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Rural Livelihoods Newsletter No. 4




Parmesh Shah

Welcome to our 4th Newsletter!
Parmesh Shah, Lead Rural Development Specialist

This is the fourth newsletter in the series and I thought that I would reflect on the key trends we see across the region this year in the rural livelihood space. We have talked in the past about supporting development of self-managed and self-reliant institutions for the poor to enable them to diversify and enhance livelihood opportunities. However, as we scale up these efforts across the region and work with more than 12 million households, there is a need to develop new ways of thinking about these programs. The poor households we work with live in poor and remote regions which have low levels of investments by both the public and private sector. The poor are perceived to be risky. How can we overcome this risk perception?

Rural livelihood programs—when implemented on scale—are creating an institutional platform that enables information, voice, assets, and human resources of the poor to be aggregated, amplified, and scaled up. I would categorize this as creating a favorable investment climate for the poor and creating an eco system for pro poor investment. Rural livelihood programs are not only about directly transferring resources to the community. They are about changing the risk perception about the poor and making the poor risk worthy and investment worthy. The investments made in these projects create an institutional platform that enables the poor to transform the social capital into economic capital and human capital and ultimately come out of poverty. This institutional platform, as created through various rural livelihood programs supported by us and various other agencies, has proved to be effective to enable the poor to exploit growth opportunities by opening up rural markets. This platform has been equally effective in reducing vulnerability and coping with the food and financial crises. Over the course of this year, we have been amazed by the resilience of this institutional platform to work in both crisis and growth. This platform has also supported the start up and flourishing of many nano enterprises run by poor households and the development of franchises for last mile service delivery run by community organizations and entrepreneurs in sectors as diverse as veterinary care, agri-processing, dairy, nutrition, health, education, food security, and financial services. I strongly believe that we are on threshold of a new service delivery architecture run by the poor for the poor that will be both cost effective and efficient.

Throughout the course of the year I have seen many examples of what I have described above on the ground. In Afghanistan I saw the recently privatized veterinary clinics working on delivering veterinary care services of high quality using mobile phones, thus overcoming the disadvantages of remoteness. This includes sending cattle vaccination reminders through SMS to remote villages and ensuring that artificial insemination services are delivered just in time to ensure high conception rates. In Tamil Nadu, India, the institutional platform enables a poor household to send their daughters for the best skill training and become air hostesses or work for a large telecommunications company, thus enabling the household to leap frog and participate in the service sector economy. In Bihar, poor disadvantaged communities pools their savings to access credit and reduce their dependence on moneylenders for high cost credit thus forcing the moneylenders to drop interest rates by 20% in one year. In Pakistan, the community institutions have been at the forefront of managing post earthquake reconstruction in efficient and cost effective manner. In Orissa, self-help groups are responsible for running the public distribution franchise for food at the village level and have ensured that poor are able to handle the food crisis. Andhra Pradesh has demonstrated various service delivery franchises in the area of financial and insurance services using biometric cards, call centers, and rural BPOs on a large scale covering more than eight million households.

All these examples point towards change in the risk perception of both public and private sector and increase in investment by investors including commercial banks, agribusiness companies, large cooperatives, top recruiters of human resources, and various public sector agencies responsible for service delivery. The major development at the policy level has been the announcement of the National Mission for Rural Livelihood Enhancement by the new Indian Government which aims at scaling up the rural livelihood development approaches used in our programs at the national level. We are very excited at this breakthrough. It is a testament to the hard work put in by many teams over the years.

This year we will work on developing a work program for impact evaluation and assessment for the rural livelihood programs on a systematic basis across the portfolio. I take this opportunity to thank all our teams, project collaborators and other agencies for tremendous work over the year and hope that we will continue to work on expanding livelihood opportunities for the community and the rural poor.

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Welcome Simeon Ehui, the New SASDA Manager!

Simeon EhuiOn September 1, 2009, Simeon Ehui will be joining us as the new Sector Manager for South Asia Agriculture and Rural Development (SASDA). Simeon, a national of Cote Ivoire, joined the Bank in 2003 after a distinguished career as a technical specialist and manager at the International Livestock Research Institute and the International Institute of Tropical Agriculture. He has a PhD in agricultural economics from Purdue University and has published extensively in his field. Before taking this position, Simeon was Sector Leader in the Africa Region based in Abuja, Nigeria. He brings broad experience and a track record of success and innovation from his work in Africa. Simeon is passionate about helping to transform the lives of people and see them grow; especially the less privileged. He is well respected for his leadership abilities, incredible drive for results, terrific client skills, problem solving skills and his highly developed people management skills.

