Making a difference in Asia and the Pacific



Issue 13 - November/December 2006

PBAS: looking beyond the resource allocation system

In this issue


Message from the director of the Asia and the Pacific Division

In line with ‘industry standard’ in all other major international development finance institutions, in 2003 member countries brought the performance-based allocation system (PBAS) to IFAD. The main purpose of the PBAS was twofold: to increase the effectiveness of the use of IFAD’s scarce resources and to establish a more transparent basis and predictable level of future resource flows.

Prior to the PBAS, IFAD allocated its resources for financing country programmes on the basis of perceived strategic opportunities for rural poverty reduction, somehow weighted by the absorptive capacity of countries. There was an understanding that this system could lead to country allocations that were imbalanced and unpredictable, and that it was insufficiently conducive to development effectiveness of IFAD.

The organization seeks to increase the poverty reduction dividends from the resources it lends and grants. It seeks to support effective, innovation-oriented programmes that lead to sustainable replication and scaling up and provide inputs for pro-poor policy and institutional change. Leading research has indicated that effectiveness of investment programmes is actually pre-conditioned by a pro-poor policy and institutional framework and its enforcement. It also showed that development programmes do not systematically and significantly succeed in firmly establishing such a conducive pro-poor policy framework, where it does not pre-exist.

IFAD, with its rural poverty-focused mandate, aspires to the system that allocates resources on the basis of need, and particularly on the probability of transforming the resources into lasting poverty reduction. The system apportions resources on the basis of numbers of poor rural people and their per capita incomes, which are indicators of need. It also allocates resources on the basis of a pre-existent supportive environment reflected by pro-poor macro and sectoral policies, with inclusive rural policies and institutions, and past country programme performance – the heart of the PBAS.

This newsletter presents the edifying experience of introducing the PBAS into IFAD and into its country programmes. The learning process is enabling IFAD to improve the system and deepen its usefulness. Indeed, the PBAS is growing beyond its initial resource allocation vocation. As some of the following country experiences illustrate, it has become a process, a dialogue with IFAD’s developing member countries on the pro-poor policy and institutional transformation requirements that would lead to enhanced effectiveness and sustainability of poverty reduction programmes. This dialogue is experience-driven and increasingly evidence-based. It shapes in concrete terms the agenda for institutional transformation that is inherent in so many country programmes.

While countries with high scores are being allocated significant levels of resources to be effectively invested in a more programmatic manner, countries with lower performance scores are being supported with resources to help them address the institutional and policy constraints that limit the effectiveness of their poverty reduction programmes. An important result of the PBAS is that all countries now have a comparative basis for predictable access to poverty reduction resources from IFAD.

Annual PBAS reviews of country programme performance and the related consultations with our in-country partners ensure that the PBAS assessment remains a continuous dialogue on substantive enabling conditions rather than a one-off resource allocation exercise.

While the journey of IFAD’s PBAS has been well embarked upon, close collaboration with member countries and other development partners, particularly in the context of country-owned poverty reduction strategies, policies and institutions, will allow IFAD to develop the PBAS into a key instrument for country-owned management for poverty reduction results and for enhanced development effectiveness.  

Thomas Elhaut, director, Asia and the Pacific Division

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Introduction and evolution of the PBAS in IFAD

chinaIFAD introduced the PBAS to ensure more effective use of development resources. The PBAS is based on the allocation of financial resources according to borrowing countries’ performance, population and gross national income (GNI) per capita. Since its introduction, the PBAS has been a continuous learning process for IFAD. Some changes in the methodology were introduced to maximize the effective implementation of the system.

Following discussions with donors during the Seventh Replenishment in 2003 and 2004, IFAD developed the new system called the PBAS to allocate resources among its borrowing member countries. The system is rules-based, using a formula that incorporates measures of country need and country performance. 

The PBAS introduces an approach to allocate IFAD’s loan and country grant resources to country programmes on the following bases:

  • country performance (broad policy framework, rural development policy and portfolio performance)
  • population
  • GNI per capita

All financing agencies, including the World Bank and the Asian Development Bank, have introduced a similar system of resource allocation. The system is a response to the desire of donors to ensure that their financial contributions, approved by their governments and usually provided by taxpayers, are effectively used for poverty alleviation.

The PBA systems and processes in these various institutions reflect distinctive institutional mandates, policies, governance structures and client groups. For example, the Caribbean Development Bank’s system makes special provision for countries that are vulnerable to natural calamities such as seasonally endemic hurricanes.  

