Public Disclosure Authorized
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PROJECT INFORMATION DOCUMENT (PID)
APPRAISAL STAGE
Report No.: AB4665
Third Pakistan Poverty Alleviation Fund Project
Project Name
Region
Sector
Project ID
Borrower(s)
Implementing Agency
Environment Category
Date PID Prepared
Date of Appraisal
Authorization
Date of Board Approval
SOUTH ASIA
Rural Development, Finance, Infrastructure, Human
Development, Social Development
Themes: Other rural development (P); Participation and civic
engagement (S): Gender(S)
P105075
GOVERNMENT OF PAKISTAN
Pakistan Poverty Alleviation Fund
House No 1, Street No 20, F-7/2
Pakistan
Tel: 92-51-111000102 Fax: 92-51-2652246
info@ppaf.org.pk
[ ] A [X] B [ ] C [ ] FI [ ]
April 21, 2009
April 21, 2009
June 4, 2009
Country and Sector Background
1. Pakistan has a population of over 162 million, over 60% of which live in rural areas. However it is
also one of the most urbanized countries in the South Asian region with 35% of its population living in
the urban areas as compared to the regional average of 29%. The country’s Gross Domestic Product
Growth in 2007 was 6.4% and the agriculture sector accounts for about 22 percent of the national GDP.
The economy grew at 7.3 percent on average per year during 2003/04 through 2006/07, driven by solid
performances in the services and industrial sectors. However the key challenge for the country continues
to sustain economic growth despite being hit by a number of external and internal shocks more so over
the last few years.
2. Poorly functioning markets and constrained access to assets limit opportunities for rural growth and
poverty reduction. More than 60 percent of poor rural households are nonfarm households, with no access
to land or water. 38 percent of small landowning farmers are also poor. Incomes from non-farm activities,
including agricultural products processing, trade, construction, and transport services already account for
63 percent of total rural incomes. Well-functioning markets to facilitate access to assets (land, capital,
water) and linkages with non farm sector are crucial for the growth.
3. Approximately 40 % of the population lacks access to power and about 75 % of all rural
health, education and market facilities are accessible only by earth tracks. Similarly, water
and sanitation services which are critical to achieving human development outcomes suffer
from poor quality and limited availability.
4. Rising food and fuel prices, energy crises as well as inflationary pressures have not only pushed the
poor below the poverty line, it has increased vulnerability of the ultra-poor to an unprecedented level. In
recent years, rising levels of ethnic and religious strife and recurring natural calamities have further
limited the country’s capacity to deal effectively with persistent poverty. Conflict and insecurity is no
longer confined to a few border areas. It is now impacting the poor in all parts of the country.
5. The country continues to significantly under-perform compared to others at similar levels of per
capita income in terms of social indicators and rural development. According to the Country Assistance
Strategy (CAS) for the period FY2006-2009, this is a reflection of “low public expenditures as well as
weaknesses in public service delivery which limit the effective use of scarce resources.” Weaknesses in
the management and maintenance of public services stems from capacity constraints, poor quality inputs
and materials, and, in some cases, lack of clarity of the roles and responsibilities of various levels of
government – especially local government. Social and human development is constrained by the lack of
reliable and sustainable livelihood opportunities and the exclusion of the poor and of women from most
decision making processes.
6. In most cases, countries with high growth rates of agricultural value added per capita of agricultural
population such as China (3.5 percent annual growth rate), Malaysia (3.1 percent), and Vietnam (2.4
percent) were also good performers in rural poverty reduction, however Brazil (5.3 percent annual growth
rate) and Pakistan (2.4 percent) have been less successful in reducing poverty, mainly because of the
highly unequal ownership of and access to productive assets such as land and irrigation water. (World
development report 2008, Agriculture for Development) From past experiences in Pakistan and within the
region, working through a community-based approach has lead to projects being able to achieve largescale and sustained poverty reduction in rural areas to address the immediate needs of the poor and
vulnerable and to help them share in the benefits of economic growth.
World Bank priorities for participatory and rural livelihoods development 1
7. Participation and accountability: The importance to target the poor to share the benefit of growth
and to address their immediate needs is widely recognized. The Government’s devolution
initiative strengthened accountability and aimed to improve rural service delivery through capacity
building for local governments and communities, and citizen participation.
