IFAD experiences and lessons learnt innovation in building financial inclusiveness in the Gambia

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IFAD experiences and lessons learnt innovation
in building financial inclusiveness in the Gambia
GOTG
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PRESENTATION SUMMARY

• IFAD IN THE GAMBIA
• RFCIP
• - Goal, Objectives, Components Modus Operandi
• RFCIP Achievements
• Experiences Lessons Learnt
• Strategic Elements from Lessons Learnt
• Follow-up RFP
• - Goal, Objectives, Components Modus Operandi
• Innovative Features (RFCIP RFP)
• Conclusion

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IFAD IN THE GAMBIA

• IFAD has financed six projects in the Gambia
  since 1982.
• investing a total of US39.06 million.
• A seventh project, the Participatory Integrated
  Watershed Management Project, was approved in
  2004.
• Five projects were initiated by IFAD and two by
  the World Banks International Development
  Association.
• Six of the projects have received co financing
  from other donors.
• All projects have had an agricultural focus and
  pursued the overall goal of reducing rural
  poverty and
• improving household food security, especially
  among small farmers and women.

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IFAD STRATEGY IN THE GAMBIA

• IFAD projects in the Gambia have become more
  demand-driven. developing rural poor peoples
  participation in planning and implementation.
• For the purpose of accumulating know-how and
  reducing the risk of failure, IFAD-assisted
  projects in the Gambia provide for innovative
  pilot operations with potential for scaling up
• Outstanding features of pilot activity include
• - the village-based savings and credit
  association (VISACA) concept,
• -access and water management in swampland and
  lowland rice cultivation, and
• -community-initiated self-help groups.
• ?These activities were tested , adapted and have
  become successful i in newer projects such as the
  Lowlands Agricultural Development Program and
  Rural Finance and Community Initiatives Project.

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REASONS FOR IFAD INTERVENTION IN RURAL FINANCE

• Demonstrated Leadership in Rural Finance through
  RFCIP etc.
• Demand for Rural Financial Services not fully met
  by main delivery mechanisms and
• Existing Instruments, face a myriad of problems
  that need to be addressed to enhance outreach and
  sustainability of RF Services

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EVOLUTION OF IFAD/RFCIP

• COUNTRY STRATEGY AND OPPORTUNITIES PAPER
• The RFCIP evolved from discussions between IFAD
  and the Government of The Gambia as far back as
  1992.
• In 1997 IFAD prepared a Country Strategy and
  Opportunities Paper (COSOP) to chart a path for
  the continuation of IFADs collaboration with the
  Gambia.
• The main areas proposed were household food
  security and rural financial services.
• The COSOP also proposed a phased project
  approach to combine the two identified investment
  areas, with sufficient flexibility to adapt
  project content to changing/emerging circumstances

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• FORMULATION MISSION
• An IFAD formulation mission working on the RFCIP
  was sent to the Gambia in early 1998, and a draft
  proposal was produced in April 1998.
• APPRAISAL MISSION
• In July 1998 an Appraisal mission was sent to The
  Gambia to modify and refine the Project
• The main changes gave greater prominence to the
  development of a national rural microfinance
  network, and in Central River and Lower River
  Divisions provide support to improve agricultural
  production and productivity, and strengthen
  traditional farmer and producer groups.
• PROJECT START-UP
• - The IFAD loan for the RFCIP was declared
  effective on July 14th 1999, which signalled the
  commencement of the Project. The Project was
  then formerly launched at a Workshop in
  Mansakonko, LRD, on Wednesday 21st of July 1999.

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THE PROJECT

• PROJECT BUDGET - US 10.99 MILLION
• IFAD - US 9.01 million (82)
• Gambia Government - US 1.53 million (14)
• Beneficiaries - US 0.45 million (4)
• GOAL
• Improve food security and incomes of rural farm
  households.
• OBJECTIVES
• Streamlining and expansion of rural financial
  services
• Increasing access to nutritionally diverse food
  and promoting the means of enhancing rural
  incomes
• Strengthening and development of farmer groups to
  undertake self-help activities

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COMPONENTS

• RURAL FINANCE DEVELOPMENT COMPONENT
• The objectives of this component were
• To accelerate and streamline the development of
  rural financial services, including the
  development of a policy and regulatory framework
• The promotion of rural savings and credit
• The removal of infrastructural constraints to
  household food security
• Institutional strengthening and capacity building
  of all the key actors within the sector.
• The Rural Finance Development Component was
  divided into two sub-components strengthening
  of the VISACA network, and provision of support
  to the Micro-Finance Department of Central Bank
  of The Gambia
• The geographical coverage of the Component was
  countrywide, with its main implementing partners
  being the VISACA facilitators (FFHC, AFET, FORUT,
  NASACA) and, especially the Micro-Finance
  Promotion Centre, and Micro-Finance Department of
  the Central Bank.