Uniquely, IFAD’s approach includes special provision for rural sector performance, which is weighted heavily in the overall assessment of country policies and institutions. The rural sector performance review has given IFAD the basis for policy dialogue and for emphasizing the rural and agricultural focus of IFAD.

The first PBAS-based allocation was made in 2004 for the three-year period 2005-07. At the time, IFAD also noted that the PBAS would continue to evolve to reflect operational experience. The initial design was to be a starting pointfor an ongoing process of refinement relative to the methodology of assessment and the weighting of the separate factors of the formula.

Last year a series of technical issues that limited the effective implementation of the system were identified. For example, IFAD noted that the large variations in population among IFAD’s member states had resulted in wide differences in country scores and allocations. This was principally because of population levels that made it necessary to introduce maximum and minimum allocations. The influence of the population factor reduced the system’s responsiveness to changes in performance indicators.

In April 2006 the Executive Board agreed to reduce the influence of the population factor in the formula. The new level was regarded as a ‘point of balance’ at which population still carried significant influence as a determinant of ‘needs’ in the formula but at the same time allowed performance and GNI per capita to have a strong role.


New PBAS formula



Country sectoral policy and institutional policy score is calculated by means of the following formula:

Needs factors                                     Performance factors                  


Rural POP0.45 x GNIpc-0.25 x {0.2 IRAI + 0.35 PAR + 0.45 RDSR}2.0    =


POP – population; GNIpc – GNI per capita; IRAI – IDA resource allocation index; PAR – project at risk; RDSR – rural development sector rating


Following the successfully concluded replenishment discussions, it was also agreed that fixed regional allocations would no longer apply. This means that IFAD regions would no longer receive pre-determined allocations of funds for lending and grants. However, the ‘uniform’ system would need to reflect strategic priorities in terms of the regional distribution of development assistance. In addition, IFAD would continue to direct at least the current percentage share of resources to sub-Saharan Africa, provided that the performance of individual countries warrants it.

Brian Baldwin, senior operations management adviser, Programme Management Department

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Country governments help to shape the PBAS process

PhilippinesTo date IFAD has organized a number of national consultations on the PBAS in the region. The objective was to discuss the PBAS assessment with country governments and to identify key areas that need improvement. The Philippines and Viet Nam provide examples of countries where such consultations took place. Their governments made recommendations which are helping to shape the PBAS process in these countries. Such recommendations and an increased sense of ownership over the PBAS make the PBAS a more effective tool in determining country allocations.

The Philippines

When the PBAS was introduced in preparation for the first PBAS cycle of 2005-07, the first challenge was to explain its rationale and the scoring process thoroughly to concerned government departments. Fortunately it was easy to demonstrate the advantages of a system that will enable a transparent and scientific allocation of IFAD resources to country programmes.

In an official reaction to the first sectoral policy and institutional policy scoring done by IFAD, the director of the Public Investment Staff, one of the sections of the National Economic and Development Authority (NEDA), stated in a letter dated 28 October 2004, “…From our review of the document, we generally have no major objections to the assessment made by IFAD. Moreover, we find the scoring system useful and applicable for when we later do a performance evaluation of the Medium-Term Philippines Development Plan (MTPDP).”

Such encouraging comments emerged from a broad-based consultative process jointly managed by the NEDA Secretariat and the IFAD country programme manager. Working closely with the director of the Public Investment Staff of NEDA, IFAD succeeded in sharing all relevant background documentation and the preliminary country scores widely within the government.

IFAD also held a half-day validation seminar, which took place at NEDA on 11 October 2004. The seminar was attended by the following government departments:

  • Department of Agriculture
  • Department of Agrarian Reforms
  • Department of Trade and Industry
  • Department of Social Welfare and Development
  • National Anti-Poverty Commission in the Office of the President of the Republic of the Philippines
  • NEDA Secretariat, including the Public Investment Staff

After the seminar all departments were invited to provide comments, which were subsequently compiled by NEDA and submitted to IFAD.

The conclusions of the consultative process, which were shared with IFAD on 28 October 2004, turned out to be quite thorough. While generally agreeing with IFAD’s overall assessment and scores, the government partners made several proposals for improving the system and process.