8. Livelihood opportunities. Social mobilization and increased capacity for collective action will
enhance opportunities for livelihood and income generating activities and greater "voice" in dealing with
the private sector and markets. Support for the basic infrastructure and social services delivery would help
improving the rural investment climate, a vibrant private sector, employment and livelihood
opportunities, and linkages between farm and non-farm sectors.
9. Institution building and poverty reduction: While establishing institutions of the poor through
social mobilization is not a recent trend in Pakistan, very little has been achieved on strengthening these
into becoming viable and self-sustaining structures of social capital that derive policy changes and
effectiveness in service delivery. In addition, institutions of the poor still struggle along inclusivity where
elite capture and ‘better-offs’ amongst the poor are able to benefit more from development interventions.
10. Agriculture sector:2 Agriculture provides the livelihood of two-thirds of the country’s population,
contributes 20 percent to GDP, 50 percent to exports, and employs 44 percent of the labour force. Most of
its contribution comes from crops and livestock subsectors in almost equal proportions, although fruits
and horticulture are increasing in importance.
1
2
The World Bank “Pakistan: Priorities for Agriculture”
The World Bank “Pakistan: Priorities for Agriculture” and the World Development Report 2008, Agriculture for
Development and Pakistan’s Second Poverty Reduction Strategy Paper (PRSP-II)
11. However, the recent trend of agriculture incomes is far less encouraging and rural poverty was back
to 38.9 percent by 2002, the same level where it was at the beginning of the 1990s. This has occurred
despite generally favorable policies on prices and markets, and a relatively liberalized environment.
While consecutive droughts have certainly played a detrimental role in the performance of the sector, it
also faces significant structural constraints that hinder the sector’s contribution to economic growth and
poverty reduction.
12. Weak rural service delivery: Pakistan has taken major decisions to devolve authority to local
governments to improve service delivery. This means the roles of different tires of government has been
better defined, and downward accountability strengthened. This is a dynamic process, and the country still
faces implementation challenges. However, strengthening service delivery and enhanced citizen
participation is critical for the development of the non-farm sector, the rural investment climate, and
governance.
13. Micro-Finance sector: Promoting more equitable access to assets is also key to the implementation
of an integrated rural development and livelihood program and is a World Bank priority for Agriculture
and Rural Development in Pakistan. Access to formal and informal credit by medium- and small-size
farmers and non-farm enterprises should be expanded and innovative means explored to ensure the poor
have access to financial resources that protect them from shocks and further indebtedness.
14. Pakistan has the lowest level of Micro-finance outreach in the region, both in terms of percentage of
borrowers and percentage of poor borrowers (see table below). Borrowers are concentrated in limited
geographical urban centers, so its low and not well disbursed from a geographical perspective, which
makes access to micro-credit even more skewed than the indicators reflect.
15. On the other hand Pakistan has the highest level of growth of the micro-finance industry, increasing
by 57% from 2006-07 but has among the lowest efficiency, sustainability, and productivity indicators in
the region (see graphs below). While there are some outstanding institutions (Aga Khan, FMFB, Kashf)
operating in Pakistan, overall, the sector is lagging in these performance indicators. The enabling
environment for Pakistan from a regulatory perspective is quite progressive, but political economy issues
may negate benefits from a beneficial regulatory environment.
16. The microfinance sector in Pakistan contracted in the last quarter of 2008, likely due to the
confluence of three things; Firstly there has been a liquidity crunch as a result of the global financial
crisis, and commercial banks are pulling lines of credit; secondly there has been major delinquency
outbreak in Punjab, in part because of political economy issues by elected officials & general amnesty
declarations; and third the growth of the institutions is outpacing institutional capacity.