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COMPONENT (Cont)

• AGRICULTURAL SUPPORT COMPONENT
• The objectives of this component were to
• Assist kafos and producer groups to increase
  agricultural production and thus enhance
  Household Food Security from direct consumption
  as well as from cash sales,
• Address environmental constraints to increased
  production, and
• Improve the technology available.
• This was to be achieved by offering kafos a
  restricted menu of crop and livestock enterprise
  improvement packages
• The proposed enterprises were early millet,
  Findo, multipurpose gardens, small ruminants and
  poultry
• The component was divided into Livestock and
  Crops Technical Support respectively, and
  operated in two administrative Regions, Central
  River and Lower River
• The main implementing partners for the Component
  were Departments of Livestock and Agricultural
  Services respectively, National Agricultural
  Research Institute and the International
  Trypanotolerance Centre

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COMPONENT (Cont)

• KAFO CAPACITY BUILDING COMPONENT
• The specific objectives of this component were
  to
• Promote participatory communication approaches
  for information dissemination and awareness
  raising
• Strengthen kafos and producer groups to enhance
  their organisational, planning and monitoring
  capacities for implementation of their own
  development priorities
• Improve women and mens access to productive,
  technical and social services
• Remove constraints to household food security by
  implementing kafo and village mini-projects.
• The Kafo Capacity Building Component operated in
  the Central and Lower River Regions, and its main
  implementing partners included NGOs and Community
  Based Organisations, and the Departments of
  Community Development, Agricultural Services and
  Livestock Services.

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COMPONENT (Cont)

• PROJECT MANAGEMENT AND MONITORING AND EVALUATION
  COMPONENT
• The objective of this component was to
• Assure smooth and efficient implementation,
  monitoring and evaluation for project activities
• The main implementing agency for this component
  was the Project Support Unit (PSU), which was
  based in Cape Point, Bakau.
• The PSU worked closely with all implementing
  partners to ensure the achievement of the
  Projects objectives, as well as with the
  Projects Coordinating Office of the Department of
  State for Agriculture
• The PSU was headed by the Project Coordinator
• Other Senior staff were the Financial Controller,
  Rural Finance Officer and Agricultural
  Development Officer
• At field level, the PSU was represented by three
  Field Coordinators located in the three main
  Administrative divisions that the project
  operates in, i.e. LRD, CRR/North and CRR/South.

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IMPLEMENTING ARRANGEMENTS

• The project was implemented by NGOs, government
  departments, private contractors and the
  beneficiaries.
• Project intervention was dependent upon community
  demands which was followed by PRAs with Animation
  Teams (multidisciplinary corps of specialists) in
  the target Regions
• The implementing agencies were required to take
  responsibility for undertaking an agreed annual
  work programme defined by means of a contract,
  which also covered the need for monitoring and
  reporting.
• The PSU was responsible for coordinating and
  monitoring the implementation of Project
  activities by implementing agencies, and to
  ensure that such implementation contributes
  effectively and efficiently towards the
  achievement of project objectives.

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IMPLEMENTING ARRANGEMENTS(Cont)

• At a higher level, the Project Steering Committee
  (PSC) oversees the direction of the Project. Its
  members comprised of Permanent Secretaries of
  DOSA and DOSFEA, SPACO, Central Bank of The
  Gambia, NGO Representatives and 2 Farmer
  representatives.

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RFCIP ACHIEVEMENTS

• Development, multiplication and dissemination of
  cassava, sweet potato and Findo planting
  materials nationwide for better access of
  beneficiaries to planting materials which are in
  high demand.
• In Chamoi URD/S, Pateh Sam, Makka and Njie Kunda
  (Namina East, CRD/S) and Pakaliba (Jarra East,
  LRD), the Project financed gully control and
  upland conservation intervention that improved
  the village and farmland conditions.
• The funding under the Farmer Partnership Fund
  (FPF) was based on 86 grant from the FPF and 14
  contribution by beneficiaries over 350 FPF
  projects achieved,

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RFCIP ACHIEVEMENTS(Contd)

• Establishment of six intensive feed gardens in
  LRD and CRD that are integrated with vegetable
  production to provide supplementary fodder to
  small ruminants for increased productivity and
  provide nutritious food to rural communities and
  generate income for food security and poverty
  alleviation.
• Institutional support to line Departments of DOSA
  (DAS, DLS, NARI, DOP) in the form of office
  equipments, vehicles, motor cycles, fuel,
  computers with unhindered state of the art access
  to internet and rehabilitation of offices and
  residential quarters.

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RFCIP ACHIEVEMENTS (Outputs) RFDC COMPONENT
(CONTD).