Simeon's three priorities in South Asia will be to: (i) provide technical and managerial leadership and strategic vision for the agriculture and rural development agenda in South Asia with a special focus on reinvigorating the Bank’s knowledge and analytic work; (ii) lead a shift to a middle income country focus for South Asia’s clients with a particular emphasis on South-South learning, cross-sectoral programs and the impact of climate change on agriculture; and (iii) support the introduction of innovative lending and knowledge products to help our clients achieve development results.

When he has free time, which is a rare commodity for Simeon, he likes to spend it with his two daughters, who he says he does not see as much as he would like, and to play golf, a hobby he recently picked up. And if you want to indulge him, you might want to try it with rice and peanut butter stew (with chicken or fish) – his favorite food. Welcome Simeon!

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New Project Approvals—June was a very busy month!

On June 4, 2009, the Bank’s Board approved a US$250 million IDA credit for the Third Pakistan Poverty Alleviation Fund (PPAF-III) Project. Since 2000, PPAF has facilitated the formation of 80,000 community organizations and provided 1.9 million micro-credit loans, 16,000 community infrastructure schemes, and skills and enterprise development training for 232,000 people. PPAF-III will build on these achievements and continue empowering poor people with increased incomes, improved productive capacity, and better access to services to achieve sustainable livelihoods and reduce poverty.

The Second Madhya Pradesh District Poverty Initiatives Project was approved by the Bank’s Board on June 24, 2009. This US$100 million IDA credit will empower the poor by organizing them into Self Help Groups (SHGs) and facilitate their federation into cluster-level organizations, to enable them to access higher value markets, formal financial intermediaries, among other things. It will develop the capacity of SHGs to start or enhance their livelihoods activities and strengthen their business operations through producer based federations, companies, and cooperatives.

On June 30, 2009—just in time for the end of our fiscal year!—the Bank’s Board approved the Third Uttar Pradesh Sodic Lands Reclamation Project. This US$197 million IDA credit reclaim an additional 130,000 ha of predominantly barren and low productivity sodic lands, covering about 25 districts, thus improving food security for thousands of poor farming households through increased productivity and cropping intensity. UP Sodic 3 will also mobilize these vulnerable groups, especially women, into Self Help Groups (SHGs). The project will support the formation of some 5,500 SHGs in around 2600 project villages. The previous projects have already supported around 15,000 SHGs, helping them pool savings and connecting them to the formal banking network.

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Recent Events

SERP wins at the South Asia Nutrition Development Marketplace
Smriti Lakhey, Junior Professional Associate, SASDA, World Bank-Washington, DC

Congratulations to the Society of Elimination of Rural Poverty (SERP) for winning at the South Asia Development Marketplace on Nutrition held in Bangladesh on August 5th. SERP--the implementing agency of Andhra Pradesh Rural Poverty Reduction Project--was awarded $40,000 (along with twenty-one other civil society organizations from across South Asia) to implement its proposal for a “Community-driven Nutrition Behavior Change Campaign” to improve infant and expectant mother feeding practices in the tribal communities of Andhra Pradesh (AP). The tribal population is mostly isolated, have limited access to public health, and routinely yield poorer than average health and nutrition statistics. SERP plans to improve the health and nutrition conditions among women and children in AP through community-managed nutrition-cum-day care centers, a community-managed nutrition services system, and bundling the nutrition program with a micro-credit product. The program also includes a “one-stop-shop” to access health services (including government programs) and a strong monitoring and evaluation system to track progress. SERP will implement these activities using a network of community-based organizations—i.e., the self-help groups (SHGs) and federations of SHGs at the village and sub-district level. There are currently about 10 million women members who are part of the SHG network.

SERP wins DM on Nutrition

Childhood malnutrition in India is exceptionally high with 46 percent of India’s children under three years of age being underweight. In AP, 37 percent of children under three and 46 percent of women of reproductive age are underweight. Similarly, 79 percent of children aged 6 to 36 months and 56.4 percent of pregnant women suffer from anemia in this state. SERP’s nutrition and health program will address these issues. The impacts of perinatal and neonatal care among the members enrolled at 600 nutrition centers are commendable: 98 percent safe deliveries, 88 percent normal deliveries, no low birth weight babies born and no maternal, infant, or neonatal deaths in 2816 deliveries among the members.

