded groups as agents of their own development.
Looking ahead, the growing number of IFAD country offices offers new opportunities for IFAD to be more involved in country-level policy dialogue processes. This will require that more incentives, resources and information be provided to country-level staff with more explicit links to monitoring policy dialogue activities.
Nicaragua Country Strategy and Programme Evaluation
The IFAD-supported country programme has made significant contributions to rural development in Nicaragua. To address the rapidly changing institutional framework, IFAD has introduced flexibility into its programme and continues to provide support for the country’s decisions and development plans.
The programme has contributed to the development of national strategies on access to markets, assets and value chains; strengthening of rural organizations; promotion of non-agricultural rural activities; and adaptation to climate change. One clearly positive aspect of the programme has been its focus on family farming. In this regard, the programme has established an area of thematic specialization that has created a distinct comparative advantage for IFAD-supported activities in the country.
There are opportunities to boost the contribution of non-lending activities under the programme. In particular, significant progress has been observed on policy dialogue in rural development, but has not translated into concrete contributions to policies and strategies. The strides made in knowledge management are still limited, due in great part to the lack of easy access to technical information or to the knowledge base accumulated by IFAD and other cooperation agencies. And partnerships with nongovernmental actors, including the private sector, are limited.
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Post-Tsunami Coastal Rehabilitation and Resource Management Programme (2017)
The goal of the programme was to restore the assets of women and men directly or indirectly affected by the tsunami and to re-establish the foundation of their previous economic activities, while helping them diversify into new, profitable income-generating activities.
Some of the notable contributions from the programme comprised activities in which IFAD has solid experience, i.e. building public-private partnerships (in the case of shrimp farming) and developing microcredit and microenterprises. For instance, the cluster shrimp farm at Vakarai has had a much clearer impact on incomes. The evidence indicates that the incomes of the farmers had increased by more than 50 per cent. On the other hand, IFAD engaged in activities which were not part of its core competence – for example, building houses for beneficiaries – and this meant that it could not leverage its expertise and experience to best effect.
The evaluation argues for re-examining IFAD's role in post-crisis situations, especially in regards to focusing mainly on its core activities with a simpler design and a more flexible operational process, and giving due consideration to the linkages between poverty, gender and crisis in designing the programme targeting strategy.
National Rural Development Programme – Phase I: Western Region (2017)
The programme objectives were to significantly reduce poverty and prevent exclusion and discrimination among the poorest indigenous and non-indigenous populations of the Western Region of Guatemala through comprehensive, integrated and environmentally sustainable socio-economic development of rural areas.
The programme proposed activities to strengthen local development and decentralization, boost competitiveness and social investments, and strengthen the capacities of the Ministry of Agriculture, Livestock and Nutrition as the programme implementing agency. Despite the programme’s relevance to the needs of the country and the target population, it succeeded in carrying out only a limited number of isolated productive infrastructure activities and investments of limited scope, far from the integrated rural development approach envisioned in its design.
The evaluation recommends further analysis on social targeting strategy for beneficiary and intervention mechanism selection. The structural problems underlying rural poverty in Guatemala call for differentiated intervention mechanisms and particular attention to indigenous peoples and vulnerable groups such as women, young people and people with disabilities.
Philippines Country Strategy and Programme Evaluation
This country strategy and programme evaluation covers the IFAD-Government partnership under the two country strategies of 1999 and 2009. IFAD's portfolio in the Philippines has been a mix of area-based projects with multi-sectoral components based on a participatory approach, and those with a sectoral focus (such as microenterprise development, irrigation and natural resources management) and with wider geographical coverage. The main target group has included upland farmers, indigenous peoples, agrarian reform beneficiaries and fishers.
The evaluation finds that IFAD and the Government have a fostered close and effective partnership in their efforts to address rural poverty issues, and project and programmes have made notable achievements – for example, in gender equality and women’s empowerment, and in increased crop yields through irrigated agriculture. The prospect of sustainability of benefits is generally favourable, and beyond the lending portfolio good practices have been noted in knowledge management and effective partnerships, in particular with diverse government agencies and civil society organizations.
On the other hand, more can be done to improve performance and upgrade non-lending activities and there is room to improve the evidence from monitoring and evaluation across the portfolio so that good practices can be scaled up.
Post-Tsunami Agricultural and Fisheries Rehabilitation Programme
Project Performance Evaluation
The Post-Tsunami Agricultural and Fisheries Rehabilitation Programme in the Republic of Maldives was implemented between 2005 and 2013. The programme aimed to contribute to restoring agricultural gross domestic product to pre-tsunami levels, returning the economy to a stable, long-term growth trend and reducing the fishery sector’s vulnerability to natural disasters. The programme made little progress in the first three years, which meant that its original design was only partially relevant to the rapidly changing country context. After the Mid-term Review, the programme was revitalized to focus on the country's development needs, rather than on disaster relief restoration.