In particular, the government recommended refining the scoring form and enhancing the assessment, as follows:

  • The assessment should be more comprehensive. It should include the performance evaluation of emerging key players other than the government departments.
  • Together with NEDA, IFAD should conduct a rapid assessment/study on the relevant aspects of the PBAS scoring framework. This would ensure that narratives and scores are supported by more comprehensive and reliable statistics and are not entirely subjective.
  • Because some of the questions in the scoring form might be considered offensive, their wording should be revised. For example, regarding procedures for registering a small and medium enterprise or private trading business indicator, it was suggested that the phrase “occasionally involve bribing” be changed and that “bureaucratic procedures” be used instead.

The government also identified a number of existing policies that should have been captured in the PBAS narratives. Some of these policies include:

  • the Agriculture and Fisheries Modernization Act
  • the Philippines Fisheries Code
  • the dialogue with rural organizations as demonstrated by their role in preparing the Comprehensive Agriculture and Fisheries Modernization Plan
  • the Self Employment Assistance Programme of the Department of Social Welfare and Development

philippinesSome key experiences that emerged from the PBAS consultations in the Philippines are worth noting.

A major challenge facing IFAD is how to accommodate the comments received from governments. This especially applies to comments recommending revision of the format of the scoring form and to comments concerning the need to ensure the objectivity in the scoring that is based on the results of a detailed survey and study. If accepted by IFAD, the recommendations will result in revision of the corporate scoring forms. They will also have significant cost implications. But it is important to address them to ensure the continued constructive engagement of government partners in the PBAS process.

There are significant cost implications for the country programme management teams if the PBAS assessments are to be done in a comprehensive manner that involves all key stakeholders. They include the cost implications of doing a thorough rural sector study even though the IFAD Executive Board had anticipated the use of secondary data for this purpose. Governments may believe that sector studies by other organizations such as the World Bank may have addressed insufficiently the policy concerns raised in IFAD’s PBAS scoring forms.

The validation seminars with all concerned departments can also become quite time- consuming. But without them IFAD might be seen as being subjective in its assessment, with potential negative consequences on the perceptions of country governments.

In view of the successful conclusions at the end of the 2004 consultative process, the country teams and the government felt it unnecessary to revise the country scores in 2005 and 2006 in the same exhaustive manner as in 2004. The changes in the three-year cycle are considered insignificant in their effect on the scores. It is probably more useful to assume that the scoring should be done only once during each three-year PBAS cycle. The scores should be reviewed at any time only if something major occurs that might have significant impact on the policy framework. Otherwise the revision should be made mandatory only at the end of a cycle, in preparation for the following PBAS cycle.

Sana F. K. Jatta, country programme manager

Read more about the Philippines

Viet Nam

viet namA number of representatives from various departments of the Government of Viet Nam met in IFAD’s PBAS consultation on 11 July 2005 at the Ministry of Planning and Investment. The consultation was chaired by the Ministry of Planning and Investment and included representatives from the Ministry of Finance, Ministry of Foreign Affairs, Ministry of Agriculture and Rural Development, the Central Institute for Economic Management and IFAD.

Because PBAS has an important role in the development process, the government representatives made the following recommendations to IFAD:

  • The PBAS narrative should be constantly updated.
  • An ad hoc working group should be formed in the future to ensure that the PBAS narrative information is accurate.
  • There should be a more participatory process in the finalization of the document with the Government of Viet Nam.
  • Although the PBAS is an IFAD document, the Government of Viet Nam should have more ownership, to ensure that it is as accurate as possible and that it can be used as a reference for other donors.
  • The objectives, rationale, purpose and methodology of the PBAS should be clearly stated at the beginning of the document.
  • The policy areas with particular relevance to the IFAD-supported country programme should be identified.

The government representatives further suggested that an analysis of rural development in Viet Nam should be added to the beginning of the PBAS narrative in the form of an executive summary. Furthermore, conclusions and recommendations should be included at the end of the document to make the PBAS narrative a more effective tool.

Atsuko Toda, country programme manager

Read more about the Viet Nam

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New results-based COSOP integrates the PBAS: experience from Bangladesh 

PBAS meetingIn September 2006 the Executive Board approved IFAD’s new approach to the Country Strategic Opportunities Programme (COSOP). The approach uses a methodology for integrating IFAD’s PBAS analysis into the COSOP. It focuses on assessing pro-poor rural sector policies and strategies at the country level and on the performance of ongoing projects. Both types of analyses provide a basis for calculating the ‘country score’, which is a proxy indicator for the resources available for implementation of the country programme.