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Kathy Sierra, Vice President and Head of Sustainable Development Network (SDN), in Andhra Pradesh
Smriti Lakhey, Junior Professional Associate, SASDA, World Bank-Washington, DC

Kathy Sierra in APOn February 9th Katherine Sierra visited Mondegowrelli village and Yacharam mandal in Ranga Reddy district of Andhra Pradesh to make first hand observations of the progress made by the organizations of the poor and rural women under Andhra Pradesh Rural Poverty Reduction Project (APRPR). During her visit, Kathy interacted with members of women Self-Help Groups (SHGs) and their federations, as well as the households that benefitted from the project. She learned about their achievements in leveraging resources from commercial banks and the issues that they face in enhancing their livelihoods and income. The women of SHGs explained how the poor organize and form their institutions. They discussed their saving and credit activities, and the project interventions that have benefitted them ─ such as employment-generation program, value addition in dairy activities, health and nutrition program, and access to government schemes, among others. Kathy also met with the SHG members who are physically challenged, talked to local farmers who have adopted sustainable agricultural practices, including pesticide-free farming, and learned about the enterprises run by federations of SHGs. The visit, which included an exhibition of all the interventions of APRPRP, was organized by Society for Elimination of Rural Poverty (SERP), the implementing agency of APRPRP. Kathy remarked that this was a “transformational” experience for her, and the local women who came to see her appreciated her interest in learning about their lives.

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Monitoring & Evaluation (M&E) Learning and Design Workshop
Ai Chin Wee, Senior Operations Officer, SASDA, World Bank-New Delhi

The World Bank organized a five day Monitoring & Evaluation (M&E) Learning and Design Workshop in New Delhi, June 8-12, 2009 with forty participants from the World Bank, Project Directors and staff of 12 new Bank-supported agriculture and rural development projects, the Ministry of Rural Development, and partner agencies (DFID, IFAD, FAO). Three international and four local M&E specialists worked with participating teams to improve their projects’ M&E and MIS systems.

M&E Workshop 2009

Case studies included the Karnataka Watershed Management Project, which has received four national awards for its work on project design and M&E; the Tamil Nadu Empowerment and Poverty Reduction (Vazhndhu Kaattuvom) Project presented a compelling film on participatory monitoring and how testimony from the field has been captured into the formal monitoring and evaluation arrangements of the project.

Participants enjoyed the workshop and commended the practical clinics that helped teams customize the training to their individual project’s M&E needs and identify immediate actions that could be taken to improve their systems.

A workshop report and course manual for future offerings is being finalized and we hope to be able to provide similar training opportunities in the future. For more information, please contact Ai Chin Wee

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Feature Articles

The Food, Energy, and Financial Crises: Implications of the Triple Hit to South Asia
Johannes (Hans) G.P. Jansen, SASDA, World Bank-Washington, DC

South Asia’s progress in reducing poverty is being severely threatened by the current global economic downturn that resulted from the financial crisis, which followed last year’s food and energy crises. Economic growth in many South Asian countries may, as a result, come to a virtual standstill in per capita terms with obvious consequences for reaching the MDGs.

In terms of trade loss, last year’s energy crisis was much more of an external shock to South Asia than the simultaneous increases in world food prices, because international food trade plays a relatively minor role in South Asia and domestic food policies shield domestic markets from shocks in external markets. Still there are huge implications for the poor, since poor people spend a much larger share of their income on food than on energy and higher food prices undermine the poor’s food security and increase nutritional deficiencies. High food prices also limit essential non-food consumption such as health, sanitation and schooling. The impact of food price inflation on poverty headcount differs across countries and regions, but generally it is quite significant. Our own household level analyses suggest increases in poverty rates of up to 7% in Bangladesh, 4% Pakistan and 2% in Nepal, even after accounting for changes in consumer and producer behavior.

It would be premature to argue that the food and energy crises are over. Energy prices are on an upward path again and food price decreases are not happening to the same extent for every food crop. For example, even though wheat and maize prices have decreased, they are still higher than four years ago while rice is still much more expensive than it has ever been over the past 20 years. Compared to the past the consensus is that food prices will not only stay higher, they will become more volatile.

Are higher and more volatile food prices unequivocally a bad phenomenon? Not necessarily. The main problem with last year’s food price spike was the excessive speed at which prices increased, largely fuelled by unregulated speculation and questionable national policy decisions. These caused prices to rise to levels unjustified by economic fundamentals alone. But whereas higher volatility brings uncertainty which is generally not good for investment decisions, the latter are made largely based on expected profitability. Past production growth rates for the main grain staples in South Asia have not kept up with consumption growth (see figures).

3 Crises Graphic

This suggests that there will be continuing upward pressure on food prices which in turn could provide farmers with an excellent incentive to increase food production. Investments aimed at raising agricultural productivity in South Asia are very much needed and higher prices can provide a stimulus to agricultural supply response. But there are two conditions for this to happen: first, the global economic crisis should not jeopardize investment in agricultural research and rural infrastructure needed for increased production and productivity; second, government policies must not stand in the way and allow price incentives to reach farmers.

