Annual Report 2007/2008 - Poverty Alleviation Fund, Nepal

ANNUAL REPORT 2007/08

POVERTYALLEVIATION FUNDNEPALANNUAL REPORT 2007/08

POVERTY ALLEVIATION FUNDiv

AcronymsANNUAL REPORT 2007/08ADDCN Association of District Development Committees NepalAEPC Alternative Energy Promotion CenterCAP Community Action PlanCBCapacity BuildingCBOs Community Based OrganizationsCBS Central Bureau of StatisticsCCP Community Contribution PlanCGCommunity GroupCICommunity InfrastructureCIP Community Infrastructure ProjectCO Community OrganizationDDC District Development CommitteeDNPWC Department of National Park and Wildlife ConservationEIA Environmental Impact AssessmentFMR Financial Management ReportGON Government of NepalGOs Governmental OrganizationsGTZ German Technical CooperationIDA International Development Agency, World BankIEE Initial Environmental ExaminationIESE Initial Environmental and Social ExaminationIFAD International Fund for Agriculture DevelopmentIGIncome GenerationIGAs Income Generation ActivitiesLDF Local Development FundLDO Local Development OfficerMDGs Millennium Development GoalsMEs Micro EnterprisesMIS Management Information SystemMoF Ministry of FinanceMoLD Ministry of Local DevelopmentMoU Memorandum of UnderstandingNDM Nepal Development MarketplaceNEA Nepal Electricity AuthorityNGOs Non Governmental OrganizationsNOA Non Operating AccountNPC National Planning CommissionO and M Operation and MaintenanceOA Operating AccountOAG Office of the Auditor GeneralPAF Poverty Alleviation FundPM Portfolio ManagerPMO Prime Minister OfficePMR Project Management ReportPOPartner OrganizationPSOs Private Sector OrganizationsR & D Research and DevelopmentRBB Rastriya Banijya BankRCIW Rural Community Infrastructure WorksREDP Regular Energy Development ProgramSAs Service AgenciesSMSocial MobilizationSNV Netherlands Development OrganizationSRI System of Rice IntensificationTAC Technical Appraisal CommitteeToT Trainings of TrainersUG User GroupUNICEF United Nations International Childern’s Emergency FundUSD United States DollarVCDP Vulnerable Community Development PlanVDC Village Development CommitteeWB World BankWFP World Food Programmev

POVERTY ALLEVIATION FUNDContentsEXECUTIVE DIRECTOR’S REPORTBringing Smile in The Lives of The Poor .........................................................XICHAPTER1: INDRODUCTION1.1 PAF Context/Objectives 11.2 The Strategy 21.3 Guiding Principles 21.4 Programme Components 31.5 Operational Modality 61.6 Salient Features 81.7 Organizational Overview 81.8 The Programme Coverage 8CHAPTER 2: IMPLEMENTATION STATUS2.1 Annual Achievements Against Targets 102.2 Component-wise Progress Status 12CHAPTER 3: INFORMATION, MONITORING AND CO-ORDINATION3.1 Monitoring and Evaluation 483.2 Communication and Outreach 533.3 Management Information System 543.4 Partnership and Collaboration 55CHPTER4: FINANCIAL MANAGEMENT4.1 Financial Planning and Management 564.2 Performance Audit 594.3 Budget Expenditure 604.4 Financial Progress Status 61CHAPTER5: LESSONS AND FUTURE DIRECTIONS5.1 Lessons Learned and Challenges 635.2 Lessons Learned 645.3 Future Programme and District Coverage Plan-PAF II 65vi