The new approach implies undertaking a PBAS analysis as part of the COSOP preparation exercise. The methodology used in the approach was designed with reference to IFAD’s experience and the experience of IFAD’s partner international financing institutions.

The approach includes preparation of a rural sector analysis to obtain a ‘rural sector score’ and an analysis of ongoing project performance to obtain a ‘project-at-risk score’. Both scores are then inputted into the PBAS formula to produce the overall ‘country score’.

The rural sector analysis identifies the key areas where improvements are needed in pro-poor rural sector policies and strategies at the country level. The analysis also ensures that the COSOP can provide focused assistance to the country in these areas. In the case of Bangladesh, the PBAS rural sector analysis highlighted the need for:

  • a more pro-poor agricultural research and extension system
  • increased access to productive natural resources (particularly fisheries) for poor      people

These needs were translated into concrete strategic objectives in the design of the new COSOP for Bangladesh.

The project-at-risk analysis uses a pre-defined check list to help identify key areas where improvements are needed in the implementation of ongoing IFAD projects in the country concerned. This ensures that the COSOP can include a programme of support to improve project performance in the identified areas. For example, in the case of Bangladesh, an analysis highlighted the need for:

  • improved project level financial management 
  • improved monitoring and evaluation (M&E)

As a result, an action plan to improve performance in these areas was included in the COSOP for Bangladesh. IFAD has already begun implementing this action plan, and it has launched missions to provide technical support in financial management and M&E.

Once the rural sector and the project-at-risk scores are known, they can be included in the PBAS formula. This produces a country score, which translates into an annual allocation for year one of the COSOP. In the case of Bangladesh the allocation for year one was calculated at US$16.55 million. The allocations for subsequent years of the COSOP can only be calculated on a year-by-year basis upon completion of the annual PBAS exercise.

To indicate the importance of the PBAS in determining the overall volume of resources available for implementation of the country programme, hypothetical high case and low case scenarios are included in the COSOP. Both scenarios are calculated by modelling the effect of an increase or decrease in the rural sector score and in the project-at-risk score. This provides a highly indicative illustration of the effect of these variables on the country score. In the case of Bangladesh, in a high case scenario, with an increase of 0.3 in the rural sector score and an increase of 1.0 in the project-at-risk rating, the country score would increase by 20 per cent. In a low case scenario, the country score would decrease by the same amount. 

Once all the calculations are completed, the PBAS data is included in the draft COSOP document and discussed at a wrap-up meeting chaired by the government. A wrap-up meeting on the draft COSOP for Bangladesh was held on 15 February 2006. The PBAS calculations in the COSOP were endorsed at the meeting.

Ms Nargis Islam, joint chief, Economic Relations Division, Ministry of Finance, Government of Bangladesh and Nigel Brett, country programme manager

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Farmers in Sri Lanka and the Philippines make their voices heard

sri lankaThe Farmers’ Forum is an emerging bottom-up process of consultation and dialogue among organizations of small rural producers, their governments and IFAD. Last year IFAD organized two consultations with farmers’ organizations (FOs) in Sri Lanka and the Philippines. Through these experiences, the Asia and the Pacific Division has seen that FOs have the potential to become valuable partners in the PBAS national consultations. They can help voice the concrete constraints faced by poor rural producers and alert both IFAD and the government to specific legal or policy issues.

As a follow-up to the Farmers’ Forum initiative, in 2005 IFAD organized two national consultations with FOs in Sri Lanka and the Philippines. To take advantage of this initiative and “get two birds with one stone”, the division focused the consultation with participating representatives of FOs on selected policy issues in the PBAS.

The objectives of the two consultations were to:

  • strengthen IFAD’s understanding of the role, mission, strengths, needs and aspirations of FOs and of the type of partnership that may be developed with them
  • get FOs’ feedback on the way they perceive the legal and policy framework in their respective countries

The consultations were successful in meeting both objectives. IFAD has deepened its understanding of the specific policy issues that are perceived by the FOs in Sri Lanka and the Philippines as constraints to agricultural and rural development. IFAD has also recognized some of the opportunities that may exist to improve the legal and policy framework.

FOs in Sri Lanka have pointed out that the Agrarian Development Act is providing a sound framework for the establishment and work of the organizations (one of the 12 rural sector framework assessment criteria). This especially applies to the participation of FOs in the Agrarian Development Councils at the provincial and district level.