Additionally, the initial design focused more on physical inputs – e.g. new boats, new markets, new ice plants – and less on capacity-building or training. The revitalization shifted the focus of the programme from direct support to the fishery and agriculture sectors to policy support to the Ministry of Fisheries and Agriculture.
The programme could have been revitalized in a more systematic way with effective programme planning and clear intervention logic. Although there was a wholesale set of changes in the components of the programme, there was no systematic reconsideration of the programme's overall objectives. The programme was most effective at national policy level with regard to sustainable fishing, but it is rather difficult to measure any direct effect on the ground.
IFAD’s Support to Scaling Up of Results
IFAD defines scaling up as "expanding, adapting and supporting successful policies, programmes and knowledge, so that they can leverage resources and partners to deliver larger results for a greater number of rural poor in a sustainable way”. This synthesis reviews how IFAD’s business model and project cycle match scaling-up aspirations. It provides a review of past evaluations and other IFAD documents, drawing lessons and identifying factors of success and risk in IFAD’s support to scaling up of results.
In the IFAD project cycle, scaling up requires attention at design (the need to keep the project scope focused) and during implementation (the need for better analysis of progress, results, and scalability prospects and constraints). Continued engagement beyond project completion is needed as well, to fine-tune promising interventions and to preserve the quality of their design and implementation from risks associated with pressures for high disbursement and outreach.
As recommended by this synthesis, in order to enhance scaling-up opportunities, it will be important for IFAD to sharpen country strategies as well as the project development and implementation cycle, build stronger consensus among operational staff, and refine the definition of its corporate scaling-up targets and methods for verification.
National Agricultural Technology and Training Programme: Technical Assistance Fund
The objective of the programme was to improve the production and marketing capacity of rural enterprises of small- and medium-scale producers through sustainable access to technical assistance services. The programme applied a demand-driven approach to technical assistance services in order to spur significant progress on developing a technology market by incorporating and training individual technicians, enterprises and universities. In addition, the programme was able to adapt a new element to its logical framework by implementing the Food Production Bond.
The evaluation found that women’s empowerment and participation was one of the greatest achievements under the programme, in addition to the positive changes in incomes, agricultural production, food security and human and social capital. A total of 7,000 women benefited, representing 48 per cent of all project beneficiaries. On the other hand, the evaluation identified opportunities for improvement in areas such as monitoring and evaluation, environment and natural resources management; and in methods to strengthen the sustainability of technical assistance markets.
West Noubaria Rural Development Project
Project Performance Evaluation
The Independent Office of Evaluation of IFAD (IOE) undertook a project performance evaluation of the West Noubaria Rural Development Project in the Arab Republic of Egypt. The project's goal was to enhance the livelihoods of the target population through increased sustainable economic activity and greater social self-reliance. It covered 78 villages in the Noubaria land reclamation zones located on either side of the Cairo-Alexandria desert road. The total targeted population was 36,180 households or 228,000 individuals.
The evaluation found that the project addressed the most urgent needs of the newly settled smallholders and made an effective contribution to their overall wellbeing. The newly created community organizations are providing a range of basic services, including education, health, and credit. But, the evaluation also highlights the need for increased attention to sustainability issues, also in similar projects from the outset. The newly-created community organizations must have a legal status to be able to provide effective services on a sustainable basis. Community-managed credit funds are effective and easy to access, but they do not address the longer-term need for financial services. Attention must also be paid to ensuring sustainable access to, and use of, limited water resources through appropriate technology and an adequate institutional framework.
Rural Livelihoods Support Programme (2017)
Project Performance Evaluation
The objective of the Rural Livelihoods Support Programme in the Republic of Malawi was to sustainably reduce poverty through the promotion of on- and off-farm and wage-based incomes. The programme was implemented between 2004 and 2014. It operated in an environment of evolving decentralization and worked through local government bodies, especially village-level bodies, for example, in 245 villages, spanning 36 Village Development Committees.
One of the main achievements of the programme is the goat pass-on system, which has increased the resilience of the target groups and provided them with alternative sources of income. The programme sought to increase the productivity of maize through the provision of extension services. However, by focusing on maize in a mono-cropping system, it did not take into account other options for enhancing adaptation to climate change and improve nutrition security among the target groups.
What works for gender equality and women’s empowerment – a review of practices and results
The Independent Office of Evaluation of IFAD (IOE) has just released the evaluation synthesis report “What works for gender equality and women’s empowerment – a review of practices and results”. The report intends to support learning on what practices work for gender equality and women’s empowerment (GEWE) and under what conditions in the context of rural development and the agricultural sector. The report identifies transformative GEWE practices that should be further promoted and scaled up under the Agenda 2030.
