Fiscal year 2010/11 - Poverty Alleviation Fund, Nepal

Foreword
The dismal national growth rate of 2 to 4 per cent from
1996/97 to until now has left a quarter of the Nepalese
population below the poverty line. A more detailed and
sophisticated assessment of Multi Dimensional Poverty
Index (MPI), conducted by Oxford University, has indicated that
two third of the population is still living below the poverty line.
Poor employment situation, slow development expenditure,
frustrating investment climate, rising inflation and its pains and
collapsing financial sector-all have contributed towards stopping
the country from moving forward-in terms of economy, stability,
peace building, inclusive growth, and thus widening the gap
between the rich and poor.
In this context, the Poverty Alleviation Fund is working as a
specialized and fast track vehicle to reach out to the poor, and
has achieved some significant results on the ground especially
impacting on the lives of the poor and marginalized communities
living in the far-flung villages and districts.
Six years down the line, PAF has been a brand as one out of
ten Nepali is directly benefiting from PAF programme. Reaching
out to the most vulnerable groups, especially those who are
disadvantaged due to gender, caste, ethnicity or physical
isolation, PAF has demonstrated that even modest amounts of
resources given to the community led development can help
many poor families to get out of poverty, in a sustainable way.
PAF is working now with other development partners and
programmes to build synergies between the programmes
aiming to alleviate poverty and community empowerment.
PAF has made important strides in joining hands with local
governments to avoid duplications and yield maximum benefits
from the pro-poor programme at the grass root level.
The community based and driven approach has already resulted
in the formation of over 17 thousand community organizations
(COs) spread in 40 districts. Nearly 500 thousand households
are direct beneficiaries of which 74 per cent are women and 66
per cent are ultra poor--those who do not have food sufficiency
for more than 3 months in a year.
Independent analysis has shown that in communities where
PAF intervention is for more than 6 months, consumption
growth has increased by 49 per cent, and we have witnessed
significant improvement in gender empowerment, health and
education status and social capital and assets formation.
Building on the success and learning, we are working on finetuning
our approach to cover the hardcore, embrace pocketbased
development approach and make the community
organizations self-sustaining.
In view of the wide varieties of activities undertaken within
the sub-projects of PAF-led programme, the challenges faced
for sustainability of the sub-projects include the linkage with
market for sustaining income-generating activities as well as
the availibility of insurance and safety-nets, particularly for
livestock. PAF is also to explore an alternative to livestock -based
activities for landless poor as the huge demand at present is
mainly related with livestock. Another important issue before
PAF is to build the community capacity to manage Revolving
Fund and operate the sub-projects and raise the awareness of
the community through functional literacy. Also, there is a need
to adopt different approach for poorest districts and districts
with greater access and livelihood opportunities and special
support to vulneranble poor and backward ethnic groups such
as Mushhar, Dom, Chamar, Raute, among others.
PAF is working on its exit strategy focusing on its strategic
thrust to enable community to go to a sustained path to get out
of poverty within a stipulated 5-6 years of time. In this line, PAF
is now embracing a pocket area development approach based
on the potential strength of the area. Monitoring, Research
and Development is being further strengthened to support
the programme implementation including capacity building
of main actors i.e. community organizations(CO), Partner
Organizations(PO), local bodies and PAF.
Based on lessons learned, PAF is now working on the expansion
of its programme in new VDCs and districts and important
initiatives are taken for the institutionalization of Community
Organizations as co-operative or other forms of institution and
link with financial institutions and markets where programme
is already in implementation. Also the PAF is laying special
emphasis on the capacity building of community organizations,
partner organizations and PAF while co-ordination and
collaboration is being accorded high priority.
I look forward to the support from all in our campaign to fight
against poverty.
Janak Raj Joshi
Vice Chairman
PAF
ANNUAL PROGRESS REPORT (2010/2011)
i

List of Abbreviations and Acronyms
AEPC
Alternative Energy Promotion Center
CBS
Central Bureau of Statistics
CD
Capacity Development
CO
Community Organization
CI
Community Infrastructure
COP
Community Organization of Poor
CB
Capacity Building
CCP
Community Contribution Plan
CBOs
Community Based Organizations
CG
Community Group
CIP
Community Infrastructure Project
DDC
District Development Committee
DNPWC
Department of National Park and Wildlife Conservation
EIA
Environmental Impact Assessment
FPCRTF
Food Price Crisis Response Trust Fund
FMR
Financial Management Report
FNCCI
Federation of Nepalese Chamber of Commerce and Industries
GOs
Governmental Organizations
GIZ
German International Cooperation
GoN
Government of Nepal
IG
Income Generation
IEE
Initial Environmental Examination
IESE
Initial Environmental and Social Examination
IDA
International Development Agency, World Bank
IFAD
International Fund for Agriculture Development
LDO
Local Development Officer
LDF
Local Development Fund
LFLP
Leasehold Forestry and Livestock Program
MDGs
Millennium Development Goals
MIS
Management Information System
MLD
Ministry of Local Development
MoU
Memorandum of Understanding
NDM
Nepal Development Market Place
NEA
Nepal Electricity Authority
NGOs
Non Governmental Organizations
NPC
National Planning Commission
NOA
Non Operating Account
OA
Operating Account
OAG
Office of the Auditor General
O and M
Operation and Maintenance
PAF
Poverty Alleviation Fund
PO
Partner Organization
PSOs
Private Sector Organizations
PM
Portfolio Manager
PMR
Project Management Report
RBB
Rastriya Banijya Bank
REDP
Rural Energy Development Programme
RCIW
Rural Community Infrastructure Works
R & D
Research and Development
SM
Social Mobilization
SAs
Service Agencies
SNV
Netherlands Development Organization
SRI
System of Rice Intensification
TAC
Technical Appraisal Committee
TU
Tribhuwan University
UG
User Group
UNICEF
United Nations International Children’s Emergency Fund
USAID
United States Agency for International Development
USD
United States Dollar
VDC
Village Development Committee
VCDP
Vulnerable Community Development Plan
WFP
World Food Programme
WB
World Bank
ii ANNUAL PROGRESS REPORT (2010/2011)

Table of Contents
Foreword
List of Abbreviations and Acronyms
Executive Director’s Report
i
ii
v
Chapter 1: Introduction
1.1. PAF introduction 1
1.2. The Strategy 1
1.3. The Approach 1
1.4. Institutional Arrangements 1
1.5. Programme Components 1
Institutional and implementation arrangements 3
Links with Local Governments 3
2.1. Annual Achievements Against Targets 5
2.2. Component wise progress status 5
2.2.1. Social Mobilization 5
1. Demand Driven Community Proposal and Direct Funding 5
Chapter 2: PAF Progress and Achievements
2. Facilitation of Community Through POs 8
3. Reaching Out to the Poor and Social Inclusion 8
4. Community Institutional Building 10
3.1. MIS, Monitoring and Evaluation 25
Chapter 3: information, monitoring and evaluation
3.2. Results From Monitoring Data Analysis 26
3.3. Environmental Framework and Monitoring 26
3.4. PO Performance Evaluations 26
3.5. Impact Evaluation 26
3.6. Communications, Outreach and Publications 27
3.7. Grievance Handling 27
Chapter 4: partnership and collaboration 29
Chapter 5: THE OUTCOME AND RESULT 33
Chapter 6: Financial Management 35
Chapter 7: Lessons and Future Directions 38

LIST OF Success StorIES
Soap Factory Set Up in Gokuleshwor 7
Watch, Radio Shop Earn Livelihood 14
Livestock Insurance Providing Boon for Community 31
Pig Farming Transforms Lives of Dalits 32
LIST OF ANNEXES
Annex 1: Current Board of Governors (as of January 2012) 40
Ex-Board Members Who Served During The Reporting Year (Fy 2010-11)
Annex 2: CO registration, agreement for sub-project and disbursement status
(Fiscal year 2010/11 only) 41
Annex 3: CO registration, agreement for sub-project and disbursement status (Cumulative) 42
Annex 4: POs, COs and Coverage (Fiscal year 2010/11 only) 43
Annex 5: POs, COs and Coverage (cumulative to date)c 45
Annex 6: PAF in Terai Border VDCs 47
Annex 7: PAF in Karnali 47
Annex 8: Community Institutional Development 48
List of CO Federations in Districts
Annex 9: Status of the On-going Innovative Sub-projects 49
List of Cooperatives formed through CO’s initiatives in Districts
Annex 10: Various Trainings to The Members of COs By Districts 50
Annex 11: PO Capacity Development Status 54
Annex 12: Gross Annual Income Change of CO members 55
Annex 13: Summary Results of Revolving Fund Status 2010 57
Annex 14: PAF Result Matrix 58
Annex 15: Year wise Target vs. Achievements 61
Annex 16: Details of expenditure up to July 16, 2011 (Cumulative PAF-I and PAF-II) 61
Annex 17 (1): Program Funding Status of FY-2067/68 (2010/11 only) 62
Annex 17 (2): District wise Target Vs Achievement in FY-2067/68 (2010/11 only) 63
Annex 18: Poverty Alleviation Fund Project – II Progress Status 65
Annex19: PAF II CO registration, agreement for sub-project and
disbursement status (cumulative) 66
Annex 20: PAF II Expenditure (in NRs.) 67
Annex 21: Summary Results of Follow-on Impact Survey 2010
(Done by TU and the World Bank) 68
Annex 22: Un-audited Financial Statement for FY 2010-11 70
Annex 22: Un-audited Project Account for FY 2010-11 72
Annex 24: Current Staff List (as of January 2012) 91

Executive
Director’s
Report
Making Communities Empowered
In
our continued crusade against poverty, the reporting
year has remained important for many reasons.
Firstly, different impact evaluation studies have
confirmed that PAF has helped to raise per capita
consumption, average income, food sufficiency, child schooling
and access to services and women's empowerment. PAF has
also created and improved community assets in rural areas
benefiting large number of the rural population. These findings
are the results of a comprehensive and independent follow- up
study done in 2010 in the 6 sample districts conducted by TU
and two separate studies on social re-assessment and revolving
fund by PAF itself.
Secondly, PAF was able to receive the additional financing of
US$ 75 million to strengthen its impact on the lives of the poor
and cover additional poor households under the programme.
The government of Nepal and WB signed a grant agreement on
July 13, 2011 for the additional funding for the ongoing second
phase of PAF. Also, PAF has added more strategic partners
during the year as several Memorandum of Understandings
(MoUs) have also been signed with different organizations at
central level to facilitate different task as well as to facilitate
collaboration in implementation of sub-projects at community
level with complementarities.
Seven years on the ground, a total of 17,898 community
organizations (COs) of poor are registered with PAF, out of which
PAF has already inked agreements with 16,819 COs. In their bid
to sustainability and institutional growth, communities have also
begun to build federations, network of COs and co-operatives.
So far, 53 Multi-purpose co-operatives and 547 federation
of COs have already been formed. The PAF supported COs
are currently pursuing 16, 576 Income Generation and 3039
Infrastructure related sub-projects till the end of the reporting
period.
Reaching Out to the Poor
PAF is now currently working in 40 poorest districts defined
by the Central Bureau of Statistics while additional 19 districts
are also covered under separate innovotive window and Nepal
Development Market Place (NDM). Among the 40 districts,
PAF is working in 71 per cent of total VDCs (87 per cent in 25
districts and 50 per cent in 15 districts).
All five districts of the Karnali zone are covered by the
programme. Till date, programme has reached 134 VDCs i.e.
100 per cent of 134 VDCs in Karnali and benefitted 54,329 poor
households while Programme is covering Ten (10) districts in
Terai (Mahottari, Rautahat, Sarlahi, Kapilbastu, Siraha, Bara,
Bardiya, Dhanusa, Parsa, Saptari) and benefitted 159,647HHs
covering 590 VDCs (i.e. 17 per cent of poor HHs and 52 per
cent of VDCs). Out of 146 border VDCs of Kapilbastu, Mahottari,
Rautahat, Sarlahi and Siraha among above Terai districts, PAF
program coveres 95 VDCs (i.e. 65 per cent) and benifitted
20,015 HHs
Further, innnovative pocket programme is still continued in
Makawanpur, Morang, Kanchanpur and Chitwan districts. It has
reached additional 13,376 poor households in 48 VDCs in those
districts.
In an overall scenario, PAF has covered 470,021 poor HHs
as CO member beneficiaries, among which a total of 65.8
per cent members falls under hardcore poor category (food
sufficiency less than 3 months among other criteria fixed by
the communities), 25.41 per cent members falls under medium
poor category (food sufficiency more than 3 months but less
than 6 months among other criteria set by the communities), 8.6
per cent members falls under poor category (food sufficiency
more than 6 months but less than a year among other criteria
set by the communities) and 0.2 per cent members falls under
marginal “non-poor” Category.
Likewise, CO member households constitutes 29 per cent Dalit,
28 per cent Janajati, 3 per cent Muslim, 30 per cent Brahmin/
Chhetri and 10 per cent other caste and ethnicity. Gender-wise,
74 per cent are female members in COs.
Similarly, the key position holders in the community organisation
such as president, treasurer, secretary constitutes, 34 per cent
Dalit, 27 per cent Janajati, and 2 per cent Muslims and 29 per cent
Brahman/Chettri, and 8 per cent from other caste and ethnicity.
Gender-wise, 62 per cent key position holders in CO are female.
When per centage beneficiery of PAF by caste and ethnicity is
compared with district per centage ethnicity composition(as
ANNUAL PROGRESS REPORT (2010/2011)
v

shown in the graph below), it is obvious that PAF is focusing on
socially excluded and disadvantageds groups such as Dalit and
Janajati. By and large, PAF has covered almost 100 per cent of
Dalit in initital 25 districts. Also PAF has benefited almost 90 per
cent of the poor households in 25 districts.
Programme Cost Sharing
1200000
1000000
800000
600000
400000
200000
Percentage
80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
0
Dalit, 11.66
Total HH
Janajati,
18.66
District
Total District Poor
HH
Chart a: PAF Benefited Poor HHs in 25 Districts
Others,
69.69
Dalit,
29.43
PAF Benefitted HH
(93.42% of District Poor HH)
Janajati,
25.92
CO Member
Beneficiaries
Others,
44.66
Chart b: District Population Ethnicity Composition Vs PAF Beneficiary in
25 Districts
PAF is investing 80.6 per cent (i.e. Rs. 9,183m) of the total subproject
cost. Community sharing is 15 per cent (7 per cent in
Cash— i.e. Rs. 761m and 8 per cent in Kind—i.e. Rs. 881m) of the
total sub-project costs whereas VDC/DDC and other development
partners are sharing 5 per cent (i.e. Rs. 564m) in total sub-project
cost. In Income Generating sub projects, community is sharing 9
per cent in cash and 2 per cent in kind whereas in Infrastructure
sub projects, it is 1 per cent in cash and 24 per cent in kind. Apart
from community contribution, DDC/VDC are sharing 1 per cent of
the cost and other collaborating partners are sharing 4 per cent of
the cost in infrastructure sub-projects.
Out of the total PAF investment, 79 per cent is for income
generating sub-projects and 21 per cent for infrastructure subprojects.
About 87 per cent of the PAF investment in income
generating sub-projects is established in community managed
Revolving Fund(RF).
Community Institutional Development
Community institutionalization process is taking place in some
of the districts where community has felt need to federate
themselves for certain purpose. Multi-purpose co-operatives,
co-operatives for single purpose and federation of COs are
formed as per communities’ felt need. Informal networks of COs
are being formed in each VDC as a process of instiutionalization.
A total of 166 CO federations are formed till the end of the
reporting year. Also, 53 cooperatives are established on the
aegis of the PAF supported community organizations to carry
out different activities aiming at alleviating poverty.
Collaboration in Sub-projects Implementation
PAF emphasized in collaboration with different partners while
implementing its program its program at the district level. For
this purpose, PAF has signed MoUs with MLD, WFP, DNPWC,
REDP, Helvetas, USAID/EIG, Heifer, LFLP and FNCCI, among
others so to strengthen synergies between programmes.
PAF Outcomes
The follow-up study in six sample districts, and three
controlled districts, shows that the net program impact on
per capita consumption (in real terms adjusted for price
inflation) increased by 49 per cent for those beneficiaries
who have received the money for at least six months and 28
per cent for all beneficiaries’ who were PAF money recipient
households (HHs) with food sufficiency for six months or less
has decreased by 10 per cent.
The social re-assessment, has shown that the average income
of individual household has increased by 82.5 per cent. The
comparative analysis, with three or more than three years
of maturity period, shows that HH level assets and school
enrollment status of the children have increased while there
was a marked improvement in food sufficiency for individual
households. Also,construction and use of toilet/latrine has
increased.
Also, the revolving fund assessment carried out during the end
of FY 2066/67, shows that communities are managing their
revolving fund satisfactorily. The data collected as of 16 July
2010, shows that the fund provided by PAF has increased by
7.8 per cent. Similarly, among the total CO members, 84.6 per
cent of the members have accessed the fund, at least, for once
to initiate their income generation activities. The assessment
also shows that 83.8 per cent of the total fund has been invested
as loans to its members, 14.1 per cent deposited at the bank
and the remaining fund is with the COs in the form of the cash.
Further, assessment shows that the average rate of repayment
is 76.1 per cent.
vi ANNUAL PROGRESS REPORT (2010/2011)

Budget Expenditure
Out of the total PAF expenditure upto FY 2067/68 (2010/11),
93.52 per cent is from IDA (International Development Agencythe
World Bank) grant, 2.21 per cent is from IFAD (International
Fund for Agriculture Development) grant and the rest 4.26 per
cent from GoN (Government of Nepal).
In this FY 2067/68 (2010/11), total expenditure is Rs.
2,60,12,83,022.25 which is 85.59 per cent of total budget of
Rs.3, 039,166,000. Currently the PAF Project II is funded by IDA
Grant with US$ 100m and IFAD Grant of US$ 4m for four years
till January 2012. IDA disbursement to this PAF II project till
date is 98.49 per cent (as advance) i.e. equivalent to about US$
98.49m. IFAD disbursement to PAF till the end of the reporting
period is US$ 2.29m.
Recently, IDA hs agreed to provide additional finacing of US$
75m (out of which US$65m is from IDA grant and US$ 10m
grant is from FPCRTF) for PAF II project.
Lessons and Challenges
In view of the wide varieties of activities undertaken within the
sub-project, the challenges faced for sustainability of the subprojects
include the linkage with market for sustaining incomegenerating
activities as well as the availibility of Insurance
Safety-Net particularly for livestock. PAF is also to explore an
alternative to livestock based activities for landless poor as
there still persists a trend of huge demand of livestock related
sub-projects. Another important issue before PAF is to build the
community’s capacity to manage revolving fund and operate
the sub-projects sustainably. It also need to raise the awareness
of the community through functional literactcy. Similarly, there
is a need to adopt different approach for poorest districts and
districts with greater access and livelihood opportunities and
special support to vulnernble poor, marginalized ethnic groups
such as Mushhar, Dom, Chamar, Raute, among others.
While working towards above challenges, it is inevitable to
work with diversified groups of poor communities supporting
each other and network for linkages and collaboration with
other programmes and line agencies to support communities.
Further, legal institutionalization of Community Organizations
through coalition or formation of functional co-operatives
and establishment of strong linkages with VDC/ DDC are also
important for sustainability and long-term support to these
community groups. PAF is also initiating dialogue to formulate
a separate act to govern community organizations and self
help groups to avoide duplications and sustain community
efforts.
PAF is working with its exit strategy focusing on its strategic
thrust to enable community to go to sustained path to get out
of poverty within a stipulated 5-6 years of time. In this line, PAF
needs to work on pocket area development approach based on
the strength local potentials and at the same time, focus will be
given to nutrition improvement by diversifying production and
providing special focus to marginalized community groups.
The emphasis will be given for infrastructural development
to support these initiatives. Monitoring, Research and
Development needs to be further strengthened to support the
implementation including capacity building of main actors i.e.
CO, PO, Local Bodies and PAF.
The future strategy
Based on lessons learned, PAF will work for the expansion
of its programme in new VDCs and districts and important
initiatives will be taken for the institutionalization of Community
Organizations as co-operative or other forms of institution
as per their decision and link with financial institutions and
markets where programme is already in implementation. PAF
will also emphasize on the capacity Building of community
organizations, partner organizations and PAF while Coordination
and collaboration would also be accorded high
priority. This year onwards PAF is strenghening on syststematic
Grievance Handling Process with stakeholders views on the
effective Performance Management System of COs, POs and
PAF secretariat.
We look forward to work together with all stakeholders in the
days to come.
Thank you.
Raj Babu Shrestha
Executive Director
ANNUAL PROGRESS REPORT (2010/2011)
vii

Chapter 1:
Introduction
1.1. PAF introduction
A quarter of the Nepali population still lives below poverty line. The
majorities of the poor live predominantly in rural areas and engage in
traditional and subsistence farming on small plots of low quality land,
have limited access to credit, infrastructure, markets and basic social
services, often because of remoteness, and rely heavily on seasonal
migration and remittance.
Poverty Alleviation Fund (PAF) was established in 2004 as a special
and targeted programme to bring the excluded communities in the
mainstream of development, by involving the poor and disadvantaged
groups themselves in the driving seat of development efforts. PAF is
contributing on bringing the level of poverty down to 10 per cent in
20 years in pursuant with the long term goal of Government of Nepal;
and reduce poverty by half by the year 2015 as per the Millennium
Development Goals (MDGs).
1.2. The Strategy
PAF has taken strategy to enable poor people through social mobilization
and capacity building to organize and obtain quality basic services in
cost-effective and sustainable manner with their direct involvement.
PAF uses Partner Organizations (POs) to help facilitate poor vulnerable
people and their community Groups or Organizations to implement the
programme components, and they include local bodies, NGOs/ CBOs
and private sector organizations. PAF also seeks to forge partnership
with various organizations working in its areas of operation at the
village, district and national level in order to ensure holistic development
intervention to bring discernible impact on poverty reduction and scaling
up the programmes in considerably less time
1.3. The Approach
PAF has followed six guiding principles: namely (a) Targeted to the poor
(Antodaya) (b) Social Inclusion (Samabesi) (c) Demand Driven approach
(Maag Anusar) (d) Transparency (Pardarsita), (e) Direct funding to
community organizations of the poor (Prataksha Bhuktani), and (f)
Community Institutional Development (Samudaya Ko Sansthagat Bikash).
Social Mobilization, Income Generation, Small Community
Infrastructure Development and Capacity Building are the four major
programme components of PAF. The target beneficiaries of PAF are the
poor women, Dalit, Janajatis, and the vulnerable communities living
below the poverty line.
1.4. Institutional Arrangements
Initially established by an ordinance in 2004, PAF is governed by an act
since 2006, thus PAF is an autonomous, independent and professional
organization governed by separate law. The 12- member governing
board, chaired by the Prime Minister, is responsible for policy guidance
and programme approval.
Vice-chairperson and 5 members- are appointed by the government from
among the development professionals while other 5 ex-officio members
include National Planning Commission (NPC) Secretary, Chairman of
the Association of District Development Committees of Nepal (ADDCN),
Chairman of Association of Village Development Committees of Nepal
(AVDCN), Chairman of National Women Commission (NWC), and
Chairman of National Dalit Commission (NDC).
Currently, the PAF secretariat consists of 62 staffs, mostly professional,
recruited on a competitive basis. A total of 370 partner organizations
work on behalf of the poor in 40 programme districts.
1.5. Programme Components
(a) Small-Scale Village and Community Infrastructure: Given the
remoteness of many communities and the virtual non-existence of public
infrastructure services, small investments in infrastructure and services
can make a significant difference to poor communities. The communities
are often very clear on what they need, and are willing to contribute to
sub-projects within their means. Consideration is given to sub-projects
already included in VDC plans and/or where the District Development
Committee (DDC) and/or VDC are prepared to provide matching grants.
Key selection criteria include the number of target households that would
benefit and the expected employment impact. In addition, infrastructure
sub-projects would require communities to prepare and commit to a
realistic Operations and Maintenance (O&M) plan. Partner organizations
ANNUAL PROGRESS REPORT (2010/2011) 1