Project Development Objectives
17. The development objective for the proposed project is to empower the targeted rural poor with
improved productive capacity and access to services to achieve sustainable livelihoods. This will be
achieved by increased organization and inclusion of the rural poor – including women, youth and ultra
poor households – in community organizations and their enhanced participation in economic activities,
skill enhancement for taking-up higher value employment, and increased income through an increased
asset base, improved infrastructure and market linkages. The project has mainstreamed gender into its
objectives and design, the key outcome indicators to assess achievement of the PDO will be the
following:
•
3
Community institutions that are inclusive, viable3 and sustainable4
A maturity index will be used to identify and assess viable community institutions
•
•
An increase in household assets and/or incomes
Improved access to municipal and local services
Rationale for Bank Involvement
18. The Pakistan Poverty Alleviation Fund (PPAF) was formed in 1999 with World Bank funding and
support – and has so far successfully financed PPAFI and PPAFII, which includes three tranches of
additional financing. The second PPAF project has been extended and will close at the end of July 2009,
by which time it would have disbursed or committed over 100% of its funds, including those received as
additional financing for earthquake relief and reconstruction. PPAF has worked through the creation of a
strong outreach mechanisms in 119 (out of 134) districts of the country (including AJK, Northern Areas
and FATA). They have built partnerships with 74 Partner Organizations (PO) that have in turn organized
over 80,000 community organizations that serve as a platform for the rural poor to access finances, skills,
infrastructure, health, education and for participation in the development of their own communities and
interaction with government
19. Several studies, including third party evaluations and a study (March 2008) commissioned by the
Ministry of Finance, expresses a high degree of satisfaction over the effectiveness of PPAF service
delivery and recommends enhancement in provision of additional resources (see Annex 4 for a summary
of investments financed from PPAF I and II and their impact). A 2005 assessment of PPAFs micro-credit
work found that on average low income households who borrowed from PPAF are better off today than
they would have been if they had not borrowed. The Implementation Completion Review and Report for
PPAF II also commented that PPAF financed Community Physical Infrastructure (CPI) activities have
been accomplished at significantly lower costs than similar works implemented by government in the
same communities.
20. PPAF has responded to special needs for various groups of poor including disabled, women, land-less
peasants, religious minorities, etc. There is an increased emphasis in the Government’s poverty reduction
programs also to ensure that livelihood services are designed to cater to the needs of sub-groups on poor
through integrated approaches to infrastructure, social services and credit provision. Similarly, the World
Bank’s gender action plan promotes gender equality as smart economics, stating that women’s economic
empowerment is not only a question of rights but their empowerment actually benefits their families,
communities and national development efforts, thus putting poverty reduction on a faster track. PPAF-III
therefore is well placed to align its interventions to respond effectively to Government’s priorities and has
proven track record of providing institutional support and financial and social services over the past 8
years.
21. The rapid growth of community organizations is creating a substantial demand by the poor for
community level infrastructure services, social sector services, access to financial services, skill
development and stronger economic opportunities. Although some of this demand should be met through
better linkages of these communities with local and provincial governments as well as with markets; the
most backward districts and the chronic poor throughout the country continue to face inadequate services
from government. The private sector also finds it uneconomic to work in remote rural regions and with
unorganized producers.
22. The Government of Pakistan and PPAF have therefore approached the Bank for financing a third
operation to build on the achievements to date and to expand the program to the poorest households and
4
Sustainability defined as being active, financially viable and having a good governance structure. Active being (e.g. regular
attendance at meetings), financially viable being (e.g. taking and repaying loans) and having a governance structure that ensures
independence, representation and operational sustainability – measures of these are detailed in Operations Manual.
districts of Pakistan. This would continue to build demand for improved services and accountability, and
deliver pro-poor benefits in target communities while efforts continue through other government and
private sector programs to improve access and quality of services. A Third PPAF project would also
support the PPAF to fully evolve from a micro-credit focused organization (financed through PPAF I) to
a multi-sectoral organization that can effectively address the many dimensions of chronic poverty in
Pakistan. This would include stronger approaches to building institutions of the poor and to livelihood
enhancement that would enable poor households and communities to be more successful at attracting
financial and other service providers. A PPAF III project would also allow the consolidation of
investments targeted at building assets of the poor (physical, financial, human) through grant based
approaches.
Description
23. The proposed PPAF III project builds on 8 years of PPAF experience and aims to improve poverty
outcomes through consolidation and a saturation approach in targeted areas, a stronger focus on the
marginalized groups of the most vulnerable and poorest households including women, and through
integrated approaches to livelihood enhancement that learn from other programs in Pakistan and South
Asia. The PPAF III project would also strengthen its approach to building inclusive institutions of the
poor and improving their access to markets and local government. The approach of PPAF III to credit
would be to facilitate outreach, improve capacity and build access to (rather than primarily provide)
micro-credit.