Since most of the poor in South Asia are in rural areas and most rural people are poor and between 35-50 percent of the labor force remains reliant on agriculture, the latter remains crucial to economic growth and poverty reduction. No country that successfully transformed itself from a developing to a developed country has been able to do so without developing its agricultural sector first. Don’t count on South Asia becoming the exception.

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So, Who are the Poor, Exactly? Participatory Targeting Answers the Question in Nepal and Madhya Pradesh, India
Smriti Lakhey, Junior Professional Associate, SASDA, World Bank-Washington, DC and Nathan Belete, Senior Rural Development Economist, SASDA, World Bank-New Delhi

Poor quality targeting limits the ability of poverty reduction programs to achieve their desired outcomes, especially in societies with high levels of inequality. The distinction between the ‘poor’ and ‘not poor’ may be very hazy at times—particularly when outsiders are making the decisions or when data is unreliable. So, we need to take careful measures to reach our intended groups and to ensure that no social tension is created while targeting project participants.

Rural livelihoods projects use a mix of methods to target the poor in their projects, starting with geographic and categorical targeting and then using participatory targeting at the village and community level to create a shared understanding of who are most in need. This article describes targeting in two livelihoods projects: the Nepal Poverty Alleviation Fund (NPAF) and the Madhya Pradesh District Poverty Initiatives Project (MPDPIP).

Nepal artistic photo

The NPAF identified its 6 project districts—2 in the mountains, 2 in the hills, and 2 in the terai—using the National Planning Commission’s poverty rankings. Within each district, NPAF selected 25 Village District Committees (VDCs) based on their respective poverty ranking. Finally, villagers used information that only they would know well to identify eligible beneficiaries in a participatory exercise that ranked families by the relative well-being using the criteria of: food security, caste, ethnicity, gender, accessibility to services, assets, and income. The villagers first identified “disadvantaged rural households” and then categorized them as either excluded groups or the very poor. The “excluded” normally had no say in decision-making in society—mainly women, dalits (lowest caste) and janajatis (indigenous people). The “very poor” were identified based on food security: On average, about 58% of households were identified as “very poor”.

Within the Community Organizations (COs) formed in the project, 66.9% members were “very poor” (food sufficiency of less than 3 months), 24.7% members were “medium poor” (food sufficiency between 3 and 6 months), 8.2% members were “poor” (food sufficiency between 6 and 12 months). Only 0.2% of CO members were in the marginal “non-poor” category. NPAF supported income-generating activities for target households based on this list. Effective targeting of the poor has been one of the most successful components of PAF Nepal, as evidenced by the data on group membership.

In India, the transparency of the MPDPIP process contributed to its strength. The project used similar geographical and categorical criteria to identify target villages and then used a “Participatory Wealth Ranking Methodology" to help villagers clarify their perceptions of poverty so they could identify the poorest households in their midst. Groups comprising villagers with diverse economic and social standing ranked all households in their villages in order of poverty. The poorest families had less than 1 hectare of non-irrigated land or no land at all, lived in mud houses, and/or depended upon piecemeal labor. Complementary techniques, such as assessing distribution of natural resources among families, further refined the categorization process. Once the list of the poorest and most vulnerable families was completed, it was verified with people from different sections of society, and was finally approval in the Gram Sabha (the village assembly). As a result of this process, many eligible Below Poverty Line (BPL) families who had been left out of other development programs were reached, and staff gained a better understanding of the economic and legal status of village families for group formation later in the project.

Sample surveys taken during impact analysis at the end of the MPDPIP showed that around 80 percent of beneficiaries came from backward castes and scheduled castes and tribes. They were largely illiterate (only an average literacy rate of 38 percent), and the majority were marginal farmers or agricultural laborers.

Importantly, this Wealth Ranking Methodology worked very well and largely without conflict or controversy during the project implementation, as communities accepted the results as a true indicator of households’ poverty levels, based on their own perspectives.

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Building a Longer Bridge: One-time Grants for the Poorest in Gemidiriya
Melissa Williams, Operations Officer, SASDA, World Bank-Washington, DC

Livelihoods projects that use the savings and thrift approach to institutional development—working through self-help groups, village savings and credit organizations, etc.—are building bridges for the “unbankable poor” so they can finally access the formal financial services that they need. But what about those in absolute poverty, who cannot even begin to save within an SHG or other group? How can projects build a longer bridge for the destitute so they are not left behind by yet another poverty reduction program?