• At year end 2006, 66 VISACAs had been registered
  compared with the revised target of 70. This
  represented about 94 achievement rate
• Four out of the registered VISACAs were, however,
  not operational due to some technical and
  financial reasons beyond their control.
• .Total membership in the 66 VISACAs had reached
  39,870 individual villagers and 3,925 kafos, with
  17,920 women or 45 percent of the total
  individual membership.
• Outreach level at year end 2006 for deposits was
  GMD 22.9 million, comprising about 80 term
  deposits.
• The level of deposits had trended upwards from
  GMD 10.0 million in 2001, GMD 17.0 million in
  2002, GMD 27.0 million in 2003, GMD 34.8 million
  in 2004 and GMD 40.3 million in 2005.
• The decline in 2006 was largely due to withdrawal
  of deposits by members to meet household expenses
  since little or no incremental loans were
  provided by the project.
• The total loans (mostly repeater) advanced in
  2006 was GMD 14.2 million bringing the cumulative
  total loans granted for the period 2001-2006 to
  about GMD 76.1 million. Refer to Tables that
  follow

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TABLE 1 VISACA MEMBERSHP
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TABLE 2 VISACA SAVINGS
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TABLE 3 VISACA LOANS
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RFDC OUTCOMES

• The main outcomes of RFDC include
• i) the depth1 of VISACAs outreach,
• ii) the quality of the loan assets, and
• iii) profitability/or sustainability of the
  VISACAs in providing loans.
• The main indicators used respectively in
  assessing the above are
• i) average balances of outstanding savings and
  loans2,
• ii) Portfolio-At-Risk (PAR)gt30days/ of doubtful
  loans and
• iii) Operational Self-Sufficiency (OSS) of the
  VISACAs as index on profitability/sustainability.

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OUTCOMES (CONT).

• Available data indicate that the average deposit
  rose from D1 226 in 2001 (less than 13 of per
  capita GDP) to GMD2 146 (about USD 79.5) in 2006
  (more than 24 of per capita GDP).
• On the other hand, a total of GMD 14,152,154 was
  disbursed in 4,254 loans in 2006, compared to
  GMD7, 810,715 in 8,167 loans in 2001.
• The average loan amount increased from GMD 818
  (less than 13 of per capita GDP) in 2001 to D 3
  327 ( about USD 123) in 2001.

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MAIN PROBLEMS OF THE VISACAS

• The VISACAs as presently constituted are
  constrained with
• i) a weak governance culture as evidenced in
  weak ownership (only about 37 of members had
  active TD accounts), low participation by
  members, weak capacity of management committee
  (MC) members and cashiers, and entrenchment of MC
  members
• ii) poor data collection and processing,
  rudimentary information technology and management
  information systems. This constraint seriously
  hampered rigorous financial analysis during the
  PCR mission
• iii) lack of capacity to develop new financial
  products in response to members needs, and
• iv) lack of a strategic plan or business plan to
  guide their operations.
• The symptomatic weakness of the VISACAs
  manifested in the low OSS of 65 recorded by the
  IE at end of 2003 and the PCRs computed OSS
  figure of 42 at year end 2006.

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EXPERIENCES AND LESSONS LEARNT

• EXPERIENCES,AND LESSONS LEARNT
• Key lessons are derived from extensive evaluation
  of rural finance programs funded by IFAD in both
  the Gambia and in West Africa. Overall IFADs
  experience in micro finance is also available on
  the Internet (SITE www. Ifad.org Section IFAD
  Eval).
• Project Design (RFCIP)
• Design assumptions found to be unrealistic
  included i) the appraisal Economic Rate of
  Return (ERR) estimate of 23 was based on
  exaggerated incremental effects on upland crops
  expansion and net incomes ii) the appraisal
  target of constructing 43 new VISACAs was found
  at MTR to be unrealistic on the grounds that it
  neglected the critical issue of the
  sustainability of the existing VISACAs and iii)
  the provision of salary for one cashier and a
  manager tended to go against the principle of
  VISACA self-management.

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EXPERIENCES CONT.

• Targeting
• Targeting issues The premise that fresh
  productive and entrepreneurial opportunities were
  to be provided alongside the promotion of savings
  and access to small loans was faulty. While the
  VISACA component was designed to operate
  countrywide and the other two components only in
  two Regions, the proposed synergy was only
  functional in a limited geographical sphere.
• Systemic problems of the VISACAs i) the weak
  capacity of key actors of the VISACAs seriously
  undermined their sustainability and ii) over
  reliance on external funding for loans undermined
  deposit mobilization efforts, increased financial
  charges, adversely affected the loan assets
  quality and ultimately their profitability.

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EXPERIENCES (CONTD).

• Diversifying sources of HFS i) kafo farms and
  findo production have proved less impacting. The
  nonchalant attitude of kafo members to community
  owned farms did not promote higher productivity,
  while in the case of findo, the low technology
  uptake resulted in low output coupled with the
  problem of processing the grains and ii) the
  establishment of CBs without due rigorous
  investment analysis as to their locations,
  potential throughput of grains, economic rents to
  be paid had proved less helpful as very little
  grains had been stored.