The evaluation synthesis provides a conceptual framework for gender-transformative practices and changes in IFAD. It presents a systematic review of gender practices and results documented in IOE evaluations since 2010, drawing from a sample of 57 IOE reports. The review identified 121 GEWE practices, classified into four main areas: access to resources and opportunities, reducing time poverty, creating an enabling environment, and enhancing women’s and men’s awareness, consciousness and confidence.
The review identifies practices that have made an effective contribution to transformative change. They addressed root causes of gender inequality and women’s powerlessness, in particular illiteracy, exclusion from access to resources and limited social capital. Participatory approaches and capacity-building had a clear impact on women’s self-esteem, status and recognition, and in a number of cases challenged gender roles and power relations. But the report also highlights that policy engagement on gender is a critical element to support transformative change but has not yet received sufficient attention.
Democratic Republic of the Congo Country Strategy and Programme Evaluation
This Country Strategy and Programme Evaluation for the Democratic Republic of the Congo covers the period 2003 to 2015 and five projects for which IFAD has committed about US$156 million.Since the first loan in 1980, IFAD has financed eight projects, targeting over half a million households. The estimated total project cost is US$339 million, of which two thirds were financed by IFAD.
The country programme’s short-term impact on agricultural productivity and food security, household incomes and human and social capital is quite significant as a result of the strategic choice to focus on quick-impact actions in a highly precarious baseline situation. The programme had very good quantitative results in terms of organizing producers, using farmer organizations as the main point of entry for supporting the revival of agriculture. By investing heavily in better access roads, improved seed distribution and agricultural extension, the programme contributed to raising productivity and incomes, and to improving food security in the project areas.
The country strategic opportunities programmes and project portfolio are broadly relevant to national and IFAD corporate strategies and the needs of the rural poor, however, the evaluation found that the country context of fragility and accompanying risks are not sufficiently taken into account in the analysis of the operating context, strategies, approaches and partnerships. There is a mismatch between the country programme’s ambitious objectives and complex arrangements, short project duration and limited external support on the one hand, and the major contextual challenges and limited management and planning capacities of the project teams, on the other.
The evaluation puts forward various critical recommendations for the future partnership between IFAD and the DRC, such as adjusting the institutional set-up of the country programme; strengthening its strategic relevance and targeting approach; and improving relevance and effectiveness of non-lending activities (e.g. policy dialogue, knowledge management and partnership-building).
Republic of Mozambique: Sofala Bank Artisanal Fisheries Project
The Sofala Bank Artisanal Fisheries Project focused on community development, fisheries development, markets, financial services and policy support. It targeted about 500,000 people, including 26,000 direct beneficiaries in 290 fishing communities along the coast.
Whilst the focus of the evaluation was decisively on assessing impact, it also covered all the evaluation criteria adopted by IOE (e.g. relevance, effectiveness, efficiency, etc.) in order to facilitate a more comprehensive evaluation of the programme. The evaluation followed quasi-experimental methods, combining quantitative econometric and quantitative techniques with the aim of attributing impact to the project. The evaluation designed an impact survey to collect primary quantitative data, which was administered to a sample of 1,028 households including beneficiary and non-beneficiary households. The quantitative part of the evaluation was complemented by a rich qualitative analysis to allow for a more comprehensive understanding of the processes of change induced by the intervention.
SBAFP was an important milestone in the development of the artisanal fishery sector. This is attributed to its integrated livelihood approach, which delivered tangible results beyond fishery development in remote and complex fishing areas. The project had remarkable impacts at the household, institutional and policy levels. This includes better incomes and assets among beneficiaries, enhanced human and social capital, improved access to social and market infrastructures, as well as better participation in grass-roots institutions and in particular in savings and credit groups. SBAFP made an important contribution to policy formulation and legislation favouring the artisanal fishery subsector and helped strengthen institutions in the subsector. The development of the Plano Estratégico para o Sector da Pesca Artesanal (PESPA 2006-2016), which is planned to be renewed in collaboration with the World Bank, stands out as one of the project’s highest achievements.
However, more could have been done to achieve greater results and impacts. Despite the key role that women play in the fishery value chain, the project design did not include a strategy for gender mainstreaming, thus constraining results on gender equality and women’s empowerment. The support to market access remained mainly confined to developing infrastructure and improving post-harvesting practices. In particular, the inadequate attention to private sector linkages and engagement, business counselling services, and marketing of fishing products limited wider impact and transformation of the artisanal communities. Finally, the weaknesses in the monitoring and evaluation system and availability and quality of data impinged on the ability to assess and attribute impact to the project.
Agricultural Rehabilitation Programme in Orientale Province
The Agricultural Rehabilitation Programme in Orientale Province in the Democratic Republic of the Congo was implemented in a context of serious hardship. It took strategic measures that had rapid impact on agricultural production and food security, and human and social capital. Actions included improving road access, creating grass-roots organizations, distributing agricultural and fisheries tools and inputs, and rehabilitating social infrastructure. The programme contributed to reviving the agricultural economy and instilling a participatory local development dynamic in the programme area.