ANNUAL REPORT 2007/08LIST OF ANNEXESAnnex 1: Fact Sheet as of July 15, 2008 66Annex-2: District-wise CO Registration, CO and Sub-projects Agreements, PAFInvestment and Community Contribution in Sub-projects (FY 2064/65) 67Annex-3: District-wise CO Registration, CO and Sub-projects Agreements, PAFInvestment and Community Contribution in Sub-projects (Cummulative) 68Annex 4: District-wise Number of POs, Working VDCs and Beneficiaries (FY 2064/65) 68Annex 5: District-wise Number of POs, Working VDCs and Beneficiaries(Cumulative) 71Annex 6: PAF Coverage (VDC and HHs) in 25 Districts 71Annex 7: PAF Current Board of GovernersEx-Board of Governer during FY 2007/08 and Onwards 72Annex 8: PAF Current Staff 73Annex 9: PAF Participatory M&E System 75Annex 10: PAF Organizational Structure 77Annex 11: Financial Statement 77LIST OF SUCCESS STORIESSuccess Story 1: Hotel transforms Dalit couple’s life 15Success Story 2: A worker is now a mill owner 25Success Story 3: Goats have changed Ram Bahadur’s life 33Success Story 4: A rural road that has replaced Marijuana with potatoes 38Success Story 5: Village gets drinking water in 19 days 45LIST OF BOXESBOX 1: PAF in Karnali 46BOX 2: PAF in Terai Border VDC 47BOX 3: Networking in Achham 56BOX 4: Performance Audit by Office of Auditor’s General 59LIST OF TABLESTable 2.1: Achievement Targets of Block Grant 11Table 2.2: Detail of Capacity Development Related Activities 12Table 2.3: CO Registration, CO Agreement and Sub-project Agreement 13Table 2.4: PAF Investment in The Community Sub-projects 14Table 2.5: Details of POs Status 18Table 2.6: CO Member Beneficiaries 18Table 2.7: Number of Key Position Holders in COs 22Table 2.8: Some of The Institutional Building Initiatives in Districts 24Table 2.9: Sector-wise Income Generation Activities by Households and 27Table 2.10: No of Households Involved in Livestock Sector by Category 29Table 2.11: PAF Investment in Agriculture Sector by Category 31Table 2.12: Type, Number And Distribution of Sub-projects 35Table 2.13: PAF Investment and Community Contribution in INFRA Sub-projects 36Table 2.14: Beneficiaries HHs 40Table 2.15: Summary of Investment, Beneficiaries and Per HH Cost 40Table 2.16: Number of Sub-projects with Environmental and 40Table 2.17: Details of CO Capacity Development 43vii

POVERTY ALLEVIATION FUNDTable 2.18: Details of PO Capacity Development 43Table B2(A): Details of PAF Work in Terai Border VDC 47Table 4.1: PAF Expenditure Status (in million) 60Table 4.2: Disbursement Expenditure to COs (in million) 62Table 4.3: Disbursement Expenditure to POs (in million) 62LIST OF CHARTCHART 2.1: PAF Investment:Income Generation Vs. Infrastructure 16CHART 2.2: PAF Investment Share in IG and INFRA by Programme Area 16CHART 2.3: Overall Cost Sharing 16CHART 2.4: Community Cost Sharing in IG Sub-projects 17CHART 2.5: Community Cost Sharing in INFRA Sub-projects 17CHART 2.6: Overall Cost Sharing by Programme Area 17CHART 2.7: CO Member Distribution by Programme Area 19CHART 2.8: CO Member-Beneficiaries by Poverty Rank [Cumulative] 19CHART 2.9: Distribution of Members in Programme Area by Poverty Ranking 20CHART 2.10: PAF Benefitted Poor Households (HHs) in 25 districts 20CHART 2.11: CO Members by Caste Ethnicity 20CHART 2.12: Distribution of Members in Programme Areas by Caste/Ethnicity-wise 21CHART 2.13: District Ethinicity Composition Vs PAF Coverage [25 District] 21CHART 2.14: CO Member by Gender 22CHART 2.15: Gender-wise Distribution of Members by Programme Area 22CHART 2.16: Caste/Ethnicity-wise Key Position Holders in Programme Area 23CHART 2.17: Key Position Holders by Gender 23CHART 2.18: Key Position Holders by Caste/Ethnicity 23CHART 2.19: Trend of Investment in IG/Infra 26CHART 2.20: Investment in IGA 27CHART 2.21: HHs Involved in Livestock Sector in Programme Area 28CHART 2.22: HHs Involved in Agriculture Sector by Activities 29CHART 2.23: PAF investment in Trading by Ecological Region 31CHART 2.24: PAF Investment in Service Sector by Ecological Region 31CHART 2.25: Distribution of Sub-projects by Type [FY 2065/65] 35CHART 2.26: Distribution of Sub-projects by Type [Cumulative] 35CHART 2.27: PAF Investment in INFRA Sub-projects by Regions[Cumulative] 36CHART 2.28: Share of Investment in INFRA Sub-projects [Cumulative] 37CHART 2.29: Share of Investment in INFRA Sub-projects in different regions[Cumulative] 37CHART B1(A):PAF Coverage in Karnali District 46CHART B2(A):Poverty-wise CO Members in Terai Border VDCs 47CHART B2(B): Ethinicity-wise CO Members in Terai Border VDCs 47