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EXPERIENCES (CONTINUED)

• Performance of NGO Facilitators Service
  contracts not based on performance did not elicit
  high performance from project partners so as to
  ensure value for money.
• Ineffective ME Lack of understanding concerning
  the true purpose of ME resulted in a flow of
  information useful in the short term,
  particularly, for physical and financial
  progress, rather than for tracking progress and
  impact, diagnoses of problems and their
  resolution.
• Delay in submission of Audit reports
• Timely submission of confirmed statements from
  the bankers of project partners did not ensure
  timely submission of audit reports by independent
  auditors.
• The major changes in Institutions during
  Implementation have been the creation of a
  fully-fledged Microfinance Department (MFD)
  within the Central Bank of The Gambia, replacing
  the previous Rural Finance Unit.
• Adaptations at the intermediate level have
  included establishing an Apex at the Western
  Region network, NASACA, and two fully-fledged
  Technical Service Providers (TSPs), one
  associated with NASACA (MICROFIMS) and the other
  established as an offshoot of the AFET
  (NAVISACA).

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EXPERIENCES (CONTD).

• To date the operations of as many as 12 VISACAs
  have been affected by fraud to the extent that
  some of them have ceased operations and the rest
  are now operating at reduced levels.
• Performance of NGO Facilitators Service
  contracts not based on performance did not elicit
  high performance from project partners so as to
  ensure value for money.
• Ineffective ME Lack of understanding concerning
  the true purpose of ME resulted in a flow of
  information useful in the short term,
  particularly, for physical and financial
  progress, rather than for tracking progress and
  impact, diagnoses of problems and their
  resolution.

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LESSONS LEARNT (CONT).

• Delay in submission of Audit reports
• Timely submission of confirmed statements from
  the bankers of project partners did not ensure
  timely submission of audit reports by independent
  auditors.
• The major changes in Institutions during
  Implementation have been the creation of a
  fully-fledged Microfinance Department (MFD)
  within the Central Bank of The Gambia, replacing
  the previous Rural Finance Unit.
• Adaptations at the intermediate level have
  included establishing an Apex at the Western
  Region network, NASACA, and two fully-fledged
  Technical Service Providers (TSPs), one
  associated with NASACA (MICROFIMS) and the other
  established as an offshoot of the AFET
  (NAVISACA).
• To date the operations of as many as 12 VISACAs
  have been affected by fraud to the extent that
  some of them have ceased operations and the rest
  are bow operating at reduced levels.

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STRATEGIC ELEMENTS OF LESSONS LEARNT

• Retail versus wholesale support
• De-linking micro finance from other
  interventions
• Linkage with the RFS/commercial bank sector
• Knowledge about institution partners
• Regulatory framework for MFIs
• Design of micro finance programmes (shareholder
  participation)
• Apex structure for MFIs
• Upgrading MIS of MFIs including monitoring,
  internal control and audits
• Role of IFAD as a donor (sustainability and
  outreach)
• Complementarily of IFAD with other donors
• Strategic partnership with the donor community
  for MFIs development
• Donor coordination) Knowledge generation,
  Management and dissemination.

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SWOT

• The key strengths identified as follows by type
  of function. i) For the MFIs as
  Practitioners/direct lenders the strengths
  included operating close to the communities
  using their own premises, good connections to
  networks and support agencies, and strong
  membership drive.
• The main weaknesses include pervasive capacity
  constraints in terms of staff skills,
• equipment and materials, as well as poor
  infrastructures
• insufficient capital to meet the needs of the
  industrys lending operations
• poor records-keeping and weak management
  information systems (MIS)
• inadequate diversification of services/products
  weak governance high overheads due to many
  inefficiencies poorly defined performance
  standards and indicators, and regulatory and
  supervisory shortcomings.

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SWOT (CONT).

• The main opportunities/potentials include rising
  client demand for microfinance services presence
  of many projects/programmes providing support to
  microfinance and/or advisory services on
  agricultural and non-agricultural
  income-generating activities (IGAs) increased
  training possibilities for staff of the industry
  players creation of employment opportunities
  and improved access to education and health for
  clients and members at the grassroots level.
• The key threats include slow growth of the
  microfinance industry due to inadequate
  specialization exposure to financial
  mismanagement and fraud due to poor
  records-keeping, theft and loan default, moral
  hazard and adverse selection problems unhealthy
  competition (subsidized services) political
  interference and long term funding problems due
  to excessive reliance on external resources.