24. The project comprises of five components: i) Social mobilization and institution building and; ii)
Livelihoods enhancement and protection; iii) Micro-credit access; (iv) Basic services & infrastructure;
and v) Project implementation support. The key features of each proposed component is as follows:
25. Component 1: Social Mobilization and Institution Building (US$ 38.5 million): The objective of
this component is to target and empower the poor by supporting their organization into three tiers namely
the (i) COs and aggregation at a higher (ii) village institution and (iii) at the Union Council level a tierthree representative organization, to build voice and scale for an effective interface with local government
bodies, other development programs and markets. PPAFs Partner Organizations will be entrusted with the
task of intensifying their coverage within the Union Council and strengthen new and existing community
institutions. PPAF’s role will be two –fold:
(i) Identify poor and ultra poor using the poverty score card5 to allow for improved inclusion
in community level organizations and standardization of targeting approaches across POs; and
(ii) Incubate community institutions which demonstrate a potential to grow through
sequential steps corresponding to the lifecycle and performance of a CO/VO and third tier
Union council level organization.
26. Expected outcome of this component is that inclusive COs are formed of the poor and their federations
mobilized, which are able to manage their own development, access services through improved linkages to
local government, other development programs and markets for sustainable service delivery.
27. Component 2: Livelihood enhancement and protection (US$ 85.5 million): The objective of this
component is to develop the capacity, opportunities, assets and productivity of community members to
5
The 13 point National Poverty Score Card is derived from the 2004-5 PLSM and will be used by the Benazir
Income Support Program as well as PPAF, thereby facilitating access of poor to government schemes.
reduce their vulnerability to shocks, improve their livelihoods initiatives and strengthen their business
operations. This component will:
• Support community members to build up their savings capacity and proficiency in funds
management through internal lending, while complementing these efforts with grants and technical
support to increase assets, productivity and incomes;
• Develop and implement mechanisms to identify and support innovative micro-enterprises and
value chain development that will result in improved livelihoods; and
•
Facilitate and promote linkages with private, public sector and civil society service providers.
28. The expected outcomes from this component are enhanced assets, incomes, market linkages and
sustainable livelihood opportunities for targeted households improved with reduced vulnerability to shocks.
29. Component 3: Micro-credit access (US$ 40 million): The objective of this component is to improve
availability and access of the poor to micro-finance to enhance their capacities, productivity and returns
from livelihood initiatives. In most areas, the intention would be to improve access to existing microfinance (both PPAF financed and other sources). However, this component of PPAF III also includes a
facility to provide micro-credit to poor borrowers through POs working in areas that are unable to access
finance from the mainstream micro-finance sector (i.e. in districts where potential market penetration is
less than 5%). This component would include capacity building for selected POs to improve their ability
to work in these least developed areas and provide training and technical assistance to improve existing
systems, review and improves the current loan methodology and cost recovery as well as the lending
mechanisms between POs and PPAF.. This would complement the livelihood finance provided in the
form or grants for productive assets and would only be available for those community members that have
reached credit worthy status and have viable livelihood enterprises.
30. The expected outcome of this component is increased access of the poor (especially women) to
micro-credit, particularly in the least developed areas of Pakistan.
31. Component 4: Basic Services and Infrastructure (US$ 80.0 million): The objective of this
component is (a) to establish and upgrade basic services and community infrastructure to serve the poor
(US$50m), and (b) improved health and education facilities (US$30m).
32. This will be based on a ‘saturation’ approach at the village and Union Council level and will cover
basic infrastructure, additional productive and integrated community infrastructure projects (such as
drought mitigation and preparedness; and integrated area up-gradation) and alternative energy projects.
This component also provides continuation of the Sindh Coastal Area Development (SCAD) Program.
33. Sub-component 4a uses best practice and builds on the work already done under PPAF I&II, by
adopting a deepening and saturation approach and working primarily in villages where previous
investments have been made. The federation of community organizations under PPAF III would help
poor communities to access and leverage external public and private sector financing for infrastructure
projects.