(POs) would also be used to facilitate the process of community
organization and capacity building in advance for the preparation of subproject
proposals. Community contributions would average 10%, with
adjustments made for very remote and difficult areas. In the sectors
where policies are in place that require a higher community contribution
(e.g., 20% in rural water, with possible adjustments for very remote or
poor communities), such rates would be applied to ensure consistency.
Examples of sub-projects implemented to date under PAF include link
roads, culverts, footbridges, micro-hydro, micro-irrigation, water supply
and sanitation schemes, and community meeting halls, schools, health
facilities and other small-scale infrastructure.
(b) Income Generating Sub-projects: Matching grants is provided
to self-selected groups of poor and excluded people for incomegeneration
activities, based on objective criteria including ethnicity,
caste, gender and poverty levels. Beneficiaries contribute 10 per cent
of the sub-project cost in cash. A proportion of the grants is reserved
for technical assistance to be contracted by communities themselves
in areas where they felt such need. Under PAF I, communities have had
discretion as to how to manage the funds received, with a number of
them choosing to revolve the funds within their group. Under PAF II,
any groups choosing to manage resources in this way are receiving
training in community-managed finance – under the capacity building
component – with a view to strengthen them to eventually have access
sponsored by organizations representing or working with the target
groups, target groups themselves and/or local bodies. Examples under
the first phase of PAF have included innovations such as arsenic filters,
forest based cardamom cultivation, evaporative cooling technology for
food preservation and women’s health projects.
(d) Capacity Building: This would include five sub-components:
(i) Social Mobilization of Community Groups: This subcomponent
is supporting training/skills development for POs
themselves and for capacity building of community groups. POs
are selected to work in target areas to disseminate information
about the project, mobilize community groups, work with them in
developing sub-project proposals and develop their skills in project
management, financial management (FM), procurement, monitoring
and evaluation etc. where local governments are functioning,
POs are also liaised with them to ensure that the proposed subprojects
are consistent with VDC plans and priorities. In addition to
mobilization of communities, capacity of POs themselves is also
built under this sub-component, such that they are sensitive to key
social, environmental and livelihoods-related issues such as gender,
caste, disability, sustainability, accountability and local governance,
natural resource management, and market linkages, etc. More
importantly, POs are partnered exclusively for social mobilization,
facilitation, technical backstopping and monitoring of COs.
to broader financial services for livelihoods initiatives. As with other subprojects,
POs are contracted by the PAF to work with all communities,
including through locally selected community facilitators, to assist in
participatory processes, group formation, and development of sound
sub-project proposals. Particular attention is paid to the commercial/
economic viability of income-generating sub-projects to avoid the risk
of supply or NGO driven proposals which are not sufficiently well linked
with markets. Common examples to date under PAF have included
micro-irrigation, micro enterprises/service sector activities, artisan/
crafts, land productivity investments, trading and animal husbandry.
Analysis of a representative sample of these investments shows income
increases for beneficiary households of 10-15%.
(c) Innovation and Special Programs: An innovation window is
continued to support proposals meriting special consideration owing
to exceptional needs in a given context, or demonstrating innovative
ways to improve livelihoods development and reach targeted groups.
These proposals can be national or regional in coverage and may be
(ii) Capacity Building for Local Bodies: The extent of
decentralization in Nepal is limited, particularly given the continued
absence of elected local bodies which were dissolved during the
conflict period. With a view to supporting intermediary delivery
channels that lay the foundation for strengthened local government,
this sub-component is focusing on building capacity of functioning
and interested local bodies (VDCs, DDCs) in pro-poor planning and
monitoring, and other relevant topics to promote inclusive planning
and service delivery for local development, as well as on the rules of
operation of the PAF in order to enable local bodies to assist groups
and communities to access PAF resources.
(iii) Capacity Building for Target Groups Engaged in Income-
Generating Activities: All sub-projects include some provision for
technical assistance as needed, but groups engaged in incomegenerating
activities may require more support to help prepare for
the activity or to help implement it successfully. Therefore, this subcomponent
would focus on developing skills such as marketing,
2 ANNUAL PROGRESS REPORT (2010/2011)

transport logistics, financing, and quality control. A capacity building
agency would be contracted by PAF to work with community groups
to identify needs, develop capacity-building plans and procure
relevant technical assistance.
(iv) Support to Rural and Community Finance: There is ample
evidence that the vast majority of PAF beneficiaries do not have
access to rural financial services, including microfinance lending.
With a view to the longer-term sustainability and growth of the
community Income Generating Activities (IGAs) and enterprises,
PAF is supporting training for community-managed finance in order
to strengthen institutions and encourage eventual access to broader
financial services for livelihood support. To achieve this objective,
this sub-component would finance mapping and monitoring
of those emergent groups revolving their PAF grant funds and
mobilizing savings; provide training and capacity building support to
strengthen these activities; explore linkages to financial institutions
and relevant partners; and support PAF’s articulation of a longer
term vision or ‘graduation strategy’ for viable community institutions
and enterprises.
(v) Information, Monitoring and Evaluation: This subcomponent
include: (a) dissemination of information about the
project and other public sector programmes; (b) support for
PAF’s management information system (MIS), which will need
to be expanded to accommodate the scaled-up programme; (c)
structured monitoring activities, including field visits to assess
progress; (d) regular beneficiary assessments, including qualitative
field work; and (e) follow-on impact assessment surveys to refine
and monitor against the project
Institutional and
implementation arrangements
At the national level, overall project management responsibility is with
the PAF Board, chaired by the Prime Minister. The Vice Chairman
functions as a full time executive of PAF, and the Board includes ten other
Members. The Executive Director of PAF serves the Secretary of the
Board. The ex-officio members are the Secretary of the National Planning
Commission, the Chairpersons of the Federation of District Development
Committee, the Village Development Committee, the National Women’s
Commission and National Dalit Commission. Other appointed members
are five prominent professional persons, including a woman, who have
contributed to poverty alleviation in Nepal. PAF has a lean structure
with a limited number of staff who have been recruited on fixed term
contracts on a competitive basis, and a number of consultants and/or
NGOs who are retained to support operations as needed.
At the regional level, PAF is seeking to establish offices in those locations
where the volume of work requires a presence, but keeps its own staff
to a minimum. PAF works through POs which it recruits competitively,
for purposes of social mobilization and capacity building at the
community level. These POs disseminate information about the project,
mobilize community groups, work with them and build their capacity
to develop and manage sub-project proposals, and monitor the quality
of participation. POs can be NGOs; community based organizations,
or VDCs/DDCs, provided they meet PAF eligibility criteria. POs are
required to appoint community facilitators in each target village, who
must be trusted by and selected in consultation with the communities,
with attention to PAF’s aim of reaching excluded groups. POs also liaise
with local bodies to ensure that proposed infrastructure sub-projects
are consistent with VDC/DDC plans and priorities. While POs may be
entrusted by community groups to submit final sub-project proposals
to PAF, once approved, grant funds flow directly to communities and not
through POs.
At the community level, PAF supports two types of sub-projects: (i) smallscale
village infrastructure and services, and (ii) income generation. The
same basic rules apply: sub-project proposals are identified by groups
of poor people (which could include members of a village or several
villages) who come together as community groups/organizations (COs);
decisions regarding sub-projects are participatory and inclusive, and this
is carefully monitored; the community groups make cash contributions;
there are ceilings on the investment per household and on the size of
each sub-project; and funds for implementation of sub-projects and
technical assistance are deposited in community bank accounts.
The village-level project cycle comprises: (a) community mobilization;
(b) sub-project preparation including development of an operations
and maintenance plan; (c) appraisal; (d) approval by the PAF Technical
Appraisal Committee (TAC) and (e) implementation. Where local
governments are operational, the DDCs and the VDCs also need to
endorse infrastructure sub-projects. Final sub-project proposals are
appraised by PAF staff and approved by the Board, although approval
authority can be delegated to Portfolio Manager.
Links with Local Governments
PAF’s institutional arrangements at the local level is linked with
government local bodies in the following way: (i) there is a dedicated
component on capacity building for local bodies (ii) DDC/VDCs can be
POs; (iii) all infrastructure sub-projects that are going to be financed
through PAF have to be incorporated in VDC and the DDC annual plans;
and (iv) for larger infrastructure demands from communities, VDCs
and DDCs can co-finance any investment as long as PAF rules and
criteria are met.
ANNUAL PROGRESS REPORT (2010/2011) 3

4 ANNUAL PROGRESS REPORT (2010/2011)

Chapter 2:
PAF Progress and
Achievements
This chapter discusses the annual achievements against
the target and overall implementation status of the
different programme components during the reporting
period as well as the cumulative achievements
2.1. Annual Achievements Against Targets
PAF had set a definite target in its key components--social mobilization, income generation, community infrastructure activities, capacity building and
innovative sub-projects. The table below summarizes the achievements of the reporting year against the annual target:
Table 1: Annual Achievements against targets for FY 2010-11
Description Annual Target Physical Progress Progress %
Income Generation Sub-Projects 1,738 2,790 161
Infrastructure Sub-Projects 395 338 86
Innovative Sub-Projects 60 20 33
Total Sub-Projects 2,193 3,148 144
Beneficiary HHs(including Infra sub-projects) 85,000 75,629 89
Programme Funding status for the reporting year Rs. 3,039,166,000 Rs. 2,601,283,022.25 85.59
For the reporting year 2010-11, the achievement in income generations sub-projects was far above the target i.e. 161 per cent while for infrastructure
related projects the achievement was above 86 per cent. In case of innovative sub-projects, PAF had set an annual outputs of 60 sub-projects, while
the achievements has stood at only 20 (33 per cent). Similarly, in the case of PAF expenditure for the reporting year, the achievement was 85.59 per
cent against the project expenditure target of 3,039.1 million (Annex 17).
2.2. Component wise progress status
2.2.1. Social Mobilization
The objective of the social mobilization is to build up capacity of communities for preparation, design, implementation, operation and management of
community sub-projects to enhance their livelihoods.
1. Demand Driven Community Proposal and Direct Funding
1.1. Community Organizations, Sub-projects and Investments
A total of 17,898 community organizations (COs) were registered with PAF (2,007 in Mountain, 9,653 in Hilly region and 5,773 in Terai districts and
465 through Innovative Window Programme Districts) till the end of the reporting year.
Of the total registered COs, PAF has inked agreements with 16,819 COs (1,862 in Mountain, 8,818 in Hilly region and 5,698 in Terai districts and
remaining 441 in Innovative Window Programme Districts) to implement different IG and community infrastructures related sub-projects.
During the reporting year, 3,070 COs were registered and 2,832 COs were entered into agreement with PAF for implementing the comunity sub projects.
Similarly, 3,148 number of agreements were done for various IG and INFRA subprojects (refer Table 2 on next page).
ANNUAL PROGRESS REPORT (2010/2011) 5

Table 2: CO registration, CO Agreement and Sub-project Agreement
FY 2010/11
Cumulative
Categories
No. of Regd. COs
Agreement
No. of Regd. COs
Agreement
No. of COs No. Of Agreement No. of COs No. Of Agreement
Mountain 611 519 590 2,007 1,862 2,100
Hills 1367 1,149 1,309 9,653 8,818 10,198
Terai 1,066 1,144 1,229 5,773 5,698 5,888
Innovative Districts 26 20 20 465 441 492
Grand total 3,070 2,832 3,148 17,898 16,819 18,678
In the case of income generation, the most demanded activities from the community are related to agriculture, livestock, cottage industries, trade and
skill based services. Similarly, infrastructure sub-projects are related to micro-irrigation, link road, culvert/bridge, ropeway, electricity/micro-hydro,
water mill, water supply, sanitation, school and health post building, among others.
Table 3: PAF investment to the Community Sub -projects
Categories
FY 2010/11(Million Rs.)
Cumulative (Million Rs.)
IG Infra Total IG Infra Total
Mountain 191.812 59.104 250.916 919.531 189.628 1,109.159
Hills 451.545 194.918 646.462 3,640.130 1,350.903 4,997.322
Terai 614.779 90.399 705.177 2,535.484 341.379 2,871.525
Innovative Districts 6.023 0 6.023 153.826 51.475 205.302
Grand total 1,264.157 344.421 1,608.578 7,248.973 1,933.386 9,183.310
Till the end of previous FY 2009/10, agreements were made with 13,987 COs amounting to Rs. 7,574m while during the reporting year alone additional
2,832 COs signed agreement amounting to 1,608m. Therefore in cumulative terms, agreements were made with 16,819 COs amounting Rs. 9,183m
till the end of reporting year i.e. FY 2010/11. Details are illustrated in Annex 2, Annex 3, Annex 4 and Annex 5. PAF coverage in Terai border VDCs and
Karnali region is given in Annex 6 and Annex 7.
1.2. Programme Cost Sharing (Investment—IG Vs Infra, PAF Vs Community)
PAF alone has invested Rs. 1,263m in IG activities during the reporting year against the total cumulative investment of Rs. 7,248m till the end of the
reporting year. In the case of Infra. schemes, PAF invested 344m during the reporting year while cumulative investment has remained at Rs. 1933m.
Overall, out of the total PAF investment, 79 per cent has been made in income generating sub-projects and 21 per cent has been funneled in infrastructure
related sub-projects.
In terms of region-wise investment, PAF has invested the highest amount for IG sub-projects in hilly region, followed by Terai, mountain and innovative
districts. Similar investment trends is maintained in infra sub-projects as well (See in chart).
In cumulative average, community sharing is 15 per cent (13 per cent in cash and 2 per cent in kind) of the total sub-project cost whereas others, mainly
the VDCs and DDCs, have shared 1 per cent of the total sub-project cost. In total, PAF has invested 80 per cent of the community sub-projects cost.
chart 1: PAF Investment Income Generation Vs Infrastructure
chart 2: PAF Investment
Amount
21%
4,500,000,000
4,000,000,000
3,500,000,000
IG
PAF (INFRA)
PAF (IG)
3,000,000,000
2,500,000,000
2,000,000,000
1,500,000,000
INFRA
IG
79%
1,000,000,000
500,000,000
0
IG
INFRA
INFRA
Hill Mountain Terai
Region
6 ANNUAL PROGRESS REPORT (2010/2011)

chart 3: Contribution in Sub-projects (IG+INGRA)
chart 4: Contribution in INFRA sub-projects
Others
4%
Others
7%
DDC/VDC
2%
PAF
80%
DDC/VDC
1%
PO
0%
CO Kind
2%
PAF
66%
CO Kind
24%
CO Cash
13%
CO Cash
1%
Soap factory set up
in Gokuleshwor
Implementation of PAF programmes in Gokulehswor, Baitadi
has reached 5 years. Even while majority of the CO members
in the village remained happy pursuing traditional means of
income generation like livestock rearing and animal husbandry,
some of the members of Siddhanath CO chose to implement
manufacturing enterprise.
Given that demand of soap always remained high the village
and nearby markets and there were no producers to make the
supply, some of the members of 23-member Siddhanath CO
of Gokuleshwor VDC - 9 assessed there was a huge market of
washing soaps and they could tap that potential by establishing
a soap manufacturing enterprise.
Following the release of the first installment from PAF, the CO
organized 12-day training on how to produce washing soaps.
The trainings were attended 19 community members, including
6 members of Siddhanath CO, 6 members of Janashakti CO
and 7 members of Devati CO. After the training, however, the
members realized they need huge monetary input to actually
materialze their plan and if they failed to compete, they will
suffer a huge loss. This realization forced many to drop the idea.
However, Kalpana Nath and Ram Nath, chairman and treasurer of
Siddhanath CO respectively had different idea. They committed
themselves to set up the factory and even registered ‘Chaulani
Soap Industry’ at the Office of the Cottage and Small Industries
Development Committee (OoCSIDC) in Baitadi.
They even inaugurated the industry in the presence of OoCSIDC
Chief Nrit Bahadur Bogati, Chairman of Rural Development Serice
Center Bishnu Datta Joshi and local political representatives and
prominent local personalities on February 23, 2011.
“We had planned to start the industry by taking loans of Rs
15,000 each from the CO. But procurement of fixed assets alone
has crossed over Rs 275,000, said Kalpana Nath. Thankfully,
PAF contributed Rs 120,000 in this process and the members
acquired raw materials investing Rs 125,000.
Still good news was; contrary to initial skepticism, they have
not yet faced any problems over finding the marker. “We were
not even required to send soaps in the market. Retailers come
directly in the factory and take away their orders,” said Ram
Nath, another promoter of the soap factory.
The factory has set wholesale price of soap (each weighing
in a range of 170 grams to 180 grams) at Rs 9 per piece and
traders are happily retailing it at Rs 10. “We required huge initial
investment because we needed to source the raw materials from
Bareli and Pilbhiti of India. Otherwise, we are enjoying pretty
good business and soung return,” said Ram Nath.
Success Story
ANNUAL PROGRESS REPORT (2010/2011) 7

2. Facilitation of Community Through POs
Partner Organizations (POs) are selected by PAF to facilitate Community
Organizations of the Poor (COPs). The facilitation work of POs includes
organizing COs, enhancing COs capacity development on planning
activities, carry out detailed feasibility studies, survey design &
estimates, and proposal preparation during preparatory phase, and
provide technical assistance and monitoring and supervision of various
sub-projects during implementation phase.
As such, 370 Partner Organizations (POs) are working with communities
(57 for Mountain Districts, 174 in hilly Districts, 128 for Terai districts
and 11 for Innovative Window Programme and 37 for NDM-World Bank
Programme). In addition, 17 POs were terminated due to their under
performance.
Table 4: Details of POs Number
Description
No. of Pos working
Mountain 57
Hills 174
Terai 128
Innovative Programme 11
TOTAL 370
NDM-World Bank 2005 12
NDM-World Bank 2008 25
GRAND Total 407
3. Reaching Out to the Poor
and Social Inclusion
PAF has taken the strategy to with the thought that poor community should be
organized themselves to prepare, implement and manage their programme
and they should be in the driving seat, with decision making authority.
chart 5: CO Members-Beneficary Category
8.60%
0.20%
poor, and thus included as CO members in PAF programme.
3.1. CO Members
During the reporting year, PAF was able to reach out 64,758 poor HHs
and organize them as CO member households to carry out different
activities aimed at improving their livelihood. A total of 470,021 CO
members households were benefited from PAF assistance till the end
chart 6: Regionwise CO member HH
32%
of the reporting year,
3%
11%
When comparing the region-wise break down of the CO members, Hilly
region holds the highest share with 54 per cent, followed by Terai and
Mountain region with 32 and 11 per cent respectively, while innovative
districts have a meager share of 3 per cent.
Table 4: CO member-Beneficiaries
54%
Programme Areas FY 2067/68 Cumulative
Mountain 9,616 53,857
Hills 29,160 253,674
Terai 25,479 149,114
Innovative District 503 13,376
Total 64,758 470,021
3.2. CO Members by Poverty Ranking
Hill
Mountain
Terai
Innovative districts
25.40%
65.80%
Hardcore Poor
Medium Poor
Poor
Non Poor
Among beneficiaries members in Community Organizations of Poor
(COPs), 65.8 per cent members falls under the hardcore poor category
(food sufficiency less than 3 months among criteria fixed by community),
25.4 per cent members falls under medium poor category (food
sufficiency more than 3 months but less than 6 months among other
criteria set by the community itself), 8.6 per cent members falls under
poor category (food sufficiency more than 6 months but less than a
year among other criteria set by the community itself) and a very small
fraction of per centage members falls under marginal Non-poor Category.
Participatory social assessment and community well- being ranking
process identified the poor community members as primary beneficiaries
at the settlement level. They are organized into community organization
to plan, implement and manage their sub-projects. As entry point of PAF
programme at settlement level, social mapping and participatory social
assessment are the primary social mobilization steps. The settelmenet
level social assessment has revealed that the 62 per cent of the HHs are
3.3. CO Members by Caste and Ethnicity
Out of the total 470,021 CO members households till the end of the
reporting year, CO member households constitutes 29 per cent Dalit, 28
per cent Janjati, 3 per cent Muslim, 30 per cent Brahmin/Chhetri and 10
per cent other caste and ethnicity.
8 ANNUAL PROGRESS REPORT (2010/2011)

Caste and ethnicity wise distribution of CO members in terms of region shows that Dalit dominates in the Terai region and Chhettri in hilly and Janajati
in mountain regions. (see diagram).
chart 7: CO Members-Ethinicity Wise
chart 8: Ethnicity Wise CO Members
Number
3%
10%
29%
Dalit
Janajati
120000
100000
c
D j
b
24%
Bramhin
80000
6%
28%
Chhetri
Muslim
Others
60000
40000
20000
0
D
j
j
m o c
m
D
b m o
b c
Hill Mountain Terai
o
Region
3.4. CO Members by Gender
Female CO members have the lion’s share in terms of community participation and membership with 74 per cent. They are highest in hillly region and
followed by Terai region and mountain region (See Chart 9, 10).
chart 9: CO Members Gender-wise
chart 10: CO Members-Ethinicity Wise
Number
250000
Female
26%
Male
Female
200000
150000
100000
Male
Female
74%
5000
0
Female
Male
Male
Hill Mountain Terai
Region
ANNUAL PROGRESS REPORT (2010/2011) 9

3.5. CO Members by Key Position Holders
The president, treasurer and secretary are considered as key positions in every individual COs. There are a total of 45,632 key position holders within
the community organizations registered to PAF. The gender-wise and ethnicity wise breakdown of key position holders are presented in following tables
and charts.
Table 5 : CO members by Key position holders
Gender
Ethnicity
Region
Male Female Dalit Janajati Brahmin Chhetri Muslim Others
Mountain 1,584 3,876 1,183 1,836 316 1,998 0 2,441
Hills 11,422 13,628 8,036 6,458 1,667 8,288 8 10,548
Terai 3,290 10,746 6,225 3,816 110 128 972 3,023
Innovative District 426 660 118 915 20 30 3 50
Total 16,722 28,910 15,562 13,025 2,113 10,444 983 16,062
Of the total 45,632 key position holders in PAF supported COs, 62 per
cent are female, in accordance with PAF’s affirmative approach for the
empowerment of the poor women.
Caste and ethnic representations in key positions shows that 34 per
cent are Dalits, followed by 27 per cent of Janajatis and 29 per cent of
Brahamin/Chhetris and 8 per cent other ethnicity. At the regional level,
Dalits dominates in key position holders in Terai and Chhetris dominates
in hilly districts. Janajati dominates in mountain region and innovative
districts.
chart 10: Key Position Holders-Gender Wise
4. Community Institutional Building
Community institutionalization process is also emerging in some of the
districts where community felt need to federate themselves for certain
purpose. 53 Multi-purpose co-operatives and 547 federation of COs are
formed as per communities’ felt need. Informal networks of COs are
being formed in each VDC, in the process of institutionalization. PAF
has recently formulated CO graduation and PO exit strategy setting out
its priorities
from making an exit after making the COs capable of handling their own
development needs. The annual performance of the individual PO is tied
to the number of COs that would be graduated to a self-propelling and
self-sustaining institutions. Details of community institutional building is
given in Annex 8 and Annex 9.
38%
62%
chart 11: Key Position Holders-Gender Wise
34%
29%
8%
2%
27%
Male
Female
Dalit
Janajati
Muslim
Others
Bramhin/Chhetri
2.2.2. Income Generating Activities and Micro
Enterprise
PAF has been successful to reaching out to over 540 thousands poor
households through the supporting of different income generation
activities and community infrastructures. Out of total investment of
Rs 8266 millions, 72 per cent is made in income generation activities
followed by 21 per cent in community infrastructure development, 4 per
cent to build up community capacity and rest 3 per cent in communty
organization management and monitoring activities. A wide range of
income generation activities have been demanded and supported,based
upon the potentials and opportunities available at community level. The
potentials include the availability of raw materials, resources, access to
market, skill and traditional occupation etc.
Partner organizations provide information to community members
and facilitate them to identify potential income generation activities. It
is apparent that Nepal being an agricultural country, more than 80 per
cent of its population relies on agriculture. Income generation activities
supported by PAF are mostly related to agriculture and livestock sector.
IG Activities—Sector, HHs and Investment
By the end of FY 2067/68, PAF has made agreement with 16,819 COs
to implement 19615 sub-projects. Out of them, 16,576 sub-projects
are related to income generation activities. The ratios of number of IG
subproject to the total number of sub-projects, increased from 55 per
cent in FY 2061/62 to 83.64 per cent in FY 2064/6 and it stands on 89
per cent on FY 2067/68.
10 ANNUAL PROGRESS REPORT (2010/2011)

chart 12: IG activities investment by sector and region
Percentage
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
FY
2061/62
FY
2062/63
PAF Investment in COs
FY
2063/64
FY
2064/65
FY
2065/66
FY
2066/67
FY
2067/68
Income Generation 60.80% 65.20% 82.50% 74.20% 72.00% 64.70% 76.50%
Community Infrastructure 32.50% 26.50% 7.60% 18.00% 20.40% 28.80% 21.50%
Community Capacity Building 4.90% 5.90% 6.00% 5.00% 4.40% 3.70% 1.40%
CO Management, M&E 1.80% 2.50% 2.90% 2.80% 3.10% 2.80% 0.70%
In terms of investment, the ratios of IG sector
continuously increased to 84 per cent of total investment
in FY 2063/64 from 61 per cent in FY 2061/62, and then
started to decrease to 64.7 per cent in FY 2066/67. The
graph shows that investment on IG sector has constantly
increased till FY 2063/64 and then started to decrease.
Being income generation activities as first choice of poor,
IG investment again increased in FY 2010/11due to the
expansion of PAF coverage in new fifteen districts.
Income generation activities can be grouped into different
sector like, agriculture, livestock, service, trading,
manufacturing and others. PAF investment by sectors
as well as households involved in each sector has been
presented in table and charts below. The following data
on PAF investment in income generating sub-projects
does not include the investment related to COs’ capacity
building and institutional management cost.
Table 6 : Sector wise income generation activities by households and PAF investment
S.N.
Sectors
FY 2067/68
Cumulative achievements
HHs Amt (in M) % of HHs % of Invest. HHs Amt (in M) % of HHs % of Invest
1 Agriculture 6,266 80.05 10.70% 7.0% 49,069 415.56 11% 6.34%
2 Livestock 43,039 814.99 73.49% 71.0% 304,314 4,660.30 68% 71.15%
3 Service 197 56.28 0.34% 4.9% 18,207 254.61 4% 3.89%
4 Trading 7,990 178.65 13.64% 15.6% 65,780 1,110.42 15% 16.95%
5 Manufacturing 1,076 17.95 1.84% 1.6% 12,474 108.91 3% 1.66%
Total 58,568 1,147.91 100.00% 100.0% 449,844 6,549.80 100% 100.00%
The people living in rural areas have a limited access to basic infrastructures like road, electricity, market as well as information, resulting more demand
of livestock activities as income generation sub-projects.
Livestock sector is the largest portfolio of IG activities by investment as well as HHs involved. About 71 per cent of PAF support is disbursed to this
sector and 68 per cent of IG beneficiaries’ households are engaged, followed by trade related activities with 17 per cent, agriculture related with 6 per
cent, service sector with 4 per cent, manufacturing and others activities with about 2 per cent.
Out of total households 304,314 involved in livestock husbandry, about 33 per cent is engaged in milk production through buffalo and cow raising,
60 per cent in meat production, 5 per cent in ox/he buffalo raising for farming /breeding and the rest 2 per cent for transportation purpose.Of the
total investment of Rs 466 millions in livestock sector, about 49 per cent is in meat production followed by 41 per cent in milk production, 5 per cent
in breeding/farming, 3 per cent in transportation and rest 1 per cent in livestock support activities. The trends of investment in different category in
livestock sector is presented in chart.
chart 13: Investment in IGA by Sector
chart 14: Investment in IGA by Sector
5% 3%
2%
4%
17%
71%
2% 6% Livestock
Service
Trading
Manufacturing
Agriculture
49%
41%
Breeding/Farming
Transportation
Livestock Management Activities
Milk Production
Meat Production
ANNUAL PROGRESS REPORT (2010/2011) 11

chart 15: Trend of Investment in Livestock Activities
60%
50%
40%
30%
20%
10%
0%
061/62 062/63 063/64 064/65 065/66 067/68 066/67
Milk Production
Breeding/Farming
Livestock Management Activities
Meat Production
Transportation
chart 16: Investment in Livestock Activities by Region
70%
60%
50%
40%
30%
20%
10%
0%
65%
28%
15%
1% 3% 2%
1%
0% 2% 0%
Hill Mountain Terai
Livestock Management Activities
Livestock for Meat Production
Livestock for Milk Production
57%
28%
18%
13%
Livestock for Transportation
Livestock for Breedign/Farming
66%
The variation of communities demand across the geographical region,
accessible and non accessible areas reveals that the communities are
smart enough in selection of activities based on accessibility, existing
natural resources, and potential markets opportunities.
In Terai region, market of fresh milk is relatively higher and accessible
and the products can be easily marketed with little time and efforts for
collection and transportation. Nearly, 56 per cent of total households
(with 66 per cent of total investment in livestock sector in region)
pursuing livestock as part of their income generation activity in Terai
region, are rearing buffaloes and cows for milk products, followed by 31
per cent (18 per cent of total amount) for meat production and remaining
13 per cent (13 per cent of total amount) for farming /breeding purpose.
Similarly in Hilly region, 74 per cent HHs (with 65 per cent of total
amount) have been found to be engaged in meat production by rearing
goat, pig, poultry, among others. In the same region, 22 per cent HHs
(with 28 per cent of total amount) of livestock raising is done for milk
production purpose followed by 4 per cent HHs (with 13 per cent of
total amount) for farming/breeding and transportation purposes. In the
case of Mountain region, 61 per cent of households (with 57 per cent of
amount) are involved in meat production, followed by 28 per cent HHs
Table 7: PAF investment in Agriculture sector by category
(with 15 per cent of total amount) in milk production and remaining 11
per cent for transportation purpose.
In addition to animal husbandry, PAF has provided support in its
associated areas such as animal treatment fund, establishment
of veterinary services, developing village level health workers to
supplement livestock component. In view of the largest investment
portfolio in livestock sector, due emphasis has been laid to establish
linkages with markets and services.
Apart from livestock, diverse activities in the agricultural sector have
been demanded by the communities. The activities thus demanded
are system of rice intensification (SRI), vegetable farming in open field
to tunnel house, seed multiplication, cash crop production, and fruit
farming. Households involved in different agriculture and forest related
activities have been presented in the Chart 17 (refer to next page).
Out of total 49,069 HHs, 54 per cent households are engaged in
vegetable farming, followed by 17 per cent in fruit farming, 17 per cent
in agro-forestry, about 5 per cent in bee keeping and rest in cash crop,
fishery etc. PAF investment in different activities and number of involved
households are presented in table below:
FY 2067/68 Cumulative till 2067/68
Sub-sector
HH
Per
cent
Amount
(in M)
Per
cent
HH
Per
cent
Amount
(in M)
Per
cent
Agro forestry 604 9.7 2.15 2.1 8138 16.6 28.65 6.9
Fruit farming 194 3.1 2.61 2.6 8557 17.4 36.71 8.8
Cereal crops 14 0.2 0.23 0.2 430 0.9 1.63 0.4
Cash crops 732 11.7 8.89 8.8 2444 5.0 22.29 5.4
Vegetable farming 4579 73.4 82.96 81.9 26713 54.4 289.36 69.6
Bee keeping 87 1.4 1.88 1.9 2317 4.7 25.78 6.2
Fishery 29 0.5 0.95 0.9 470 1.0 7.25 1.7
Agriculture Support Activities 0 0.0 1.60 1.6 0.0 3.90 0.9
Total 6239 100.0 101.26 100.0 49069 100.0 415.56 100.0
Vegetable farming has been proved very lucrative to increase the income of poor within a short interval of time, where market is easily available for
fresh vegetables. Under innovative window programme, PAF has also supported vegetable farming in lease land to landless and marginalized people in
Chitwan district. This programme has helped increase income of the poor, thereby, creating them full time employment.
12 ANNUAL PROGRESS REPORT (2010/2011)

chart 17: PAF investment in Agriculture sector by category
1%
5%
Vegetable
17%
17%
1% 5%
54%
Bee Keeping
Fishery
Agro Forestry
Fruit Farming
Cereal Crop
Cash Crops
In moutain district like Mugu, green vegetable was outright impossible
during winter season before PAF intervention. But after PAF arrival, it has
been usual to grow commercial vegetables even in winter season with the
introduction of pit green house and solar tunnel house. Such vegetable
farming technology/methodology has been successfully demonstrated
and this proven and tested case has induced high potential of scaling up
in other areas in the days ahead.
Irrespective of better yield but comparatively longer gestation period, the
demand of fruit farming is stumpy. Nonetheless, a promotional activity
of fruit farming undertaken by the communities has widened the scope
for scaling up this intervention in coming days.
chart 18: Investment in Trading by Business Types
5%
76%
2% 3%
7%
7%
chart 19: Investment in Service sector by Category
28%
2%
5%
4%
8% 2%
14%
29%
3%
5%
Others
Electrical Goods
Garment
Livestock Related
Agri Business
Retail Shop
Swing and Cutting
Livestock Support
Agro Processing
Hotel/Resturant
Barber
Repair and Maintenance
Metal Works
Transportation
Communication
Others
Further to the above, trading is the second largest portfolio on IG.
Altogether, 65780 HHs are engaged in trading business, whilst PAF
has invested NRs 1110 Millions in this sector. Of the total investment,
76 per cent has been invested in retail shop, followed by 7 per cent in
agriculture related buisines, 7 per cent in livestock and livestock product
related business, 3 per cent in garment business and rest in other
different types of activities.
Analysis in trading sector shows that retail business has largest
investment in all ecological belts, which accounts more than 65 per cent
in Terai, 85 per cent in Mountain districts and more than 87 per cent
in Hill districts. Animal business, wood product business, agriculture
inputs, food items related business are other major activities in this
sector.
Overall, 18,207 HHs are engaged in service sector, where PAF has
invested about 254 millions. Out of total investment, 245 millions has
been invested in income generating social services and rest in social
services like supports for schools and healthposts, scholarship etc.
Tailoring buisiness is one of the largest components of social sector
having 29 per cent investment, followed by transportation 28 per cent,
small hotels/teashops 14 per cent, repair and maintenance 8 per cent,
and rest in other activities like livestock supports, agrovet services etc.
A total of 12,474 HHs are involved in manufacturing related business,
and PAF investment is about 109 millions in this sector. Out of total
investment, about 53 per cent has been in non-agro products related
manufacturing activities, followed by 41 per cent in forest products
related, agro-processing related 4.3 per cent and rest in fruit processing.
Listing of income generation activities shows that there are diversified
IG activities undertaken by the community members. Of them, livestock
sector alone has been verified major activity as compared to other IG
activities. It means, there is still great challenge to provide informed
choices to the people, so that they are able to select suitable IG activities
based on their need, local resources, knowledge, skills and available
market potentials. A lion’s share of investment in livestock sector
demands more concentration to develop mechanism to provide adequate
veterinary services at rural areas. It is unambiguous that to sustain the
diverse interventions as specified above, PAF should accord higher
priority to enhance the qualitative capacity of both partner organizations
and community organizations.
As COs/HHs activities on Income Generation are being continued
through utilization of Revolving Fund managed by the CO, there might be
shift in activities based on knowledge and market potentials. This aspect
need to be atudied in future.
ANNUAL PROGRESS REPORT (2010/2011) 13