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RURAL FINANCE PROJECT (RFP)

• The RFP therefore designed as successor to RFCIP
  after COSOP, Pre-formulation, Formulation and
  Appraisal Missions by IFAD/GOTG
• GOTG and IFAD agreed to reform of Rural Financial
  Sector through holistic interventions for
  Sustainable Poverty Reduction by promoting Rural
  Economic Growth
• The proposed RFP is therefore designed to
  contribute towards this goal by broadening and
  deepening financial intermediation in the rural
  areas.
• This would be achieved through selected existing
  MF Institutions and their Supporting Institutions
  (Sis)
• The envisaged duration of six years is divided
  into two cycles of three years each
• The effectiveness of RFP is scheduled for APRIL
  2008

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PROJECT RATIONALE AND OBJECTIVES

• The overall development goal of the RFP will be
  to create an enabling microfinance environment
  for rural poverty reduction.
• Its specific objectives will be to
• Forster self-sustaining rural MFIs (VISACAs and
  NBFIs)
• Ensure that MFIs have consolidated access to
  qualified support
• Forge partnership with other Projects including
  those with grant resources for socio-economic
  infrastructure

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PROJECT COST

• The project cost, including duties, taxes, and
  contingencies, is estimated at USD8.73 million
  over two cycles of three years each, for a
  six-year period.
• IFAD contributions involving both a loan for
  USD6.12 and grant for USD 0.4 million, will cover
  74.7 of the total project cost.
• Governments contribution of USD0.95,
  representing 10.9. MFIs and TSPs will contribute
  USD 0.38M representing 4.4. The existing Line of
  Credit of RFCIP, amounting to 0.87M, equivalent
  to 10 will be used to continue on lending to
  selected MFIs.

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PROJECT AREA

• The proposed project would be nation-wide by
  virtue of the spatial distribution of the
  visacas, which are present in all the
  administrative Regions outside GBA.
• GAWFA and NACCUG do not cover large parts of the
  country and
• GAMSAVINGS has yet to penetrate into the rural
  areas.
• The rather low penetration of NBFIs into the
  rural areas will be addressed indirectly, by
  supporting their capacity building efforts
  thereby allowing them to use their own funds to
  expand rural outreach

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INTERVENTION STRATEGIES

• Develop a viable and self-sustaining network of
  village based financial services throughout the
  country, by consolidating and expanding the
  VISACA Concept and Practice
• Foster self-sufficiency principles in the
  operation of MFIs (in particular the VISACAs)
  with primary objective of achieving enhanced
  outreach and sustainability
• Support the creation of a viable Apex body ,
  owned fully by the VISACAs, to provide the latter
  with cost effective technical and financial
  support
• Support other rural microfinance approaches
  (mutualistic group lending) with a view both to
  learning from alternative methodologies and
  expanding outreach of diversified and self
  sustaining Financial Services

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INTERVENT STRATEGIES (CONTINUED)

• Build the capacities of SIs to perform their
  roles effectively
• Support the implementation of Policies and
  strategies laid down in the NMFS, including the
  provisions for fostering a conducive environment
  for regulating the MF sub sector
• Support the development of simple and appropriate
  financial tools to enable the MFIs provide
  profitable financial services to their clients
• Forge partnerships with complementary
  interventions
• Encourage MFIs to join the regional MIX Market

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PROJECT COMPONENTS

• The Project has three operational Components and
  they are
• A-Institutional strengthening of MFIs
  (VISACAS/NBFIs)
• B-Institutional strengthening of SIs/TSPs
  (MFPC,MFD-CBG,GAMFINENT and Local TSPs)
• C-Implementation (PSU and External TSP)

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Component A Institution Strengthening of MFIs
(VISACAS and NBFIs)

• Component A comprises three thrusts under six
  sub-components
• Support to the VISACAS, including the fostering
  of an Apex body(A1 and A2)
• Support to NBFIs (A3,A4,and A5)
• Refinancing facility using the existing LoC from
  RFCIP (subcomponent A6)

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Subcomponent A1

• Under sub-component A1, existing VISACA premises
  with structural defects will be rehabilitated
  and/equipped with safes complying with CBG
  standards
• 16 VISACA will be upgraded with computers and
  motorcycles for field operations
• The number of VISACA will be increased to 80 by
  fostering 10 new VISACA in Multipurpose Centres
  built by SDF
• An intensive training programme will be put in
  place for Cashiers, Management Committees and
  members

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Subcomponent A2

• An Apex organisation for the VISACA will be
  fostered, involving capital investments
  (construction of a head office and the purchase
  of means of transport and equipments) as well as
  training and Technical Assistance (TA)
• Efforts to foster the Apex body and strengthen
  individual VISACAS will be undertaken
  concurrently with a view to building the former
  on a strong foundation represented by the latter.

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Subcomponent A3,A4, and A5

• Sub-components A3,A4, and A5 envisage targeted
  support to key NBFIs that intend to expand their
  operations
• This sub-component will complete the microfinance
  panorama in a manner that will foster healthy
  competition
• The capacity of NACCUG,GAWFA, and GAMSAVING will
  be strengthened to enable them deliver financial
  services to the rural clients. However the
  provision made for GAMSAVING will be subjected o
  the latter having already opened a branch office
  in a rural Region.