34. Improvement of health and education facilities (sub-component 4b) would be supported building on
the successful pilot financed through PPAF II.
35. Expected outcome of this component is increased access of the poor communities to provision of
basic needs like drinking water, irrigation, energy, access to transport, access to markets, health and
education facilities and local government institutions.
36. Component 5: Project Implementation Support (US$ 6 million): The component will facilitate
various governance, implementation, coordination, monitoring & evaluation, learning and quality
enhancement efforts in the project. It will consist of the following four sub-components: (i) Governance
Management; (ii) Project Management; (iii) Monitoring and Evaluation; and (iv) Capacity Building for
institutional development.
37. The expected outcome of this component is an effective and transparent project management
established for coordination, learning and impact evaluation, and quality enhancement.
38. The project components are underpinned by two dimensions to ensure a continuous process of
monitoring:
(i)
The first dimension assesses COs and federated Village Organizations (VOs) and UC
level Local Support Organizations (LSOs) for their institutional growth, integrity and
ability to meet indicators set for maturity, governance, transparency and participation.
(ii)
The second dimension comprises of standard monitoring by PPAF. A key feature of the
Monitoring & Information System (MIS) is that PPAF will have comprehensive
information on the level of poverty targeting it is able to achieve, as well as the extent to
which the poor who access the program are able to move out of poverty.
39. Progress on the outcomes would be tracked through a baseline survey (to be drawn from the score
card data during social mobilization as well through participatory community monitoring processes that
will continue from PPAFII), followed by medium term outcome assessments and long term impact
evaluations.
40. Financing
Source:
BORROWER/RECIPIENT
International Development Association (IDA)
Total
($m.)
0
250
250
Institutional and implementation arrangements
41. The primary agency responsible for the overall oversight of the project will be the Pakistan Poverty
Alleviation Fund – an apex organization established under the mandate of the GoP for delivery of cost
effective services to the poor and poorest of the country.
42. PPAF: The Project will be implemented through the PPAF working with NGOs (namely ‘Partner
Organizations’ of which there are currently 74 POs) as its partners in reaching-out to the poor (details of
its mandate and governance structure are given in Annex 6). Financing would be provided to POs with
good track records of working with communities and building their capacity to handle grants, microcredit, implement and maintain small scale infrastructure, facilitating livelihoods development and
support social sector interventions.
43. Partner Organizations : In relation to the mandate of PPAF, POs are defined as all those NonGovernmental Organizations (NGOs), Rural Support Programs (RSPs), CBOs, and/or private sector
institutions and entities that are involved in the work of poverty alleviation. POs are expected to perform
the following functions, depending upon arrangements reached with PPAF:
i.
ii.
iii.
iv.
v.
vi.
vii.
Mobilizing community groups including women, youth, disable, minorities, etc. and training
them in skill enhancement, marketing, etc.
Facilitating the identification and development of livelihood initiatives and the establishment of
forward and backward linkages to improve returns and opportunities;
Providing grants for livelihood enhancement;
Acting as intermediaries for providing micro-credit loans
Providing communities with health and education facilities
Acting as intermediaries for small scale infrastructure projects in the following ways:
a. assisting communities with the preparation of their proposals (including village and
livelihood plans); and
b. facilitating communities in implementation of projects
Supervising and monitoring PPAF-financed projects
Implementation Arrangements
44. Methodology: The following flow chart gives an overview of the implementation methodology (other
than micro-credit implementation):
Community groups submit proposals to POs for sub-projects (such as
livelihood grants, SSIP, SSDPs) for implementation
POs appraise proposals and sub-projects according to their eligibility
criteria and submit proposals to PPAF for funding
PPAF appraises POs that meet its eligibility criteria and continuously
monitors, evaluates and audits their performance
45. Terms and conditions between the PPAF and the POs and between the POs and the beneficiaries are
clearly laid out in their respective Terms of Partnership (see operations manual for detailed eligibility
criteria, terms of partnership and flow of finds).
Sustainability
46. Institutional Sustainability: The PPAF has developed into a viable organization due to the interest
earned on its micro credit operations, the endowment invested in long-term Government securities, and
new finance being sourced from donors and the private sector.