However, the highly challenging implementation context was not sufficiently taken into account in the overly ambitious and complex programme design, and the programme team’s planning and management capacity was not commensurate to the challenges. Consequently, programme efficiency was low with important implementation delays and very high operating costs, which only improved towards the end. In addition, sustainability of impact is at risk because of the weak maturity of producers' organizations and limited capacity of public and private service providers.
Programme performance and impact could have been much higher, had the programme had more realistic objectives and geographical coverage, and more appropriate duration and phasing; had it given more attention to capacity building among community-based organizations and deconcentrated government services; and had it better integrated marketing and environmental aspects to reduce risks related to overproduction, environmental degradation and climate change.
IFAD’s Decentralization Experience
The Independent Office of Evaluation conducted a corporate-level evaluation of IFAD’s decentralization experience in 2016, covering the period from 2003 through mid-2016.
The evaluation found that the objectives of the decentralization process were broadly relevant to improve the development effectiveness of IFAD-funded operations. In particular, by bringing IFAD closer to its operation and to the country development context and actors, country presence was expected to improve project and strategy design and implementation support, enhance engagement in non-lending activities, improve alignment with country systems and donor coordination, and contribute towards system-wide coherence of the United Nations.
However, IFAD could have learned more from the experience of other organizations and could have been more realistic in its expectations. In particular, the range of activities that country offices were to perform was very broad compared to the resource envelope allocated to them. Moreover, for many years IFAD concentrated on expanding its country presence but paid little attention to re-organizing headquarters.
The report also highlighted that by opening country offices, IFAD was in a better position to provide implementation support to its operations. It is through this support that country offices contributed to better project performance and results, especially in terms of impact and gender equality. But the contribution to non-lending activities (e.g. knowledge management, partnership-building and policy dialogue) was mixed. This was partly due to the limited human and financial resource available at the country-office level for non-lending activities. Moreover, engagement in policy dialogue largely depended on relevant interests and experience of individual staff members.
2016 Annual Report on Results And Impact of IFAD operations
The 2016 Annual Report on Results and Impact of IFAD Operations (ARRI) draws from 40 independent, impartial and rigorous evaluations carried out in 2015. This year’s report assesses results against the Ninth Replenishment of IFAD’s Resources (IFAD9). It also identifies opportunities and challenges in light of the priorities for the Tenth Replenishment of IFAD’s Resources (IFAD10) and in the broader context of the Sustainable Development Goals and the 2030 Agenda for Sustainable Development.
Areas of strength
The broad picture of performance in the IFAD9 period emerging from the 2016 ARRI is positive. The 2015 evaluations found that overall 80 per cent of the projects are rated moderately satisfactory or better for most of the criteria in 2013-2015.
IFAD has made a positive contribution to rural poverty reduction, for which the percentage of moderately satisfactory or better projects increased from 87 per cent for operations completed in 2011-2013 to 92.3 per cent in 2012-2014.
This is mainly a result of the Fund’s attention to improving income and assets, supporting human and social capital empowerment, enhancing agricultural productivity and food security and boosting technological innovation and scaling up.
In particular, IFAD operations completed in 2012-2014 achieved the highest impact on household income and assets, as compared to other impact domains, with 92.3 per cent of the projects rated moderately satisfactory or better. The contribution of IFAD’s operations to food security and agricultural productivity, which is the keystone of the Fund’s mandate, has been substantive in terms of both improving the availability of and access to food, and enhancing agricultural productivity. Eighty-six per cent of projects are assessed as moderately satisfactory or better in 2012-2014, which is the highest percentage since 2007.
Moving beyond the project level, the assessment of non-lending activities (e.g. knowledge management, partnership-building and policy dialogue) in the 2015 Country Strategy and Programme Evaluations show an improvement of performance in knowledge management from 67 per cent moderately satisfactory country programmes since 2010-2012 to 78 per cent in 2013-2015. This confirms the increased attention of the Fund to sharing experiences and lessons learned.
Areas for improvement
Notwithstanding the mentioned positive findings, the 2016 ARRI highlights that IFAD’s performance is largely only moderately satisfactory and identifies systemic issues at both project and country levels that merit further attention moving forward to achieve satisfactory and highly satisfactory results:
Weak targeting strategies, which are often not flexible enough to adapt to changing contexts, and poverty analyses that do not sufficiently capture the differences among groups of rural poor, limit the reach of project activities to all targeted beneficiaries, in particular the poorest.
Poor nutrition mainstreaming in IFAD’s portfolio and the lack of evidence of the potential contributions of improved agricultural productivity to food security and nutrition hinder increased impact in rural poverty reduction.
Inadequate management of fiduciary responsibilities which constrains efficiency of operations and better performance of governments.