ANNUAL REPORT 2007/08x

POVERTY ALLEVIATION FUNDExecutive Director’s ReportBringing smile in thelives of the poorWith only four years of implementation, PAF has achieved notable results on the ground.PAF has been able to organize 239,306 CO members in the form of 8,423 communityorganizations across the country till the end of the reporting year. Of them, anoverwhelming 67 per cent are the hard core poor—who are unable to feed themselveseven for 3 months.A further caste and ethnicity wise break down shows that 35 per cent of the CO membersare Dalit (so called lower caste), and 28 per cent are indigenous communities(Janjatis).Similarly a whooping 69 per cent of CO members are women.These results are in accordance with PAF’s clearly defined social inclusion strategy andaffirmative action on the ground.Independent studies have also confirmed that PAF is well on track to mobilize the poor tounleash their potentials. A recent performance audit of the Auditor General Office ofGovernment of Nepal has said PAF programme has eased living, and improved incomeand saving status of the community people. It also mentioned that there has been “nomisuse of the fund” and PAF is “spot-on” on transparency front.A World Bank commissioned preliminary evaluation has indicated a good rate of returnon PAF investments, ranging from 20-25 per cent. Annual per capita incomes forbeneficiary families have increased by 10-15 per cent. A detailed follow up Survey tostudy on the impact of the PAF assistance in four pilot and two control districts is currentlyunderway and this will definitive conclusions on our achievements at the grass root level.The prospect of sustainability of Community organizations also looks possible as someof them in the pilot districts have already federated themselves in the form of multipurposecooperatives and they have also already established different networks to servethem well in terms of knowledge sharing and efficient and effective delivery.More importantly, we have seen that COs have also created a revolving fund at theirorganization. The fund amount is produced through interest incurred through (i)thexi

ANNUAL REPORT 2007/08amount lent to the CO members for their income generating activities, and (ii) principleloan amount repaid by the CO members against income generation activities (IGAs). Wehave developed the revolving fund management guideline to smoothen the progress ofCO revolving fund management during the reporting year.We are encouraged from such spontaneous graduation and will extend our support forsimilar community bid in the days to come.From the very beginning, PAF has emphasized on the need of better linkage with localauthorities, line agencies and other local programs in order to meet the challenges ofwide varieties of activities being implemented by the choice of the community people.There are good initiatives made in this front as we have signed a MoU with MoLD forinformation sharing and better coordination during the reporting year. There are scoresof examples where we have established coordination with different development actorsat the local level.Out of the total PAF expenditure of NRs 3.84 billion till Fiscal year 2064/65 (2007-08),94.44 per cent was in programme implementation through CO & PO ( 81.27 per cent forCO & 13.14 per cent for PO), 2.08 per cent in Monitoring, Training, Studies and OtherProgramme Support, 0.77 per cent in capital investment for PAF and 2.71 per cent in PAFoperation and PAF expenditure in Fiscal year 2064/65 was NRs 1875 million which is 95per cent of the allocated budget.During the last 4 years we have learned lessons on different aspects of community leddevelopment initiatives and there are challenges as well that we need to face in the daysahead. Success of the intervention has been witnessed since the communities have takenfull ownership of the programme due participatory demand-driven approach, communitymanagement and transparecny at all level. It is clear that poor can handle their programmeeffectively when they are organized and capaciated appropiately.PAF should, however, accord high priority to enhance the qualitative capacity of bothpartner organizations and community organizations. The legal institutional developmentof the community organizations of the poor that can continue their programme ontheir own is the major challege ahead. In this context, PAF has prepared a long-termvision plan with an objective of bringing Nepalese poor in sustained path out of povertyby 2025 AD.xii