Success Story
watch, radio shop
earn livelihood
If you have skill and dedication, even a watch and radio
shop will easily help you earn the livelihood. This is what Noj
Bahadur Ghartimagar of Rajbara-9, Pyuthan has proven.
Four years ago, Ghartimagar had left for Malaysia spending
Rs 100,000. He had hoped he will get good overseas job and
earn handsome income. But that proved as mere a mirage. By
the time he returned to village, he had barely managed to save
anything. This broke his dreams of earning decent life through
foreign employment. But as there existed no job opportunities
in the village, he decided to move to India in search of new
job. However, before leaving for India, he chose to give one
last try in the village itself and opened a watch and radio shop.
That was the case of 2009.
“Thanks to PAF, I managed to get hold of Rs 18,000 in loans to
start the shop. After that, I have never looked back or thought
of leaving the country for job,” said Noj Bahadur, he became
a member of Dikhachuli CO when PAF started the programme
in his VDC.
Ghartimagar learned the repair skills only after starting the
business. Day-to-day familiarization with the equipment
helped his sharpen his skill. In case of complex problems,
he takes help of repair specialists working in Thulabesi and
Bijuwar. “The business is doing good. It is fetching me Rs
12,000 to Rs 15,000 every month,” he beams with smile.
The demand for radio has increased in Rajbara and nearby
villages after new FM radio stations came into operations.
His shop - NB Watch and Radio Repair Center - always
remains crowded with people visitng the VDC office and
local school. Thanks to the business, he has enrolled his 2
children, including a daughter, in a school. “I have no problem
in fulfilling all basic family needs now,” he stated.
Ghartimagar has already cleared the loans he took to start the
business. He is planning to take fresh loans, eying to expand
the size of the business. “I want to add new watches, radio
and mobile phone sets in my shop,” he said.
Noj Bahadur has proven that even the people who failed to
earn much in overseas job can make decent earning and lead
a decent life in the village itself. His service has also enabled
the locally to get the repair works (of watch and radio) done in
the village itself. Previously, they were required to walk at least
three hours to fix their watches and radios. “This has eased us
greatly,” said Dilip Buda, a local.
That is not all. Noj Bahadur is regarded as skilled manpower
and a person who started completely a new business in the
village. “His business stands quite apart from what other
CO members are doing. And still good thing is, he is among
those members are earning the most in the village,” said Sane
Ranamaga, chairman of Dikhachuli CO. As a result, locals treat
Noj Bahadur with high respect. He invariably takes active part
in the CO meeting and lead the fellow members with examples
on how poor themselves can end their poverty by dedicating
themselves to various income generation activities.
(Courtesy: Publications of POs in Pyuthan district)
2.2.3. Community Infrastructure
Completed Infra Subprojects/Schemes
Till the end of the reporting year, a total of 7,398 infrastructures schemes were completed while 701 schemes were completed during the fiscal year
2010/11 alone (the reporting year).
In terms of distribution of schemes by sector during the reproting year, drinking water supply & sanitation sub-projects--numbering 334, stands at the
top followed by 142 building construction related sub-projects and 79 small irrigation sub-projects. Similarly, a total of 45 sub-projects were related to
rural energy while 43 sub-projects were related to rural access i.e. transportation.
Till the end of fiscal year 2010/11, it is clear that water supply & sanitation related activities stands at the top with 3,776 number followed by with 2,149
irrigation activities, 333 community building sub-projects and 237 rural access sub-projects. Also, a total of 194 rural energy related sub-projects were
constructed in cumulative and against 709 miscellaneous activities that includes drainage, improved cook stove, ICT support, river training, rice mills,
among others.
14 ANNUAL PROGRESS REPORT (2010/2011)

Chart 20: Distribution of Infrastructure by type
chart 20.A: Distribution of Infrastructure by type
334.48%
58.80%
Benefited Households
43.60%
142.20%
79.11%
45.70%
chart 20.B: Distribution of Infrastructure by type
333.40%
237.30%
194.30%
709.10%
3776.51%
2194.29%
Rural Access
Community Building
Rural Energy
Small Irrigation
Water Supply & Sanitation
Miscellaneous
Rural Access
Community Building
Rural Energy
Small Irrigation
Water Supply & Sanitation
Miscellaneous
For the reporitng year, building construction has benefited maximim
number of households while in cumulative scenario, water supply and
sanitation activities have benefited the most. Maximum demand were
made for communty building during the reporting year while in overall
scenario, demand of water supply schemes is maximum in rural area.
in infrastructure) has been invested for those buildings while Rs.
113.46 milloin (25 per cent of PAF investment in infrastructure) has
been invested for 334 schemes related to water supply & sanitation.
Despite the number of water supply schemes is higher than communty
buildings, the amount of investment of water supply sub-project is less
than that of buildings.
Similarly, in cumulative scenario , a total of 354 million rupees (30 per
cent of PAF investment) were invested for water supply and sanitation
which is higher than other investment made in other categories of
infrastructures. This is mainly due to the higer number of water suppy
related scheme in cumulative terms.
TABLE 8: PAF investment in different Infrastructure Schemes (Completed
subprojects)
SN
Category of
Infrastructures
PAF Investment (in Million)
FY 2067/68
Cumulative
1 Rural Access 45.23 155.42
2 Community Building 152.81 267.53
3 Rural Energy 93.82 207.49
4 Small Irrigation 43.55 142.07
5 Water Supply &
Sanitation
113.67 354.56
6 Miscellaneous 12.35 41.06
Total 461.46 1168.16
Community’s Contribution in
Infrastructure Related Investment
To construct infrastructure, community are also contributing in the total
investment. They are contributing in cash as well as in kind. Collection
of local materials and labor is the main job of community while executing
community infrastructure sub-projects. So, there is a variation in Community
contribution between different types of infrastructures. Water supply and
sanitation schemes have highest contribution from communities which
were completed during the reporting year. They have contributed Rs 46.23
M for water supply and sanitation schemes, which is 28.63 per cent of
total cost. It is followed by small irrigation sub-projects having 26.68 per
chart 21: Infrastructure activities and benefited households
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
Rural Access Community Building Rural Energy Small Irrigation Water Supply & Sanitation Miscellaneous
FY 2067/68
Cumulative
PAF Investment in Community Infrastructure
A total of 142 number of community buildings were completed during
the reporting year and Rs 152 million (33 per cent of PAF Investment
cent contributions while rural energy has attracted the least contribution
of 15.99 per cent due mainly to non-local materials required for energy
sub-projects. In average, there is 22.18 per cent community contribution
infrastructure completed during the reporting year.
ANNUAL PROGRESS REPORT (2010/2011) 15

Similarly in cumulative scenario, water supply & sanitation related infrastructures have maximum contribution (27.07 per cent) from the communities.
It is followed by rural access with 25.54 per cent. In total, 24.36 per cent contribution has been made by the community for community infrastructure.
chart 22: Ratio of Community Contribution in different Community Infra schemes
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
Rural Access Community Rural Energy Small Irrigation Water Supply Miscellaneous Total
Building
& Sanitation
FY 2067/68
Cumulative
Contribution from Local Bodies
DDC and VDC are also contributing in PAF supported infrastructure sub-projects. These institutions have contributed a total of Rs. 52.45 M in cumulative
and Rs 33.31 million during the reporting year alone. Its contribution in rural energy is at the top position and followed by rural access. This shows that
local bodies are more interested in rural energy and rural access. In cumulative, they have contributed 37.48 M and 27.42 M for sub-projects during
the reporting year. This shows that co-ordination between PAF and Local bodies is increasing in the recent days. DDCs and VDCs have contributed Rs
2.11 M for rural access schemes completed during the reporting year while Rs 6.01 M has been invested for the rural access in cumulative. Further
analysis shows that communities are enforcing local bodies to contribute in sub-projects that need higher investment.
Table 9: Contribution from Local bodies in different PAF schemes (Completed Sub-projects)
Investment of Local Bodies
SN
Category of Infrastructures
FY 2067/68
Cumulative
Amount (million) % Amount (million) %
1 Rural Access 2.11 3.38 6.01 2.73
2 Community Building 2.19 1.06 3.82 1.04
3 Rural Energy 27.42 11.12 37.48 7.87
4 Small Irrigation 0.075 0.12 1.91 0.94
5 Water Supply & Sanitation 1.5 0.93 3.22 0.63
6 Miscellaneous 0 0 0 0
Total 33.12 4.43 52.45 2.87
Out of total DDC/VDC investment, in PAF projects—either during the reporting year or in cumulative, the highest investment has been made in rural
energy. Rural energy is seconded by community buildings in case of reporting year and rural access in case of cumulative.
chart 23: Local Bodies Investment (2067/68)
5%
0%
0%
6%
7%
Rural Access
Community Building
Rural Energy
Small Irrigation
Water Supply & Sanitation
Miscellaneous
82%
chart 24: Local Bodies Investment (Cumulative)
0%
4% 6% 11%
Rural Access
7%
Community Building
Rural Energy
Small Irrigation
Water Supply & Sanitation
Miscellaneous
72%
16 ANNUAL PROGRESS REPORT (2010/2011)

Investment from Other Sources
Besides DDC and VDC, other donor and line agencies including Alternative Energy Promotion Centre, Rural Energy Development Programme and
District Education Office have also invested in PAF supported infrastructures schemes. They have invested Rs 159.92 million in cumulative and Rs
90.47 million for infrastructures completed during the reporting year. Out of the total investment, 80 per cent has been made in rural energy sector in
cumulative, whereas 95 per cent has been made during the reporting year.
Table 10: Investment from different sources in completed schemes
Investment from other sources
SN
Category of Infrastructures
FY 2067/68
Cumulative
Amount (million) % Amount (million) %
1 Rural Access 1.36 2.18 2.61 1.19
2 Community Building 2.76 1.34 6.93 1.9
3 Rural Energy 86.01 34.87 128.22 26.91
4 Small Irrigation 0.265 0.45 8.69 4.29
5 Water Supply & Sanitation 0.07 0.05 13.41 2.64
6 Miscellaneous 0 0 0.06 0.13
Total 90.47 12.03 159.92 8.77
Out of total DDC/VDC investment, in PAF projects—either during the reporting year or in cumulative, the highest investment has been made in rural
energy. Rural energy is seconded by community buildings in case of reporting year and water supply and sanitation in case of cumulative.
Ratio of investment by different agencies
chart 25: Other’s Investment FY 2067/68
chart 26: Other’s Investment (Cumulative)
0% 0%
0%
2%
3%
0%
2%
4%
Rural Access
Community Building
Rural Energy
Small Irrigation
Water Supply & Sanitation
Miscellaneous
6%
8%
Rural Access
Community Building
Rural Energy
Small Irrigation
Water Supply & Sanitation
Miscellaneous
95%
80%
In cumulative, the table below shows that Local bodies as well as other development agencies are more interested for coordination in rural energy.
They are contributing 8 per cent and 21 per cent of total cost of infrastructure respectively. Contribution from PAF side is highest with 81 per cent for
miscellaneous category of sub-projects- that includes Drainage, improveed cook stove, ICT support , river training and rice mills, among others, and
lowest for rural energy, where PAF’s contribution is only 44 per cent of the total cost. Per centage of Community contribution is highest (27 per cent)
for water supply & sanitation and least (18 per cent) for miscellaneous type sub-projects. In an average, PAF has contributed 64 per cent of total cost ,
whereas CO’s contribution is 24 per cent, DDC and VDC’s contribution is 3 per cent and other’s contribution is 9 per cent.
ANNUAL PROGRESS REPORT (2010/2011) 17

Table 11: Ratio of investment by different agencies for PAF community infrastructure (Cumulative)
Types of Infrastructure PAF CO Cash CO Kind CO Total DDC VDC Others Total
Rural Access 71% 1% 25% 26% 3% 1% 100%
Community Building 73% 0% 24% 24% 1% 2% 100%
Rural Energy 44% 2% 19% 21% 8% 27% 100%
Small Irrigation 70% 1% 24% 25% 1% 4% 100%
Water Supply & Sanitation 70% 0% 27% 27% 1% 3% 100%
Miscellaneous 81% 7% 11% 18% 0% 0% 100%
Total 64% 1% 23% 24% 3% 9% 100%
For infrastructure completed during the reporting year, PAF, Community, DDC/VDC and other line agencies have contributed 61,23, 4 and 12 per cent
of total cost of infrastruture respectively. Contribution from PAF is highest (83 per cent) for miscellaneous type of sub-projects and lowest for rural
energy, where PAF’s contribution is only 38 per cent of the total cost. Per centage of Community contribution is highest (28 per cent) for water supply
& sanitation and lowest (16 per cent) for rural energy type sub-projects.
Table 12: Ratio of investment by different agencies for PAF community infrastructure (Reporting year)
Types of Infrastructure PAF CO Cash CO Kind CO Total DDC VDC Others Total
Rural Access 72% 1% 21% 22% 3% 2% 100%
Community Building 74% 0% 23% 23% 1% 1% 100%
Rural Energy 38% 1% 15% 16% 11% 35% 100%
Small Irrigation 73% 0% 26% 26% 0% 0% 100%
Water Supply & Sanitation 70% 0% 28% 28% 1% 0% 100%
Miscellaneous 83% 7% 10% 17% 0% 0% 100%
Total 61% 1% 22% 23% 4% 12% 100%
Per Capita Cost-PAF Contribution and Total Investment
PAF rules allows to have highest per capita investment Rs 5,500 for individual infrastructure related sub-projects. But in actual , per capita cost of
PAF investment is Rs 2184 for those sub projects completed during the reporting year while the cumulative per capita cost for PAF is Rs 1428. For
infrastructures completed during the reporting year, per capita cost is highest for water supply & sanitation sub-projects with Rs 2686 and lowest for
rural access with Rs 1,687. Similarly, when comaprision is made for all completed infrastructures, rural energy related infrastructures have the highest
per capita invesment of Rs 1,875 . And rural access sub projects has the lowest per capita cost with Rs 812.
Table 13: Per Capita Cost--Total investment and PAF Contribution
Category of Infrastructures
Beneficiaries Population Per capita cost wrt PAF Per Capita cost with respect to Total Cost
FY 67/68 cumulative FY 67/68 cumulative FY 67/68 cumulative
Rural Access 26819 191591 1,687.00 812.00 2331 1151
Community Building 83859 171579 1,823.00 1,560.00 2465 2135
Rural Energy 37088 110666 2,530.00 1,875.00 6652 4306
Small Irrigation 17707 106261 2,461.00 1,338.00 3382 1908
Water Supply & Sanitation 42325 211478 2,686.00 1,677.00 3816 2408
Miscellaneous 3464 26850 3,566.00 1,530.00 4284 1883
Average 211262 818425 2,185.00 1,428.00 3561 2231
Per capita cost in total is highest for rural energy related infrastrcutures for both repoting year as well as in cumulatative. Its value is Rs 2530 and Rs 1875
for the reporting year and cumulative respectively. For Rural access, it is lowest with Rs 2331 and Rs 1150 for reporting year and cumulative respectively.
Per Household Community Contribution
For sustainability of infrastructure, PAF enforces community to take its ownership. And for this, they are also contributing through their labour and
work for the collection of non-local materials. In average , community has contributed Rs 4,732 and Rs 3,413 for recently completed and cumulative
infrastructures respectively. It is highest for water supply and sanitation type infrastructures among recently completed infrastructures and rural energy
sub projects have highest value in cumulative.
18 ANNUAL PROGRESS REPORT (2010/2011)

Salient Features of PAF Supported Infrastructure & Per unit Cost
Infrastructure for Rural Access
During the reporting year, four bridges (769 m length), nine culverts (33 meter in length), 27 rural roads (51 km in length) and three trail roads (4 km in
length) have been completed whereas in cumulative scenario, a total of 20 bridges (1190 m length), 80 culverts (280 meter in length), 127 rural roads
(204 km in length) and 10 trail roads (19 km in length) have been completed.
Table 14: Per unit cost for rural access sub projects
Salient Features
Per unit cost
SN Rural access
Unit FY 2067/68 Cumulative FY 2067/68 Cumulative
1 Bridge m 769 1190 14739 16145
2 Culvert m 33 280 118691 75196
3 Road & its maintenance km 51 204 871648 859130
4 Trail Road km 4 19 699125 253078
Here per unit cost of bridge in the reporting fiscal year is less than that of cumulative as long as bridges were completed with less per unit cost.
chart 27: Per Household Community Contribution
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
Rural Access Community Rural Energy Small Irrigation Water Supply Miscellaneous Total
Building
& Sanitation
FY 2067/68
Cumulative
Community Buildings
Till now, PAF has supported for school, health post, community building and agriculture related building (cellar storage, market shed, milk/ vegetable
collection center). In FY 2010/11, 129 school buildings (626 rooms) have been constructed and maintained. One health post (2 rooms), four agriculture
related buildings (13 rooms) and eight other types of community buildings (23 rooms) are constructed, whereas in cumulative, 272 school buildings
(1,101 rooms), 5 health posts (16 rooms), 11 agriculture related buildings (22 rooms) and 45 other types of community buildings (41 rooms) are
constructed 664 number of rooms having 27655 m2 plinth area have been constructed during the reporting year and 1220 rooms having 48874 m2
plinth area were constructed in cumulative. Recently completed building’s unit cost is Rs. 311,277/room and Rs 7,474/m2 area and in cumulative, its
value is 300,189/room and 7,493/m2 plinth area.
Table 15: Per unit cost for Community Buildings Construction
SN
Building
Salient Features
Per unit cost
Unit FY 2067/68 Cumulative FY 2067/68 Cumulative
1 Building Room No & Plinth Area 664/ room (27655 m2
plinth area)
1220/ room
(48874 m2 plinth area)
311277/ room and Rs
7474/m2
300189/ room and
7493/m2 plinth area.
ANNUAL PROGRESS REPORT (2010/2011) 19

Rural Energy
Electricity line extension, Micro hydro power and solar system are sub-projects under the rural energy category. In recent fiscal year, a total of
seven electricity line extension sub projects (97 km extension), 37 numbers of micro-hydro sub-projects (770 kw) and one solar system have been
completed. In cumulative, 37 number of electricity line extension (167 km extension), 98 numbers of micro-hydro sub-projects (1626 kw) and 59 solar
system have been completed. The cost per Kw is Rs. 298,791 for infrastructure completed during the reporting year and Rs 259,793 in cumulative.
Table 16: Per Unit Cost for Rural Energy Related Sub-projects
SN
Rural Energy
Salient Features
Per unit cost
Unit FY 2067/68 Cumulative FY 2067/68 Cumulative
1 Micro Hydro kw 770 1626 298791 259793
Small Irrigation
PAF is providing different types of schemes such as deep boring, artisan boring, treadle pump, drip, sprinkle, water harvest tank, plastic pond, earthen
pond, well, lift and surface to community based on local topography, available water and command area. In recent year, 79 number of irrigation
sub-projects (754 hectares) are completed among which 38 number of surface irrigation, two lift irrigation sub-projects, four earthen ponds were
constructed. In cumulative, 347 numbers of boring, 2 drip, 9 lift irrigation, 12 plastic pond, 13 earthen pond, 123 surface irrigation and 24 sprinkled
irrigation were completed. This has helped to irrigate more than 3,000 hectares of land.
Water Supply & Sanitation
Gravity, Lift, tube well, dug well, Rain water harvesting types of water supply schemes are constructed under PAF support. Simultaneously, waste pit
and toilets are also constructed under PAF. In FY 2010/11, 169 number of gravity water supply (1156-taps/ water points), 2 lift water supply, 23 subprojects
of tube well, 4 sub-projects of dug well and 133 number of toilet sub-projects are completed.
In cumulative, 523 number of gravity water supply (1156-taps/ water points), eight lift water supply, one rain water harvesting, 1,128 sub-projects of
tube well, 46 dug well sub-projects and 1962 number of toilets (2476 in number)sub-projects were completed.
Infrastructure (Under Construction)
There are 650 infrastructures sub-projects under construction as of July 2011 and most of them are expected to be completed by next year. Among
them, water supply and sanitation sub-projects are at top position whereas infrastructure under miscellaneous category (Ghatta, river training) subprojects
are minimum. And maximum households will be benefited from rural access which is 13,068 (24.1 per cent). It is followed by community
building, from which 13,046 household (24 per cent) will be benefited.
chart 28: Ratio of different infrastructure projects (under construction)
chart 28.a: Number of Sub-projects
chart 28.b: Benefited Household
266.10%
193.30%
61.90%
86,13%
101,16%
66,10%
143,22%
Rural Access
Community Building
Rural Energy
Small Irrigation
Water Supply & Sanitation
Miscellaneous
7271.13%
9970.18%
10546.20%
13068.20%
13046.24%
Rural Access
Community Building
Rural Energy
Small Irrigation
Water Supply & Sanitation
Miscellaneous
PAF has made agreements with communities amounting Rs 605.4 million to construct these infrastructures. PAF is going to invest Rs 146.8 million for
rural energy. This is the highest amount among under construction category. PAF’s second investment is water supply and sanitation related schemes
where it has invested Rs 143.3 million.
20 ANNUAL PROGRESS REPORT (2010/2011)

Table 17: Contribution by different agencies for infrastructure under construction
Contribution in Million ( NRs)
SN Type of Infrastructures
PAF Community Others DDCVDC
1 Rural Access 95.8 26.7 74.4 7.9
2 Building 120.1 34.9 1.7 0.6
3 Rural energy 146.8 66.8 133.2 42.7
4 Small Irrigation 94.4 28.2 2.4 0.3
5 Water supply 143.3 43.9 0.2 1
6 Miscellaneous 5.2 1.3 0.1 0
Total 605.4 201.3 211.7 52.1
Communities Contribution for Projects Under Construction
Community has committed to contribute Rs. 201.3 million for under construction infrastructures. Their commitment is highest for rural energy (Rs 66.8
million) and least for miscellaneous Rs 1.3 million).
With respect to total cost, Community’s commitment for contribution is 18.9 per cent in average. This is maximum for water supply and sanitation (23.4
per cent) followed by small irrigation (22.6 per cent) and least for rural access. It is 13.1 per cent with respect to total cost.
Table 18: Communities Contribution for projects under construction
Cost Contribution in per centage
SN Type of Infrastructures
PAF Community Others DDCVDC Total
1 Rural Access 46.8% 13.1% 36.4% 3.9% 100
2 Building 76.4% 22.2% 1.1% 0.4% 100
3 Rural Energy 37.7% 17.2% 34.2% 11% 100
4 Small Irrigation 75.4% 22.6% 2% 0.3% 100
5 Water Supply 76.1% 23.4% 0.2% 0.6% 100
6 Miscellaneous 78.8% 19.7% 1.6% 0% 100
Total 56.6% 18.9% 19.8% 4.9% 100
ANNUAL PROGRESS REPORT (2010/2011) 21

