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Asset Publisher

TOPICS

Rural Finance

SOLUTION TYPE

Financing Scheme, Innovation (technical or institutional)

REGION

East and Southern Africa

"Fourteen Community Initiative Funds (CIFs) have benefitted more than 11,500 people, improving incomes and livelihoods, through increased agricultural productivity and enhanced access to markets and financial services, as well as promoting gender equality."

BACKGROUND

The objective Butana Integrated Rural Development Project was to improve in a sustainable manner the livelihoods and resilience of the poor rural households living in Butana area, in Sudan. As part of its implementation, the project developed the capacity of community based organizations to engage in rural finance. This included a community approach to support the poorest farmers by co-financing small scale productive enterprises: the Community Initiative Fund.

WHAT’S INVOLVED

A matching-grant formula
To support small-scale productive enterprises by complementing initial seed funding by the beneficiaries

Community Based Organisation
Local beneficiaries are selected and organized into interest groups to invest in the same type of activity /initiative

EXPLORE THIS SOLUTION

Community Initiative Funds can offer:

- A financing mechanism by organizing local producers in interests groups

- A method of improving incomes and livelihoods while promoting gender equality

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Countries involved

Sudan

Project partners

Government of Sudan

Project dates

2006-2019

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Summary

The objective Butana Integrated Rural Development Project was to improve in a sustainable manner the livelihoods and resilience of the poor rural households living in Butana area, in Sudan. As part of its implementation, the project developed the capacity of community based organizations to engage in rural finance. This included a community approach to support the poorest farmers by co-financing small scale productive enterprises: the Community Initiative Fund.

 

Challenge/Problem

Sudan’s Butana region exemplifies the challenges that the country’s smallholder farmers and livestock herders face. Butana is a grazing area that spans 80,000 square kilometres over the states of Khartoum, Gedaref, River Nile, Gezira and Kassala, populated by 800,000 people dwelling in about 700 villages. As of today, Butana is under multiple pressures. The rapid advance of desertification in the area, due to disruptive economic activities and climate change-related shocks, is deteriorating the area’s already scarce natural resource base and further exacerbating the vulnerability of Butana’s smallholders and pastoralists.

In Butana, agriculture is predominately rainfed. Pastoralism is widespread, and livestock exports make up a high percentage of total agriculture revenue. Rainfed farming systems suffer from low and variable productivity due to erratic climatic conditions, inappropriate tillage and soil and water conservation practices, and weak or non-existent management of shared rangeland and forest resources. These factors lead to reduced soil fertility, land degradation and in some areas desertification. Butana communities in general and small-scale producers in particular suffer from many challenges that limit the improvement of livelihoods. Some of these challenges are rising costs of production inputs, inflation, lack of funding, weak financing institutions, poor product marketing and weak value-added processes.

 

Solution

The specific objectives of the Butana Integrated Rural Development Project (BIRDP) were to improve the access and bargaining position of women and men in the marketing of livestock and to develop the capacity of community-based organizations to engage in environmentally sound, socially and gender equitable development initiatives.

Hence, the project promoted the target group’s access to finance by setting up 14 Community Initiative Funds (CIFs) that benefitted more than 11,500 persons (96 per cent of the initial target). These CIFs operate under a matching-grant formula to provide financing to groups to set up small-scale productive enterprises.  The CIF provides matching funds for initiatives taken by poor women groups - both female headed households and women from poor families.

For each type of initiatives such as animal restocking where the repayment in kind from the female birth when reached the productive age or other types where the repayment in cash with small profit margin, the group provide 25% and the project 75% of the total cost of the investment

Through the project guidelines, the community development committee (CDC) select local beneficiaries and organize them into interest groups based on their interest to invest in the same type of activity /initiative.  After the market survey has been done to estimate the total cost of the initiative, The CDC mobilize the group members to collect 25% of the total cost and then the project provides 75% of the total cost.

The purchase process is the responsibility of the community procurement committee with selected representatives from the group members    

As an early step in ensuring the sustainability of the project, community initiatives were linked with available local financing institutions as well as organizations working in the field of microfinance and social development.

 

Results

Through the funds, the following activities/ventures were supported:

-Gas units funding or provision (gas cylinders and/or gas stoves) (3115 initiatives)
-Animal restocking (2,299 initiatives)
-Irrigation units (956 initiatives)
-Palm fronds provision (338 initiatives)
-Grain or fodder storage (253 initiatives)
-Donkey driven carts, electric motors provision (210 initiatives)
-Sheep fattening (76 initiatives)Poultry production (24 initiatives)
-Veterinary medicines/paravets (2 initiatives)

The project also improved smallholders’ livelihoods and incomes not only through increased agricultural productivity and enhanced access to markets and financial services, but also by promoting equality among beneficiaries. This was achieved by providing equal access to loans, regardless of gender, in accordance with the agreed terms of borrowing within the communities. The Community Initiative Funds (CIFs) have focused on gender transformation as a development driver and achieved impressive results despite the Butana Region’s difficult sociocultural context.

 

Lessons Learned/Potential for replication

1- Business-oriented community-based groups can be created and empowered through sensitizing and building the capacity of Community Based Organisations (CBOs). There should be strong linkages among CBOs and different partners, service providers and technical governmental administrations.

2- Early preparation of Community Adaptation Plans for Action (CLAPA) helps communities to understand and articulate their development priorities based on socio-economic and environmental feasibility.

3- The ideas and proposals of community initiatives should be based on actual and practical activities or services related to livelihoods and environmental preservation.

4- CIF is an important tool to facilitate linkages and monitor the implementation of initiatives as well as the transfer and exchange of knowledge.

5- To ensure sustainability, it is important to link community initiatives with available local financing institutions early on, in addition to training communities on financing and credit management processes.

 

Next Steps

Communities have already prepared their Community Adaptation Plans for Action, which clearly define investment options and implementation methods. Additionally, per the exit strategy plan, communities have been linked with local development and service institutions, and Local Extension Workers (LEW) have been trained to provide technical extension and follow-up services. At the end of the project, a governmental decree established the Butana Development Fund (BDF). This fund, in coordination with the federal and local governments, supervises all activities implemented by the project, including community initiatives. The BDF will ensure the sustainability of the development interventions and finance any future development initiatives.

Last update: 30/09/2022