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Subcomponent A6

• This subcomponent refers to the LoC (about GMD
  24.4 million) that RFP will inherit form RFCIP.
• These funds will be on-lent to the VISACAs
  experiencing liquidity crunches, as they do not
  have access to urban savings like the NBFIs
• The funds are expected to be used mainly for
  short-term credit and cover part of local
  contributions for matching grants for productive
  investments from partners like CDDP, SDF, etc.
  This will enhance access by IFADs traget groups
  to increased resources.

45
Component B Institutional strengthening of SIs
and TSPs (MFD-CBG,GAMFINET, NGOs)

• Provisions are made for the capacity building
  needs of SIs,including MFD-CBG, GAMFINET and
  local TSPs and MFPC. The main objectives are to
• 1.Enhance the ability of MFD-CBG to efficiently
  supervise and regulate MFIs in The Gambia
• 2.Create a centre for microfinance excellence at
  the MFPC and
• 3.Strengthen the capacity of other TSPs.
• Component B envisages four subcomponents and they
  are B1, B2,B3,and B4.

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Subcomponent B1

• B1 will upgrade the ability of MFD-CBG to
  supervise and regulate the operations of the MFIs
  in the Gambia. This will include
• Revision of rating criteria, building up staff
  capacity through training and attachment to
  similar rating institutions
• 2. Review and updating of regulatory and
  supervisory instruments to internationally
  accepted good practices standards
• Training of CBG staff through short-term
  programmes with other Central Banks
• 4. Systems improvement through procurement of an
  MIS for the MFI database, as well as for rating
  of the MFIs and support for the data collection
  and participation in the MIX market by the CBG
  and making said participation mandatory for key
  MFIs.

47
Subcomponent B2

• Subcomponent B2 will build up the capacity of the
  MFPC as a centre of excellence on microfinance by
  providing equipment as well as targeted training
  and technical assistance for the development of
  training modules and curricula. The aim is to
  endow MFPC with the expertise and capability both
  to
• 1. Deliver TOT to the TSPs in charge of helping
  MFIs clients including farmers and producers of
  goods and services, maximise the benefits
  F-Services and
• 2. Develop the centres capacity to accredit and
  quality assure the TSPs specialised in the
  provision of training and BDs on microfinance.

48
Subcomponent B3

• Subcomponent B3 will support a major
  organisational redesign of GAMFINET redefinition
  of its mandate and goals and formulation of
  strategic plan and a programme for its networking
  and advocacy thrust, including the promotion of
  performance standards.

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Subcomponent B4

• Under this subcomponent ,the capacity of the TSPs
  will be built up by providing training both in
  microfinance and the delivery of BDS to the
  clients of the MFIs.
• The funds for study on how to structure the
  VISACAs under an apex body are also envisaged
  under this subcomponent
• The grand-funded external TSP will provide TA in
  getting the study done in PY1.
• The MFPC will conduct four courses to train up to
  20 persons in the skills needed both to provide
  enterprise development training for MFIs clients
  and to help the VISACAs in preparing financial
  records.
• Funds are also envisaged to pay for bi-annual
  backstopping visits by UNCDPs Microfinance Unit
  at Dakar and for environmental monitoring by the
  National Environment Agency (NEA)

50
Component C Implementation (PSU and External
TSP)

• The component will cover
• The creation and operating costs of lean and
  autonomous project Support Unit (PSU) and
• Backstopping on microfinance by a highly
  qualified External TSP with expertise currently
  not available in the country. The costs of the
  latter will be covered by an IFAD grant.

51
Project Organization and Management

• Project Organisation
• RFP is to be implemented by the Department of
  State for Agriculture as the executing Agency,
  with the overall responsibility for implementing
  the project, providing general policy directions
  for implementation and coordinating/liaising with
  other Departments and line departments.
• DOSA has alreadyl set-up a PSC and PSU

52
Project Steering Committee

• The PSC has been established to be responsible
  for
• 1. Orienting the project implementation Strategy
• 2. Oversee planning, review progress and impact
  and
• 3. Ensure effective linkages with related
  Projects and Government services.
• The PSC comprises the following DOSA,CBG,
• DOSFEA,SPACO, IBAS, PIWAMP, MFIs,TSPs, and Two
  Clients (Male and Female) of MFIs (PSC now
  revised by PIMU)

53
Project Support Unit (PSU)

• The PSU based in Banjul will be responsible for
  day-to-day project management. The project
  Coordinator (PC) who will head the PSU will be
  assisted by a team comprising
• Deputy PC (DPC) with a strong background in rural
  microfinance
• Monitoring and evaluation officer with strong
  analytical and writing skills
• Two Field Operations Officers in charge of field
  work attached to microfinance and community
  mobilization respectively and
• Financial and Administrative Manager (FAM)

54
PSU (CONTINUED)

• Provision is also made for support staff,
  including secretaries and security personnel.
• The PSUs responsibilities for the day-to-day
  implementation will include
• 1. All activities involved with management and
  coordination, M and E and relations with the
  external TSP
• 2.The access to LoC under subcomponent A6
• The use of standard procedures to regulate access
  to funds for the activities under component A.

