Fiscal year 2010/11 - Poverty Alleviation Fund, Nepal

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