Non-lending activities have historically been the weakest area of IFAD support with 64 per cent of the country programmes rated only moderately satisfactory since 2006. The 2015 Country Programme Evaluations found that while performance in knowledge management is improving, policy dialogue and partnership-building at country level show a decline in performance. Partnerships remain bound to the project level, thus limiting dialogue, dissemination of results and scaling up of successful approaches.
Each year since 2007, the ARRI has focused on a learning theme. The topics for the learning themes are agreed with the IFAD Executive Board, with the aim of deepening the analysis on selected issues that merit additional reflection and debate in order to enhance the performance of IFAD operations. The learning theme presented in this year’s ARRI is knowledge management, with an emphasis on how operations can learn to improve performance.The report highlighted that notwithstanding the improvements in performance in knowledge management, the limited allocation of resources, time and incentives restrain the systematization of knowledge management in IFAD and the establishment of stronger learning loops among the project, country and institutional levels. By and large, the knowledge acquired during project implementation is often not systematically captured and widely shared.
Smallholder Access to Markets: Evaluation Synthesis
The Independent Office of Evaluation of IFAD (IOE) undertook an evaluation synthesis on smallholder farmers' access to markets. The exercise was based on a desk review, mainly IOE evaluations conducted between 2005 and 2015, complemented by interviews and a review of external literature.
The evaluation synthesis confirms that IFAD's approach and interventions in this area have diversified and improved. IFAD has indeed accumulated experience and institutional knowledge to continue and further enhance its support. Among other factors for effective interventions, the report pointed out the importance of sound and timely market analysis and a market-oriented approach, as well as capacity development of smallholders to interact with markets on better terms. Interventions should be sufficiently flexible to respond to local contexts and specific needs, with attention to risks smallholder farmers might face by altering their economic strategies. Future support deserves more careful reflection on impact pathways from better market access to a common objective of “improved household food security”, and effective and timely monitoring of project performance that takes into consideration changing market contexts.
Rural Microenterprise Promotion Programme
The Rural Microenterprise Promotion Programme (RuMEPP) in the Republic of the Philippine implemented between 2006 and 2013, sought to address two main areas of impediments to microenterprise development – finance; and knowledge and skills.
One of the programme's notable achievements is its contribution to enhancing the Government’s support, in particular that of the Department of Trade and Industry, to microenterprise development in terms of approach and scale, while also linking up with other opportunities and fostering partnerships with other actors. The programme was effective in mobilizing and organizing business development services, which provided critical support to start-up microenterprises and to upgrading existing microenterprises. A major advancement was made in terms of the systematic integration of marketing-related issues to organized trainings (e.g. packaging and labelling, product design and development), as well as other types of support (e.g. facilitating linkages with market outlets).
A large proportion of the programme funds was allocated for credit lines and was all disbursed through microfinance institutions, reaching numerous microenterprise borrowers. However, there was insufficient attention to how microfinance institutions' services could be strengthened to better cater for different types of clients in addition to or rather than simply injecting liquidity into the financial sector.
India Country Programme Evaluation
Since 1979, IFAD has invested more than US$928 million in 27 programmes and projects in India, with a total cost of $2.6 billion when cofinancing is included, directly benefitting 4.4 million households.
The evaluation confirmed that IFAD-supported projects have achieved significant results in building grass-roots institutions, empowering women and improving the lives of tribal communities in India. More specifically, projects have contributed to mobilizing communities and developing basic community infrastructure, as well as developing agricultural production and improving rural livelihoods, the use of national resources, and access to credit and financial services.
Overall, portfolio performance has been solid. However, delays in project entry into force and slow implementation have been a common problem. This is explained by the challenging physical and socio-economic conditions of the project areas, as well as limitations in implementation capacity at the state level.
Portfolio impact has been satisfactory in terms of household assets and income, human and social capital, while moderately satisfactory in other domains (i.e. impact on natural resources and climate change, and institutions and policies).
In a large, middle-income country like India, good project performance continues to be important, but demand is emerging for knowledge sharing and analysis to inform public policies and programmes. There is scope for IFAD to invest more in systematizing and analyzing its project experiences so that they can be fed not only into better project design and implementation but also into the formulation of public policies and programmes.
The Gambia Country Programme Evaluation
The evaluation finds that the partnership between IFAD and the Government of The Gambia has been highly valued, reflecting mutual trust and cordial relations. The project objectives and designs are relevant, in general responding to the needs and priorities of the target groups and the Government.
However, the extent to which the objectives were achieved was rather limited, due to a number of factors, including high and unpredictable staff turnover and weak partnerships with other stakeholders such as non-governmental organizations and development agencies. There was also a lack of clear targeting strategy in order to effectively reach and support the intended beneficiaries. Sustainability of benefits was found to be challenging in all interventions, even though the focus on this aspect increased over the years. The projects and programmes have had a positive impact on women's economic empowerment in general, but there could have been more attention to the issue of drudgery.