The Gemidiriya project in Sri Lanka uses One-time Grants (OTGs) to the poorest as a safeguard against excluding the most vulnerable—like the disabled, widows without any income, single women with small children and without any income, other destitute, etc.—that lack the financial capacity to participate in the savings and loan activities of the project.

The OTG program is part of the livelihoods support fund (up to 5%)—one of three funds that the village organizations (VO) manage as part of the project. The goal is to provide support for starting very small scale income generation so that the most vulnerable are able to save and later participate in the normal Savings and Loan Fund activities of the VO. The village agrees on the rules for selecting OTG participants and amount of the grants, and they designate a subcommittee to implement the program, providing guidance to the recipients.

How Does Gemidiriya Make OTGs Work?
Require it! Village organizations (VOs) in Gemidiriya must identify and agree upon the list of those most vulnerable in their community and allot a one-time grant to each. As a group, they are represented in the VO with a reserved position on the VO’s Board of Directors.

Incentivize it! VOs that perform well—meeting specific eligibility criteria within four years of joining the project—can receive an incentive fund, which they can use to invest in any priority they choose. One of the criteria for access is that the VO has reached 80% of those identified as qualifying for an OTG, so a well-performing village is one that helps the poorest among their ranks.

Monitor it! VOs are regularly monitored for the number of OTGs disbursed, but the project goes further than just “inputs”. Gemidiriya is tracking the number of OTG recipients that have (1) started a small income generating activity and (2) accessed a loan from their village savings and credit organization, which tells the implementers if the OTG program is really acting as a longer bridge for the poorest.

Examples of OTG at Work
Sumantha in GDFCarving a Livelihood Out of Scrap Wood. Sumantha supported his family as a day laborer earning a maximum of Rs. 3000/month (US$26/month) in Siripura village of Budulla District. A talented artist and carver, Sumantha had abandoned his craft because he could not compete with artisans using modern wood-working machinery. When Gemidiriya came to the village, Sumantha and his family qualified for a one-time grant for the poorest. With a Rs. 12,000 grant, he purchased a compressor that allowed him to elevate a hobby to a livelihood. He now carves 16 varieties of animals including cranes, deer, elephants etc., which he sells in local markets. “Gemidiriya, after giving its help, doesn’t wash off its hands, but finds the market too. Recently they presented my carvings for an exhibition too. Helping the poor people like us, who are living in a remote village like this, is a big thing.” Sumantha now earns Rs. 10,000 per month and supports his family well by doing what he loves.

PiyaseeliEmbuldeniya’s New Lunch Lady. Piyaseeli, a widow in Embuldeniya village of Rathnapura District, cared for herself, her 72 year old mother, and her invalid sister off of a small tea plot and her labor. The family was indebted to many villagers just to cover living expenses and medication. Through Gemidiriya, Piyaseeli and her family qualified for a one-time grant for the poorest. With Rs. 7800 she started the school tuck shop that allowed her to cover her household expenses. She has since bought a refrigerator to store fresh vegetables for the children. Piyaseeli is now paying off the refrigerator and a loan from Gemidiriya and is able to saving money as well. She is also on the Board of Directors of her Village Organization. “Now I have no burden. I am greatly happy. I had no way to have this happiness if Gemidiriya did not come to our village.”

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Making Carbon Markets Work for the Poor: Livelihoods and Carbon Credits in Himachal Pradesh 
Prachi Seth, Program Assistant, SASDA, the World Bank

Field contribute to carbon creditThough it is known for beautiful scenery, a wealth of natural resources, and a rich cultural heritage, the state of Himachal Pradesh in India is also grappling with environmental degradation and deforestation. About 90 percent of the population live in rural areas and rely on marginal or subsistence farming for their livelihoods, which are made all the more precarious by the degradation of the natural resource base.

The Mid-Himalayan Watershed Development Project (MHWDP) began operations in 2006 to reverse this degradation and improve the productive potential of natural resources, and thus the incomes of rural households. Contributing to this goal, a bio-carbon investment is being added as a component to MHWDP with the specific purpose of converting barren lands into forested lands using locally grown and accepted species. This process of afforestation will be led by farmers, who will benefit from the improved natural resource base as well as the alternative livelihoods from non-timber forest products (NTFP). Moreover, bio-carbon will create the potential for the poor communities to earn long-term income in the carbon credit market.

