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Quick Links to the Primary Activities:
Capacity Building for IFAD-Supported Projects and Programmes
Action Research with Partner Institutions
Promotion of Rural Finance Policy Dialogue
Sharing of Knowledge in Best Practices and Management 
 

Promotion of Rural Finance Policy Dialogue

The focus will be the creation of an enabling policy environment that will allow a complete, competitive, and deep rural financial market to emerge. The main activities will be: (a) participation by the RF specialist in coordinated development partner discussions with governments and central banks in relation to the policies, laws and regulations needed to facilitate mobilization of small deposits and protect small savers; and (b) supporting rural finance institutions to enable them to effectively engaging in dialogue with the decision makers on rural finance issues.  Such engagements will depend on high quality outputs emerging from the research agenda; and will be conducted within the framework of IFAD's relations with its partner governments, and in close collaboration with the other players in the KMP. The Rural Finance Specialist will work closely with the IFAD Country Presence in the various countries to desiimante the findings of its research work. Another channel is to partners with AFRACA and other networks in the regions to provide an avenue for wider dissemination of the findings.

The focus under this component is the creation of an enabling policy environment that will allow a complete, competitive, and deep rural financial market to emerge. The main issues can be divided and grouped in five categories; a) the pursuit of sectorially neutral economic policies that will promote rural finance; b) clarification of property rights to enable re-classification of acceptable collaterals; c) the establishment of an appropriate legal and regulatory framework; and d) the promotion and development of business development services and market linkages that complement the rural financial services.

The activities in this component could involve participation in coordinated development partner discussions with governments and central banks in relation to the policies, laws and regulations needed to facilitate mobilization of small deposits and protect small savers.  For example, (interest rate deregulation could have a critical impact in enabling R/MFIs to offer appropriate interest yields on deposits, or at least to protect them against the erosion of inflation). This creation of an "enabling environment" is best undertaken in conjunction with other multilateral institutions in order to provide pressure on Governments to pursue sound policies.

Undertake action research studies that will provide concrete evidence that could be used in policy dialogue. Some of the key study areas could sub-contract to IAC, Kenya Institute of Public Policy Research (KIPPRA), Institute of Policy Analysis Research (IPAR), Tegemeo Institute ( University of Egerton), etc. Under this component, there will be some investment in dialogue tools to be used in training the rural finance institutions in ways of partnering with the development partners to effectively engaging in dialogue with the decision makers on rural finance issues. The tools would be developed by the partnership with IAC or other private sector institutions with experience in developing the tools.

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