This is the first country programme evaluation of The Gambia conducted by the Independent Office of Evaluation of IFAD and it covers the partnership between the Government and IFAD during the period 2004-2014. Over the last 30 years, IFAD has supported ten projects and programmes in The Gambia for a total cost of US$196 million, of which IFAD contributed US$73.1 million.
Finance for Enterprise Development and Employment Creation Project
Bangladesh is one of the most densely populated countries in the world, with a population density of 1,174 inhabitants per sq.km in 2011. Depending on the source, rural poverty stood between 43 and 53 per cent at the time of project design (2006). The agriculture sector (including crop, livestock and fisheries) makes up about 18 per cent of the country’s gross domestic product and is the main source of employment, absorbing 47.5 per cent of the workforce. The majority of farmers (53 per cent) are landless. While agriculture is the backbone of the rural economy in Bangladesh, it does not provide year-round income earning options. There are many microenterprises in rural and peri-urban areas in both agricultural and non-agricultural sectors which, if developed, could have a large potential to employ the rural poor. A key constraint to the growth of these microenterprises is access to finance and value chains.
The Independent Office of Evaluation of IFAD (IOE) has undertaken a project performance assessment (PPA) of the Finance for Enterprise Development and Employment Creation (FEDEC) in Bangladesh to: (i) provide an independent assessment of the overall results of the project; and (ii) generate findings and recommendations for the design and implementation of ongoing and future operations in the country.
Project design and implementation. The project was approved in September 2007. The IFAD loan effectiveness date was 8 January 2008, and the actual loan closing date was 30 September 2014, being a six-year implementation period. The PPA mission to Bangladesh took place in November 2014. The project goal was to stimulate pro-poor growth to increase employment opportunities and reduce poverty. The project objective was to expand existing microenterprises and establish new ones. To achieve the objective, the project design envisaged three key components: (i) microfinance services, (ii) value chain development (VCD); and (iii) project coordination and management.
The project was implemented by Palli Karma-Sahayak Foundation (PKSF) as the lead agency through partner organizations. PKSF is the government apex funding agency for non-governmental organizations, and held overall responsibility for project implementation under the conditions and terms of the Subsidiary Loan and Grant Agreement. PKSF worked with 159 partner organizations regarding microenterprise lending and with more than 44 partner organizations relating to VCD activities. These partner organizations (which also operate as microfinance institutions –MFIs - but are not limited to that function) have significant experience in providing microfinance while many have become familiar with microenterprise financing through earlier projects which did not have a focus on value chain access. Since retail financing to microenterprises was the main activity of the project, these partner organizations were actually the drivers of the whole project.
The total project cost at design was US$57.8 million, with the expectation of being proportionately shared by IFAD (61 per cent), Government/PKSF (38 per cent), and beneficiaries and partner organizations (1.3 per cent). At closure, the total actual project cost was US$314.74 million, financed by the IFAD loan to the amount of US$35.67 million (11.3 per cent), the PKSF contribution to the amount of US$57.06 million (18.1 per cent), and partner organizations and beneficiaries to the amount of US$222.01 million (70.6 per cent). The contribution of participant partner organizations to the microenterprise loan funds, although present from the beginning, increased dramatically towards the project end to enhance their equity participation in microenterprise lending.
The FEDEC approach was geared towards increasing the income of the rural poor by creating improved access to finance for the microenterprises. Development of a range of value chains was also an integral part of the project design and was envisaged to foster the economic growth of not only the microenterprises but also the backward and forward market actors thereby creating further employment for rural poor people in Bangladesh. The key assumption of the project was to reach the poor directly through the growth of microenterprises accessing microfinance, and indirectly through job creation. During implementation, a much higher number of microenterprises than initially targeted responded positively and met the eligibility criteria for receiving loans laid out by the implementing agency and, consequently, the partner organizations and the project tapped into this opportunity. However, the major risk identified was whether these microenterprises being financed were actually creating more employment and income for the rural poor.
The project financed four major categories of enterprises namely: trade and service, agriculture, and manufacturing and processing. The share of trade in total loan outstanding was the highest (48 per cent), followed by agriculture (25 per cent), services (15 per cent) and basic manufacturing and processing (12 per cent). Use of loans in trade was dominated by small retail businesses, while in agriculture the dominant sub-sector was livestock. Service sector loans were dominated by house construction and small-scale motorized passenger vehicles, while mini-garment production dominated the basic manufacturing and processing category. The project completed a revised number of 44 value chain sub-projects against an initial set target of 60. An analysis of the value chain sub- projects reveals that an overwhelming majority of them (91 per cent) are in agriculture including crops (flowers, vegetables, rice, bananas), fisheries/crab/ prawns and livestock.
