1. Brief description of PAIFAR-B.
The Government of Burundi, with the support of the International Fund for Agricultural Development (IFAD), initiated the Project to Support Agricultural and Rural Financial Inclusion in Burundi (PAIFAR-B). This project is under the supervision of the Ministry of Finance, Budget and Economic Development Cooperation and by delegation, the Ministry of the Environment, Agriculture and Livestock is the project owner of PAIFAR-B.
Project objectives: contribute to increasing the income of rural people for a sustainable reduction in their level of poverty.
Development objective: strengthen the financial inclusion of rural populations (producers, POs, women, young people, micro-entrepreneurs and the vulnerable), agricultural and non-agricultural, in bridging the gaps between demand and supply of financial and non-financial services.
Project Components: (i) Component 1 : Operationalization of the financial inclusion strategy by: S/C 1.1: Update of the National Financial Inclusion Strategy, S/C 1.2 Strengthening technical skills of the BRB Microfinance Service, and S/C1.3: Strengthening the capacities of key actors for effective financial inclusion; (ii) Component 2: Strengthening the provision of financial services in rural areas to better meet the needs of populations targeted by: S/C 2.1: Improving financial inclusion through financing of smallholder farmers and their cooperatives; S/C 2.2: Improving financial inclusion through financing of non-agricultural households (AGR) and young micro entrepreneurs; and S/C 2.3: Improving financial inclusion through the implementation of a model of progression through the reduction of extreme poverty and chronic malnutrition; (iii) component 3: Overall coordination of the project and Monitoring-Evaluation and knowledge management.
The PAIFAR-B partnership with TWITEZIMBERE ASBL concerns the implementation of subcomponent 2.3 activities through an inclusive support and support mechanism (MASI) in favor of very vulnerable households by providing support, coaching and mentoring.
The objective of subcomponent 2.3 “Improving financial inclusion through the implementation of a progression model through the reduction of extreme poverty and chronic malnutrition” is ensure real social protection for the very vulnerable population, while preparing them, ultimately, to access the financial services offered by MFIs. The first step will be to ensure that targeted households escape the extreme poverty they face as well as chronic malnutrition.
2. Intervention area.
The PAIFAR-B area of action is made up of the 17 provinces of Burundi but activities were initially concentrated on the areas covered by IFAD technical projects, i.e. 14 provinces (Bubanza, Bujumbura, Cankuzo, Cibitoke, Gitega, Karuzi, Kayanza, Muramvya, Muyinga, Ngozi, Ruyigi, Rutana, Bururi and Rumonge).
As part of the partnership with TWITEZIMBERE for the implementation of the activities of sub-component 23, the action zone was initially made up of 5 provinces (Bubanza, Cankuzo, Gitega, Kayanza) at a rate of 1,000 households per province, 10 communes (Musigati, Rugazi, Gisagara, Mishiha, Giheta, Mutaho Gatara and Kayanza) and 56 hills with 6 hills for the communes of Musigati, Rugazi, Gisagara, Mutaho Gatara and Kayanza and 4 hills for the communes of Mishiha and Giheta . But from 2022 the zone is made up of 4 provinces, 8 communes and 44 hills because the province of Rutana was removed from the provinces to support as part of the progression model.
3. Approach and implementation strategy.
PAIFAR-B adopts a holistic approach aimed at ensuring access to diversified financial and non-financial services for a wide range of potential pro-poor agricultural and non-agricultural enterprises that could emerge in the intervention areas. of IFAD projects in Burundi.
This approach integrates the two axes established by the definition of the concept of food security: i) the availability of food resources at the national level through the financing of agricultural and livestock production and; ii) accessibility to food resources through the financing of AGR, particularly for the most deprived.
PAIFAR-B’s financial inclusion strategy takes into account the most vulnerable social groups, that is to say those who are excluded from microfinance. A progression model has been adopted to accelerate financial inclusion as planned by the National Financial Inclusion Strategy in Burundi.
Through the progression model, three-pronged support is provided to the most vulnerable population, in particular: (i) providing social protection to the most vulnerable by offering them, among other things, consumption support via monetary transfer; (ii) structure and train the most vulnerable targeted population and support them in their integration or reintegration into the economic fabric of the IFAD project intervention area; (iii) connect this section of the population with MFIs, allowing them to benefit from adapted financial services.
The progression model aims to support this very vulnerable population who cannot currently have access to financial services to access, after a period of at least one and a half years, the offer of financial services from EMF. Household coaching is planned for 24 months, but could be extended to 36 months if necessary.
4. Main activities already carried out within the framework of sub-component 2.3.
⦁ Identification/validation of the poorest regions and communities in the country based on national poverty maps and/or knowledge of affected regions/hills acquired through IFAD projects (5 provinces: Bubanza, Cankuzo, Gitega, Kayanza and Rutana and 10 communes, two per province, were targeted;
⦁ Establishment of selection criteria for the poorest households (food insecurity, social isolation, lack of access to land, absence of productive assets, etc.);
⦁ Targeting 5,000 poorest households by excluding wealthier households and regular updating of the lists of beneficiaries at a rate of 1,000 households per municipality;
⦁ Consumption support (monetary transfers): 9 monetary transfers including 8 for an amount of 75,000 FBU per beneficiary and 1 for an amount of 50,000 FBU per beneficiary were made;
⦁ Raising awareness/coaching/mentoring of targeted households on the proper management of transferred funds, on a balanced diet, on hygiene and sanitation, on access to health care, on the schooling of children and on the initiation of activities income generating;
⦁ Training of beneficiaries in financial education and on the conduct of an income-generating activity (AGR);
⦁ Choice of 3,000 most motivated households who will be supported in the transfer of assets and access to financial services;
⦁ Support from beneficiaries in the development of project files in order to benefit from the assets;
⦁ Analysis and approval of AGR project files proposed by beneficiaries;
⦁ Establishment of the list of beneficiaries with asset needs and their estimated cost;
⦁ Training of beneficiaries in economic activities (Determination of cost and sales price, Marketing and financial management of an IGA/basic accounting);
⦁ Raising awareness among beneficiaries about savings and access to credit;
⦁ Training of beneficiaries on the joint guarantee;
⦁ Support beneficiaries to form solidarity guarantee groups (GCS).
5. Remaining activities to be carried out
⦁ Transfer of assets for the implementation of microprojects chosen by the beneficiaries;
⦁ Support and coaching of asset beneficiaries in the implementation of their micro-projects;
⦁ Connect beneficiaries with MFIs;
⦁ Support the GCS in preparing credit application files;
⦁ Support GCS in credit management.