2.2.4. Innovative Special Programme
Overview
PAF has been implementing special window programme (innovative)
beyond and within its regular districts. The programme has been
focusing on adopting innovative concept, ideas, process, technology
etc. for the improvement of livelihood of target community. During the
reporting year, PAF is still continuing support for innovative programme
as provided in Annex 9.
Besides, PAF also has handled the NDM (Nepal Development Market
Place, popularly known as “Launa Aba Ta Kehi Garaun” projects)
which was called on by World Bank in 2008. Most of them have been
completed and some of them are still in the phase of completion.
Successful Completion and Replication
One of the major objectives of PAF is to bring the innovative process,
technology and method in the sector of poverty alleviation. This is the
reason being implementing the innovative and NDM projects so that it
can be replicated to the regular programme. Some of the Projects have
shown the remarkable replications in different parts of the country. For
example, the SRI technology which has been successfully replicated in
Bajura and Siraha districts from its initiation from Morang as an NDM
programme in 2005. The Productivity of paddy has increased more than
double in both the replicated districts compared to conventional method
of paddy cultivation. Similarly, the Wi Fi technology that has been started
by Mahabir Pun as an NDM project supported by PAF, who later won the
Magassasy International Prize, has been widely replicated in Achham
and Bhajang districts and they are doing wonders in those remote and
inaccessible areas in terms of tele-medicine and knowledge. Also with
the effectiveness of such technology Government of Nepal freed the
license acquiring fees from 2006 September to IPS up to the capacity
2.4 Gigahertz to 5.8 Gigahertz. Also, after the success of a mechanized
bridge in Tanahu under NDM 2005, similar bridge has been constructed
in Sindhuli.
Learning :
• PAF should undertake more and more innovative programmes
which transfer the technology and process that are pro-poor.
• PAF should undertake such innovative project that focuses on the
policy review of the concerned stakeholders for the welfare of the
poor.
• There should be sufficient time and resources for the successful
replication of the project at regular programme areas.
• PAF should also encourage the individual or an organization to bring
the projects that are innovative and replicable throughout the year.
Future Plan
It may be noted that PAF has developed Innovative Sub-projects
Guidelines during the reporting year. PAF has also announced to
launch 20 innovative programmes. The applications to conduct such
innovative programmes have been received by PAF and are currently
under processing.
2.2.5. Capacity Development
Capacity development has been the centerpiece of international
development assistance since the end of II World War and the start of the
decolonization period. Capacity development is the major component of
millennium development goals (MDGs) in order to reduce poverty, and
capacity development is one of the core programme components of PAF.
The PAF Perspectives of Capacity Development
PAF is established to support poor women, Dalits, Janajatis and
vulnerable groups for their livelihood improvement and empowerment.
For this, they are organized into Community Organizations (COs). PAF
has mobilized Partner Organizations (POs) to support and facilitate COs
to launch activities in the programme districts. Actually COs implement
PAF activities by themselves but POs act as a bridging agent between
PAF and COs to launch PAF activities.
COs are the primary stakeholders of PAF and are regarded as the
centerpiece of its development effort. Without the capability development
of its primary stakeholders, the expected outcome of the programme
couldn’t be achieved. COs are capacitated in the relevant areas. PAF
aims to institutionalize and strengthen COs for their empowerment
and sustainable development. Hence, Capacity development of COs
is the major thrust of PAF. PAF has incorporated the components like
Social Mobilization, Capacity Building, Income Generation/Employment
Creation and Community Infrastructures in the programme in order
to support COs holistically. From the very beginning, PAF has been
capacitating COs, POs and PAF staff in pertinent themes. Capacity
development of COs is linked to capacity development of POs and PAF
staff.
General Current Trend of Capacity Development of COs
and POs
Since PAF has adopted the demand driven approach. Hence, the technical
and skill enhancement training related to various income generating
activities and community infrastructures are based on the demanded
activities by each members of COs. Other trainings like entrepreneurship
skill development and institutional strengthening are firstly imparted.
Training of Trainers (ToT) to staff of POs and through POs it is imparted
to the members of COs. Because capacity development of COs is linked
to capacity development of POs. POs facilitate COs being in frontline,
their capacity enhancement is imperative to capacitate COs. Hence,
PAF firstly has been imparting ToT on Enterprise Development, Social
Mobilization, Leadership Development and Group Management, Account
and Revolving Fund Management and Public Audit to the staff of POs.
Apart from imparting training to the members of COs, the POs do coach
COs during their meetings and technical support.
PAF believes that unless the members of COs have entrepreneurship
skill, the operation and management of income-generating activities
may not sustain at all. Hence, each member of COs is oriented on
Entrepreneurship Skill Development to identify and select appropriate and
profitable economic activities for them. Similarly, the relevant members
of COs are trained in Construction, Operation and Maintenance of
various implemented infrastructures in the community. PAF has adopted
the following approaches to capacitate the COs:
22 ANNUAL PROGRESS REPORT (2010/2011)

Capacity Development of Community Organizations (COs)
Since COs are the integral elements of PAF, they are given utmost
priority for their capacity development. PAF has been adopting following
approaches to capacitate the COs
• Creating awareness and sensitization through rigorous social
mobilization process
• Facilitating them to be organized into Community Organizations
(COs) to create their own institution. Empower them in decision
making process.
• Facilitating /encouraging them to participate in participatory need
identification, and project cycle management.
The following are trainings that PAF is providing to the COs (details
in Annex 10)
• Organizing orientation on PAF Implementation Process i.e. PAF
polices/strategies, norms and working procedures in order to
implement PAF activities smoothly and effectively. This is firstly
imparted to POs by PAF staff and imparted to COs through POs.
• Organizing Entrepreneurship Skill Development Training i.e. SIYB
and MECD to enable them to identify potential income generating
activities at their local level and operate it sustainably. This training
is firstly imparted to the staff of POs and imparted to COs through
POs.
• Organizing other trainings, orientations and exposures relevant to
institutional development of COs. They are: Leadership Development
and Group Management, Account Management, Revolving Fund and
Saving-Credit Management, Public Audit, Cooperative Education
and Management and exposure visit. This training is firstly imparted
to the staff of POs and imparted to COs through POs.
• Organizing technical and skill development and trainings, orientations
and exposures relevant to various economic activities as demanded
by COs. Mostly those trainings and orientation are directly imparted
to COs by hiring resource person. Apart from training, they are
exposed new technologies, and approaches by organizing exposure
visits. If replicable, they may replicate those in their communities.
• Organizing trainings, orientations and exposures on construction,
operation and maintenance of various community infrastructures
as demanded by COs. Such training is directly imparted to the
members of COs by hiring resource person.
• Regular coaching and mentoring to COs by POs entrepreneurship
skill development and institutional development related matters i.e.
Account Management, and Revolving Fund Management during
monthly meeting of COs. Particularly, Social Mobilizers coach and
mentor COs in the above matters.
• Facilitating and mentoring COs to establish coordination, linkage and
networking with other organizations for their improved sustainable
livelihood management beyond PAF.
• Organizing Awareness and Social Improvement related orientations
and training by hiring resource person or by coordinating with other
organizations i.e. Health, Hygiene and Sanitation, Gender Sensitivity,
Domestic Violence and Rights Based Approach.
The details of COs capacity development activities are provided in Annex 10.
Capacity Development of Partner Organizations
PAF has been mobilizing POs to facilitate and support COs in planning
and implementation of PAF activities. The POs facilitate COs being in
front line. Hence, capacity enhancement of POs is essential to capacitate
COs.
PAF has been imparting Orientation on PAF Implementation Process i.e.
PAF policies and working procedures, PAF Environmental Framework,
PAF Community Level Infrastructures Implementation Process and ToTs
on Entrepreneurship Capacity Building, Social Mobilization, Leadership
Development and Group Management, Account, Revolving Fund and
Saving-Credit Management and other required themes to the staff of
POs. Once they get training, the staffs of POs impart such training and
orientation to the members of COs. Apart from this, the staffs of POs are
taken to exposure visit in best practices of institutional development and
economic activities management. The staff of POs do regular mentoring
and coaching to the members of COs on what they gained during training
and exposures. The detail of the PO capacity development activities is
mentioned in Annex 11.
Capacity Development of PAF Secretariat
PAF secretariat is established to support poor and vulnerable women,
Dalit, Janajati and other castes for their poverty reduction. It is an
autonomous institution to oversee the overall poverty reduction activities
implemented for the target groups. Hence, the capacity development of
PAF secretariat is very vital to implement PAF programme effectively and
efficiently in the programme districts. If PAF staffers’ capacity is well
strengthened, they transfer this to the staff of POs and the staff of POs
transfers their knowledge and skill to the members of COs. They provide
regular backstopping and mentoring to POs and COs to bring effective
results and outcome of PAF activities in the districts. Apart from this,
they do coordination and networking with the Local Bodies (DDCs &
VDCs), and Line Agencies to leverage resources for the betterment of
target groups. Hence, capacity development of PAF secretariat is linked
to capacity development of POs, COs and Local Bodies.
PAF has, since its inception, been developing the capacity of PAF staff
by organizing a series of Interaction Meetings, Workshops, Orientations,
Training and Exposures. Training is, however organized on the basis
of their need. Training is organized for individual and group based on
specific need. Interaction meetings and orientations are also organized
on pertinent policies/strategies and issues to make the staff aware. Incountry
and international exposure visits are also organized to make
staff familiar with the new practices and approaches.
In-house Workshops and Meetings
PAF organizes in-house workshops and meetings on regular basis. The
objective of organizing such events is to impart knowledge and skill
and discuss on relevant issues. Such events are organized exclusively
for PAF staff and including donors and development partners. Usually
workshops are conducted to impart knowledge and skill to the
participants and meetings are conducted to discuss on relevant issues
and identify approaches and options to address the issues. PAF inhouse
events are presented as followings:
• In order to plan overall PAF divisional activities for the FY 2011/12, a
two day residential PAF Annual Planning Workshop took place from
9 to 11 May, 2011 in Dhulikhel, Kavre district. All PAF professional
staff and some board members namely Dr. Arzu Deuba, Shri Krishna
ANNUAL PROGRESS REPORT (2010/2011) 23

Upadhaya, Dr. Duman Thapa, Dr. Bal Gopal Baidhaya, Mr. Khalil
Miya and Mr. Rishi Raj Lumsali were present in the worksop. All the
participants actively participated in the workshop and formulated
strategies to implement the planned activities.
• In order to strengthen and intensify PAF-DDCs/VDCs coordination
collaboration in the districts, a two day “Regional Workshop with
MLD was held in Nepalgunj from 1- 2 January, 2011. PAF district
LDOs, VDC Secretaries and PAF POs from Far, Mid and Western
development regions were present in the workshop. During
the workshop Vice-Chairperson from NPC, Secretary and Joint
Secretary from MLD, Regional Administrators from Far, Mid and
Western development regions were present. Similarly, Regional
Directors for Agriculture Development and Education were also
present. The workshop concluded to go jointly with DDCs and Line
Agencies to reduce poverty and to avoid duplication of programmes
and resources in the Districts.
• In order to strengthen PAF programme further based on
implementation learning, a two day “PAF Programme Review
Workshop” with Central Development Region POs was concluded
from September 28 to 29, 2010 in Janakpurdham of Dhanusa
District. Both the workshops identified and discussed on learning of
successful and failure cases of PAF activities. The workshops thus
organized have drawn recommendations and suggestions to PAF to
formulate policies and strategies to address the failure cases.
Capacity Development of Local Bodies
From the very beginning, PAF has been rigorously coordinating and
collaborating with DDCs and VDCs to implement activities in the district.
Therefore, PAF has been involving DDCs and VDCs to monitor PAF
activities regularly. During monitoring, DDCs and VDCs provide feedback
and suggestions on the activities which helps to further improve and
strengthen gaps and lapses in providing services to the community.
DDCs and VDCs do have government resources for infrastructures and
socio-economic development of district and village. Apart from this, the
sectoral Line Agencies and other developmental organizations do have
resources for the sectoral activities. DDCs is the umbrella organization
to coordinate overall developmental activities in the district. Hence, it
has vital role in forging resources for betterment of poor people. PAF
has been implementing programme in close coordination with DDCs to
forge resources from other organization for the benefit of poor people.
PAF intends to capacitate DDCs based on their capacity development
plan and other themes applicable and beneficial to PAF beneficiaries.
PAF has envisaged to enhance the capacity of DDCs and VDCs in the
following themes:
• Participatory Monitoring and Evaluation
Since DDCs and VDCs are involved in regular monitoring
of PAF activities. This enables them for effective monitoring
and evaluation of PAF and other donors activities in the
district. During the monitoring visit they provide feedback
and suggestions to improve and strengthen PAF programme
further. During the FY 2067/68, DDCs have made 147
monitoring visit in 34 PAF programme districts.
• PAF Programme Review and Coordination Meeting
In order to review PAF progress status, coordination and
review meeting with DDCs and Line Agencies is organized
regularly in the PAF programme districts. During the meeting,
DDC and Line Agencies provide feedback and suggestions,
which contributes further improvement and strengthening of
PAF activities. Apart from that, such meeting acts as platform
to forge resources for the betterment of target groups. During
the FY 2067/68, PAF organized 72 events of coordination
and review meeting with DDCs and Line agencies in 34 PAF
programme districts.
• TOT on Entrepreneurship Skill Development
PAF has been conducting TOT on Enterprise Development to
the staff of POs in the district. The main objective of TOT is
to develop entrepreneurship skill among the members of COs
through POs. After getting TOT, the POs impart such training
to the members of COs. Being a permanent institute in the
district; DDCs must have human resource knowledgeable in
entrepreneurship skill development. In that case, they can
impart such training to beneficiaries beyond PAF and other
projects. Hence, in some district PAF has involved the relevant
staff of DDC in the entrepreneurship skill development training.
• Collaboration and Coordination with LGCDP
LGCDP is a development programme supported by many
donors to work for the overall development of district.
LGCDP activities are launched through DDCs in the district.
Along with development activities, LGCDP has also capacity
development component which assesses the overall district
level Capacity Development Need and acts to address that.
So, PAF could collaborate with LGCDP to identify the capacity
development needs in the district which could be linked to
capacity development and benefit to PAF COs.
• VDC and Ward Level Orientation on PAF
PAF has been implementing its activities in the target
communities in the VDC. While entering the VDCs to launch
activities, PAF has been conducting VDC and Ward level
orientation on PAF. This has helped PAF to get VDC support
and feedback to identify target communities and launch PAF
activities effectively.
• Organize Exposure Visit to DDC Personnel
PAF has been organizing regular exposure visits to POs and
COs. PAF has envisaged including VDCs staff along with POs
exposure visit event.
24 ANNUAL PROGRESS REPORT (2010/2011)

Chapter 3:
information,
monitoring and
evaluation
3.1. MIS, Monitoring and
Evaluation
Monitoring and evaluation (M&E) is an inextricable part of PAF’s
mission, providing an analytical basis for programmatic decisions,
allowing PAF to learn from its experiences, and share the impact and
lessons with different stakeholders. This has been supported by the
PAF MIS system. PAF MIS system help the management in processing
its activities, managing contracts with CO/PO, monitoring and taking
informal decisions. The major MIS development in PAF includes PMIS
(Programme Management Information System), HRIS (Human Resource
Information System), AMIS (Administration Management Information
System) and FMIS (Financial Management Information System).
Further PMIS is linked with FMIS to track the fund flow to community
organizations.
PAF’s monitoring data is developed on 5 different databases which
support the process of working with partner and community
organizations and monitoring the sub-project activities (figure 1). These
databases provide a rich source of information on PAF activities and
have been increasingly analyzed to improve planning and address
weaknesses in the project implementation process and to identify areas
of strength that can be scaled up.
PAF’s monitoring focuses on the progress, process, compliances and the
results of the project activities. PAF has been encouraging all the stakeholders
to be involved in the monitoring process of the projects activities.
As community is at the driving seat of the PAF’s programme, monitoring
by the community is essential for the compliances and the results of the
programme. Thus, the monitoring sub- committee of each community
organizations (CO) is responsible to monitor the activities carrying by the
respective COs. Besides, the social mobilizers assigned by the partner
organizations (POs) are also responsible to facilitate the monitoring subcommittee
for the effective monitoring and also monitor the activities of
COs by themselves.
Besides, the POs -programme coordinators, supervisors and board
members are also responsible to monitor or track the progress and the
compliances made by the community organizations.
The Portfolio Managers (PMs) and the consultant assigned by the PMs,
appraisal and monitor the activities of the POs as well as COs. Similarly,
in periodic basis, the local bodies’ representatives (DDC, VDC and other
line agencies) also carry out the monitoring visits in the PAF working
areas of the districts.
Further, the PAF central level also carries out monitoring visits in the
districts in periodic basis. Likewise, PAF Board Members, representatives
from line ministries and representatives from the World Bank also carry
out monitoring visits in periodic basis.
Further PAF has been reporting its progress against the set indicators on
regular basis. For detail refer to Annex 12.
Partner Organization
Selection
Community organization
selection and registration
Community: Selection
priority activites
Community:
Implementation of
activites
Partner Organization
Selection
Community
organizations database -
Beneficiary Assessment
Community
Agreements database
Sub-project
Projects database
Revolving Fund
database
ANNUAL PROGRESS REPORT (2010/2011) 25

3.2. Results From Monitoring
Data Analysis
The re-social assessment of the sample 289 COs which are three or more
than three years of maturity period was carried out during 2010.
The comparative analysis of the re-social assessment data with the
baseline social assessment shows that HH level assets increased, School
enrollment of the children increased, improvement in food sufficiency
duration of individual HH, and Construction and use of toilet/latrine
increased.
Similarly, the household level gross income (from all the sources) of the
re-assessed 8,168 HHs has increased by 82.5 per cent in real term. A
district-wise gross annual income change of CO members is provided in
Annex 13. g year. The data was collected till November 15, 2009.
The revolving fund assessment carried out during the end of FY
2066/67, shows that community has been managing their revolving fund
satisfactorily (Annex 14). The data collected as of July 16, 2010, shows
that fund provided to the COs by PAF has been increased by 7.8 per cent
which includes the interest charges against the loan taken by its members,
community contribution and fund collected from other sources.
Similarly, among the total CO members, 84.6 per cent of the members have
accessed the fund at least for one time to initiate their income generation
activities. Out of the total members accessing the fund from RF, 8.72 per
cent members have used the fund for more than two times, 19.77 per
cent members have used two times and 71.51 per cent members have
used one time.
The assessment also shows 83.8 per cent of the total fund has been
invested as loan to its members, 14.1 per cent of the fund is in bank and
rest amount is as cash in hand in COs itself. Further, assessment shows
that the average rate of repayment of the loan disbursed is 76 per cent
3.3. Environmental Framework
and Monitoring
Majority of PAF supported sub- projects are of small and micro
scales hence they hardly fall under legal obligations for environmental
assessment. However, PAF realizes that even micro/small scale
projects may have some environmental implications and has laid
down Environment Management Framework (EMF) to address them as
precautionary principles. EMF has standardized methods for the subprojects
to assess the environmental problems associated with their
implementation and ways to mitigate them.
According to PAF EMF environmental assessment and planning mandatory
during the project preparation for sub-project’s approval. Possible risks of
proposed sub-project and their mitigation measures are identified by the
community and documented as Environmental and Social Assessment
(ESA) Checklist in facilitation from the partner organization. PAF monitors
the compliance to this process during the sub project appraisal. During
project implementation, PAF reviews the progress on implementation of
the mitigation measures outlined in the ESA checklist. Both compliance
and impact monitoring on environment are important components while
conducting regular sub project monitoring.
In addition, the monitoring team of Environmental Consultant also carries
out special environmental monitoring of sub projects on sample basis.
ERMC P. Ltd. In Association with SchEMs P. Ltd. has been working as
environmental consultant from February 2011. 72 sub projects in six
districts were monitored in FY 2010/11 by the environment consultant.
Monitoring reports has not pointed out major harmful implications of the
PAF IG or Infrastructure development activities on the local environment.
The monitoring result has rather shown that Community-level
environmental assessment and planning has increased environmental
awareness among target communities and ensured environmental
friendliness of the sub-projects.
3.4. PO Performance
Evaluations
From the last FY 2066/67, PAF has initiated to evaluate the performance
evaluation of the POs in different aspects. The evaluation was done in
2 major areas. The first section is focused on the PO’s organizational
chart 29: Ranking of POs
Not participated
D (Less than
11
50%)
117
C (50-64%)
181
B (65-79%)
44
A (80% or more)
357
Total
0 100 200 300 400
capacity to deliver the services as defined in the TOR and the second
section is focused in how the COs/Beneficiaries perceive the services
provided by the POs to them.
The overall objective of this process is to strengthen the PAF M&E
system effective and assess the effectiveness of the services provided
by the PO s to the COs.
During the FY 2067/68, POs’ perfornmance evaluation was also
conducted. The total number 357 POs were evaluated and based on
the results, the POs were entered into agreement for partnership with
PAF to work in FY 2068/69 accordingly. The following graph shows the
rankingof POs based on the score obtained in the evaluation process.
3.5. Impact Evaluation
Baseline Survey
4
Number of POs
Centre for Economic Development Administration/Tribhuvan University
(CEDA/TU) has been selected for conducting the baseline survey in
30 new districts. The contract has been done during this year and the
preparation works conducting the survey is ongoing.
26 ANNUAL PROGRESS REPORT (2010/2011)

Impact Study
The final report of the follow up survey in 6 sample districts of 19 districts
has been produced. The analysis of the cleaned data provided by the
CEDA/TU was done by the team from the World Bank. The summary
of the findings is described in chapter 5. Similarly, the World Bank has
also produced a brochure ‘Nepal Poverty Alleviation Fund: Evaluating
Impact’, based on the results of the study.
3.6. Communications, Outreach
and Publications
PAF has laid significnat emphasis for communicaitons as it is critical
to create demand from beneficiaries ensure transparency and foster
partnership and learning across stakeholders.
PAF communication strategy aimed to disseminate PAF approach/
procedure/rules to the related stakeholders, develop the external and
internal communication capacity of PAF and identify and develop
communication messages for PAF, as well as disseminate best practices
and success stories
Some of the major activities that were initiated and continued during the
reporting year include.
• Weekly Radio Programme from Different FM Radios Nepal
• Publication of Newsletter “Jeevika” –both in English and Nepali on a
regular basis.
• Dynamic websites created, updated regularly
• Annual Reports—both national and district based publications,
Brochures, Fact Sheets, Mini Brochures publications
• Success stories and cases collections
• Different interaction meetings and workshop at the local and national
level
• Extensive media coverage at the local level and national levels
• PAF has updated its Programme Implementation Guidelines and
published it during the reporting year.
• PAF has prepared and published a guideline for Community
Infrastructure Sub-projects during the reporting year.
Since PAF work is now increased in terms of its coverage and depth,
there is a growing need to generate greater awareness based on the
results. A proactive communication and outreach strategy will be of
highly important in this regard. PAF will work with all stakeholders to
keep them abreast of the important developments and disseminating the
information at national and international forums.
3.7. Grievance Handling
Since the beginning of the reporting year, PAF has developed a grievance
handling system to record and response any complaints on practices,
policies and procedures of PAF at the centre as well a the grass roots
level. A complaint for PAF is defined as individuals or group’s displeasure
with the Handling of PAF works, any aspect of the service provided, or
not provided, in any PAF involved programme or site, the behavior or
decisions of PAF and PO’s staff, among others.
A concept note of PAF grievance handling mechanism was developed
and a sub-committee of the board members was also formed to oversee
and supervise grievance handling system in PAF. PAF has developed
a direct email to the vice chairperson, executive director and the
programme chief in its website. The PAF can use the already installed
suggestion box in its central office. Any complain coming either from
a direct email to the PAF Vice Chairperson, Executive director, website
email, or telephone, or any other means are recorded and registered
in a complaints register, with the updated status of the complaint and
remedial actions taken.
So far, complaints are being made related to the field level misuse of PAF
fund, activities of PO, exclusion of hardcore poor, and selection of PO
in the districts, among others. PAF programme division chief is directly
overseeing all the grievance related activities.
• Orientations programme and stakeholders consultations at the local
level
ANNUAL PROGRESS REPORT (2010/2011) 27

28 ANNUAL PROGRESS REPORT (2010/2011)

Chapter 4:
partnership and
collaboration
PAF belives that to alleviate the poverty partnership is very significant.
It is imperative to join hands with the like minded agencies for the nobel
cause of poverty alleviation. Hence PAF gives top pirority for partnership
and collaboration with different agencies (Governmental and Non
Governmenal) both at the central level and at the district level. The
different efforts related to partnership forging and collaboration for the
period of 2010 to 2011 are mentioned below.
A national level coordination meeting in chairmanship of the Chief
Secretary of Government of Nepal was carried out in order to implement
the program more effectively in coordination with the government line
agencies. Further, PAf Board started to invite the Chief Secretary of
Government of Nepal, Secretary of Ministry of Finance and Secretary of
Ministry of Local Development as an observer in the Board meetings to
enhance coordination with the government agencies.
Several MoUs have also been signed with different organizations at
central level to facilitate different tasks as well as to facilitate collaboration
in implementation of sub-projects at community level.
1. MoU with MoLD
On 8 October 2010, Ministry of Local Development (MoLD) and the
Poverty Alleviation Fund (PAF-Nepal) agreed to work together by signing
a Memorandum of Understanding and forming a strategic alliance to
alleviate poverty through synergic efforts between the two institutions.
The MoU was signed by Mr Som Lal Subedi, Joint Secretary, MoLD and
Mr Raj Babu Shrestha, Executive Director of PAF, in the presence of PAF
Vice Chairperson, Mr Vidyadhar Mallik and MoLD secretary Mr. Krishna
Gyawali.
The MoU entails increased coordination and linkages during project
planning, implementation, monitoring, reporting and review while
implementing targeted poverty alleviation and empowerment initiatives
at the local level.
2. MoU with WFP
On 30 August 2010, The United Nations World Food Programme (WFP)
and the Poverty Alleviation Fund (PAF), two of the largest organisations
working in Nepal’s most food insecure areas, joined forces by signing
a Memorandum of Understanding and forming a strategic alliance to
alleviate poverty and food insecurity in the Mid to Far-Western Hill and
Mountain regions.
WFP and PAF will collaborate to provide vital food and nutrition
assistance whilst engaging beneficiaries in income generating and
community infrastructure projects through food/cash-for-work. Specific
projects to be considered include: small scale irrigation, cash crop
plantation, enhanced farming techniques and poultry farming. WFP also
plans to provide food for training activities that will benefit members of
community organizations of PAF.
3. MoU with GIZ
On 29 April 2011, The German Development Cooperation (GIZ) and
Poverty Alleviation Fund (PAF-Nepal) have agreed to work together in
the common working districts and municipalities of Nepal.
Building on the core competencies of each other, PAF and GIZ assisted
three different programmes will collaborate to improve and strengthen
pro-poor governance at the local level and facilitate local level planning
to articulate the voice of the disadvantaged population at the district
development committee (DDC) and municipality level.
Under the new arrangement, both the institutions would work together to
ensure the access of poor and marginalized population to public goods
and services, provide market information to farmers through market
information systems and support in market linkages of agricultural
products, among others.
4. MoU with USAID Supported EIG
On 13 Dec 2010, USAID sponsored Education for Income Generation
and Conflict Mitigation project and Poverty Alleviation Fund (PAF-Nepal)
have agreed to work in tandem targeting the unemployed youths of the
Mid Western Development region of Nepal.
Building on the core competencies of each other, both the programme
will collaborate in assessing the need for job creation, developing and
imparting applicable training for eligible youths and extending support for
enterprise development and job creation through a package programme.
Under the new arrangement, the youths of the under-served region
will receive trainings in literacy, life skills, vocational education and
ANNUAL PROGRESS REPORT (2010/2011) 29

agriculture trade including Non-Timber Forest Products (NTFPs),
commercial farming of vegetables, among others. Also, the poor
farmers will be informed about the appropriate technology related to the
commercial farming of vegetables and processing of NTFPs-- Medicinal
and Aromatic Plants.
5. MoUs with Heifer, Practical Action and
LFLP
On 29 July 2011, The Poverty Alleviation Fund (PAF-Nepal) joined forces
with two international non-governmental organizations and one national
programme aiming to establish synergies in poverty alleviation efforts
at the grass roots and ensure increased opportunities for the poor and
disadvantaged people.
PAF signed three separate memorandums of understanding (MoUs)
with Practical Action Nepal, Heifer International Nepal and Department
of Forest, Leasehold Forestry and Livestock Programme (LFLP) to work
together on fighting poverty in common working districts.
As part of the understanding with LFLP, PAF supported community
organizations would have easy access of leasehold forestry while
leasehold forestry users groups would be facilitated and encouraged to
enter in community organizations formed under the aegis of PAF. Also,
both the programmes have agreed not to form separate community
organizations in the new working areas. “PAF would also acknowledge
the leasehold forestry user’s groups if the members qualify PAF’s
poverty ranking criteria”, reads the MoU. Both the programme would
ensure the participation and leadership of Women, Dalit, Janajatis and
members of the marginalized groups in community groups. A 7-member
Central Coordination Committee has been formed under the leadership
of PAF Vice Chairperson while a 12-member district level coordination
committee would be headed by the District Development Committee
(DDC) Chairperson.
Under the MoU with Practical Action, PAF and Practical Action would
work together to improve communities’ access to services by supporting
them to choose and adopt the mode of transport that better serve them.
Also both the institutions would work to improve the agricultural income
by enhancing the production through pocket area development and
providing the agricultural products easy access to market outlets through
developing Gravity Goods Ropeways and other pro-poor technologies.
The alliance with Heifer entails joint planning to identify poverty ridden
clusters, feasible production clusters, seek support from the related
government ministries and achieve national priorities. “As PAF intends
to support in activities like income generation activities and rural
infrastructure building as per the demand from the community, Heifer
would complement in income generation, improving nutrition, improving
environment as well as in social mobilization activities, “ states the MoU,
“Periodic reviews of the partnership would be made as appropriate for
highest synergy from expertise of the parties.”
6. MoU with Helvetas
On 7 February 2011, Helvetas Nepal and the Poverty Alleviation Fund
(PAF-Nepal) joined forces forming a strategic alliance to enhance the
livelihoods of the rural poor. The alliance, to begin from Bardiya district
with possible expansion to other districts, entails joint activities to reduce
the vulnerability and increase resilience of the disadvantaged people and
increase agricultural productivity.
Both the institutions have agreed to work together to facilitate access
to common land resources for land-poor and landless and disseminate
appropriate technologies for the promotion of commercial farming of
vegetables particularly in riverbeds, but later also on rain-fed agricultural
land and other suitable areas. Also, they have agreed to establish
synergies to support poor farmers on market linkages of agricultural
products provide access to irrigation and drinking water and facilitate
local level planning at ward and village development committee (VDC)
level.
7. MoU with FNCCI to work Jointly to
Promote Agri-business
On 21 November 2010, Poverty Alleviation Fund (PAF-Nepal) and
Federation of Nepalese Chambers of Commerce and Industry (FNCCI)
have joined hands to promote agriculture related business including
livestock and Non Timber Forests Products(NTFPs) aimed at alleviating
poverty and economic development.
The MoU entails both the institutions engagement on capacitating the
Community Organizations (COs) to carry out agriculture and livestock
related business and establishing small processing enterprises
producing high value products. The MoU also paves ways for involving
COs in profitable and market oriented production and improved access
to market through the provision of technology and information service as
well as critical public infrastructure for promoting agribusiness, states a
joint statement issued after the signing of the agreement.
To be implemented in 40 PAF programme districts, the agreement is
also expected to create and strengthen industry-wide partnerships along
the value chain and thus forging linkage between producers, traders,
processors and other stakeholders.
8. Other MoUs
Besides the different MoUs reached during the reporting year, PAF is
continuing different MoUs with different institutions and programme,
signed before the reporting year including the MoU with Alternative
Energy Promotion Centre (AEPC).
30 ANNUAL PROGRESS REPORT (2010/2011)