Relevance. The project appropriately included both financial and complementary non-financial services but lacked support to any form of beneficiary organization. The objectives were relevant to the 2005 National Strategy for Accelerated Poverty Reduction and well aligned with the 2006 IFAD Country Strategic Opportunities Programme. Particular attention was given to scaling up microcredit initiatives to meet the needs of growing microenterprises and small businesses in the rural areas, thus contributing to the rural economy and job creation. Limited or lack of access to finance is indeed recognized as one of the key constraints to the growth of microenterprises in Bangladesh. The project also tried to improve the capacity of MFIs to provide non-financial services for business growth (training, marketing, technology, etc.) by providing technical support and through a VCD approach. In this last respect, the project was overly ambitious in scope given the short period of time available for implementation.
Micro-enterprises in Bangladesh provide not only sustainable income-earning options for entrepreneurs but also wage employment opportunities for poor people. The latter segment of the rural population, mostly landless, depends largely on agricultural labour opportunities which are periodic. However, the FEDEC did not really target the poor/most vulnerable or monitor their inclusion in, and benefits stemming from, the project. A much larger portion of loans went to the trading business, which employs relatively less people than the manufacturing and processing sectors. Employment creation for women was also not rigorously sought after. Not all partner organizations applied project guidelines regarding the eligibility of microenterprises for loans and sometimes loans were provided to microenterprises that could have accessed them through formal institutions.
Effectiveness. FEDEC has built the capacity of PKSF and partner organizations to efficiently support microenterprise development as per the objective. Overall project effectiveness, with respect to the number of microenterprises which received loans, was highly satisfactory as it reached the target mid-way through the project. With a very high recovery rate of 98.53 per cent, it appears that the microenterprise loan financing service has been able to create a strong foothold and is very likely to continue. The number of microenterprise borrowers registered an increase of 483,774 (from 79,403 on 29 February 2008 to 563,177 on 31 March 2014) (67.1 per cent women), against a target of 117,700 (an achievement of 411 per cent). Likewise, the average loan size went up from BDT 59,281 in February 2008 to slightly more than BDT 80,000 in March 2014. The project far exceeded the two critical lending targets, i.e. the number of borrowers and the average loan size/total loan outstanding.
Efficiency. The larger part of the overall project budget (98.6 per cent) was spent on microenterprise lending and the project performed very efficiently in this context. The original funds for microenterprise lending for the total project had been disbursed by mid-term. The recovery rate has also been outstanding. For loans given to partner organizations by PKSF, the cumulative recovery rate was 98.5 per cent, while that of loans given to microentrepreneurs by partner organizations was 99.15 per cent. The IFAD-PKSF eleven-year consolidated partnership and PKSF's in-depth knowledge of financial services combined with a network of 250 national partner organizations, provided FEDEC with a unique opportunity for sharing costs, ownership, trust and knowledge.
Rural poverty impact. Rural microenterprise entrepreneurs, the first target group of the project, significantly raised their income and assets as a result of microenterprise loans and families owning a microenterprise are now more food secure. However, the change was not as significant for the rural poor, often landless and/or female-headed households, the second target group of the project, who were expected to benefit from the growth of microenterprises through employment creation. Most microenterprises accessing loans did not belong to the most labour intensive sectors, and increased labour demand was largely absorbed by unpaid family labour.
PKSF introduced training on environment and regulatory issues related to microenterprises for PKSF and partner organizations’ staff. Unfortunately, this was not followed-up proactively with the microenterprises except for perhaps in the flower sub-sector. Results show a large increase in the production of nutrient-rich fish and some positive impact in terms of quality and quantity intake within the target households.
Sustainability. Considering the high recovery rate of microenterprise loans, it is very likely that PKSF and partner organizations will continue providing the service. In addition, since microenterprise lending also reduces transaction costs (bigger loan size compared to microcredits) the growth of microenterprise clients in the overall portfolio of each partner organization is likely to increase. Hence, the financial service for the target group can be considered sustainable. However, the picture for the non-financial services is not as bright. Integration of the private sector in an efficient and sustainable manner in the VCD projects was hardly visible. PKSF is committed to the sustainability of the microenterprise approach developed under FEDEC through its continued financing to, and supervision of, partner organizations. The IFAD-funded Promoting Agricultural Commercialization and Enterprises Project (PACE) approved in September 2014 also provides a great opportunity to consolidate the innovations introduced, particularly seasonal loans.
Innovation and scaling up. The project took an innovative approach by addressing the financing needs of the less-poor operating microenterprises with potential to expand. A key assumption was that the microenterprises would themselves employ more poor people following their growth. In VCD projects, some technology innovation in the local context was observed with, for example, the introduction of improved mung bean production technology, expanding high value and more labour-intensive flower production, prawn culture associated with fish, etc. FEDEC has promoted the introduction of new financing products (seasonal loans); as well as new varieties of crops (summer tomatoes, mung beans; gerbera, roses and gladiolas flowers, prawns, catfish) in areas where they were not produced before. PKSF has documented some of these innovations and has trained partner organizations to diversify their financing products. However, the absence of strong partnerships with the private sector undermines potential for scaling up innovative enterprises.
