What would it take to make the most of development funds?

Summary

To meet sustainable development goals, IFAD is investing in member countries’ internal capacity to deliver and scale solutions.

Description

In an effort to achieve global Sustainable Development Goals (SDGs) – including SDG 1, no poverty; and SDG 2, no hunger – the International Fund for Agricultural Development (IFAD) is investing in member countries' internal delivery capacity, especially in agriculture, where the right interventions yield both food and financial gain to rural communities.

Our partnership with IFAD includes two major programs: DELIVER, which deep-dives into programs and priorities in six member countries, and RESOLVE, which shares what we learn with Delivery Units and senior government officials in 25 countries, accelerating momentum towards SDGs worldwide.

Real-world challenges

The government of Togo had already established a Delivery Unit to support several presidential priorities, including the Programme National de Promotion de l'Entreprenariat (PNPER), established in 2014 to reduce poverty and improve living conditions in rural communities, especially for women and young people. Our engagement began in April 2019, with a focus on accelerating rural entrepreneurship and job creation by helping more individuals turn business ideas into fundable business plans.

Progress had been slow leading up to our engagement, with only 23 businesses financed from 2014-2018; our first job was to understand why. We drew a delivery chain, mapping every step of the application process and every entity along the way. Based on this map, we built a data system to track key milestones and created a dashboard to visualize the findings. A clear picture began to emerge, and we saw two major bottlenecks: One is that micro-finance institutions (MFIs) were hesitant to loan money based on a perceived low rate of reimbursement; another is that business plans took a long time to be approved overall.

Once we knew the issues we wanted to prioritize, we established data-driven routines with internal and external stakeholders to solve problems, track progress, and rapidly share lessons.

Real-world solutions

Field visits revealed an interesting detail: Low loan repayment rates were not due to entrepreneurs' inability to pay, but rather, a glitch in the process on the MFI side. We piloted a solution in a few districts, tested to validate, and scaled across MFIs. We also looked closely at business plan approval, finding opportunities to streamline and speed up the process.

As is often the case in development work, MFIs are key external stakeholders. Over the course of our support, we've expanded the number of MFIs from two to eight, increasing Togo's baseline capacity for financing businesses, and established sidebar routines to ensure all eight MFIs can learn from each other quickly.

We've also provided on-the-ground coaching, measurement and evaluation, and direct support to all stakeholders. Classroom-style trainings and leadership coaching underscore the work, reinforcing the skills and systems of consistent delivery and creating a knowledge management mechanism across a diverse team of players.

Results
148 business plans were financed in 2019, and 624 businesses received financing in 2020. 

Many of the recipients are young people and new entrepreneurs. Our "I do, we do, you do" approach sets Togo up for ongoing success with minimal support from our team.

And as with everything we learn in the DELIVER program, we will share what's worked with additional governments through the RESOLVE program, ultimately creating a learning log for the development community as a whole.

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What would it take to make the most of development funds?
What would it take to make the most of development funds?
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