A Bio-carbon Annuity?
Consider the income generation prospects of bio-carbon . . . The afforestation by MHWDP and the bio-carbon component will consume CO2 from the atmosphere (carbon sequestration), which can loosely be considered equivalent to reducing carbon emissions from an industrial process—e.g., manufacturing, transportation, etc. The CO2 stored by the plantation is referred to as a Carbon Emissions Reduction (CER), a name given through the Kyoto Protocol. CERs are a 'tradeable' commodity that polluting industries can purchase to offset the CO2 their operations release into the atmosphere, thus lowering their carbon footprint. This transaction offers local communities a revenue stream when they sell the CERs they generate through their plantation (see figure). In a conservative scenario, it is expected that the price per tonne of CO2 sequestered by MHWDP communities will be US$4.00. With a projection of 5,058,103 tonnes of CO2 equivalent (or tCO2-e) being sequestered over a 20 year period, the long-term returns for the local community could be quite significant (around US$20 million over the 20 year period).

Biocarbon market system

The bio-carbon component will cover 602 Gram Panchayats and 10,000 hectares of degraded land in the watersheds of the Mid-Himalayan region. It will establish plantation activities such as nursery management, plantation management, land preparation, etc. that have already begun to generate employment opportunities for landless and marginal farmers both within and outside the project, ultimately generating up to 343 man days per hectare. The employment generation combined with the carbon offset income, additional NTFP income, and the improved productivity of existing farmland should significantly improve the livelihood outlook for the poor in the project area.

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Microfinance Innovation and Outreach Program (MIOP)
Imtiaz Alvi, Senior Institutional Development Specialist, SASDA, World Bank-Islamabad

In partnership with the International Fund for Agricultural Development (IFAD), World Bank’s Pakistan Poverty Alleviation Fund (PPAF) launched the Microfinance Innovation and Outreach Program (MIOP) in 2006 to offer microfinance services to the rural poor in Pakistan to improve their livelihoods. MIOP has provided much-needed space for development of innovative financial products, such as livestock insurance, leasing arrangements and equity partnerships, as well as Islamic modes of financing based on profit-sharing. PPAF’s partnership with IFAD through MIOP has brought new approaches to designing, implementing and funding projects aimed at improving lives of rural poor and providing partners space to experiment and innovate.

Pakistani Trader

MIOP targets small farmers, livestock owners, traders and micro entrepreneurs, with an emphasis on providing new opportunities to women and households headed by women. The program itself is implemented through Partner Organizations (POs). Some examples of MIOP’s innovations are:

  • The Innovation and Outreach Facility (I&O). As MIOP’s biggest component, I&O facility helps POs pilot new projects, conduct action research, and scale-up microfinance products and services in rural Pakistan.
  • The Young Partner Program (YPP) expands PPAF’s capacity to provide microfinance services to rural areas through the support of young organizations and dedicated individuals. These partners set up low-cost settlement branches to serve neglected rural areas. PPAF additionally invests in youth through its Young Professionals Scheme, which places young professionals as interns with POs.
  • A sub-project to mobilize and organize farmers to increase livestock production and seize opportunities for income generation in the dairy sector was launched under MIOP. This addresses the issue of limited access to market information and inadequate milk collection centres, establishing “Farmer enterprise groups” (FEGs) and providing technical support to small rural agribusiness.
  • Two MIOP partners offer Islamic Microfinance products in areas where conventional services do not work. The concept of “murabaha” is based on equity partnership of the POs with the client. The client pays a share of the profit and purchases an equity stake in the asset through instalments similar to conventional loan repayment instalments. In addition, “Ijara”- the Islamic form of leasing- was also introduced.
  • The flexibility of MIOP has also enabled PPAF to set up the “Social Safety Net” (SSN) project which is based on the graduation model. This assumes that the poorest communities initially need grants, food aid and subsidized employment to provide for basic survival needs. Once these needs are met, livelihood training and carefully sequenced financial services coupled with asset transfers can help clients graduate from dependence on safety net programs and become fully fledged microfinance clients.

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Pro-Poor Technology: A Better Backyard Chicken!
Grahame Dixie, Senior Agricultural Specialist, SASDA, The World Bank

Livestock is a growth sector in South Asia, and poultry is a leading activity with a compound annual growth rate of 5 percent. The livelihood opportunities for the rural poor could be significant—especially for the landless, marginal farm households, scheduled castes, scheduled tribes and women who engage in backyard poultry operations. The problem has been that small producers face low productivity which often keeps them at subsistence production rather than commercial production. Recent institutional and technological innovations could change this situation. Kegg Farms was one of the pioneers of broiler production in India, but as large, well capitalized companies started to dominate the industry, Kegg decided to concentrate on its core bird breeding skills and develop a better backyard chicken.