POVERTY ALLEVIATION FUNDCurrently, PAF is in its second Phase beginning 2008. PAF is encouraged with WB’sadditional 100m US dollar grant for scaling up the progress that we registered till dateand expansion of the programme in additional underserved districts. PAF plan to addadditional 15 districts by the end of fiscal year 2008/09, bringing the total number ofprogramme districts to 40. PAF will cover all 75 districts by the end of the fiscalyear 2009/10.I am thankful to the Board of governors and all the professional staff for their incessantsupport so as to deepen our efforts in reaching out poor and fine tuning related plan andpolicies. I would also like to take this opportunity to thank the World Bank and IFAD forthe support and forging partnership with PAF.Finally, I would like to pay tribute to all stakeholders including the members of Communityorganizations and partner organizations without whose support and active participationPAF would not be where it is today.Raj Babu ShresthaExecutive DirectorPAFJanuary, 2009xiii

Chapter 1INDRODUCTION1.1 PAF Context/ObjectivesWith average GDP per capita of US$ 340 in 2007, Nepal remains the poorest in South Asia and one of thepoorest in the world. Thirty-one per cent of population in Nepal still lives below poverty line. The incidence ofpoverty is much higher (35 per cent) in rural areas than the urban centers (10 per cent), and evidence showsthat inequality and regional disparities are ever-increasing.The poor live predominantly in rural areas and engage in traditional and subsistence farming on small plots oflow quality land, have limited access to credit, infrastructure, markets and basic social services, often becauseof remoteness, and rely heavily on seasonal migration and remittance.Certain caste, ethnic groups, women and those living in remote areas are socially excluded and lag seriouslybehind in terms of income, assets, and most human development indicators.So the main concern before PAF is reaching out to poor and excluded communities—who are mainly poorwomen, Dalits and indigenous people.PAF Seeks to Contribute Directly to Achieve the Following NationalObjectivesTo attain the level of poverty to Ten per cent in 20 years in pursuant with the long term goal ofNepal Government; andTo reduce poverty by half by the year 2015 as per the Millennium Development Goals (MDGs).1

PAF ANNUAL REPORT 2007/081.2 The StrategyTo implement the programme, PAF envisages the following strategies: Enable poor people through social mobilization and capacity building to organize and obtain quality basicservices in cost-effective and sustainable manner with their direct involvement in identification, planning,designing, executing and managing, operating & maintaining the schemes/ programme. Use Partner Organizations (POs) to help facilitate poor vulnerable people and their community Groups orOrganizations to implement the programme components, and they include local bodies, NGOs/ CBOsand private sector organizations. Build partnership with various organizations working in its areas of operation at the village, district andnational level in order to ensure holistic development intervention to bring discernible impact on povertyreduction and scaling up the programmes in considerably less time. Build PAF an independent, autonomous and a professional organization sensitive to the needs andaspirations of the poor, expected to comprise a lean and thin structure with a core professional staff onlyand act as facilitator.1.3 Guiding PrinciplesSix basic guiding principles are followed in the operation of PAF activities.1. Targeted to poor (Antyodaya): Seeking the prosperity of poor and disadvantaged at the lowest end of economicladder. The last is the first for PAF. PAF follows bottom-up approach rather than top-down approach.2. Social Inclusion (Samabeshi): Seeking the participation of Dalit, Janjati, Women and other disadvantagedgroups below poverty level.3. Transparency (Pardarshita): All the activities of PAF are transparent. Every Community organization(CO) displays it activities on a board in their community.4. Demand Driven (Mang Anusar): Programmes are designed based on the needs and demands of thetargeted people.5. Direct Funding(Pratakchhya Bhuktani): Funding is made directly in the account of community organizationto implement the programme. Every CO has opened a back account in the nearest bank office as per the ruleof PAF. This provides both empowerment and confidence in them.6. Community Institutional Development: It is regarded as a crux for the sustainability of communityorganizations. Community institutionalization is exclusively done for the legal identity to the communityorganizations so that they can self-propel by delivering services to the target poor even after the phase outof PAF intervention. Multi-purpose co-operatives, co-operatives for single function and federation of COsare formed as per communities’ need.2