47. Community organizations created under the project will be monitored and assisted until they become
self-managed, self-reliant and sustainable institutions. Various linkages and partnerships with interested
actors in the private sector would augment their business foundation and sustainability.
48. The capacity and sustainability of the Partner Organizations was an important aim of the Second
PPAF project. This is dependent on a number of factors including the rate of expansion in their operations
and diversification of their sources of funding from non-PPAF partners. Although PPAF III is more
concerned with the sustainability of community organizations than POs, PPAF’s three-pronged strategy
of enabling its POs to access larger markets remains valid under PPAF III:
(a) building institutional and managerial capacity of POs;
(b) helping POs to develop realistic business plans for results oriented coverage of union
councils, villages and community groups; and
(c) enhancing the absorptive capacity of POs to become attractive clients for commercial
lenders.
Lessons Learned from Past Operations in the Country/Sector
49. The overall design of the Third PPAF project and the specific components within it have drawn on
both the positive and negative lessons from the PPAF I and II implemented over the last eight years in
public goods delivery as well as the design of second generation livelihood projects being implemented
by the Rural Support Programs in Pakistan and other livelihood projects in the region. Bearing that in
mind, findings from the draft Implementation Completion Report (led by FAO) state that ‘the strong
performance of PPAF and its achievement of most target indicators provide encouraging evidence that the
approach utilized in PPAF II is both appropriate and effective in the context of the host country.’ The
following lessons learnt and findings have been key in making design choices for PPAFII.
50. Continuous facilitation is critical for successful social mobilization and capacity building of the poor.
The process of group formation, federating the groups at higher level tiers to achieve voice and scale, and
enable better access to local government services and financial resources, build trust and capacity
building of the poor requires long term commitments and handholding support by external facilitators,
tailored to the specific needs of each group at different stages of their development. The third phase
project follows the successful experience of PPAFI and II, in which specialized units of social mobilizers,
community activists and facilitators provided quality support to the groups. This resulted in improved
quality of goods and services delivered and home-grown grass-root empowerment of the poor. Findings
of a study undertaken by the Bank’s Development Research Group6 (DECRG) in relation to the 7,900
community infrastructure schemes built by Partner Organizations and community organizations through
this approach under the previous projects, found that they were ‘more pro-poor (beneficiaries are poorer
on average) and less exclusionary (more likely to have non-excludable elements) than comparable
government schemes in the same villages’. Infrastructure schemes through this program are also in a
better condition 5 years after completion.
51. Social mobilization and capacity building for the sake of social action alone is not enough to
empower the poor. To ensure continued support for social and economic empowerment of the poor the
project design is building on the work done in PPAFII and adopting a more holistic approach to
development at the village levels (by combining skills training with access to financial resources and
wider markets). Federation of community groups and capacity development will help materialize the
6
The World Bank (2006) Preliminary findings of Development Research Group (DECRG), Evaluating Relative Performance of
Existing RSP and Government Sponsored Community Physical Infrastructure Scheme
poor’s aspirations for tangible income opportunities. Previous investments in capacity building of the
poor via programs that offer livelihood related training (business knowledge and skills) significantly
increased new business investment among poor rural households. Although the ratio of female CO
trainees (40%) is less than that of male trainees, the DECRG’s preliminary study indicates that the effects
of training have proven to be much greater for women who now have access to business and skills
training.
52. However, investments made directly at the community level by the previous project were limited to
micro-credit to individuals, grants to communities for infrastructure, and capacity building for community
organizations. This resulted in gaps in accessing finance by community groups for upstream investments
to integrate value chains and link up with market players in the private sector. Also community
organizations under the PPAFI and II models regularly saved, but these savings were not being actively
utilized for productive purposes nor were they being used for consumption purposes to reduce
vulnerabilities to disasters, debt, death, and increased consumption needs. Experiences of various
livelihood projects in the country and region have demonstrated a positive impact and economic growth
opportunities if community groups start off by engaging in savings and can rotate their own money based
on an internally agreed service charge to ensure that the funds grow with each rotation. To achieve this
under component 2 “Livelihood enhancement and protection”, inter-lending will be encouraged and the
project will provide livelihood grants (which was not part of the earlier PPAFI and II model), to enhance
the sustainability and longer term financial viability of the community members, their institutions, at the
village and Union Council levels. Professional and technical facilitation will also aim to build linkages to
a wider market and access to financial resources and development of forward and backward linkages for
improved returns.