But such provisions have not been fully implemented. Overall, the farmers’ representatives found government support to their organizations to be insufficient. They recommended an amendment of the Agrarian Development Act that would introduce provisions for representation of FOs at the district level. This would be accomplished through an elected farmers’ representative entrusted with authority equal to that of the district assistant commissioner.

In the Philippines, IFAD asked FO representatives about their views on the legal and policy framework governing access to land. The FOs indicated that the Indigenous People’s Rights Act was in principle guaranteeing indigenous peoples the right to protect and use their ancestral domains for their own benefit. But other laws enacted to protect the environment were in direct contrast with the Act.

For instance, ancestral lands that are proclaimed national parks cannot be tapped to generate income for poor upland dwellers. FOs recommended full implementation of the Indigenous People’s Rights Act. In particular they proposed a free and prior informed consent provision spelling out that indigenous people should be consulted and should approve any type of outsiders’ interventions on their ancestral domains.

Maria Donnat, results management specialist

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Managing the PBAS in the Asia and the Pacific Division

bangladeshThe Asia and the Pacific Division has developed a number of useful mechanisms in its work with the PBAS. Written narratives and national consultations enabled country programme managers to initiate policy dialogue with borrowing countries. Annual divisional comparative analysis of all country assessments has allowed managers to identify possible discrepancies and inconsistencies in scoring. But some issues related to the PBAS process remain pending.

In 2003 IFAD’s Executive Board approved the document entitled The structure and operation of a Performance-Based Allocation System for IFAD. Initially there was widespread uncertainty among staff members and their country counterparts about a system that was perceived to ‘reward’ good performers with an increased lending envelope and, conversely, to ‘penalize’ poor performers. Many argued that countries with a ‘poor’ institutional and policy framework were precisely the types of countries that needed the most support from IFAD. The system was perceived as going against both basic common sense and IFAD’s firm conviction.

Another reason for the initial discomfort of staff members and their country partners regarding the initiative was related to the scoring guidelines spelled out in Annex I of The structure and operation of a Performance-Based Allocation System for IFAD. Many staff members were hesitant about the uniformity of market- and private sector-oriented guidelines. They feared that it would unjustly penalize countries that do not adhere to these principles although their different, elected ‘path’ could be successful in reducing poverty.

Now, as the preceding article shows, three years later IFAD has produced its third round of PBAS sectoral policy and institutional policy scoring. Most of the staff and their country counterparts now recognize the virtue of a system that has fulfilled its primary purpose: to provide a transparent basis for making decisions about the allocation of lending resources. But a number of methodological issues remain a source of concern.

Lessons learnt

Accurate documentation
The Asia and the Pacific Division has written narratives to back up sectoral policy and institutional policy scoring as an important measure to safeguard the integrity of the entire system and to increase the transparency of the scoring exercise. Detailed written narratives have proved extremely useful in allowing country programme managers to enter into an informed policy dialogue with borrowing countries. For the first round of the scoring, most of the narratives were prepared by external consultants. Since then country programme managers have gained full ownership of the exercise, and they update narratives annually.

Intradivisional annual harmonization exercise
To ensure the consistency of individual assessments with the basic principles of the PBAS and the uniformity of individual scoring decisions, it is important to compare individual country ratings across all countries. The Asia and the Pacific Division does this annually. Country programme managers perform a preliminary comparative analysis of all country assessments to identify possible discrepancies or inconsistencies in scoring. The managers then discuss these discrepancies and inconsistencies at a divisional meeting.

National PBAS consultations
IFAD is committed to consulting with borrowing countries each year to get their feedback on the performance assessments performed by IFAD and to validate them. All borrowing countries in Asia and the Pacific with an active portfolio have been consulted at least once since 2004. Although the approach to this dialogue needs to be systematized, most country programme managers find this exercise useful because:

  • it increases the transparency of the scoring exercise
  • it helps borrowing countries understand the criteria by which performance is assessed
  • it allows IFAD and its partners to enter into a fruitful dialogue about performance issues

Pending issues

viet namPolicy versus enforcement
The current intention of the PBAS is to assess country performance in establishing a policy and institutional framework that is conducive to sustained rural poverty reduction. But it is easily arguable that no matter how perfect policies and institutions may seem ‘on paper’, it is possible that they are not being implemented. The fact that a sound institutional and policy framework is in place is a necessary but insufficient condition for poverty reduction. IFAD needs to ensure that these policies are effectively being implemented and that they have a positive impact on poor people.