LIVESTOCK INSURANCE PROVIDING
BOON FOR COMMUNITY
By Umeed Bagchand
Success Story
We have heard a lot about life insurance. But, the poor and
backward communities of Achham district in far-west region are
these days insuring their livestock. Just as sudden demise of
household head pushes families in financial troubles, sudden
death of livestock reared on loans taken from community
revolving fund can also land the families into troubles. Hence,
through livestock insurance poor people are safeguarding
themselves from possible risks and losses. And their initiative
has become exemplary for others as well.
In a place where people were facing difficulties to fulfill days
end, buying insurance cover for livestock was not an easy task.
But thanks to PAF’s initiatives, community people are enjoying
the facility with relative ease. PAF pushed for livestock insurance
mainly because the prices of livestocks were skyrocketing
and any loss of such expensive wealth would only worsen the
situation for the poor. Besides, as risks associated with livestock
remained high in remote districts, many community people were
disenchanted to pursue livestock rearing. But thanks to PAF’s
endeavor, community people decided to work for the introduction
of this safety net, instead of turning away from the business.
The credit of introduction of this facility goes to the local
network of community organizations though. In a bid to avoid
the loss and safeguard community members during loss,
the network organized trainings to the CO members. “Rama
Roshan Development Society also supported us immensely
in introducing livestock insurance,” said Nain Bahadur BC,
secretary of the CO network.
The network has mobilized respespective communities involved
in livestock rearing to insure their animals. For the cover, CO
members sign an agreement with Livestock Insurance CO. PAF
has facilitated them by layin down detail procedures on how
livestock insurance should be implemented. The manual is pretty
similar with norms of life insurance. Separate provisions have
been put in place for insurance of big and smaller livestock. The
initial cost incurred while registering for the livestock insurance
is borne equally by the members and PAF. The cost of renewal,
however, needs to be shouldered by the livestock owners
themselves.
If a livestock died due to natural reason, the insurer CO
compensates to members 80 per cent of its total cost price.
“Insurance has been arranged considering the overall needs
of the VDCs,” said Pramod Joshi, PAF’s Portfolio Manager for
Achham district.
The introduction of the service has greatly relieved the farmers
who used to suffer the most from loss of livestock. Many farmers
are already enjoying the benefits from this financial cover. As a
result, people who made mockery of the service in the beginning
too have started to take the service. “The motive of the service
is not to earn profit, but to support the CO members that are
pursuing livestock rearing,” said Khamba BC, a member of the
CO that introduced the service with PAF support.
Mangalsen CO that is formed by 25 PAF COs is implementing
the livestock insurance service. “The demand for the service
has increased as more community members started to realize
its importance,” said Jung Bahadur Nepali, Chairman of
Mangalsen CO.
(Bagchand is a BBC Correspondent)
ANNUAL PROGRESS REPORT (2010/2011) 31

Success Story
Pig farming transforms
lives of Dalits
Darabatti Mallik, a member of impoverish Dum community --
one of the poorest and excluded ethnic groups of Siraha district,
has undergone a sea change in her life through pig rearing. This
income generating activity she started with the support of PAF
two years ago not only helped her save her husband life when
he suffered brain hemorrhage while working in others’ pig farm,
but also enabled her enroll children for education and owner of a
residential plot and herd of pigs.
Darabatti had started rearing pigs with 11 piglets that she bought
with loans support of Saraswoti-Jyoti Community Organization
of PAF. “Brain hemorrhage of my husband suddenly landed me
in helpless situation. I needed to treat him and also take care of
the children, whereas we had no money and property to support
that,” she recalled her plight.
Commencement of PAF program, however, came as a boon for
her. “Now all my financial woes have vanished -- thanks to soft
loans the CO provided to its members,” she added.
After six months of starting the farm, she jumped into meat
retailing. With assistance of her husband’s younger brother, she
still runs the meat shop in weekly markets in Lahan and Thadi,
the local business hubs.
With the income, she could afford decent treatment for her
husband in Siliguri of India. “This has remarkably improved his
health. Now he even extends me a helping hand in the farm,”
she smiled.
Over these years, her son, Pashupati Mallik, passed out of
school leaving certificate exams. He recently joined Nepal Police
service as well. “Other three children are studying in an English
medium school,” she stated.
Darabatti is now planning to build a house in her own residential
plot that she bought along Lahan-Thadi road segment. According
to Darabatti, she cleared her initial loans, but still owes Rs 19,000
that she took as loans from the CO few months ago.
Inspired by Darabatti’s success, 17 of 23 Dalit members of
Saraswoti-Jyoti CO have jumped into pig farming. “These
supports of PAF have spurred very positive outcome in the
lives of the rural poor,” said Tej Narayan Chaudhary, president
of Gramjyoti Development Center, a partner organization of PAF.
He added that the impact could further multiply if rural roads are
extended and markets developed in the villages.
(Courtesy: Gorkhapatra daily)
32 ANNUAL PROGRESS REPORT (2010/2011)

Chapter 5:
THE OUTCOME
AND RESULT
This chapter discuss the the outcome of some
of the major studies relating to PAF results on
the ground.
During the reporting year, some of the few imporatant outcome study
were done including the details report of the impact evaluaiton study
conducted by CEDA, TU.
An Independetn PAF impact evluation, conducted in six sample districts,
and three control districts, show that the programme impact on real
per capita consumption growth was 31 per cent over a two year PAF
intervention period. This is impressive in the context of the same analysis
which indicates that in the absence of the PAF programme, the targeted
households would have recorded about negative 2 per cent growth.
The estimated net programme impact on per capita consumption (in real
terms adjusted for price inflation) growth is 13 per cent for PAF Income
Generating (IG) participant households, 28 per cent for PAF money
recipient households and 49 per cent for those beneficiaries who have
received the money for at least six months. The net impact in the growth
in per capita consumption is even higher for Dalit and Janajatis and
for the poorer segments of the population, implying program’s ability to
distribute growth towards targeted groups.
The evaluation data shows a 10 per centage point decrease in incidence
of food insufficiency and 7 per centage point increase in school enrolment
rate for children aged 6-15. The programme effect is also seen in access to
services (agriculture centers, community forest groups, farmer’s groups)
and women’s empowerment. For child malnutrition (stunting, underweight)
a higher, positive impact is seen for children between 1-2 years of age
amongst PAF supported households. (See details in Annex 21)
A social re-assessment study of 289 sample COs from 24 programme
districts covering 8,168 HHs, has shown that the average income of
individual households has increased by 82.5 per cent. The comparative
analysis, with three or more than three years of maturity period, shows
that HH level assets and school enrollment status of the children have
increased while there was a marked improvement in food sufficiency
for individual households. Also,construction and use of toilet/latrine was
increased.
The data also shows that among the 8,168 CO members HHs, the
average real income at the HHs level is increased by 82.5 per cent (See
Annex 13)
One another analysis on revolving fund status at CO level, carried out
during the end of FY 2066/67, shows that communities are managing
their revolving fund satisfactorily. The data collected, shows that PAF
provided fund has increased by 7.8 per cent. Similarly, among the
total CO members, 84.6 per cent of the members have accessed the
fund at least for once to initiate their income generation activities.
The assessment also shows 83.8 per cent of the total fund has been
invested as loan to its members, 14.1 per cent deposited at the bank
and the remaining fund is with the COs in the form of cash. Further,
assessment shows that the average rate of repayment is 76.1 per cent.
(See Annex 14)
ANNUAL PROGRESS REPORT (2010/2011) 33

34 ANNUAL PROGRESS REPORT (2010/2011)

Chapter 6:
Financial
Management
This chapter discuss the the outcome of some of the major
studies relating to PAF results on the ground.
6.1. Financial Planning and
Management
PAF Financial Management System consists of three pillars namely-
Financial Planning, Financial Management and Financial Reporting.
Financial management is directed by Applicable Accounting Standards
which is accepted both by Government of Nepal and World Bank. It also
fulfills the requirements of partner organizations. Financial Management
System of PAF is governed by Financial Management Manual.
PAF accounting system is based on Cash basis. It maintains all books of
accounts relating to receipts and expenditures. PAF maintains its books
of account on computerized accounting software-Fin App.
For effective implementation of PAF activities and monitoring of
documents, regular auditing is done by internal and external auditors.
M/S P.P. Pradhan & Company is assigned as internal auditor for the
FY 2066/67 and FY 2067/68. Similarly, external audit is carried out by
Office of Auditor General.
For effective planning and monitoring of funds, PAF has signed separate
MoU with Rastriya Banijya Bank (RBB) and Nepal Bank Limited
(NBL). PAF has opened Main account and along with main account,
separate bank accounts are opened for PAF operating expenses and for
Programme expenses. Also, RBB and NBL have opened Operating bank
account for each community organization in their concerned districts.
PAF prepares Implementation Progress Report (IPR) on a trimester basis
for the purpose of review by internal management and reporting to the
World Bank., The report is comprised of different sections including brief
description of project progress. The IPR is the comprehensive report
that includes various reporting formats, which cover financial, physical
progress, contract expenditure and procurement information. The report
2A discloses the information on sources and uses of funds. Likewise,
2B provides information on uses of funds by project activity and 2C
is the section that gives information on IDA eligible expenditure and
the disbursement status. Section 2D is for reconciliation statement of
special account and the projection for the forthcoming trimester.
Review of physical progress section provides all information on the
achievement against planned with regards to major physical indicators
set by PAF. Contract expenditure report has two parts- goods and
The funds flow modality of PAF with community organization is as follows:
Figure : PAF Funds Flow Modality
PAF
Level
(Centre)
CO Level
(District)
PAF
Program
A/C
Community
Operating A/C
consultants. Furthermore, goods and consultancy are categorized on the
basis of prior or post review threshold. Similarly, procurement section
has two parts -goods and consultancy. Furthermore, procurement of
consultant has been categorized as individual consultant and firm
consultant. Whether procurement is prior or post review depends upon
the threshold for procurement of goods and consultants.
6.2. Procurement
PAF
Main A/C
Community
Contribution
PAF
Operating
A/C
Partner Organization
(PO) Provide
Technical Assistance
to Community
Organization (CO)
Annual procurement plan (PP) for the FY 2010/11 has been prepared
and implemented. The PP covers procurement of services, goods
and non-commodity services. Based on the Public Procurement
Act 2063 Public Procurement Regulation 2064 and the World Bank
Procurement Guideline, PAF has prepared a procurement guideline and
all the procurement of goods and services are procured by following the
guideline.
6.3. Budget and Expenditure
The total expenditure in FY 060/61 (2003-04), FY 2061/62 (2004-05),
FY 2062/63 (2005-06), FY 2063/64 (2006-07), FY 2064/65 (2007-08),
FY 2065/66 (2008-09), FY 2066/67 (2009-10) and FY 2067/68 (2010-
ANNUAL PROGRESS REPORT (2010/2011) 35

11) were Rs.5.78M, Rs. 247.32 M, Rs. 493.50 M, Rs 1,210.30 M, Rs. 1,875.48 M, Rs. 1,647.20 M, Rs. 2,481.5 M and 2601.28 M respectively.
Total expenditure of PAF till FY 2010/11is Rs. 10,561 M. Out of the total PAF expenditure of Rs. 10,561 M till FY 2067/68 (2010-11), 94.12 per cent
was in Program Implementation through CO & PO (CO-77.98 per cent & PO - 16.14 per cent), 2.05 per cent in Monitoring, Training, Studies and Other
Program Support, 0.55 per cent in capital investment for PAF and 3.28 per cent in PAF operation/ recurrent cost. The details are provided in Annex 16.
Out of the total PAF expenditure up to FY 2067/68 (2010/11), 93.52 per cent is from IDA (International Development Agency- the World Bank) grant,
2.21 per cent is from IFAD (International Fund for Agriculture Development) grant and the rest 4.26 per cent from GoN (Government of Nepal) source.
chart 30: Number of Sub-projects
Monitoring, Training,
Studies and Other
Program Support
2.05%
Capital Investment
0.55%
Operation/
recurrent cost
3.28%
Program Implementation
through CO & PO 94.12%
(CO 77.98, PO 16.14)
In this FY 2067/68, total expenditure is NRs. 2,60,12,83,022.25 which is 85.59 per cent of total budget of NRs.3, 039,166,000. Expenditure Trend is
as follows:
Table 19 : Expenditure Trend
Activities
FY-2067/68 Expenditure
As of FY-2067/68 Expenditure (Cumulative)
Amount in Nrs % Amount in Nrs %
Programe Cost 2,466,199,122.73 94.81 9,941,161,835.34 94.12
Operating Cost 95,107,597.62 3.66 345,925,336.61 3.28
Capital Cost 369,821.20 0.01 57,877,128.90 0.55
Training Workshop/Consultancy Cost 39,606,480.75 1.52 216,967,416.67 2.05
Total 2,601,283,022.30 10,561,931,717.52
In FY 2010/11 (067/068), the annual budget was estimated to be Rs. 3,039,166,000.00. Out of which 3.28 per cent was provisioned under recurrent
cost and the rest 96.72 per cent was under program and capital cost. The expenditure details for FY 2067/68 is provided in Annex 17. Also, PAF
unaudited financial statement and project account for the reporting year is provided in Annex 21 and 22.
Currently the PAF Project II is funded by IDA Grant with US$ 100m and IFAD Grant of US$ 4m for four years till January 2012. IDA disbursement to this
PAF II project till date is 98.49 per cent (as advance) i.e. equivalent to about US$ 98.49m. IFAD disbursement to PAF till date is US$ 2.29m. The details
of PAF II project achievment and expenditure status are shown in Annex 18, 19 and 20.
Recently, IDA hs agred to providd additional finacing of US$ 75 M (out of which US$65 M is from IDA grant and US$ 10M grant is from FPCRTF) for
PAF II project.
IDA grant for PAF Project I of US$ 40 M (Initial US$ 15 M and Additional US$ 25 M) has been made utilised by January 2009.
36 ANNUAL PROGRESS REPORT (2010/2011)

6.4. Disbursement to Community Organizations
Fund Disbursement has to be made against contracts (sub-project agreements) with Community Organization (CO) in two or more trenches while it
needs to maintain controlling mechanism based on agreed upon milestones.
Table 20: Disbursement Expenditure to COs FY 2067/68 (in Million)
District
CO Registered
w/ PAF (No.)
Agreement
With CO No. Amount (NRs.)
Total Amount Released
(NRs.)
Regular 40 Districts
Mountain 611 519 590 250,915,888.41 329,754,215.74
Hill 1367 1149 1309 646,462,330.02 1,127,736,555.05
Terai 1066 1144 1229 705,177,294.31 630,448,194.13
40 Dist. Total 3,044 2,812 3,128 1,602,555,513 2,087,938,965
Innovative Programme Districts
Innovative Tot. 26 20 20 6,022,585.00 9,076,643
Total = 3,070 2,832 3,148 1,608,578,098 2,097,015,608
Based on the community demand, several activities related to income generation and small infrastructure sub-projects are being implemented. The
disbursment status in FY 2067/68 is shown in Annex 2. Untill FY 2010/11 (2067/68) PAF has disbursed NRs 8,266 m directly to community account.
The region wise distribution of disbursement shows that the hilly region has the highest share followed by Terai and Mountain regions.
6.5. Disbursement to Partner Organizations
During the reporting year, altogether 370 Partner Organizations (POs) have been working with PAF to facilitate and provide necessary technical supports
to the COs in the PAF districts for which PAF has disbursed Rs. 456 M. On the basis of the expenditure on PO, the hilly region has the highest share
with 50.86 per cent and then Mountain and Terai regions with 14.65 per cent and 34.45 per cent respectively. Similarly the NDM programme stands for
0.03 per cent of the total disbursement to POs.
Table 21 : Disbursement Expenditure to POs
S.N. Districts Disbursed in FY-67/68 %
Disbursed as of
FY-67/68 (Cumulative)
%
A Hill 232,431,712.30 50.86 894,418,028.48 52.47
B Mountain 66,970,882.78 14.65 238,824,716.66 14.01
C Terai 157,442,657.05 34.45 525,067,088.32 30.80
D NDM 145,000.00 0.03 46,270,292.95 2.71
Total 456,990,252.13 1,704,580,126.41
6.6. Additional Funding
The World Bank has agreed to provide 75 million US$ grant assistance package (IDA US $ 65M and FPCRTF US $ 10 M) for the Government of Nepal
to help meet its objectives to alleviate poverty through PAF.
The additional US$ 75 million support for PAF will continue supporting these activities in more communities. It will also help improve food security in
response to the drought and price fluctuations, particularly among the 3.7 million Nepalese most vulnerable to the spiraling cost of food.
6.7. Audit
Internal Audit of PAF for the FY 2067/68 has been carried out by PP Pradhan and Co., Charter Accountants on a trimester basis. External Audit for the
FY 2067/68 has been carried out by the Office of the Auditor General on annual basis. After completion of the contract, Community Organizations (COs)
submit their Audit to PAF. Also social audit is being carried out by COs. Partner Organizations (PO) also submit audit report of their contract to PAF. Also
PAF undertakes audit of POs on a sample basis. PAF has plans to undertake audit of all PO and sample CO’s of each PO.
ANNUAL PROGRESS REPORT (2010/2011) 37

Chapter 7:
Lessons
and Future
Directions
This chapter discuss the the outcome of some of
the major studies relating to PaAF results on the
ground.
7.1. Lessons
PAF will work on the expansion of its programme in new VDCs and
districts. However, different strategies will be taken for poorest districts
and districts with greater access and livelihood opportunities. While
expanding in districts with greater access and livelihood opportunities,
emphasis will be given to the most deprived community.
Based on lessons learned and considering the immense demand for
both Income Generating and Infrastructure sub-projects effort will be
given for more prudent use of available resources by giving due attention
in selection of target communities and the sub-project activities. PAF's
participatory project formulation and implementation management
process will be reviewed so that priorities of ultra poor/ marginalized be
addressed. To reduce duplication of efforts and redundancies, inclusion
of PAF activities in integrated district plan and co-financing from DDC/
VDC and other agencies will be highly prioritized.
Community people are engaged in diversified IG activities including
agriculture, livestock, manufacturing, service sector and trading.
These activities need to be modernized by improving technology and
by methods such as using improved animal breeds/seeds, animal
health facilities and husbandry methods coupled with proper marketing
planning of the produced goods. Effort will be given to synchronize
these activities with community infrastructures such as irrigation, road,
drinking water and marketing management.
PAF's current initiative to build the Community's Capacity to Manage
Revolving Fund and Operate the Sub-Projects and raise the awareness
of the community through functional literacy will be further intensified.
To this, social mobilization will be kept unabated. Considerable input
will be given to establish COs linkages with basic health, education and
youth training.
Provisions for innovation and special programme will be reviewed
and emphasis will be given to replicate and scale up the successful
innovations. PAF will continue its efforts to explore an alternative to
livestock and agriculture based activities for landless poor.
As PAF is maturing, technical assistance for activities under high
demand needs to be provided regularly and attention should be paid to
the quality of service providers. This is an important factor in ensuring
that efforts made by communities are sustained and served to bring
them permanently out of poverty. A new system of PO performance
evaluation with involvement of COs has been started this year, this
process will be will be continued with further improvements in coming
days.
Efforts will be given to increase collaboration with private sector,
governmental agencies, local governments and donor agencies
at all level to implement the programme and sub-projects in the
communities to bring marked impact in considerably less time by
complementing and supplementing each other's effort. Several
Memorandums of Understanding (MoUs) has already been signed with
different organizations to facilitate collaboration. PAF's effort will be to
materialize it in implementation to benefit the poor while exploring further
collaborative efforts in the future.
Increased governmental and civil society ownership in the programme
will be achieved by regularizing productive workshops, reviews,
coordination meetings with relevant stakeholders in both central,
regional and district levels. In addition monitoring and supervision visits
by central level and district governmental agencies, DDCs, VDCs, civil
societies, political representatives and journalists in PAF project sites in
the district will be organized regularly.
Community institutionalization is taking place with the formation of CO
Federations, enterprises, multi-purpose or single purpose cooperatives
and VDC wise informal networks of COs as per communities' felt need.
PAF will give effort in formalizing (and legalizing) these institution
development process while ensuring that poor community will gain
maximum benefits from these institutions. For sustaining incomegenerating
activities initiated by communities, important initiatives will
be taken to establish the linkage with financial institutions, market as
well and the availability of Insurance Safety-Net.
PAF is working with its exit strategy focusing on its strategic thrust to
enable community to go to sustained path to get out of poverty within
a stipulated 5-6 years of time. In this line, PAF will work on activity
based pocket area development approach by building on the potential
strength of the area, linking with market and at the same time focus will
be given on improvement in nutrition. PAF will also give apecial focus
to upliftment of marginalised community. Moving ahead, PAF will pay
increased attention to research and development, monitoring processes
and outcomes, improving financial management and capacity building
of CO, PO, Local Bodies and PAF.
38 ANNUAL PROGRESS REPORT (2010/2011)

7.2. Challenges
In view of the wide varieties of activities undertaken within the subproject,
the challenges faced for sustainability of the sub-projects include
the linkage with market for sustaining income-generating activities as well
as the availibility of Insurance Safety-Net particularly for livestock. PAF
is also to explore an alternative to livestock based activities for landless
poor as the huge demand are mainly livestock related. Another important
challenge before PAF is to build the Community Capacity to Manage
Revolving Fund and Operate the Sub-Projects and raise the awareness
of the communit through functional literactcy. Also, there is a need to
adopt different approaches for poorest districts and districts with greater
access and livelihood opportunities and special support to vulnernble
poor, backward ethnic groups such as Mushhar, Dom, Chamar, Raute,
among others.
7.3. The Future strategy
PAF is now working for the expansion of its programme in new VDCs and
districts and important initiatives are taken for the institutionalization of
Community Organizations as co-operative or other forms of higher tier
institution as per their decision and link with financial institution and markets
where programme is already in implementation. Also the PAF is laying
special emphasis on the capacity building of community organization,
partner organization and PAF while co-ordination and collaboration is
being accorded high priority. This year onwards PAF is strenghening on
syststmatic Grievance Handling Process with stakeholders’ views on
the effective Performance Management System of COs, POs and PAF
secretariat.
Marginalized Community Development Programme
Despite the project interventions in the poor districts, diffferent
monitoring result shows that the marginalized community is still
lagging behind to reap the advantage of programme. So PAF is
working to remedial steps in this regard. The special focus will be
made to the marginalized communities including Mushhar, Dom,
Dushadh, Chamar, Khatwe, Byadha, Kusunda, Raute, Gandharva,
Badi, Patharkatta, Muslims, Haliya, Deuki, Jhuma, Disabled, single
women, and HIV infected people, who are deprived, backward,
illiterate, socially excluded. The government of Nepal has also
entrusted PAF to carry out special programme for these groups
under the immediate relief programme of the fiscal year 2011/12.
Under the programme, specially tailored social mobilization is being
conducted This kind of training covers- plumbing, house wiring/
electrification, mechanic-cycle/rickshaw/motorcycle, welding, bet/
bamboo product making, candle making, driving etc. More focus
is to be given to youth force of the community. This kind of skill
also enables them to seek employment in different organisationsprivate,
NGO, INGO etc. Special attention is given to commercialize
the traditional occupation of poor through enhancing their capacity,
supporting appropriate equipment/technology, and creating linkages
with markets.To this effect, PAF has developed a strategy for
speically focussed programme for marginalied community.
Pocket Area Development Programme
PAF has realized that the beauty of diversification of IGA activities
is being limited to fullfill the local market demand and building
confidence to initiate income generation activities for small
producers. In order to commercialize particular products, linkage
of external market is pre-requisite and to establish marketing
chain, volume of markatable production is important.
Diversification of IG activities has limited the potential of
establishing necessary business services required to poor
producers from public as well as private sectors. In many of COs,
activity based areas have emerged in different clusters. But POs
are not clear to link those activities of cluster with market, and
for their institutionalization. It has, heneceforth, been inevitable to
encourage POs to link activity based areas of cluster with markets
and sustain them. To this effect, PAF has develpved a strategy on
activity based pocket area development.
ANNUAL PROGRESS REPORT (2010/2011) 39

Annex 1
Current Board of Governors (as of January 2012)
Chairperson
Rt. Hon. Dr Babu Ram Bhattarai
Prime Minister
Vice Chairperson
Member
Member
Member
Member
Member
Member
Member
Member
Member
Member
Secretary PAF Board
Mr. Janak Raj Joshi
Mr. Yuba Raj Bhusal
Secretary, National Planning Commission
Mr. Rishi Raj Lumsaili
Chairperson, Association of District Development
Committees of Nepal
Ms. Mahin Limbu
Chairperson, Association of Village Development
Committees of Nepal
Ms. Chand Tara Kumari
Chairperson, National Women Commission
Ms. Sushila Shirpali Thakuri
Chairperson , National Dalit Commission
Mr. Akhileshwor Lal Das
Mr. Basanta Bahadur Telar
Ms. Durga Neupane(Bhattarai)
Dr. Kal Bahadur Rokaya
Ms. Kamala Rai
Mr. Raj Babu Shrestha
Ex-Board Members who served during the reporting year (FY 2010-11)
Vice Chairperson
Member
Member
Member
Member
Member
Member
Member
Member
Mr. Vidyadhar Mallik
Mr. Bijul Kumar Bishwokarma
National Dalit Commission
Mrs. Nainkala Thapa
National Women Commission
Dr. Bal Gopal Baidya
Dr. Arju Rana
Mr. Shree Krishna Upadyaya
Mr. Khalil Miya
Dr. Duman Thapa
Mr. Yub Raj Panday, National Planning Commission
40 ANNUAL PROGRESS REPORT (2010/2011)