The success of the Kegg Farm system is based on better quality birds coupled devolved rural distribution system with in-built incentives. Kegg produces around 16 million day-old chicks, which are sold to 1,500 mother units who grow the chicks for about two weeks before inoculating them and selling them to approximately 6,500 bicycle salesmen (pheriwallas) who sell them to individual villagers, mainly to women. Their network reaches some 800,000 farmers, often located in some of the remotest parts of the country. Kuroilers typically obtain a premium over typical broiler chickens because their meat is darker and more flavorful (i.e. about $1.30/kg). The turnover in sales of chicks is about $5 million/year with another $5million turnover for the thousands of small rural mother units.

This pro-poor technology may integrate well into livelihood projects, especially areas with higher rainfall where there is more vegetation for the birds to forage. The technology is suitable for backyard production by landless women, and institutions of the poor may be interested in operating mother units that grow day old chicks and sell them on to producers. The most ambitious opportunities exist around consolidating the supply of birds and selling them into the organized retail sector, from where there has been some interest in developing a brand of these high-quality birds.

Kuroiler chickenHigher Profits Than Desi Chicks
An independent assessment indicated that each Kuroiler chick generated an average output of $3.10 as eggs and meat. Of that, the cash generated amounts to about $2.00/chick. At some 16 million chicks distributed, these could lead to an aggregate output of about $50 million, some $30 million cash generated, and a cash profit of about $10 million.

Kuroiler birds bring more market orientation, contribute significantly to household cash flow, and present a good enterprise opportunity, especially for women.

The result of this breeding effort—the Kuroiler—is a robust dual-purpose backyard chicken that lays 100–150 eggs per year (as opposed to around 40 for a Desi chicken) and grows to 2 1/2 kilos in about half the time it takes for a Desi chicken to reach one kilo.

Relevant links: 

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Dispatches from the Field

Meet Mr. Muruganandam N (or “Murux” as we fondly call him) 
Smriti Lakhey, Junior Professional Associate, SASDA, World Bank-Washington, DC

MuruxThe Project Director of the Tamil Nadu Empowerment & Poverty Reduction Project—locally known as the Vazhndhu Kattuvom Project (or, simply, VKP)—has seen his hard work pay off for the poor.

Murux was born in Pondicherry in Tamil Nadu and raised there until the tenth grade, when he went to college in Chennai and pursued a degree in engineering and computer science. After receiving a post graduate degree in management administration from the Indian Institute of Management in Ahmedabad, where he focused on finance and marketing, he fulfilled his life-long dream and joined the Indian Administrative Service (IAS).

When asked what made him want to be the leader of VKP, he chuckles—officers don’t choose their assignments—it was the IAS that led Murux to VKP. He was already the Managing Director of the Women’s Development Corporation, so he was tapped to also lead the design of VKP in 2005.

Although Tamil Nadu is one of the most developed states in India, the poor in that state are very poor. Murux points out that in the past, most development interventions did not touch the poorest, the disabled, and the marginalized sections of society; VKP does. “Unless the project design focuses on the poorest of the poor, it does not reach the poorest and the most vulnerable. VKP trusts the poorest communities and puts them in the driving seat to lead the program. It has created a space for all program decisions to take place at the community level in a transparent manner so that it prevents leakages in the program,” he asserts.

As with most livelihoods projects, VKP introduced new concepts to Tamil Nadu, and this took time and great effort. “Initially convincing people about the idea of community driven development was difficult. The idea of participatory identification of the poorest was a hard sell.” Murux spent a lot of time and energy convincing people to be patient and give VKP time to take root, and his efforts have paid off.

Like a proud father, Murux extols the many virtues of VKP, but he is especially proud of the project’s work with youth and the disabled. The skill development fund for poor youth has provided training to about 40,000 youths, more than 80 percent of who have linked to jobs that bring Rs. 5000-6000 per month to them and their families and helping them leave poverty behind. VKP’s efforts have helped change entrenched views about the disabled. “A disabled girl I met said that she was treated as a liability before. But when she got a loan from VKP, she established a petty shop. She earns Rs.100-150 per day and supports her family. People’s attitudes towards her have changed. She is now looked upon as an asset.”

When Murux is not hard at work achieving his vision of rolling out the VKP approach to all rural areas of Tamil Nadu and creating a society free from poverty—and this is not often—he enjoys playing badminton, going for walks, and reading. Despite his heavy workload, he just finished Eckhart Tolle’s “Power of Now” and Maxim Gorky’s classic “Mother”. We hope he can continue to find time for his family and hobbies as VKP grows.