For example, IFAD should not only be satisfied that the legal, institutional and market frameworks in a given country provide the basis for rural poor people’s access to land, but it should also ensure that this access is, in fact, equal. This continues to be a challenge for the PBAS process.

Increased measurability
The system would gain considerably from the introduction of more rigorous quantitative indicators that would measure the impact of the implementation of a given policy and institutional framework. For example, to measure actual access or lack of access to land by rural poor people, proxy indicators such as the average land plot size per farmer household, the number of landless farm workers and the percentage of the rural population who are landless would strengthen the comparability of assessments.

Such indicators would also help reduce the subjectivity of the scoring exercise, facilitate comparisons of scores across countries and regions, and establish performance benchmarks.

Relevant assessment criteria
In many instances, some of the 12 main criteria and 59 subcriteria for assessing national policy frameworks are less relevant to specific country contexts. For example, while the need for sound policies in the water sector may be of paramount importance in countries faced with water scarcity, this might not be the case in countries with abundant water for agriculture. The same applies to countries where no cultural biases against women exist, where women have enjoyed the same rights and privileges as men for decades, and where boys and girls have been participating equally in primary and secondary education for years. In such countries, the subcriteria ‘organization of active campaigns for girls’ education’ is irrelevant and should not be taken into account in the scoring exercise.

Maria Donnat, results management specialist

Useful links

PBAS documents:






Martina Spisiakova
Tel: 3906-54592295

Making a Difference in Asia and the Pacific

Issue 12: September/October 2006 - Communication for poverty reduction and rural development

Issue 11: July/August 2006 - Working with UN agencies at the country level

Issue 10: May/June 2006 - Indigenous peoples and ethnic minorities

Issue 9: March/April 2006 - Access to land

Issue 8: January/February 2006 - Agricultural Technology Management

Issue 7: November/December 2005 - Pro-poor policies

Issue 6: September/October 2005 - Gender & MDGs

Issue 5: July/August 2005 - Partnership

Issue 4: May/June 2005 - Rural Finance

Issue 3: March/ April 2005 - Donor Harmonization

Issue 2: January/ February 2005

Issue 1: November/ December 2004

Project websites:

Chhattisgarh Tribal Development Programme:

North Eastern Region Community Resource Management Project for Upland Areas:

Rural Poverty Reduction Programme

Barani Area Development Project

Western Mindanao Community Initiatives Project

Sri Lanka
Post-Tsunami Development Assistance Database (DAD)

The UN Country joint website

Upcoming events:

Greater Mekong Subregion: Fourth Meeting of the Working Group on Agriculture organized by the Asian Development Bank, Siem Reap, Cambodia, 6-8 December 2006

Eighty-ninth Session of the Executive Board, IFAD headquarters, 13-14 December 2006


Start-up workshop – Market Infrastructure Development Project in Charland Regions of Bangladesh, 4 December 2006


Workshop on financial administration and management of IFAD-funded projects, Nepal, 21-24 November 2006


Upcoming missions:


Mid-term review – Microfinance and Technical Support Project, 6-20 December 2006


Study on group revolving funds, 2-26 December 2006


Formulation mission – Papuan Rural Development Project, 19 November - 20 December 2006


Inception mission – 13-30 November 2006

Sri Lanka

Pre-implementation support mission – Post-Tsunami Coastal Rehabilitation and Resource Management Programme and Post-Tsunami Livelihood Support and Partnership Programme, November 2006

Viet Nam

Inception mission – November - December 2006

About IFAD

The International Fund for Agricultural Development (IFAD) is a specialized agency of the United Nations, dedicated to eradicating poverty and hunger in developing countries. Its work in remote rural areas of the world helps countries achieve the Millennium Development Goals. Through low-interest loans and grants, IFAD develops and finances projects that enable rural poor people to overcome poverty themselves.

IFAD tackles poverty not just as a lender, but as an advocate for the small farmers, herders, fisherfolk, landless workers, artisans and indigenous peoples who live in rural areas and represent 75 per cent of the world's 1.2 billion extremely poor people. IFAD works with governments, donors, non-governmental organizations, local communities and many other partners to fight the underlying causes of rural poverty. It acts as a catalyst, bringing together partners, resources, knowledge and policies that create the conditions in which rural poor people can increase agricultural productivity, as well as seek out other options for earning income.

IFAD-supported rural development programmes and projects increase rural poor people's access to financial services, markets, technology, land and other natural resources.

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