53. To address and improve livelihoods of the poor, promoting and strengthening their own institutions is
essential. Direct and intensive support and grant transfers to the groups of the poor in the process of their
livelihoods augmentation is more effective than assistance only through Partner Organizations. This is
because livelihoods-oriented interventions focus on an enterprise and/or household’s own assets and
capacity. This has also proven to prevent unequal and divided support and reduce risks of elite capture of
project benefits by external stakeholders.
54. To access promising markets, small groups need to federate and operate at a higher level. Projects in
the region have found and strongly advocate that the lack of access to different kinds of markets is a
major reason for the rural poor to continue to remain in poverty. To overcome this constraint, federation
of small groups into entities as community, village and union council level organizations is necessary if
the full benefits of the productive assets of the poor are to be realized in a sustainable manner for
enhancing income flows. Such integration at a higher level is also essential to achieve scale. Through
federation, small group members can also access a variety of services, such as supply of higher quality
agriculture inputs and technology which make their assets more productive. Federating groups also builds
scale which has proven to increase the bargaining power of community/village members in terms of
pricing and improving value chains.
55. Keeping the design and approach flexible has allowed for innovation and new tools to meet the
changing needs of the poor. Despite the satisfactory loan recovery rate shown by PPAF, significant risk
still exists for POs lending to CO members. Life insurance is now universally included by POs in all
microfinance loans, and health insurance is becoming more widely available as well. However, the
possibility also exists that PPAF could take advantage of its unique position in Pakistan to negotiate the
introduction of disaster insurance for all borrowers on a national scale or to targeted project beneficiaries.
Such insurance, covering drought, floods, earthquakes and similar events can cause tremendous losses.
56. Continuous efforts and new approaches are required to ensure inclusion and participation of the
ultra-poor community members. Under the previous projects a participatory wealth ranking proved
effective in identifying the poor and ultra-poor. However this was subjective and PPAFIII will
complement this with a standardized Government led design, ‘National Poverty Score Card’ that will be
used to target poor and ultra-poor households and will also form a 100% baseline of all interventions.
This combination will prove to be a transparent, effective and equitable tool to identify the poor and
improve the poverty targeting.
57. Community participation through financial/labor contribution, financial management and the
procurement of building materials ensured strong community ownership of community infrastructure
projects and empowered participating communities. However, while the requirement for a minimum 15%
contribution to total project costs contributed to ownership among CO members and encouraged
community participation, it should be noted that more flexibility may be warranted for investments in
remoter and poorest areas of the country. In both cases, the 15% level may discourage such projects and
exclude poorer communities.
58. A competitive recruitment system and merit-based human resource development strategy ensures high
quality performance and commitment by project staff. Competitive recruitment and selection of staff
from both the public and private sector creates a culture of high standard performance and commitment in
the project management units.
59. An effective monitoring and evaluation system that inform continuous adaptations to program design
as well as serve as clear indication of results being achieved by the Project. In addition to periodic
reviews, an extensive Management and Information System (MIS) has been designed to identify resultstrends and inform PPAF and its POs on effectiveness of the Project interventions.
60. Safeguard Policies (including public consultation)
Safeguard Policies Triggered by the Project
Environmental Assessment (OP/BP 4.01)
Natural Habitats (OP/BP 4.04)
Pest Management (OP 4.09)
Physical Cultural Resources (OP/BP 4.11)
Involuntary Resettlement (OP/BP 4.12)
Indigenous Peoples (OP/BP 4.10)
Forests (OP/BP 4.36)
Safety of Dams (OP/BP 4.37)
Projects in Disputed Areas (OP/BP 7.60)*
Projects on International Waterways (OP/BP 7.50)
Yes
[X]
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[X]
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No
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[X]
[X]
[X ]
[X ]
[X ]
[X]
[X]
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[X]
61. Environmental Assessment (OP/BP 4.01): Some of the project activities – such as community
physical infrastructure schemes - may cause a low level of adverse environmental impacts, hence this OP
is triggered and the project is categorized as B. In response to this OP, the ESMF has been developed.