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Meet Bhum Bahadur Nepali of Nepal
By Kiran Gautam, Senior Executive Assistant, World Bank-Kathmandu

A resident of a mountainous district Pyuthan, Bhum Bahadur Nepali used to work as a contract laborer. However, in the last two years, Bhum, who comes from the lower Dalit, or untouchable, caste has lived a self-sustained life that he enjoys. With financial assistance of Rs. 14,000 (US$ 180) from the Poverty Alleviation Fund (PAF), he now earns Rs. 6,000 (US$ 80) a month, which is significant in a country where Gross National Income (GNI) per capita is US$ 340. The loan has helped him buy a sewing machine and an interlock machine to start the tailoring enterprise.

Bhum Bahadur of NepalBhum Bahadur is one of many Dalits currently supported by Poverty Alleviation Fund-Nepal program. Poverty is rampant and deeply entrenched among the Dalits — 46% of who live below the poverty line, compared to the national average of 31%. They lag considerably behind in terms of incomes, assets and most human development indicators in comparison with the higher castes.

Established in 2003, PAF is the biggest national targeted program to reach out to households living below the poverty line. Sixty-six percent of beneficiaries’ households are very poor (unable to make their ends meet even for 3 months). Targeting, empowerment and social inclusion are the major guiding principles of PAF. Poor women, Dalits, and Janajatis (ethnic communities) are the main target groups, and after four years of implementation NPAF has organized 292,193 of these households into over 10,000 Community Organizations who are able to access project financing.

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From Tribal Hamlet to Financial Consultancy
Meera Shenoy, Executive Director of EGMM, Government of Andhra Pradesh, India

It has been a long journey for Shekar Nalla –from a small tribal village in Andhra Pradesh, India to selling insurance products in the metropolitan city of Hyderabad. Shekar’s family lived a hand to mouth existence, and he thought that maybe someday in the future he would earn Rs. 24,000 (US$400). But now, Shekar earns Rs. 156,000 (US$3000) annually through his new job with an insurance company. His widowed mother no longer has to struggle because Shekhar sends her Rs. 60,000 (US$1500) a year. With his new job the status of the family has risen among the village headman and higher caste members, especially when he sent home a colored Samsung TV—the first in his village. “Richer relatives who avoided us, call me saying, ‘Shekar can you show me a job’,” says Shekhar.

Shekar Nalla of APShekar belongs to the Padmasheela family in the tribal area of Seetampeta in Srikakulam district. His father was a night watchman who squandered all his money on drinking. With barely Rs. 1500 (35$) a month and four children to feed, meeting the basic needs of just food and clothes was hard. If anyone fell sick, it meant higher debts. When Shekar’s sister—a member of a self‐help group (SHG)—told him about the Employment Generation and Marketing Mission (EGMM), which identifies, trains, and links youth to private sector jobs, he joined the program with a goal to improve his life. “Youth, especially children of SHGs, have different aspirations and yet are not connected to markets. The EGMM Jobs mission achieves this with a public‐private partnership strategy,” says Parmesh Shah, Task Team Leader from the World Bank Andhra Pradesh Rural Poverty Reduction Project, who is overseeing the project.

Shekhar proudly says, “In three months I learnt how to speak English, how to achieve my life goals, and the right attitude. Now my dressing style has changed.” In the campus placements, EGMM linked him to a job as a Sales Executive in Tata Indicom with an annual salary of Rs.63,600 (US$1500). After six months he moved to Religare Insurance & Broking, Ltd, with a starting salary of Rs. 120,000 (US$3000) as a Relationship Manager. In his free time Shekar focuses on improving his English by learning one new English word each day and using it the next. “Most of our youth realize English is not just a language skill but a life skill which gives them a better job,” says Meera Shenoy, Executive Director of EGMM. EGMM created the English and Computer Academy with industry and technical experts. The Academy has training modules suited to the rural and tribal poor; a pedagogy that involves role plays, games, and learning English through songs and watching interactive CDs and innovative ways of teacher training such as village immersion and understanding corporate needs. To date 15,000 youth like Shekar have been trained in this Academy and linked to new economy jobs.

Shekar explains the secret to his success. “I do not sell but explain to potential customers the HLV formula which is human life value,” he adds. His ambition is to go back to the village and start a small business. “I have already saved and bought some land to build a concrete (pucca) house”, says Shekar proudly.

EGMM argued that skill development and job creation was one of the best ways of eliminating rural poverty in a sustained manner during a 2008 conference on Public-Private Partnerships (PPP) for Inclusive Development (sponsored by Mart and GTZ).

You can download the conference document at

Other useful links:,

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Last updated: 2009-08-31

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