55
DIRECT SUPERVISION

• The Project will be directly supervised by IFAD
  with at least two missions per year.
• In addition , missions will participate in fine
  tuning the Microfinance Policy in The Gambia, a
  process in which IFAD has been strongly involved.

56
INNOVATIVE FEATURES(RFP)

• Innovation cannot and should not be pursued for
  its own sake. The ME system will have built-in
  mechanisms for detecting promising developments
  for analysis and appropriate action (up scaling/
  out scaling). The following are the key
  innovations in the design of RFP
• Baseline and other surveys will be conducted
  together with CDDP, with the two projects
  creating and using a common database reflecting
  the three levels of results (outputs, outcomes,
  and impact) envisaged in RIMS and WBs Results
  Framework.

57
INNOVATIVE FEATURES

• The project will rationalize and strengthen the
  rural microfinance sub sector as a whole,
  covering all key approaches (mutualistic,
  group-lending, Islamic Bank and private-sector
  financial companies). The ability of MFD-CBG to
  regulate the industry as a whole will be
  strengthened through training and by creating an
  MIS designed to facilitate the collection and
  Posting of data onto the MIX Exchange.
• The mentoring of mentors mechanism for helping
  local groups assists the members of local
  food-insecure households escape the vicious cycle
  of food insecurity and poverty is inspired by
  principles that have always governed the purpose
  of the traditional kafos inclusiveness, mutual
  aid, insurance and community welfare. The
  rationale for the mechanism is in line with a
  fundamental pillar of Islam that enjoins the
  faithful to practice alms-giving as a helping
  hand rather than mere charity.

58
INNOVATIVE FEATURES

• National Strategic Framework for Micro Finance
  (NSFM)
• The main thrusts of the NSFM Policy Framework may
  be summarized as follows
• Overall policy and enabling environment
• Enhance/maintain an enabling environment for
  microfinance markets
• Direct intervention in microfinance development
• Promote maximum outreach and access to
  microfinance by the poor and rural populations

59
Project Implementation and Management Arrangement
60
WORKING PAPERS

• To facilitate the implementation of the Project,
  Working Papers 1 to 6 have been developed as
  guidelines for Project implementation

61
Working paper 1Rural Finance in the Gambia

• Rural Development The Rural Finance Context
  Overview of the four key Models
• VISACAS
• NACCUG
• GAWFA Group-Lending
• GAMSAVINGS
• Spatial Distribution of MFIs
• Market Shares in Terms of Savings Mobilization
• Market Shares in Terms of Clientele
• Strategic Direction of the MFIs

62
Working Paper 2 Supporting Institutions

• Supporting Institutions
• The supporting institutions under the Rural
  Finance Project are the MFPC, GAMFINET, and CBTG.
  Below are the roles and responsibilities of the
  Supporting Institutions
• 1. The support institutions are responsible for
  building consensus on performance indicators for
  microfinance
• 2. Support in establishing a system for
  collecting and reporting performance indicator.
• 3. The SIs organize regional and international
  performance comparisons of members with peer
  groups
• 4. The Sis carry out specialize performance
  comparisons
• 5. Support in building capacity and skills in
  information exchange
• 6. Encourage self-regulation of MFIs
• 7. Encourage participation of MFIs in the Mix
  Market Bulletin
• 8. Support the production of a quarterly
  microfinance bulletin
• 9. Encourage lateral learning among MFIs by
  organizing annual microfinance summit

63
WORKING PAPER 3Enterprise Models
Summary of Financial Analysis of Key Enterprise
Models
64
Working paper 4Target Groups and Targeting
Mechanism

• Target Groups. IFADs mandate identifies its main
  target groups as being the poorest of the poor
  with special attention to women and other
  vulnerable categories in local society (youth,
  minorities, etc.).
• The target group for RFP is defined as comprising
  the economically active rural poor, including
  food-insecure households. While households
  headed by women may have a higher vulnerability
  (they account for 15 of the food-insecure
  households vs. only 3 of all households in the
  country), the vast majority of the food-insecure
  households (85) are headed by men. This explains
  why the above definition is gender neutral.