The environmental mitigation measures proposed under the ESMF will help reduce if not completely
eliminate the adverse impacts of the project, and will also enhance the environmental performance of the
project.
*
By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties’ claims on the
disputed areas
62. Projects in Disputed Areas (OP/BP 7.60): The Safeguard Policy on Projects in Disputed Areas OP
7.60 will be triggered as the proposed project will be carried out in AJK and Northern Areas, areas over
which India and Pakistan have been in dispute since 1947. By financing the proposed credit, IDA does
not intend to make any judgment as to the legal o f other status of any disputed territories or to prejudice
the final determination o f the parties’ claims.
63. List of Factual Technical Documents
World Bank
1. Draft Implementation Completion Report (Led by FAO);
2. Draft Evaluation led by (DECRG) of PPAF Partner Organizations (Component I: Impact
Assessment of Social Mobilization and Scaling Up a CDD Program; Component II: The
Relative Performance of Community Physical Infrastructure; Component III:
Assessment of Program Sustainability and Poverty Impact; Component IV: The Role of
Incentives for Facilitators in CDD Programs)
PPAF Conducted Studies and Research Reports
I: Baseline Reports
1. Training Manual for Baseline Surveys
2. Baseline Partner Organizations (Education)
3. Baseline of Soon Valley DMPP (Infrastructure)
4. Baseline of Village Dhoke Tabbarak Shaheed (Infrastructure)
5. Baseline of Sindh (Infrastructure)
6. Baseline of AJK (Infrastructure)
7. Baseline of Punjab (Infrastructure)
8. Baseline of Earthquake Areas (Reconstruction and Rehabilitation)
9. Workshop on Dissemination of Baseline Survey Results
II: Assessment Reports
1. Soon Valley DMPP(Infrastructure)
2. Impact of NRSP Program (Training)
3. Evaluation of SSDP Models and Delivery (Education)
4. In the Vanguard - A Chronicle of PPAF Response (Earthquake Housing, Infrastructure, Health,
Education)
III: Others
1. Workshops on Standardized Performance System (M&E)
2. Strengthening Monitoring and Evaluation Systems (M&E)
3. Module on Good Practices within PPAF's POs – 1, 2 and 3 (M&E)
4. Islamic Banking System (Credit and Enterprise)
5. PO Knowledge Approaches and Practices in Poverty Alleviation (M&E)
6. Civil Society Organizations' Competitive Edge in Effective Poverty Alleviation
7. Social and Environmental Management Framework – (in Process)
Externally Commissioned
I: Baseline Reports
1. Microfinance Innovation and Outreach Program - Baseline Survey I (Punjab Economic Research
Institute)
II: Assessment Reports
2. PPAF Micro Credit Financing: Assessment of Outcomes (Gallup Pakistan) – I, II. And III (In
Progress)
3. Impact Assessment of Community Physical Infrastructure Projects (Individual Consultant)
4. Assessment of Outcomes/impacts of community trainings supported by PPAF (Semiotics
Consultants Pvt. Limited)
5. Strategic Planning Processes (Al Khalil Institutional Development Associates)
III: Others
1. Cost of Delivery of Development Interventions (Innovative Development Strategies)
2. Drought Mitigation and Preparedness Plan in Union Councils Rodh Malazai District Pishin
(National Engineering Services Pakistan Pvt. Ltd)
3. M&E Systems/Concepts and Practices (Institute of Social Policy)
4. Study of POs Health Programs (Individual Consultant)
5. Best Practices in Rural Economic Development
6. Environmental Management Framework -1 (Haigler & Bailey)
7. Environmental Management Framework - II (National Environmental Consultants)
8. PPAF: A Catalyst for Change (Individual Consultant)
64. Contact point
Contact: Kevin John Crockford
Title: Senior Rural Development Specialist
Tel: 5785+162
Email: kcrockford@worldbank.org
Location: New Delhi, India (IBRD)
65. For more information contact:
The InfoShop
The World Bank
1818 H Street, NW
Washington, D.C. 20433
Telephone: (202) 458-4500
Fax: (202) 522-1500
Email: pic@worldbank.org
Web: http://www.worldbank.org/infoshop