ANNEX 2
CO registration, agreement for sub-project and disbursement status (Fiscal year 2010/11 only)
District
CO Registered w/ PAF
(No.)
Agreement
With CO No. Amount (NRs.)
Total Amount Released
(NRs.)
Hill
Darchula 1 27 33,347,011 136,413,197
Pyuthan 20 123 140 60,549,806 104,715,116
Ramechhap 37 63 76 32,077,662 104,468,820
Achham 106 127 133 113,543,057 94,575,856
Baitadi 85 89 100 53,321,530 79,077,301
Bajhang 139 68 81 51,698,628 59,497,890
Bajura 5 6 11 10,154,210 36,877,853
Dadeldhura 4 15 14,461,725 53,448,505
Dailekh 38 38 42 15,780,170 45,589,367
Doti 55 47 50 13,811,869 39,126,806
Jajarkot 1 2 5 6,910,459 51,733,649
Kalikot 48 49 64 43,588,367 72,892,250
Rolpa 77 77 81 24,168,491 20,347,084
Rukum 54 38 43 28,047,520 58,910,111
Sindhuli 24 18 31 20,004,742 59,210,463
Dhading 85 78 83 22,753,216 23,021,790
Khotang 156 57 58 28,218,602 23,601,350
Panchthar 210 54 54 15,426,859 13,312,733
Salyan 122 123 123 24,762,179 22,476,322
Terhathum 59 45 49 12,639,626 10,704,780
Udayapur 46 42 43 21,196,601 17,735,314
Lalitpur 150,000
Makwanpur 1,687,397
Hill Total 1,367 1,149 1,309 646,462,330 1,129,573,952
Mountain
Mugu 22 25 70 30,901,407 36,262,930
Dolpa 43 43 45 33,252,207 33,522,362
Humla 14 15,470,378 20,324,553
Jumla 9 10 16 20,806,146 104,987,283
Rasuwa 16 7 7 4,619,700 24,322,713
Okhaldhunga 87 87 87 17,633,125 14,068,378
Sindhupalchok 186 125 125 37,293,255 28,417,906
Solukhumbu 38 55 55 16,810,992 10,582,433
Taplejung 210 167 171 74,128,678 57,265,658
Mountain Total 611 519 590 250,915,888 329,754,216
Terai
Kapilbastu 78 79 82 55,031,783 66,731,611
Siraha 36 35 35 12,425,808 74,908,444
Mahottari 32 32 47 25,630,014 56,236,030
Rautahat 438 399 421 303,136,958 219,526,666
Sarlahi 112 147 81,020,501 51,090,133
ANNUAL PROGRESS REPORT (2010/2011) 41

District
CO Registered w/ PAF
(No.)
Agreement
With CO No. Amount (NRs.)
Total Amount Released
(NRs.)
Bara 79 106 106 36,129,445 26,044,376
Bardiya 102 99 104 29,897,633 21,806,988
Dhanusha 130 131 131 85,443,827 56,682,928
Parsa 73 68 73 40,233,064 36,162,094
Saptari 98 83 83 36,228,262 21,258,923
Chitawan 7 7 7 1,048,535 2,449,546
Kanchanpur 19 13 13 4,974,050 4,789,700
Terai Total 1,092 1,164 1,249 711,199,879 637,687,440
Total 3,070 2,832 3,148 1,608,578,098 2,097,015,608
Annex 3
CO registration, agreement for sub-project and disbursement status (Cumulative)
District
CO Registered w/ PAF
(No.)
Agreement
With CO No. Amount (NRs.)
Total Amount Released
(NRs.)
% Released
Hill
Darchula 885 866 1,236 579,210,992 547,637,756 95%
Pyuthan 1,127 1,095 1,267 610,175,203 602,972,908 99%
Ramechhap 1,189 1,157 1,294 511,880,353 500,476,747 98%
Achham 595 587 671 397,110,801 330,930,339 83%
Baitadi 668 532 635 311,802,657 286,536,441 92%
Bajhang 452 365 468 243,676,055 205,623,986 84%
Bajura 401 389 455 264,005,047 258,648,919 98%
Dadeldhura 378 373 421 224,007,734 217,055,319 97%
Dailekh 418 418 434 231,766,778 228,376,189 99%
Doti 473 455 479 225,833,718 224,300,411 99%
Jajarkot 360 295 316 227,044,139 179,950,720 79%
Kalikot 602 556 588 300,837,093 253,989,378 84%
Rolpa 175 175 179 71,902,311 63,244,004 88%
Rukum 334 258 272 142,039,582 122,776,067 86%
Sindhuli 800 789 955 492,041,451 480,225,059 98%
Dhading 101 94 105 36,449,547 31,235,597 86%
Khotang 156 57 58 28,218,602 23,601,350 84%
Panchthar 210 54 54 15,426,859 13,312,733 86%
Salyan 137 129 132 32,090,489 27,293,082 85%
Terhathum 59 45 49 12,973,738 10,704,780 83%
Udayapur 46 42 43 21,196,601 17,735,314 84%
Baglung 1 1 1 722,165 722,165 100%
Dhading 81 81 98 40,283,561 39,807,021 99%
Kavrepalan 1 1 1 1,735,037 1,735,037 100%
Lalitpur 2 2 2 6,784,220 6,784,224 100%
Makwanpur 111 98 105 41,947,304 39,437,593 94%
42 ANNUAL PROGRESS REPORT (2010/2011)

District
CO Registered w/ PAF
(No.)
Agreement
With CO No. Amount (NRs.)
Total Amount Released
(NRs.)
% Released
Surkhet 1 1 1 3,015,982 3,015,982 100%
Hill Total 9,763 8,915 10,319 5,074,178,018 4,718,129,121 93%
Mountain
Mugu 266 244 380 152,853,467 142,775,656 93%
Dolpa 208 208 213 128,977,487 124,410,036 96%
Humla 329 329 375 179,096,005 178,669,096 100%
Jumla 474 472 509 394,425,975 366,584,097 93%
Rasuwa 274 262 272 125,574,086 112,415,380 90%
Okhaldhunga 87 87 87 17,633,125 14,068,378 80%
Sindhupalch 186 125 125 37,293,255 28,417,906 76%
Solukhumb 60 55 55 16,810,992 10,582,433 63%
Taplejung 210 167 171 74,128,678 57,265,658 77%
Mountain Total 2,094 1,949 2,187 1,126,793,072 1,035,188,640 92%
Terai
Kapilbastu 905 887 931 524,501,211 485,052,370 92%
Siraha 1,328 1,319 1,341 515,923,195 488,315,873 95%
Mahottari 578 565 585 254,732,973 226,302,083 89%
Rautahat 1,449 1,343 1,402 835,659,348 620,826,328 74%
Sarlahi 912 1,024 1,059 479,960,630 420,834,668 88%
Bara 120 106 106 36,129,445 26,044,376 72%
Bardiya 102 99 104 29,897,633 21,806,988 73%
Dhanusha 130 131 131 85,443,827 56,682,928 66%
Parsa 151 141 146 73,048,478 54,513,655 75%
Saptari 98 83 83 36,228,262 21,476,717 59%
Chitawan 47 47 74 18,031,856 17,617,264 98%
Kanchanpur 141 132 132 43,065,392 40,099,342 93%
Morang 79 77 77 48,165,610 32,087,755 67%
Nawalparasi 1 1 1 1,551,248 1,551,248 100%
Terai Total 6,041 5,955 6,172 2,982,339,107 2,513,211,595 84%
Total 17,898 16,819 18,678 9,183,310,197 8,266,529,356 90%
Annex 4
POs, COs and Coverage (Fiscal year 2010/11 only)
District
No. of Working
Pos
Total VDC +
Municipality in
District
PO Committed
No. of VDC
CO Working
VDC
Sub Proj. No.
IG Infra CO Member HH
Beneficiary HH
Total Beneficiary
HH
Hill
Darchula 10 41 41 41 7 20 294
Pyuthan 12 49 50 49 129 11 465 4320
Ramechhap 9 55 55 55 63 13 841 1427
Achham 16 75 67 64 130 3 3456 4524
Baitadi 14 63 63 62 90 10 1935 2494
Bajhang 10 47 47 45 63 18 1859 1483
ANNUAL PROGRESS REPORT (2010/2011) 43

District
No. of Working
Pos
Total VDC +
Municipality in
District
PO Committed
No. of VDC
CO Working
VDC
Sub Proj. No.
IG Infra CO Member HH
Beneficiary HH
Total Beneficiary
HH
Bajura 4 27 27 27 6 5 138 244
Dadeldhura 8 21 21 21 2 13 277
Dailekh 5 56 25 25 38 4 1173 1267
Doti 5 51 36 34 47 3 1267 1406
Jajarkot 8 30 26 26 2 3 51 229
Kalikot 6 30 30 30 49 15 1370 2152
Rolpa 5 51 22 22 77 4 2166 1422
Rukum 10 43 33 33 33 10 942 1354
Sindhuli 10 54 54 38 18 13 462 896
Dhading 8 50 20 19 75 8 1971 1056
Khotang 7 76 38 30 50 8 1655 2949
Panchthar 7 41 21 21 54 1443 746
Salyan 6 47 27 27 123 3376 1797
Terhathum 4 32 16 16 35 14 1237 762
Udayapur 10 45 23 23 34 9 1109 1695
Baglung 0 60 0 1
Dhading 1 50 6 6
Kavrepalanchok 1 90 1 1
Lalitpur 2 42 4 2
Surkhet 0 48 0 1
Hill Total 178 1,274 753 719 1,125 184 26,916 32,794
Mountain
Mugu 6 24 24 24 51 19 299 1308
Dolpa 3 23 23 23 43 2 1236 1297
Humla 5 27 27 27 14 178
Jumla 7 30 30 30 11 5 336 419
Rasuwa 6 18 18 16 7 221 206
Okhaldhunga 7 56 28 28 87 2244 1330
Sindhupalchok 11 79 33 33 125 3318 1969
Solukhumbu 3 34 14 14 55 865 1073
Taplejung 9 50 41 40 167 4 3341 3363
Mountain Total 57 341 238 235 546 44 11,860 11,143
Terai
Kapilbastu 15 78 78 71 60 22 1875 1839
Siraha 17 108 108 88 35 756 756
Mahottari 12 77 46 46 42 5 862 1020
Rautahat 9 97 97 74 395 26 9576 12785
Sarlahi 16 100 67 67 112 35 957
Bara 13 99 46 45 106 2106 2177
Bardiya 6 32 18 15 99 5 2540 1787
Dhanusha 14 102 51 51 131 3519 3698
Parsa 11 83 48 48 56 17 1900 1765
Saptari 15 115 48 48 83 2345 4303
Chitawan 1 38 7 7 7 195 311
44 ANNUAL PROGRESS REPORT (2010/2011)

District
No. of Working
Pos
Total VDC +
Municipality in
District
PO Committed
No. of VDC
CO Working
VDC
Sub Proj. No.
IG Infra CO Member HH
Beneficiary HH
Total Beneficiary
HH
Kanchanpur 1 20 20 8 13 308 294
Makwanpur 2 44 18 18
Morang 3 65 4 3
Nawalparasi 0 74 0 1
Terai Total 135 1,132 656 590 1,139 110 25,982 31,692
Total 370 2,747 1,647 1,544 2,810 338 64,758 75,629
Annex 5
POs, COs and Coverage (cumulative to date)
District
No. of Working
Pos
Total VDC +
Municipality in
District
PO Committed No.
of VDC
CO Working
VDC
Sub Proj. No.
Sub Proj. No.
IG Infra CO Member HH
Total Beneficiary
HH
Hill
Darchula 10 41 41 41 851 393 17,828 28,734
Pyuthan 12 49 50 49 1018 258 31,324 35,490
Ramechhap 9 55 55 55 1139 190 27,873 30,679
Achham 16 75 67 64 609 62 19,331 21,928
Baitadi 14 63 63 62 526 109 17,272 20,262
Bajhang 10 47 47 45 297 171 9,246 19,394
Bajura 4 27 27 27 389 66 11,826 14,564
Dadeldhura 8 21 21 21 371 50 11,033 11,613
Dailekh 5 56 25 25 418 16 14,990 15,181
Doti 5 51 36 34 455 24 14,776 14,972
Jajarkot 8 30 26 26 293 23 10,760 15,971
Kalikot 6 30 30 30 556 32 16,239 17,226
Rolpa 5 51 22 22 175 4 5,094 4,341
Rukum 10 43 33 33 242 30 7,849 8,403
Sindhuli 10 54 54 38 792 163 24,533 28,692
Dhading 8 50 20 19 91 14 2,418 1,547
Khotang 7 76 38 30 50 8 1,655 2,949
Panchthar 7 41 21 21 54 1,443 746
Salyan 6 47 27 27 128 4 3,594 1,973
Terhathum 4 32 16 16 35 14 1,237 762
Udayapur 10 45 23 23 34 9 1,109 1,695
Baglung 0 60 0 1 1 13 142
Dhading 1 50 6 6 81 17 2,394 2,887
Kavrepalanchok 1 90 1 1 1 1 11 125
Lalitpur 2 42 4 2 2 416 516
Surkhet 0 48 0 1 1 9 655
Hill Total 178 1,274 753 719 8,605 1,662 254,273 301,447
ANNUAL PROGRESS REPORT (2010/2011) 45

District
No. of Working
Pos
Total VDC +
Municipality in
District
PO Committed No.
of VDC
CO Working
VDC
Sub Proj. No.
Sub Proj. No.
IG Infra CO Member HH
Total Beneficiary
HH
Mountain
Mugu 6 24 24 24 275 121 7,094 12,385
Dolpa 3 23 23 23 208 5 6,178 6,264
Humla 5 27 27 27 331 44 7,860 8,579
Jumla 7 30 30 30 481 91 16,958 17,898
Rasuwa 6 18 18 16 261 12 7,730 8,450
Okhaldhunga 7 56 28 28 87 2,244 1,330
Sindhupalchok 11 79 33 33 125 3,318 1,969
Solukhumbu 3 34 14 14 55 1,378 1,073
Taplejung 9 50 41 40 167 4 3,341 3,363
Mountain Total 57 341 238 235 1,990 277 56,101 61,311
Terai
Kapilbastu 15 78 78 71 862 440 24,539 34,902
Siraha 17 108 108 88 1302 257 31,365 32,619
Mahottari 12 77 46 46 580 5 14,302 14,312
Rautahat 9 97 97 71 1338 228 36,760 44,964
Sarlahi 16 100 67 67 1024 35 26,462 27,292
Bara 13 99 46 45 106 3,116 2,177
Bardiya 6 32 18 15 99 5 2,540 1,787
Dhanusha 14 102 51 51 131 3,519 3,698
Parsa 11 83 48 48 129 17 4,166 3,892
Saptari 15 115 48 51 83 2,345 4,303
Chitawan 1 38 7 7 52 28 1,229 2,055
Kanchanpur 1 20 20 8 132 3,049 3,079
Makwanpur 2 44 18 18 66 39 3,154 3,130
Morang 3 65 4 3 77 45 3,090 3,099
Nawalparasi 0 74 0 1 1 11 705
Terai Total 135 1,132 656 590 5,981 1,100 159,647 182,014
Total 370 2,747 1,647 1,544 16,576 3,039 470,021 544,772
Innovative Programme Districts
NDM-2005 12 25 25 10 2 8,999
NDM-2008 25 52 52 17 8 5,228
NDM Total 37 0 77 77 27 10 0 14,227
Total 407 2,747 1,724 1,621 16,603 3,049 470,021 558,999
46 ANNUAL PROGRESS REPORT (2010/2011)

Annex 6
PAF in Terai Border VDCs
Terai Border VDC
District Total VDC PAF Coverage VDC CO Registration Nos CO Agreement Nos
CO Member
Beneficiary HH
Total PAF Agreement
Amount (Rs.)
IG No. IG Amount INFRA No. INFRA Amount
Bara 16 15 14,468,370 40 14,468,370 0
Bardiya 9 4 18 18 453 3,860,966 18 3,860,966 0
Chitawan 4 1 5 5 145 1,530,197 5 1,530,197 0
Dhanusha 13 4 10 10 279 7,044,580 10 7,044,580 0
Kanchanpur 8 1 4 4 85 1,226,300 4 1,226,300 0
Kapilbastu 18 18 186 175 5132 121,770,446 163 70,207,763 93 51,562,684
Mahottari 7 5 74 74 1557 28,429,663 74 28,429,663 0
Parsa 20 11 37 36 1116 18,001,080 34 15,249,300 3 2,751,780
Rautahat 6 6 166 157 4790 97,197,882 158 93,655,177 7 3,542,705
Saptari 16 7 13 12 371 5,169,215 12 5,169,215 0
Sarlahi 15 15 95 99 2607 48,185,477 99 48,003,643 1 181,834
Siraha 14 8 93 92 2159 35,555,803 92 33,329,382 3 2,226,421
Total 146 95 745 722 20,015 382,439,980 709 322,174,556 107 60,265,424
100% 65% 100% 84% 16%
Annex 7
PAF in Karnali
Karnali Households (HH) Karnali Households (HH)
District No. Of PO Total VDC PAF Coverage VDC CO Registration Nos CO Agreement Nos Total HH Poor HH CO Member Beneficiary HH
Total HH Poor HH CO Member Beneficiary
HH
Dolpa 3 23 23 5,816 2,309 6,178 128,977,487.42
Humla 5 27 27 329 329 6,951 2,885 7,860 179,096,005.41
Jumla 7 30 30 474 472 15,856 5,454 16,958 394,425,975.39
Kalikot 6 30 30 602 556 18,490 10,503 16,239 300,837,093.05
Mugu 6 24 24 266 244 8,259 4,212 7,094 152,853,467.00
Total 27 134 134 1879 1809 55,372 25,363 54,329 1,156,190,028.27
100% 100% 96% 100% 98%
ANNUAL PROGRESS REPORT (2010/2011) 47

District
Total PAF Agreement
Amount (Rs.)
IG No. IG Agreement Amount (Rs.) Infra No.
Infrastructure Agreement
Amount (Rs.)
Dolpa 128,977,487.42 208 114,401,794.00 5 14,575,693.42
Humla 179,096,005.41 331 141,038,444.00 44 38,057,561.41
Jumla 394,425,975.39 481 346,684,533.00 91 47,741,442.39
Kalikot 300,837,093.05 556 270,852,781.20 32 29,984,311.85
Mugu 152,853,467.00 275 80,867,724.00 121 71,985,743.00
Total 1,156,190,028.27 1,851 953,845,276.20 293 202,344,752.07
100% 82% 18%
Annex 8
Community Institutional Development
List of CO Federations in Districts
S.N.
District
No of CO
Federation
Specific Objectives/Activities
Accham 18 Five federations have been formed for Pasu Bima Programme, 2 for ICT (Information and communication
technologies) at Bayalpata, 2 for construction of micro hydro sub projects, 5 for school buildings and 4 for
solar school systems at various VDCs.
1 Bajhang 1 Seven COs from Hemantawada and Luyata VDC have been federated to run a Seti Saipal V-SAT Center at
Chainpur to promote capacity building, entrepreneurs' skill and knowledge at local level.
2 Bajura 13 13 federations have been formed for following activities in Bajura
• 9 federations for School building construction
• 2 federations for water supply project
• 2 federations for Micro Hydro project
Dadeldhura 16 16 Federations have been made for the following activities;
• 9 federations for School building construction in 7 VDCs i.e. Jogbudha, Shirsha, Shirsha, Bhadrapur,
Alital, Bhageshwor, Koteli and Manileka.
• 5 Federations for Drinking Water Supply Scheme in 5 VDCs i.e. Ghankhet, Bhadrapur, Mastamandu and
Nvadurga.
• 2 Federations for suspended bridge projects in 2 VDCs i.e. Ajaimeru and Navadurga.
2 Darchula 14 11 CO federations have been formed to implement micro hydro sub project and three CO federations to
implement electric line extension schemes at various VDCs.
3 Doti 10 10 Federations have been made for the following activities;
• 4 federations for School building construction in 4 VDCs named Pokhari, Ganjari, Gairagaun, Basudevi.
• 3 Federations for Drinking Water Supply Scheme in 3 VDCs named Bhumirajmandau, Daud and Toleni.
• 2 Federations for micro hydro projects in 2 VDCs named Daud and Toleni.
• 1 Federation for constructing a health post building in Ranagaun VDC.
• Formed 29 COs networking in 29 VDCs for practicing their higher level organization.
• Established a cooperative in Toleni VDC for running & maintaining a micro-hydro projects involving 3
COs.
4 Kalikot 2 Two CO federations have been formed to implement a micro hydro sub project at Phoi mahadev VDC and a
pico hydro sub project at Chilkhaya VDC for rural electrification.
5 Kapilvastu 1 357 buffalo raising farmers of 5 VDCs namely Ganeshpur, Biddhyanagar, Bhagamanpur, Sirshihawa and
Ramnagar have been federated and formed Shivam Dugdha Utpadak CO for collecting milk and operating
chilling centre and cattle insurance scheme for members.
6 Mugu 3 Two federated COs have been formed for constructing and operating micro hydro scheme for rural
electrification and one for micro irrigation.
7 Pyuthan 44 41 CO federations has been formed for implementation of different infrastructure sub projects like link road,
drinking water, irrigation, micro hydro, school building in various VDCs.
Two CO federations have been formed to operate community livestock Insurance program in Tusara and
Bangesal VDC.
One CO federation has been formed for the establishment of Vegetable Collection Centre at Lung VDC.
8 Rautahat 9 9 CO federations have been formed in 9 VDCs for livestock management and insurance policy
9 Sindhuli 12 To implement infrastructure schemes like rural road, irrigation, drinking water, mechanized bridge etc.
10 Siraha 9 One federated CO for operating a chilling centre at Bishnupurkalti VDC and another one to run breeding centre
at Dhodhana and Bhadaiya VDC
Five CO federations have been formed to construct culverts in various VDCs
Two CO federations have been formed in Mukshar VDC to construct to construct Agriculture roads
11 Rukum 5 4 Water Users group and 1 school users group
48 ANNUAL PROGRESS REPORT (2010/2011)

S.N.
District
No of CO
Federation
Specific Objectives/Activities
12 Dailekh 9 One federation for Drinking Water Supply Project and 8 Federation for School Building Project.
13 Ramechhap 9 For Micro-Hydro, Irrigation and Community Building projects
List of Cooperatives formed through CO’s initiatives in Districts
S.N. District No of Cooperatives Specific Objectives/Activities
1 Accham 35 To manage all COs within the VDC.
2 Darchula 9 Six cooperatives have been established in 6 VDCs to provide saving and credit services to CO members
Three cooperatives established to provide electricity extension and distribution service by leasing
agreement with NEA.
3 Kapilvastu 1 A multipurpose cooperative has been established to run agro vet service and milk collection & marketing
center
Total 19 Cooperatives has been established till date
4 Mugu 1 Rara Bahuudesiya cooperative has been established with the joint efforts of 11 COs of three VDCs namely
Pina, Karkiwada and Shreenagar to provide agro-vet services to its members, to establish hatchery and
make available chicks in district for its members To run dairy at district headquarter collecting milk from
its members.
5 Pyuthan 2 Two cooperatives have been established at Arkha and Rajbara VDC to manage revolving fund & saving
credit fund, provide micro finance services to its members and for institutional development and
sustainability of CO efforts.
6 Rautahat 2 A cooperative has been formed in Bishanpurwar Manpur VDC to establish and operate milk chilling center
for marketing milk products produced by the members.
A cooperative has been established at Santapur Dostiya VDC to provide saving and credit service for
agricultural and livestock management
7
8
Siraha
Chitwan
1
1
Three COs in Muskar VDC are in process to register Cooperative to run saving credit and provide technical
services to its member
Eight different COs in Khaireni VDC have teamed up to form a muti-purpose cooperative. 90 per cent of
the cooperatives members are women. They are carrying cooperative farming in lease-land, marketing of
vegetable products and saving credits, among others.
9 Makwanpur 1 One Cooperative ( Basamadi Agriculture Chepang Cooperative Org.) has been formed with collaborative
efforts of 3 Community Organizations at Basamadi VDC.
Annex 9
Status of the On-going Innovative Sub-projects
S.N. Name of the POs and its address Innovative Concept Working areas Remarks
1. Multipurpose Development Management
Services, (MDMS) Nepal, Morang
Breed Improvement of Goat and Pig Seed
Improvement in Vegetable Production
2. Mahila Byabasayik Krishi Samuha, Morang Organic fertilizer production for Community
Livelihood Improvement.
3. Manohari Development Institute, (MDI),
Makawanpur
Integrating Livelihood of Tribal People
(Chepang and Tamang people) through
Agro-Forestry livelihood improvement,
Small Infrastructures like rural road and
plastic pond
4. Focus Nepal, Dhading Social Mobilization for Local Resource
Management and Enterprise Development
for Deprived Groups Chepang Community
5. Made Nepal Vegetable cultivation in lease land for
Poverty Reduction
Sisbani Badahare VDC
Tankisunawari and Baijanath
VDC
Ongoing
Ongoing
Ongoing
6 VDCs of Dhading The same VDCs are covered
through regular programme
since last year and the same
PO is facilitating.
5 VDCs of Chitwan District Ongoing
6. NNWA, Kanchanpur Livelihood Improvement 9 VDCs and 1 Municipality Ongoing
7 Nepal Water Conservation Foundation Facilitation support to social mobilization for Lalitpur
Completed
Lalitpur
ropeway construction Bhattedanda
8 Madan Bhandari Memorial Academy,
Urlabari, Morang
Education Loan Program for Vocational
Training for Deprived Education
Selected students from
Siraha, Mahottari, Sindhuli,
Rauthahat, Ramechap,
Rasuwa, Sarlahi, Jhapa,
Morang Districts
Ongoing
ANNUAL PROGRESS REPORT (2010/2011) 49

Annex 10
Various trainings to the members of COs by districts
S.N.
Description of Training, Orientation
& Exposures
No. of
Event
No. of COs
Participate
Gender & Ethnicity Wise No. of Participants
Male Female Dalit Janajati Muslim Others Total
Remarks
1 Training on Leadership and group
Management
226 1996 1698 3409 1558 689 110 2751 5078 Baitadi, Mugu, Bhajang, Rukum, Jumla, Bardiya, Parsa,
Rautahat, Sindhuli, Solokhumbu
2 Training on Enterprise
Development/SIYB (TOPE &
TOSE)
77 900 370 1189 790 397 97 285 1559 Rukum, Sindhupalchwok, Parsa, Udayapur, Mahottari
3 Orientation on Demand Led
Proposal Preparation
9 202 76 126 64 127 0 11 202 Sindhupalchwok
4 Training on Account Management 238 2716 2045 3869 2016 1574 137 2149 5876 Baitadi, Mugu, Bhajang, Rolpa, Bardiya, Kapilbastu,
Rautahat, Sarlahi, Parsa,Bara, Siraha, Saptari, Sindhuli,
Sindhupalchwok,Khotang, Solokhumbu,
5 Refresher Training on Account
management
42 408 317 296 123 163 0 327 613 Rukum, Jumla, Terthathum
6 Training on Revolving Fund &
Saving-Credit Management
233 942 1732 4462 1985 3277 140 1792 6194 Baitadi, Jumla, Rolpa, Humla Bardiya, Kapilbastu,
Rasuwa, Bara, Rautahat, Khotang, Okhaldhunga,
Terthathum, Udayapur, Siraha
7 Training on Institutional Building
and Cooperative Mgmt.
53 274 198 677 350 195 13 317 875 Darchula, Doti, Rasuwa, Parsa, Rautahat, Sindhuli,
Udayapur
8 Training on Business Management 6 6 0 21 21 0 0 0 21 Parsa
9 Training on Community Based
Livestock Insurance System
16 214 186 188 70 176 0 128 374 Sindhuli, Jumla
10 Training on Animal Husbandry
(Buffalo, Cow, Goat, Pig)
521 1873 4685 9413 3577 3012 461 7028 14098 Parsa, Bara,Sindhuli, Udayapur, Mahottari,
Sindhupalchwok, Solokhumbu, Okhaldhunga,
Terthathum, Doti, Dailekh,Jumla,Bhajang, Kalikot, Mugu
11 Training on Vegetable Farming 16 54 105 299 70 34 0 300 404 Mugu, Dailekh, Sindhupalchwok, Sindhuli
12 Training on Poultry Farming 37 31 40 27 18 0 26 71 4 Sindhuli, sindhupalchwok, Jumla
13 Training on Ginger Farming 10 33 73 147 50 131 0 39 220 Terthathum, Sindhuli
14 Training on System of Rice
Intensification (SRI)
1 8 11 12 7 16 23 Kalikot
15 Training on IPM Mgmt. 4 4 0 82 42 0 0 40 82 Bhajang
16 Training on Bee Keeping 1 10 12 6 4 7 0 7 18 Sindhuli
17 Training on Dairy Development 1 21 18 7 4 6 0 15 25 Sindhuli
18 Training on Livelihood Mgmt. 8 6 20 33 25 0 0 28 53 Mugu
19 Training for Village Level Animal
Health Workers
4 4 4 Rautahat
20 Training on Gothemal & Compost
Mal Mgmt.
1 1 10 5 0 15 0 0 15 Khotang
50 ANNUAL PROGRESS REPORT (2010/2011)