Gender equality and women's empowerment. A much higher proportion of loan recipients (67.1 per cent of 483,774 borrowers, a total of 324,612) were women. Notwithstanding the fact that most were used as a conduit by their male partners, many of them successfully mediated their access to credit to gain access to other resources and strengthen their voices in family decision-making. FEDEC’s contribution to increasing mobility and participation of women cannot be underestimated. One out of the eight microenterprises visited during the assessment was run by women. However, microenterprises and value chains seemed not to have been selected with conscious efforts to ensure gender equality and women's empowerment.
Targeting. PACE, based on lessons from FEDEC, should provide start-up capital to first generation ultra-poor (those immediately below the poverty line) with specific mechanisms and tailored financial products/non-financial services that would reduce risks in working with this target group. In addition, more careful selection criteria for microenterprise lending should be adopted and monitored carefully with priority to those working in sub-sectors with higher potential for employment generation and gender balance. This will require clear monitoring and evaluation of activities that include impact/outcome indicators linked to other services. The geographic focus should be in the poorest areas of the country, to increase the probability that more of the poor can benefit from employment creation.
Business/non-financial services. PACE should have a clear strategy on how to develop the business/non-financial service markets around the selected value chains. Value chain constraints to growth are often linked with lack of, or poor, service provisions either from within the chain (in embedded form) or from lateral provisions. The importance of embedded service provisions in agricultural sectors in Bangladesh cannot be underestimated as poor farmers can hardly afford an information service on a fee basis. To ensure sustainable impact, it is essential to develop/strengthen the service providers of the selected value chains instead of the project directly providing those services. PACE, therefore, needs to have a clear strategy to identify the service market gaps in selected value chain and build their capacity through facilitation activity with a clear exit plan.
Value chain development. Learning from FEDEC, PACE should refocus on a smaller number of pro-poor value chains as opposed to the 30 value chains foreseen. This also means that a simple view to VCD is not sufficient and assessments must identify not just blockages to access markets but all linkages related to input/output policies that may impact negatively on sustainability.
Institutions. In the development of enterprises and accessing value chains it is essential to develop them (producer/processor groups) into formal institutions and in the context of Bangladesh clear support should be given for these groups to form into companies. Such a process will strengthen their knowledge, roles and responsibilities to engage in business for further profit and/or expansion and will avoid potential elite capture. Support to farmers’ organizations could play a vital role by giving members improved access to market, information, and agricultural technologies, and related services and public goods.
Partnerships. PACE should place a high priority on developing a wide range of partnerships to leverage expertise, access and wider benefits to IFAD-supported projects. For example, they should partner with other IFAD-supported programmes in the country (implemented by the Ministry of Agriculture; and by the Local Government Engineering Department [LGED]) as well as with IFAD-supported regional programmes to support farmer organizations. As PACE aims at the development of 30 value chains, they should leverage on these partnerships with other relevant programmes. In particular, they should leverage their expertise and links with private companies that are involved in those programmes and are interested in undertaking joint market assessments, trainings and expanding access to the market for the microenterprise.
Nigeria Country Programme Evaluation
Over the last 30 years, IFAD has supported ten projects in Nigeria for a total cost of US$795.3 million, of which IFAD has provided US$317.9 million. This is the second country programme evaluation and it covers the partnership between IFAD and the Government from 2009 to 2015. The CPE found a clear trajectory of an evolving country programme that reflects deliberate efforts to adapt to changing priorities, realities and needs. The 2010-15 COSOP has built on the strengths of IFAD in Nigeria, while refocusing the programme on agriculture, in line with Government's policy priorities. The programme has targeted poverty well in the projects and programmes in the North and Middle Belt. The most significant achievement according to the evaluation was the creation of community-based organizations through which local governments were able to channel funding into otherwise hard-to-reach places. These committees continue to play an active role in planning community infrastructure and managing community assets in a sustainable way. In the Niger Delta in the South, population densities are high and market access is better, hence IFAD focussed on rural employment creation for the large youth population and the women remaining in rural areas, as well as on the promotion of on- and off-farm enterprises. Overall, there were results in increased incomes, social capital, food security and productivity, but the achievements were hampered by slow release of funding and implementation delays, particularly in the early years of programme life. Political uncertainties caused by changing governments and the institutional complexities within the federal system were major factors that affected the performance of the programme. The difficulty of the context calls for deeper analysis of governance and other crosscutting issues, including youth, gender, natural resource management, pastoralism, and conflict and fragility, to be built into IFAD's strategy for future engagement.