65
Working Paper 5Monitoring and Evaluation

• The project will establish an ME system based on
  a results-oriented logical framework and IFADs
  Framework for a Results and Impact Management
  System for IFAD-supported Country Programmes
  (RIMS). Both conventional and participatory
  methodologies will be used with a view to using
  ME as a cost-effective management tool for
  identifying problems and solutions, and also for
  enhancing response to clients real needs. The
  ME system of RFP will be as compatible as
  possible with the systems of CDDP and other
  interventions in order to facilitate knowledge
  sharing. The proposed system envisages
• 1. Internal monitoring by TSPs and PSU
• 2. External expertise for spot-checking reporting
  accuracy, independent evaluations and impact
  assessments

66
Working Paper 5(Continuation)

• 3. A strong emphasis on participatory evaluations
  as part of the annual AWPB review and formulation
  process and
• 4. Targeted surveys and thematic studies. As many
  of the tasks as possible will be outsourced to
  specialists, with the MEO remaining in charge of
  the critically important task of analysing the
  data, writing weekly reports to the PC and
  drafting the periodic progress reports (quarterly
  and annual).
• In light of the disappointing performances with
  regard to ME, both of LADEP and RFCIP, support
  for the design, implementation and monitoring of
  the ME system for RFP will be sought both from
  IFADs Field Presence Officer (FPO) at Dakar and
  from a new regional grant designed to improve the
  ME performances of IFAD-financed projects in WCA

67
Working Paper 6Financial and Economic Analysis

• Project Costs and Financing Plan
• Main Assumptions
• Expenditures, Financial Management and
  Disbursements
• Procurement Procedures and Management
• Benefits and Justification
• Financial and Economic Analysis

68
OVERVIEW OF IFAD STRATEGY IN WESTERN AND CENTRAL
AFRICA

• CONTEXT
• Human Capital Base
• Policies and Institutions
• Agricultural Productivity
• Infrastructure Base
• Globalization

69
General Objective

• Rural poverty reduction and empowerment

70
Strategic Objectives

• Strengthen the capacity of the rural poor and
  their organisations, and improve the pro-poor
  focus of rural development policies and
  institutions
• Raise agricultural and natural resource
  productivity and improve access to technology
• Increase rural incomes through improved access to
  financial capital and markets
• Reduce vulnerability to major threats to rural
  livelihoods

71
Focus Areas

• Work with partners to increase effectiveness and
  accountability of rural service delivery and
  promote decentralized decisionmaking
• Continued investment in community-driven
  development and monitoring of experience
• Development and promotion of participatory
  monitoring and evaluation tools and approaches
• Knowledge-sharing increased with regional and
  national partners on effective grass-roots
  strengthening investment and policies (FIDARIQUE
  network, Multi-Donor Regional Hub, Popular
  Coalition, Clobal Mechanism, regional grants)

72
Focus Areas (Continuation)

• Continued development of community-based natural
  resource management activities
• Technically, economically and socially
  appropriate technologies generated by technical
  assistance grants for agricultural research
  (yams, rice, cowpeas, millet and sorghum,
  vegetables) and disseminated to poor farmers,
  including through IFAD-supported projects
• Supply systems strengthened to improve poor
  farmer access to input markets and
  productivity-enhancing technologies
• Sustainable access to water resources through
  support to potable water and small/micro-irrigatio
  n investment

73
Focus Areas (Continuation)

• Rural finance systems strengthened, and
  experience disseminated on effective pro-poor
  rural financial services delivery
• Food making systems improved through support to
  farmers organisations, market information and
  transport infrastructure investment
• Income diversification promoted through support
  to nontraditional crops and off-farm income
  generation

74
Focus Areas (Continuation)

• Post-conflict assistance through grants and
  coordinated multi-donor-supported programmes in
  relevant countries
• Support to HIV/AIDS and other major disease
  prevention through outreach, and support to
  coping through targeting.

75
CONCLUSION

• Major types of micro finance systems
  characterize the Western African sub-region
  Credit Unions , Group Lending solidarity group
  systems (based on the replication of the Grameen
  model), and VISACAs or credit projects or credit
  components which were either administered by a
  commercial bank, a development bank or directly
  managed by multi Sectoral development projects.

76
CONCLUSION (CONT).

• The performance of rural finance programmes is
  mixed and has generally fallen short of
  expectations due, inter alia, to unfavorable
  macroeconomic and sector policies, reliance on
  cheap externally-sourced funds. Subsidized
  lending rates and weak implementation and
  management capacity.

77
CONCLUSION (CONT).

• Forming strategic partnerships with the objective
  of reducing poverty in the Gambia, IFAD works
  with the Government of the Gambia and with
  co-financiers such as the African Development
  Bank and the World Bank, particularly through the
  World Banks International Development,.
• National Women Farmers Association (NAWFA) is
  strengthening the capabilities of women farmers
  and their organizations through a broad range of
  activities, including land advocacy. Among civil
  society organizations.
• The National Farmers Platform, a national body of
  farm Organizations, is one of IFADs major
  partners in the Gambia among others.

78
CONCLUSION

• THANK YOU FOR YOUR CONTRIBUTION
• TO RFCIP AND YOUR UNDIVIDED
• ATTENTION AT THIS FORUM