S.N.
Description of Training, Orientation
& Exposures
No. of
Event
No. of COs
Participate
Gender & Ethnicity Wise No. of Participants
Male Female Dalit Janajati Muslim Others Total
Remarks
21 Training on Dale Ghans & Bhuin
Ghas Mgmt.
2 39 34 38 17 38 0 17 72 Sindhuli
22 Training on Beta -Bans Mgmt. 1 15 13 8 2 17 0 2 21 Sindhuli
23 Training on Fruit Farming 2 4 25 10 23 0 0 12 35 Mugu
24 Training on Carpentry & Furniture
Manufacturing
4 33 86 0 25 0 0 61 86 Mugu, Kalikot, Jumla
25 Training on Tailoring 4 37 6 54 26 0 3 31 60 Doti, Jumla, Parsa
26 Training on Candle making 2 4 1 13 8 0 0 6 14 Parsa
27 Training on Panir/Cottage Cheese
Making
1 5 5 Rautahat
28 Training on Curd Making 1 2 4 Rautahat
29 Training on Motor Bike, Bi-Cycle
and Pumping Set Repairing
3 3 0 2 1 0 0 3 3 Parsa, Rautahat
30 Orientation on Local Resource
Mobilization
8 50 68 45 17 67 0 29 113 Udayapur
31 Training on Aadharsila 28 75 636 46 682 Rautahat
32 Training on Construction and
Operation of various Infrastructures
24 31 244 265 52 321 0 136 509 Parsa, Udayapur, Sindhuli
33 Orientation on Health, Hygiene ,
Sanitation and Social Improvement
87 3137 1139 3376 1723 1395 184 1213 4515 Mugu, Parsa, Sarlahi
34 Functional Literacy Class to COs 18 18 206 137 56 63 7 217 343 Sarlahi
35 Exposure Visit 1 8 6 10 4 0 0 12 16 Baitadi
S.N.
Description of Training, Orientation
& Exposures
No. of Event
No. of COs
Participate
Gender & Ethnicity Wise No. of Participants
Male Female Dalit Janajati Muslim Others Total
Remarks
1 Training on Leadership and group
Management
2379 2053 4277 2048 865 146 3271 6330 Baitadi, Mugu, Bhajang, Rukum, Jumla, Bardiya,
Parsa, Rautahat, Sindhuli, Solokhumbu, Dhanusa
2 Training on Enterprise
Development/SIYB (TOPE &
TOSE)
77 900 370 1189 790 397 97 285 1559 Rukum, Sindhupalchwok, Parsa, Udayapur, Mahottari
3 Orientation on Demand Led
Proposal Preparation
9 202 76 126 64 127 0 11 202 Sindhupalchwok
4 Training on Account Management 268 2923 2109 4418 2344 1637 148 2398 6527 Baitadi, Mugu, Bhajang, Rolpa, Bardiya, Kapilbastu,
Rautahat, Sarlahi, Parsa,Bara, Siraha, Saptari,
Sindhuli, Sindhupalchwok,Khotang, Solokhumbu,
Dhanusa
ANNUAL PROGRESS REPORT (2010/2011) 51

S.N.
Description of Training, Orientation
& Exposures
No. of Event
No. of COs
Participate
Gender & Ethnicity Wise No. of Participants
Male Female Dalit Janajati Muslim Others Total
Remarks
5 Refresher Training on Account
management
42 408 317 296 123 163 0 327 613 Rukum, Jumla, Terthathum
6 Training on Revolving Fund &
Saving-Credit Management
257 1123 1800 4944 1927 3022 155 1640 6744 Baitadi, Jumla, Rolpa, Humla Bardiya, Kapilbastu,
Rasuwa, Bara, Rautahat, Khotang, Okhaldhunga,
Terthathum, Udayapur, Siraha , Dhanusa
7 Training on Institutional Building
and Cooperative Mgmt.
53 274 198 677 350 195 13 317 875 Darchula, Doti, Rasuwa, Parsa, Rautahat, Sindhuli,
Udayapur
8 Training on Business Management 6 6 0 21 21 0 0 0 21 Parsa
9 Training on Community Based
Livestock Insurance System
16 214 186 188 70 176 0 128 374 Sindhuli, Jumla
10 Training on Animal Husbandry
(Buffalo, Cow, Goat, Pig)
521 1873 4685 9413 3577 3012 461 7028 14098 Parsa, Bara,Sindhuli, Udayapur, Mahottari,
Sindhupalchwok, Solokhumbu, Okhaldhunga,
Terthathum, Doti, Dailekh,Jumla,Bhajang, Kalikot,
Mugu
11 Training on Vegetable Farming 16 54 105 299 70 34 0 300 404 Mugu, Dailekh, Sindhupalchwok, Sindhuli
12 Training on Poultry Farming 37 31 40 27 18 0 26 71 4 Sindhuli, sindhupalchwok, Jumla
13 Training on Ginger Farming 10 33 73 147 50 131 0 39 220 Terthathum, Sindhuli
14 Training on System of Rice
Intensification (SRI)
1 8 11 12 7 16 23 Kalikot
15 Training on IPM Mgmt. 4 4 0 82 42 0 0 40 82 Bhajang
16 Training on Bee Keeping 1 10 12 6 4 7 0 7 18 Sindhuli
17 Training on Dairy Development 1 21 18 7 4 6 0 15 25 Sindhuli
18 Training on Livelihood Mgmt. 8 6 20 33 25 0 0 28 53 Mugu
19 Training for Village Level Animal
Health Workers
4 4 4 Rautahat
20 Training on Gothemal & Compost
Mal Mgmt.
1 1 10 5 0 15 0 0 15 Khotang
21 Training on Dale Ghans & Bhuin
Ghas Mgmt.
2 39 34 38 17 38 0 17 72 Sindhuli
22 Training on Beta -Bans Mgmt. 1 15 13 8 2 17 0 2 21 Sindhuli
23 Training on Fruit Farming 2 4 25 10 23 0 0 12 35 Mugu
24 Training on Carpentry & Furniture
Manufacturing
4 33 86 0 25 0 0 61 86 Mugu, Kalikot, Jumla
25 Training on Tailoring 4 37 6 54 26 0 3 31 60 Doti, Jumla, Parsa
26 Training on Candle making 2 4 1 13 8 0 0 6 14 Parsa
27 Training on Panir/Cottage Cheese
Making
1 5 5 Rautahat
28 Training on Curd Making 1 2 4 Rautahat
52 ANNUAL PROGRESS REPORT (2010/2011)

S.N.
Description of Training, Orientation
& Exposures
No. of Event
No. of COs
Participate
Gender & Ethnicity Wise No. of Participants
Male Female Dalit Janajati Muslim Others Total
Remarks
29 Training on Skill and Capacity
Enhancement
7 56 16 152 104 12 0 52 168 Dhanusa
30 Training on Motor Bike, Bi-Cycle
and Pumping Set Repairing
3 3 0 2 1 0 0 3 3 Parsa, Rautahat
31 Orientation on Local Resource
Mobilization
8 50 68 45 17 67 0 29 113 Udayapur
32 Training on Aadharsila 28 75 636 46 682 Rautahat
33 Training on Construction
and Operation of various
Infrastructures
24 31 244 265 52 321 0 136 509 Parsa, Udayapur, Sindhuli
34 Orientation on Health, Hygiene ,
Sanitation and Social Improvement
87 3137 1139 3376 1723 1395 184 1213 4515 Mugu, Parsa, Sarlahi
35 Functional Literacy Class to COs 18 18 206 137 56 63 7 217 343 Sarlahi
36 Exposure Visit 1 8 6 10 4 0 0 12 16 Baitadi
ANNUAL PROGRESS REPORT (2010/2011) 53

Annex 11
PO Capacity Development Status
S.N.
Description of Training, Orientation
& Exposures
No. of Event
No. of POs
Participate
Gender & Ethnicity Wise No. of Participants
Male Female Dalit Janajati Muslim Others Total
Remarks
1 Orientation on PAF Implementation
process
4 21 120 26 12 22 2 110 146 Kalikot, Siraha, Dhanusa
2 Orientation on PAF Environmental
Frameworks
1 4 20 2 6 7 0 12 22 Terthathum
3 Training on Social mobilization and
leadership Development
8 57 197 70 36 64 4 163 267 Rukum, Bardiya, Mahottari, Khotang, Solokhumbu,
Dhanusa
4 ToT on Account and Revolving
Fund Management
18 89 403 139 68 206 7 261 542 Dolpa, Rolpa, Kapilbastu, bara, Rautahat, Sarlahi,
Saptari, Sindhuli,Okhaldhunga,Khotang,Solokhumbu,
Sindhupalchwok
5 Training on Livelihood
Improvement Planning
2 15 75 19 7 20 2 65 94 Dhanusa
6 Training on Aadharsila 2 15 75 19 7 20 2 65 94 Dhanusa
7 Training on Report and Proposal
Writing
2 15 75 19 7 20 2 65 94 Dhanusa
8 Workshop on Potentiality
Exploration
1 15 150 Dhanusa
9 Orientation on PAF Revolving Fund
Management Guidelines
10 41 185 49 33 57 0 145 235 Doti, Kalikot, Jumla, Khotang, Terthathum,
Sindhupalchwok, Humla,
10 Orientation on Community
Level Various infrastructures
Implementation Process
5 35 111 34 25 46 0 74 145 Kalikot, Rolpa, Kapilbastu, Saptari, Terthathum
11 Orientation on Community Based
Livestock Insurance System
1 4 21 4 0 10 0 16 26 Humla
12 Orientation on Programme
Management Information System
(PMIS)
1 4 10 1 2 3 0 5 11 Terthathum
13 Training on Value Chain 1 2 23 9 3 1 0 28 32 Doti
14 Training on Cooperative Mgmt. 2 15 4 24 38 7 0 19 64 Baitadi, Dolpa
15 Exposure Visit of POs 1 11 24 9 4 11 0 19 33 Sindhupalchwok
16 Training on Report Writing 1 5 1 4 0 4 0 1 5 Sindhupalchwok
17 Orientation on Health & Sanitation 1 98 81 17 7 23 0 68 98 Sarlahi
18 Coordination & Review Meeting
With DDCs and Line Agencies
17 Ramechhap, Rasuwa, Parsa, Bara, Rautahat,
Sindhuli, Dhanusa
54 ANNUAL PROGRESS REPORT (2010/2011)

Annex 12
Gross Annual Income Change of CO members
District
No. of COs
Total CO
Members
HH level Annual Gross Income change in Rs. (Range)
0-15000 15000-30000 30000-60000 >60000
Average income
Increased (%)
Achham 9 269 236 9 13 11 41.2
% 87.7 3.3 4.8 4.1
Bajhang 8 174 158 10 6 0 50.6
% 90.8 5.7 3.4 0.0
Bajura 6 190 65 60 44 21 176.1
% 34.2 31.6 23.2 11.1
Dadeldhura 8 221 150 50 15 6 115.5
% 67.9 22.6 6.8 2.7
Dailekh 8 264 173 58 25 8 113.9
% 65.5 22.0 9.5 3.0
Darchula 25 565 460 76 15 14 40.2
% 81.4 13.5 2.7 2.5
Dolpa 6 202 200 2 0 0 7.3
% 99.0 1.0 0.0 0.0
Doti 10 306 245 44 13 4 18.3
% 80.1 14.4 4.2 1.3
Humla 10 282 189 37 36 20 41.5
% 67.0 13.1 12.8 7.1
Jajarkot 9 285 143 109 28 5 277.2
% 50.2 38.2 9.8 1.8
Jumla 8 232 145 30 20 37 114.7
% 62.5 12.9 8.6 15.9
Kalikot 8 318 313 1 2 2 -0.1
% 98.4 0.3 0.6 0.6
Kapilvastu 25 709 531 80 36 62 142.7
% 74.9 11.3 5.1 8.7
Mahottari 13 313 179 55 48 31 51.1
% 57.2 17.6 15.3 9.9
Mugu 6 251 221 10 8 12 45.0
% 88.0 4.0 3.2 4.8
Pyuthan 16 400 247 97 45 11 98.3
% 61.8 24.3 11.3 2.8
Ramechhap 23 579 465 61 37 16 47.1
% 80.3 10.5 6.4 2.8
Rasuwa 10 284 221 36 14 13 59.5
% 77.8 12.7 4.9 4.6
Rautahat 15 416 144 108 104 60 125.7
% 34.6 26.0 25.0 14.4
Rolpa 6 225 83 59 60 23 115.1
% 36.9 26.2 26.7 10.2
Rukum 7 191 93 36 47 15 164.7
% 48.7 18.8 24.6 7.9
ANNUAL PROGRESS REPORT (2010/2011) 55

District
No. of COs
Total CO
Members
HH level Annual Gross Income change in Rs. (Range)
0-15000 15000-30000 30000-60000 >60000
Average income
Increased (%)
Sarlahi 10 296 234 42 13 7 59.1
% 79.1 14.2 4.4 2.4
Sindhuli 19 655 433 116 77 29 79.6
% 66.1 17.7 11.8 4.4
Siraha 24 541 319 112 68 42 61.8
% 59.0 20.7 12.6 7.8
Total 289 8,168 5,647 1,298 774 449 82.5
% 69.1 15.9 9.5 5.5
56 ANNUAL PROGRESS REPORT (2010/2011)

Annex 13
Summary Results of Revolving Fund Status 2010
Districts No. of POs
No. of
VDCs
No. of COs No. of Members RF from PAF
RF from other
sources
No. of members
accessing RF
Average Loan
Period
Average
Interest rate
Average
repayment rate
Loan size
Maximum Minimum
Achham 8 23 286 9,549 103,613,693 8,369,437 7,873 2.0 7.1 74.4 100,000 200
Baitadi 6 23 116 4,197 41,725,964 4,031,059 4,630 2.0 5.7 28.9 92,000 1,000
Bajhang 3 18 197 4,067 43,658,284 1,756,849 3,853 2.9 9.0 92.5 133,000 500
Bajura 4 27 318 9,843 127,633,257 5,075,455 8,547 2.4 4.4 61.5 100,000 900
Dadeldhura 8 18 378 11,198 99,167,898 4,300,986 8,855 2.1 7.5 59.8 40,000 650
Dailekh 5 25 282 10,728 134,203,907 26,098,895 9,420 1.5 5.0 87.2 84,650 1,000
Darchula 10 41 781 15,412 184,589,884 5,894,544 13,554 1.9 7.4 64.6 222,500 500
Dolpa 3 12 134 4,093 59,534,491 8,250,831 3,234 2.0 6.0 15.6 28,406 3,330
Doti 5 21 273 8,790 109,708,980 4,228,063 9,679 2.1 6.0 41.4 150,000 2,700
Humla 5 22 277 5,817 119,209,648 2,872,556 1,334 2.2 5.2 57.9 100,000 900
Jajrkot 7 20 164 6,814 62,797,731 6,575,106 6,855 2.1 11.6 48.2 160,000 1,000
Jumla 7 29 423 15,113 209,235,344 24,170,767 10,071 1.9 3.8 83.3 100,000 1,500
Kalikot 6 24 281 7,924 86,874,798 24,311,318 6,192 2.8 12.0 80.3 32,000 2,000
Mahottari 8 20 438 10,669 123,075,590 8,573,827 8,450 1.8 3.9 80.8 56,000 900
Mugu 5 24 131 4,066 29,002,755 26,038 2,479 2.8 1.0 25.2 33,000 500
Pyuthan 12 49 959 27,258 225,937,076 5,238,890 25,721 1.8 7.3 93.1 125,070 225
Rauthat 8 44 828 22,582 335,977,312 29,579,038 17,781 1.8 7.1 88.8 100,000 1,000
Rolpa 1 4 98 2,944 35,247,090 2,765,192 2,265 1.2 9.3 100.0 48,600 2,250
Rukum 3 12 114 3,187 36,272,122 5,337,705 3,029 1.5 9.4 94.0 54,600 1,500
Sindhuli 10 35 700 27,747 272,582,704 15,464,158 21,119 2.1 5.6 96.3 63,000 100
Siraha 15 63 969 22,693 284,948,003 17,916,180 18,293 2.7 6.7 71.6 260,000 900
Morang 2 3 61 2,375 23,827,681 3,971,577 2,375 1.0 6.0 81.6 60,000 2,000
Makawanpur 2 18 38 1,436 10,267,958 1,368,364 1,160 1.7 9.5 84.3 29,367 500
Total 143 575 8,246 232,502 2,759,092,169 216,176,836 196,769 2.0 6.8 76.0 260,000 100
Remarks
ANNUAL PROGRESS REPORT (2010/2011) 57

Annex 14
PAF Result Matrix
NEPAL: Poverty Alleviation Fund
Nepal – PAF II Project
RESULTS FRAMEWORK
As of 16 July 16, 2011
Impact: Reduced poverty through improved living conditions of poor
Objective Summary Performance Indicators
Means of Verification/Source of
Information
Progress
PAF II (100M) Cumulative
Project level: OUTCOMES
1. Livelihood Improved P1.1.Increased by 30% poor
households with access to
improved infrastructure facilities at
End-of-Project (EOP).
P1.1 Report available from Infra
division
No. of households: 69,374 HHs
IG+INFRA: 3,575
No. of households: 69,374 HHs
IG+INFRA: 3,575
P1.2 No. of improved community
water points constructed or
rehabilitated under the project
P1.2 Report available from Infra
division
Total: 2139 Total: 3,603
P1.3. 25% of poor households
with minimum of 15% increased
incomes through project activities
by EOP.
P1.2.1 Follow-up baseline survey
of PAF
Per centage of HHs: 66% [Based on the Beneficiary assessment
of sample households in year 2010, who have received PAF
support at least 3 years or more. A new beneficiary assessment is
under preparation.] The Follow up survey 2010 shows: Per capita
consumption of money reciepient CO members increased by 28%
( in real term) and the money received at least six or more months
increased by 49%
2. 2. Empowered women
and targeted groups’
members
P2.1 30 % of key positions in
Project Community Organizations
(COs) filled by women and persons
from the targeted households
P2.1 Status report of CO with
disaggregated data
Women: 65%
Dalit and Janajati: 57%
Total: 35,810
Women: 63%
Dalit and Janajati: 62%
Total: 50,129
P2.2. 25% of COs lead
(Chairperson) by women and the
targeted HHs
P2.2 CO status report with
disaggregated data
Women: 7,011 (56%)
Dalit and Janajati: 7,454 (60%)
Total: 12,438
Women: 9,310 (53%)
Dalit and Janajati: 11,416
(65%)
Total: 17,514
P2.3. 30% of members of Project
community organization from
targeted households
P2.3 CO status report Dalit and Janajati: 52%
Total: 310,143
Dalit and Janajati: 58%
Total: 470,021
INTERMEDIATE OUTCOMES INDICATORS
COMPONENT 1: Infrastructure Development
Remarks
“Poor Households” means those families with
less than one year’s supply of (staple) food and/or
categorized by PAF ‘A’, ‘B’ & ‘C’.
“Non-poor HHs” means other HHs that live in the
vicinity of poor HHs having access to the same
facilities and/or categorized by PAF ‘D’.
“Access” means having possible use of facilities.
“Improved facilities” means community
infrastructure facilities which have been improved
by the Project.
“incomes” means total household cash incomes
“Targeted households (HHs)” are: Dalit and
Janajati, within the Poor Households.
“Key positions “ means Chairperson, Secretary and
Treasurer of the Community Organizations
“Project COs” means the groups formed under the
Project.
58 ANNUAL PROGRESS REPORT (2010/2011)

Objective Summary Performance Indicators
C.1 Small scale village and
community infrastructure
C.1.1 No. of projects completed (a)
with target community participation,
and (b) according to quality
standards, as verified by Technical
staff of Partners Organizations
and PAF’s Infra. Division and TAC
(Technical Appraisal Committee).
C.1.2 All completed infrastructure
with O&M measures satisfactorily
operating at least one year after
sub-project completion.
COMPONENT 2: Income Generating Activities (IGA)
C.2 Income generation
projects
C.2.1 30% of each IGA community
organization belonging to targeted
HHs.
C.2.2 Increased 15% average net
income generated from IGA, by
locality.
COMPONENT 3: Innovations
C.3 Innovations Window C.3.1 100% of Innovation Grants
awarded according to the agreed
criteria
C.3.2 60% of project-funded
innovations completed minimum
of the first year of their approved
implementation program and
submitted their detailed progress
report to PAF Management by EOP.
COMPONENT 4: Capacity Building
C.4.1 Capacity building for
Community Organizations
C.4.1 At least 60% of Community
Organizations participated in
orientation program is successfully
implementing approved subprojects.
Means of Verification/Source of
Information
Progress
PAF II (100M) Cumulative
C1.1.1 Report of Infra division
and sub projects report of MIS
1. No. of INFRA subprojects
verified and approved: 1,754
2. No. of INFR subprojects
completed: 1,084
3. No. of target HHs benefited
(INFRA): 69,454 (Dalit: 15,241;
Janajati: 18,259)
IG + Infra: HH: 3,575/Dalit: 901/
Janajati: 561)
1. No. of INFRA subprojects
verified and approved: 3,039
2. No. of INFR subprojects
completed: 2,331
3. No. of target HHs benefited
(INFRA): 100,351 (Dalit:
22,991; Janajati: 25,141)
IG + Infra: HH: 32,092/Dalit:
10,960/Janajati: 10,713)
C.1.2 Status report on O&M
study of Infrastructure
No. of Infra. Sub projects operating
O&M measures:200
No. of Infra. Sub projects
operating O&M measures:1450
C2.1.1 Compiled district report
and MIS
Targeted HHs in IGA community
organization: 52% (Total: 302,503)
Targeted HHs in IGA community
organization: 61.8% (Total:
436,097)
C2.2 Baseline and follow up
surveys and social assessmnt
of COs
Average gross annual income increased 82.5% in real term. [Based
on the Beneficiary assessment of sample households in year 2010,
who have received PAF support at least 3 years or more. A new
beneficiary assessment is under preparation.]
C3.1 Assessment report of
innovative sub project awarded
1. No. of Innovative grants
awarded: comprisinga.
Nepal Development Marketplace
(NDM): 0
b. Other: 253
1. No. of Innovative grants
awarded: comprisinga.
Nepal Development
Marketplace (NDM): 37
b. Other: 534
C3.2 Progress reports 1. No. of Innovative subprojects
completed (Progress reports
available on standard template):
NDM: 0
Other: 80% (out of 253)
1. No. of Innovative subprojects
completed (Progress reports
available on standard template):
NDM: 67% (out of 37)
Other: 86% (out of 534)
C.4 Training reports Per centage of COs successfully
Implementing approved
Subprojects: 88.5% ( out of
12,370)
Per centage of COs
successfully implementing
approved Sub projects: 92.5%
(out of 17,892)
Remarks
“Quality standards” means use of materials and
work as mentioned in design & estimate of the sub
projects. It will ensure during final installment of
projects.
“Satisfactorily” means operating well, being well
maintained, O&M funds available, etc.
Criteria for Project-funded Innovation include:
those that benefit the poor and targeted population,
as defined above
are cost-effective
are replicable
have a detailed implementation plan for at least 2
years
“Successful implementation” means over half of
the group members are involved in the sub-project,
have agreed operating procedures, and an agreed
implementation plan, including processes and
sharing of cost and revenue and also fund is
granted by PAF.
ANNUAL PROGRESS REPORT (2010/2011) 59

Objective Summary Performance Indicators
C.4.2 Capacity building for
Local Bodies
C.4.2 50% of Local Bodies (LBs)
trained and involved in monitoring
PAF activities in their localities
C.4.3 Capacity building for
IGA Groups
C.4.3 60% of trained IGA
community organization members
successfully operating IGA
C.4.4 Community Groups
trained to access funds
C.4.4 50% of trained IGA
community organization members
successfully obtained and managed
financing for their business
activities.
COMPONENT 5: PAF managed effectively and efficiently
C.5 PAF is well-managed at
national & district levels
C.5 1 # of project managed
smoothly, with timely response at
PO and CO level.
C.5.2 Project management receives
PO Progress and monitoring reports
and Audit reports according to
Project standards of timeliness from
100% POs.
C.5.3 100% of complaints received
by PAF recorded, addressed
satisfactorily and the actions
documented through compliant
handling mechanism.
Means of Verification/Source of
Information
Progress
PAF II (100M) Cumulative
C4.2 Training reports and review
workshop report of LBs
1. No. of monitoring visits by the
staff of LBs: 252
1. No. of monitoring visits by
the staff of LBs: 447
C.4.3 Training reports and
follow up survey as well as case
studies.
1. No. of IG sp: 9,356
2. No. of IGA members trained:
252605
IG + INFRA: 4,511
1. No. of IG sp: 14,669
2. No. of IGA members trained:
383,929
IG + INFRA: 26,465
3. % of trained IGA members successfully operating IGA: 85.4%
(based on RF status assessment)
C.4.4 Status reports of revolving
fund of COs
% of IGA CO members obtaining and managing the funds for intended
purpose: 85.4% [Based on the assessment carried out on RF access
by the CO members for their business activities during 2010. The
new assessment of 2011 is in progress ]
C.5.1 Project completion reports PO: 898
CO: 9,166
PO: 1,144
CO: 14,802
C.5.2 Project completion reports
of POs and MIS.
PO progress reports: 898 CO level
Social Audit reports: 5,699
PO progress reports: 1144
CO level Social Audit reports:
5,699
C.5.3 Reports on compliant
handling mechanism
1. % of Complaints received and recorded and addressed: 91.6% (
Total complaints received: 36)
Remarks
• ‘Local bodies’ means VDCs, DDCs and
Municipalities
• “Trained” means participated in orientation
and other monitoring training.
“Successfully operating” means that the enterprises
are showing positive and increasing net income
• “Successfully managed” means complying
with the conditions of the financing,
including use and management of funds for
the intended purposes, diligence in timely
servicing of debt.
• ‘Funds’ means PAF revolving fund or other
funds.
• “Project Managed” means status of proposal
received, agreement done, fund transfer and
completion of sub/projects.
• “On time” means 7 and 15 days after months
completed in the case of 20 accessible and
20 remote districts respectively.
60 ANNUAL PROGRESS REPORT (2010/2011)

Annex 15
Year wise Target vs. Achievements
Physical Progress
Fiscal Year
Target in Nos. Achievement in Nos. % of achievement
FY 2060/61 - -
FY 2061/62 - 541
FY 2062/63 1,597 1166 73%
FY 2063/64 2,750 3483 126%
FY 2064/65 3,776 3117 83%
FY 2065/66 4,048 3343 83%
FY 2066/67 3,923 3882 99%
FY 2067/68 2,193 3148 144%
Total 18,287 541 102%
Financial Progress
Fiscal Year
Budget (NRs) Expenditure (NRs) %
FY 2060/61 10,000,000.00 5,781,379.00 57.81
FY 2061/62 268,000,000.00 247,322,606.00 92.28
FY 2062/63 507,925,000.00 493,505,927.00 97.16
FY 2063/64 1,254,070,000.00 1,210,296,385.00 96.51
FY 2064/65 1,970,732,000.00 1,875,485,349.00 95.17
FY 2065/66 2,978,865,000.00 1,647,207,175.00 55.30
FY 2066/67 2,723,717,000.00 2,481,049,874.47 91.09
FY 2067/68 3,039,166,000.00 2,601,283,022.25 85.59
Total 12,752,475,000.00 10,561,931,717.72 82.82
Annex 16
Details of expenditure up to July 16, 2011 (Cumulative PAF-I and PAF-II)
Details 40M Expenditure 100M Expenditure Total Expenditure
Community Organization (IG) 1,381,890,497.49 4,471,353,214.74 5,853,243,712.23
Community Organization (INFRA) 391,685,432.51 1,229,519,625.48 1,621,205,057.99
Community Organization (INNOVATIVE) 654,004,180.22 107,814,513.00 761,818,693.22
Total Community Organization (I) 2,427,580,110.22 5,808,687,353.22 8,236,267,463.44
Partner Organization (II) 373,442,911.49 1,331,451,460.41 1,704,894,371.90
Sub Total (A=I+II) 2,801,023,021.71 7,140,138,813.63 9,941,161,835.34
Monitoring, Training/Workshop (B) 108,181,431.90 108,785,984.77 216,967,416.67
PAF Capital Cost (C) 34,438,454.82 23,438,674.08 57,877,128.90
PAF Recurrent Cost (D) 120,946,304.52 224,979,032.04 345,925,336.56
Total (A+B+C+D) 3,064,589,212.95 7,497,342,504.52 10,561,931,717.47
Note:(i) Including PPF Expenditure and KA-1-6 (Beruju) Expenses Amount
(ii) Project PAF-I is closed
ANNUAL PROGRESS REPORT (2010/2011) 61

Annex 17 (1)
Program Funding Status of FY-2067/68 (2010/11 only)
Target
Progress
Descriptions
Yearly Budget Yearly Expenditure %
Block Grant to Cos
Income Generation Sub Projects 1,498,802,000.00 1,526,897,895.45 101.87
Infrastructure Sub Projects 668,271,000.00 470,910,094.15 70.47
Innovative Sub-Projects 88,343,000.00 11,400,881.00 12.91
Total Sub-Projects Block Grants (A) 2,255,416,000.00 2,009,208,870.60 89.08
Partner Organization 529,048,000.00 456,990,252.13 86.38
Goods & Equipment, Vehicle And Furniture 14,769,000.00 369,821.20 2.50
Consultancy, Training, Workshop, Seminar 113,764,000.00 39,606,480.75 34.81
Incremental Operating Expenses 126,169,000.00 95,107,597.57 75.38
Sub Total (B) 783,750,000.00 592,074,151.65 75.54
Grand Total (A+B) 3,039,166,000.00 2,601,283,022.25 85.59
62 ANNUAL PROGRESS REPORT (2010/2011)

Annex 17 (2)
District wise Target Vs Achievement in FY-2067/68 (2010/11 only)
District
Target Physical Achievement Achievement in % Beneficiaries
IG INFRA Amount IG INFRA Amount IG INFRA Amount Co members Total
Initial 6 Districts
Darchula 7 10 149,175,130.00 7 20 136413196.8 100% 200% 91% - 294
Kapilbastu 28 19 73,173,881.00 60 22 66731610.87 214% 116% 91% 1,875 1,839
Mugu 45 4 47,817,321.00 51 19 36262929.8 113% 475% 76% 299 1,308
Pyuthan 0 3 73,176,944.00 129 11 104715115.8 367% 143% 465 4,320
Ramechhap 21 5 98,163,839.00 63 13 104468819.6 300% 260% 106% 841 1,427
Siraha 38 9 113,706,731.00 35 74908444.23 92% 0% 66% 756 756
Sub Total 139 50 555,213,846.00 345 85 523,500,117 248% 170% 94% 4,236 9,944
19 Additional Districts
Achham 44 20 91,104,746.00 130 3 94575856.4 295% 15% 104% 3,456 4,524
Baitadi 9 8 60,870,320.00 90 10 79077301.2 1000% 125% 130% 1,935 2,494
Bajhang 28 11 57,861,377.00 63 18 59497889.58 225% 164% 103% 1,859 1,483
Bajura 10 4 44,666,970.00 6 5 36877853.41 60% 125% 83% 138 244
Dadeldhura 4 4 55,652,572.00 2 13 53448505 50% 325% 96% 277
Dailekh 34 9 51,411,664.00 38 4 45589366.57 112% 44% 89% 1,173 1,267
Dolpa 52 3 31,746,126.00 43 2 33522361.93 83% 67% 106% 1,236 1,297
Doti 40 5 42,616,782.00 47 3 39126805.61 118% 60% 92% 1,267 1,406
Humla 0 0 25,023,445.00 14 20324553.04 81% 178
Jajarkot 2 4 41,126,799.00 2 3 51733648.62 100% 75% 126% 51 229
Jumla 7 6 116,063,381.00 11 5 104987282.5 157% 83% 90% 336 419
Kalikot 0 18 92,279,359.00 49 15 72892250.09 83% 79% 1,370 2,152
Mahottari 22 5 69,474,916.00 42 5 56236030 191% 100% 81% 862 1,020
Rasuwa 22 5 10,021,657.00 7 24322713.29 32% 0% 243% 221 206
Rautahat 0 29 174,357,393.00 395 26 219526665.9 90% 126% 9,576 12,785
Rolpa 46 0 26,003,623.00 77 4 20347084 167% 78% 2,166 1,422
Rukum 27 19 91,457,389.00 33 10 58910110.88 122% 53% 64% 942 1,354
Sarlahi 0 31 51,328,274.00 112 35 51090133.4 113% 100% 957
Sindhuli 22 11 61,678,596.00 18 13 59210462.74 82% 118% 96% 462 896
19 Dist. Tot. 369 192 1,194,745,389.00 1,165 188 1,181,296,874 316% 98% 99% 27,050 34,610
25 Dist. Total 508 242 1,749,959,235.00 1,510 273 1,704,796,991.26 297% 113% 97% 31,286 44,554
ANNUAL PROGRESS REPORT (2010/2011) 63

District
Target Physical Achievement Achievement in % Beneficiaries
IG INFRA Amount IG INFRA Amount IG INFRA Amount Co members Total
15 B1 District
Bara 78 1 32,481,853.00 106 26044376 136% 0% 80% 2,106 2,177
Bardiya 80 3 23,478,296.00 99 5 21806988 124% 167% 93% 2,540 1,787
Dhading 56 12 28,638,967.00 75 8 23021789.7 134% 67% 80% 1,971 1,056
Dhanusha 105 1 57,359,688.00 131 56682928.3 125% 0% 99% 3,519 3,698
Khotang 14 4 26,003,187.00 50 8 23601350.18 357% 200% 91% 1,655 2,949
Okhaldhunga 56 1 18,937,895.00 87 14068378 155% 0% 74% 2,244 1,330
Panchthar 32 4 16,471,657.00 54 13312733 169% 0% 81% 1,443 746
Parsa 62 32 52,743,389.00 56 17 36162094.43 90% 53% 69% 1,900 1,765
Salyan 89 12 27,049,570.00 123 22476322 138% 0% 83% 3,376 1,797
Saptari 114 2 40,411,114.00 83 21258923 73% 0% 53% 2,345 4,303
Sindhupalch 135 6 33,871,657.00 125 28417906 93% 0% 84% 3,318 1,969
Solukhumb 32 2 11,903,186.00 55 10582433.38 172% 0% 89% 865 1,073
Taplejung 114 13 41,946,183.00 167 4 57265657.8 146% 31% 137% 3,341 3,363
Terhathum 17 32 13,865,764.00 35 14 10704780 206% 44% 77% 1,237 762
Udayapur 46 11 19,871,657.00 34 9 17735313.87 74% 82% 89% 1,109 1,695
19 Dist. Tot. 1,030 136 445,034,063.00 1,280 65 383,141,974 124% 48% 86% 32,969 30,470
40 Dist. Total 1,538 378 2,194,993,298.00 2,790 338 2,087,938,965 181% 89% 95% 64,255 75,024
Innovative Programme Districts
Baglung
Chitawan 7 0 4,609,283.00 7 2449546 100% 53% 195 311
Dhading
Kanchanpur 6 2 6,387,986.00 13 4789700 217% 0% 75% 308 294
Kavrepalan 0 0 0
Lalitpur 150000
Makwanpur 0 5 7,157,749.00 1687397 0% 24%
Morang 8 0 8,700,349.00 0% 0%
Nawalparasi
Surkhet
Innovative Tot. 21 7 26,855,367.00 20 0 9,076,643.00 95% 0% 34% 503 605
Total = 1,559 385 2,221,848,665.00 2,810 338 2,097,015,608 180% 88% 94% 64,758 75,629
64 ANNUAL PROGRESS REPORT (2010/2011)

Annex 18
Poverty Alleviation Fund Project – II Progress Status
Heading Number Amount (NRs.)
Community Organizations (CO) Registered with PAF 12,370
CO Federation Registration 517
Agreement 11924 6,740,003,674
PAF Investment in CO Income Generating (IG) Activities 11269 5,238,088,609
Community Infrastructure 1754 1,501,915,065
Partner Organizations (PO) 370
Districts Covered Total 57
Regular PAF Districts 40
Phase I (6 Districts) 6
Phase II (19 Districts) 19
Phase III (15 Districts) 15
Innovative Programme 10
NDM-World Bank Innovative Prog. 24
VDC Covered POs Working 1646
COs Programme Activity 1538
Per centage
CO Member House Holds Total 344,512
(HH)
Poverty Hardcore Poor (Ka) 220,926 64.13%
Ranking
Medium Poor (Kha) 91,315 26.51%
Poor (Ga) 31,695 9.20%
Marginal Non-Poor (Gha) 576 0.17%
Gender Male 80,150 23.26%
Female 264,362 76.74%
Ethnicity Dalit 82,987 24.09%
Janajati 97,343 28.26%
Others 164,182 47.65%
Total Beneficiary HH Total 358316
Ethnicity Dalit 89,505
Janajati 93,467
Others 175,344
ANNUAL PROGRESS REPORT (2010/2011) 65

Annex19
PAF II CO registration, agreement for sub-project and disbursement status (cumulative)
District
CO Registered w/ PAF
(No.)
Agreement
With CO No. Amount (NRs.)
Initial 6 Districts
Darchula 442 571 739 409,226,460
Kapilbastu 428 422 453 271,197,524
Mugu 119 137 195 86,919,259
Pyuthan 878 891 997 513,686,962
Ramechhap 799 824 882 375,377,411
Siraha 818 813 827 314,690,029
Sub Total 3,484 3,658 4,093 1,971,097,645
19 Additional Districts
Achham 354 393 423 302,589,200
Baitadi 500 417 444 225,825,513
Bajhang 333 252 320 192,966,725
Bajura 286 280 315 194,308,809
Dadeldhura 244 257 286 175,599,110
Dailekh 281 287 297 175,403,701
Dolpa 103 105 108 79,238,973
Doti 294 285 298 146,641,871
Humla 118 128 147 85,965,435
Jajarkot 253 192 205 155,450,857
Jumla 287 299 311 261,349,584
Kalikot 498 466 484 253,256,554
Mahottari 305 308 312 156,569,981
Rasuwa 108 101 101 60,207,592
Rautahat 1,191 1105 1144 702,191,306
Rolpa 155 156 159 60,367,061
Rukum 254 179 192 110,985,778
Sarlahi 726 848 873 414,721,098
Sindhuli 507 551 635 352,170,271
19 Dist. Tot. 6,797 6,609 7,054 4,105,809,419
25 Dist. Total 10,281 10,267 11,147 6,076,907,064
15 B1 District
Bara 120 106 106 36,129,445
Bardiya 102 99 104 29,897,633
Dhading 101 94 104 35,649,547
Dhanusha 130 131 131 85,443,827
Khotang 156 57 58 28,218,602
Okhaldhunga 87 87 87 17,633,125
Panchthar 210 54 54 15,426,859
Parsa 151 141 146 73,048,478
Salyan 137 129 132 32,090,489
Saptari 98 83 83 36,228,262
Sindhupalch 186 125 125 37,293,255
66 ANNUAL PROGRESS REPORT (2010/2011)

District
CO Registered w/ PAF
(No.)
Agreement
With CO No. Amount (NRs.)
Solukhumbu 60 55 55 16,810,992
Taplejung 210 167 171 74,128,678
Terhathum 59 45 49 12,639,626
Udayapur 46 42 43 21,196,601
15 B1 Dist. Total 1853 1415 1448 551835419
40 Dist. Total 12,134 11,682 12,595 6,628,742,483
Innovative Programme Districts
Chitawan 30 45 53 12,241,422
Dhading 51 64 68 29,911,566
Kanchanpur 65 56 56 18,491,700
Lalitpur 2 2 2 6,784,220
Makwanpur 70 59 63 27,754,427
Morang 18 16 16 16,077,855
Innovative Tot. 236 242 258 111261190
Total = 12,370 11,924 12,853 6,740,003,673
Annex 20
PAF II Expenditure (in NRs.)
Details As of FY-66/67 FY-2067/68 Total Expenditure
Community Organization (IG) 2,944,455,319.29 1,526,897,895.45 4,471,353,214.74
Community Organization (INFRA) 758,609,531.33 470,910,094.15 1,229,519,625.48
Community Organization (INNOVATIVE) 96,413,632.00 11,400,881.00 107,814,513.00
Total Community Organization (I) 3,799,478,482.62 2,009,208,870.60 5,808,687,353.22
Partner Organization (II) 874,461,208.28 456,990,252.13 1,331,451,460.41
Sub Total (A=I+II) 4,673,939,690.90 2,466,199,122.73 7,140,138,813.63
Monitoring, Training/Workshop (B) 69,179,504.02 39,606,480.75 108,785,984.77
PAF Capital Cost (C) 23,068,852.88 369,821.20 23,438,674.08
PAF Recurrent Cost (D) 129,871,434.47 95,107,597.57 224,979,032.04
Total (A+B+C+D) 4,896,059,482.27 2,601,283,022.25 7,497,342,504.52
Note: Including PPF Expenditure and KA-1-6 (Beruju) Expenses Amount
ANNUAL PROGRESS REPORT (2010/2011) 67

Annex 21
Summary Results of Follow-on Impact Survey 2010
(Done by TU and the World Bank)
1. PAF’s monitoring data is developed on 5 different databases
which support the process of working with partner and community
organizations and monitoring the sub-project activities (figure 1). These
databases provide a rich source of information on PAF activities and
have been increasingly analyzed to improve planning and address
weaknesses in the project implementation process and to identify areas
of strength that can be scaled up.
2. In addition to the MIS, an independent impact evaluation has also been
integrated into the design of the program. The IE has been a long-term
partnership between the PAF Secretariat, Tribhuvan University (TU) (that
carried out the surveys) and the WB task team (that provided Technical
Assistance- TA during the design phase and carried out the analysis).
Data for the PAF Impact Evaluation (IE) come from two rounds of surveys
Partner
Organization
Selection
Partner
Organization
Selection
of 3,000 households from 200 villages. The baseline was carried out in
late 2007 and the follow-up of the same households in early 2010. The
survey questionnaire is adapted from the Nepal Living Standards Survey
(NLSS) and includes detailed information on consumption and income,
socio-economic and demographic issues, including education, health
and nutrition, housing conditions and physical assets, migration and
remittances, employment, social environment, community relationship,
voice and participation. For comparability with the national household
survey based welfare measures, PAF survey includes a very similar
consumption module and follows the same consumption aggregation
method. The IE analysis uses panel households (2774 out of 3,000),
half of which are PAF beneficiaries (treatment) the rest non-beneficiaries
(control) households. Outcome indicators on PAF beneficiary households
and carefully matched non-beneficiary households are compared for the
periods before and after the initiation of the PAF program. This method
is known as difference-in-difference combined with propensity score
matching.
Consumption Effects
Community
organization
selection and
registration
Community
organizations
database-Beneficiary
Assessment
Community:
Selection
priority
activites
Community
Agreements
database
Subproject
Projects
database
Community:
Implementation
of activites
Revolving
Fund
database
3. The estimated net program impact on per capita consumption (in
real terms adjusted for price inflation) growth is 13% for PAF Income
Generating (IG) participant households, 28% for PAF money recipient
households and 49% for those beneficiaries who have received the
money for at least six months. It is not a surprise that these impact
estimates are larger for money recipients but it is interesting to note
that this effect remains strong for those who have had the funds for
some time and have invested them in IGAs. The magnitudes of these
estimates are impressive across all three categories of treatments both
in terms of per cent change and absolute change. For example, money
recipients for more than 6 months recorded on net a 49 per cent growth
and Rupees 6,900 (approximately US$100) absolute change in real per
capita consumption in just over two years of time. These results are all
statistically significant and robust across different matching algorithms.
The higher levels of welfare impact over time may suggest that IGA
revenue is contributing to the welfare of these households, a result that
would be desirable from a policy and sustainability point of view.
4. The net impact in the growth in per capita consumption is even higher
for Dalit and Janajatis, implying the program’s ability to distribute growth
towards targeted groups. The net effect for money recipients among this
caste/ethnic group was an increase in real per capita consumption of 34
per cent, compared to 28 per cent for the overall sample of the same
treatment category.
Food Security Effects
5. Chronic food insecurity is a particularly important concern in Nepal
and substantial amount is spent per year on public works programmes
aimed at alleviating hardship for food insecure households. Sustained
food price inflation remains a concern and an estimated 3.7 million
people are currently food insecure. The impact of high prices and food
insecurity is most severe on economically, geographically and socially
marginalized communities. Since Nepal‟s poorest households spend
more than 75% of their income on food, high prices will continue to
affect poverty alleviation efforts. The analysis estimates that the net
PAF impact on incidence of food insecurity (as defined as self-reported
food sufficiency for six months or less) is 10 per centage points decline
when the treatment group is PAF money recipients, and 14 per centage
points decrease among money recipients at least 6 months prior to
second-round survey. These effects are stronger for Dalit and Janajati
households. However, there is no impact for PAF IG households (the
base treatment category), possibly implying that the self-reported food
sufficiency indicator (measure of perceived change in household’s ability
to increase their food consumption) is not affected by PAF participation
alone when the household is yet to receive funds and start an IG activity.
Once again, these results are quite robust across different matching
alternatives.
School Enrolment Effects
6. Due to PAF, school enrolment rate among 6-15 year old children
increased by a net 7 per centage points for PAF IG households, by a
net 9 per centage points for PAF money recipient households , and a
net 12 per centage points for PAF money recipients for more than six
months. These are all notable and statistically significant impacts. While
child education is not a direct outcome associated with PAF intervention,
one can think of at least two ways by which a treated household would
change its behavior in relation to this outcome. First, PAF households
are part of the larger PAF community organization (CO) are and likely
to benefit from social-networking and mobilization. Second, actual
and perceived positive change in income (PAF funds) will likely reduce
potential constraints to sending a child to school.
68 ANNUAL PROGRESS REPORT (2010/2011)

Child Underweight Effects
7. For child malnutrition, measured in terms of underweight, the impacts
of PAF are as not strong as they are for other outcome indicators.
Nevertheless, incidence of underweight among children under 5 years of
age is estimated to decrease by 5 to 10 per centage points. The results
are however not statistically significant and also do not hold across
different matching techniques and across multiple treatment groups. We
take this as a sign of overall trend in the right direction and could see
significant effects in the next couple of years.
Other Effects
8. There are, as yet, no significant PAF impact evident on indicators
associated with community/social capital (trust, respect, relationships
between different ethnic groups, community disputes, etc.), although
the overall trend for both groups is positive. Similarly, while there is
no significant impact of PAF program on the use of health services/
facilities, the effects are qualitatively positive on the use of agricultural
centers, community forest services, and farmers’ groups.
Targeting
9. The targeting results are consistent with PAF’s objective of targeting the
poorest households and support monitoring data results as well. Of the
many categories that PAF uses to classify the disadvantaged, one is the
level of food sufficiency. The other is whether the household is from Dalit
or Janajati caste/ethnicity category. For example, the probability of being
selected as PAF money recipient goes up by 25 per centage points if you
are from a Dalit/Janajati household. Similarly, one per cent decrease in
per capita consumption at the baseline is associated with 15 per centage
points increase in the probability of being selected for PAF.
70
60
50
40
30
20
10
0
-10
-20
Reduction in Food insufficency
6.8
60.4
Control
Treatment
17.2
3 months or Less 6 months or Less
10. The impact results are also consistent with PAF’s targeting the
poorest households. Among other categories that PAF uses to classify
the poor, one is the level of food sufficiency. Households are separated
into four different groups under this category: hardcore poor (those with
less than 3 months of food security either via own production or other
-9.1
dependable sources of income), medium poor (those with 3 to 6 months
of food security), poor (those with 6 to 11 months of food security), and
non-poor (those with 12 or more months of food security). The results
show that the per centage of households with food insufficiency of 3
months or less dropped from 13.8% in 2007 to about 5.5% in 2010, a
reduction of more than 60%, for the PAF beneficiary households (defined
as those engaged in PAF supported income generating activities). The
reduction was only about 6.8% for non-beneficiaries. Similarly, the
per centage of households with food insufficiency of 6 months or less
decreased from 40% in 2007 to about 33% in 2010, a reduction of about
17.5%, for PAF beneficiary households. There was no reduction for nonbeneficiaries
during this period and in fact, there was an increase in food
insufficiency of these households by about 9%.
Access and Use of Services
11. With the second phase of PAF II still ongoing, the number of poor
households with access to improved infrastructure facilities has reached
more than 49,000. The impact evaluation results show that the school
enrollment rate for children from households engaged in PAF supported
income generating activities increased by more than 7 per centage
points. The enrollment rate was even higher for children from Dalit or
Janajati households. While there was no obvious difference between the
PAF beneficiaries and the non-beneficiaries in the use of health services/
facilities, the beneficiary households were found to be making more
use of agricultural centers, community forest services, and farmers’
groups. The increased use of such services supports the monitoring
data findings that PAF beneficiaries are investing in agriculture-related
opportunities and reaching out to service providers to improve and
develop these investments.
Conclusions
12. The evaluation results indicate that there is a positive and significant
impact on household level welfare due to the PAF program relative to
any other poverty reducing efforts that may be on-going at the same
time. The results further indicate that the program is an effective tool for
targeting the population considered most vulnerable in terms of caste
and ethnicity as well as most food insecure. There are many process
related questions that this impact evaluation does not yet answer. For
example, a review of the monitoring data suggests that women groups
are far more diversified in livelihood activities that mixed groups. Impacts
on women only groups would need to be analyzed further as should the
previously related positive indication of nutritional impact on children
under 5 years of age.
13. The household-level panel data provide an opportunity for further
analysis over time which may help us understand changes in poverty
dynamics and for further counterfactual analysis of the outcomes
reported in this paper. As such, a continuation of the survey methodology
and of the impact evaluation analysis would be an important tool for
policy makers and for the implementation of the poverty alleviation fund
at the national level.
(Ref. Impact Evaluation of the Nepal Poverty Alleviation Fund, WB/TU)
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Annex 22
Un-audited Financial Statement for FY 2010-11
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Annex 23
Un-audited Project Account for FY 2010-11
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Annex 24
Current Staff List (as of January 2012)
S.N. Staff Name Designation
1 Raj Babu Shrestha Executive Director
2 Manoj Chipalu Financial Analyst, Chief of Finance & Admin. Division
3 Murari Lal Chaudhary Community Infrastructure Expert, Chief of Community Infrastructure Division
4 Ram Prasad Dhakal Social Inclusion Expert, Chief of Program Coordination Division
5 Kanchan Tamang Lama R&D Officer and Acting Chief of M&E and Research Division
6 Anita Koirala Micro Enterprise Development Officer and Acting Chief of HRD Division
7 Avishesh Neupane Environment Officer
8 Dilip Raj Joshi Finance Officer
9 Prabin Ghimire Finance Officer
10 Shankar Prasad Yadav Civil Engineer
11 Shree Ram Subedi Communication Officer
12 Sunita Shakya MIS Officer
13 Achut Man Singh Pradhan Portfolio Manager
14 Ajay Kumar Patel Portfolio Manager
15 Akhilesh Chandra Das Portfolio Manager
16 Amar Kumar Pakhrin Portfolio Manager
17 Arun Pandey Portfolio Manager
18 Bal Krishna Bishwakarma Portfolio Manager
19 Bhupananda BK Portfolio Manager
20 Bikam Karki Portfolio Manager
21 Deepa Regmi Portfolio Manager
22 Dhana Raj Shah Portfolio Manager
23 Durga Bahadur Gandhari Portfolio Manager
24 Hare Ram Wagle Portfolio Manager
25 Ishwari Lal Bishwakarma Portfolio Manager
26 Jaya Raj Pant Portfolio Manager
27 Jharendra Bahadur Singh Portfolio Manager
28 Kamal Bahadur Thing Portfolio Manager
29 Krishna Bahadur Sherala Portfolio Manager
30 Lal Bahadur Siwa Portfolio Manager
31 Lokendra Singh Badal Portfolio Manager
32 Mahesh Kumar Shahi Portfolio Manager
33 Malati Chaudhary Portfolio Manager
34 Manoj Kumar Gupta Portfolio Manager
35 Meena Nakarmi Portfolio Manager
36 Nirak Bahadur Sunar Portfolio Manager
37 Nirmal Pant Portfolio Manager
38 Om Prasad Poudel Portfolio Manager
39 Padam Singh Thagunna Portfolio Manager
40 Pradip Paudel Portfolio Manager
41 Pramod Joshi Portfolio Manager
42 Rabindra Suwal Portfolio Manager
43 Ram Bahadur Bhusal Portfolio Manager
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S.N. Staff Name Designation
44 Ramesh Lama Portfolio Manager
45 Sajada Khatun Portfolio Manager
46 Sandeep Nath Upreti Portfolio Manager
47 Sanjay Kumar Jha Portfolio Manager
48 Tara Prasad Joshi Portfolio Manager
49 Anita Shrestha Office Assistant
50 Dipesh Ratna Shakya Office Assistant
51 Jaya Hada Office Assistant
52 Lalita Kayastha (Khanal) Finance Assistant
53 Parjun Sapkota Office Assistant
54 Rita Bayalkoti Office Assistant
55 Russell Man Singh Pradhan MIS Assistant
56 Suman Kumar Pandit Finance Assistant
57 Prem Lama Messenger
58 Rajendra Dhakal Messenger
59 Subash Rai Messenger
60 Datta Maharjan Driver
61 Devi Kumar Ale Magar Driver
62 Krishna Bahadur Khatri Driver
63 Shiva Nagarkoti Driver
Ex-staffs who worked during the reporting year of 2010-11
S.N. Staff Name Designation
1 Krishna Babu Joshi Chief of Monitoring Evaluation and Research Division
2 Mahesh Pokhrel Administration Officer
3 Naveen Prashad Procurement Officer
4 Prabin Manandhar Portfolio Manager
5 Dinesh Gautam Office Assistant
6 Kapila Prajapati Receptionist
7 Satish Chaudhary Finance Assistant
8 Smriti Sharma Receptionist
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