BRIEF INTRODUCTION1.4 Programme Components1.4.1 Social Mobilization/Awareness/EmpowermentSocial mobilization is the key component ofPAF, and also key entry point of theprogramme implementation. Theidentification of poor and formation ofcommunity organization with a group ofpoor households (25-30 in average) is themajor activity under this programme. Everyprogramme VDC has a social mobilizerfrom the partner organization. H/she isresponsible to assist the COs in sensitization,conscientization and organization.Literacy programme has been added nowin CO to help them with their literacy. Evenin literacy part, functional literacy is mostprioritized. Poverty is very closely linkedwith education, since it is considered thateducation helps to harness one’s potential.The objective of the social mobilization isto build up capacity of communities forpreparation, design, implementation,operation and management of communitysub-projects to enhance their livelihoods.Partner organizations identify thesettlements of target communities basedon the secondary information available in the district: including caste/ethnicity, income level and access tobasic service facilities. The consultation is done with concerned stakeholders and key informants. Afteridentification of the settlement, POs facilitate communities for participatory social assessment/well-beingranking. Individual households of a settlement are categorized as the hardcore poor, medium poor, poor andnon-poor by the communities themselves. Only hardcore poor, medium poor and poor are organized intoCommunity Organization (CO) to ensure “poor take decision” for them. Community Organization (CO) isformed with membership from the defined household during social assessment. Community Organizationwith active participation of each member enlists problems, interest, needs and aspiration. After seekingnecessary and relevant information, Community Organization identifies and prioritizes community sub-3

PAF ANNUAL REPORT 2007/08projects based on informed choices and participatory way. Community Organization also seeks necessaryhelp and facilitation from Partner Organization (PO) for technical assistance particularly in survey, design,market study, pre-feasibility and feasibility studies. Economically, socially and environmentally viablecommunity sub-projects, prepared with participatory Community Action Planning (CAP) process, are selectedand developed into the community proposals and related project is implanted in community.1.4.2 Income GenerationEvery member will identify and choose IG activity based on demand driven approach. Once the activities areidentified by each member, the partner organization facilitates to develop these activities into project and submitto PAF through Portfolio Manager for funding. Once TAC approves the proposal, an agreement is signedbetween CO and PAF, and money is transferred in respective CO’s bank account. In preparing the proposal thepartner organization examines the soundness of the enterprise, so that the proposal is economically andenvironmentally sound and technically feasible.Income Generation and Micro-enterprise promotion is considered as a core activity of PAF in order to enable targetgroups to gain access to food security, education and health. PAF has been providing sustainable source of capitalfund to the target groups in order to operate and manage various economic activities as per their interest andcapacity. The capital fund is provided as a grant to the Community Organizations (COs). From which thecommunity Revolving Fund (RF) is created in order to cater the capital requirement to launch and expandvarious economic activities to the target groups.PAF believes in demand driven approach. While launching the economic activities the group members havesovereignty to choose the activities of their own interest and capacity. During the activity selection, localresource potential, appropriate technology, skill and market potential is fully measured.The trainings like entrepreneurship skilldevelopment and business literacy/book keepingis provided to target groups in order to enable targetgroups to launch and operate IGAs & MEs profitablyand sustainably. Apart from this, if the particulartarget group/CO members require skill andtechnology up-gradation on specific economicactivities, their capacity is strengthened by providingsubject matter related trainings, orientations andexposures.1.4.3 Community InfrastructurePhysical infrastructures such as health center, rural water supply, small irrigation, rural road, trail, bridge andmicro-hydro which provide community with different types of services and facilities to improve their livelihood,and socio-economic standards directly or indirectly may be termed as community infrastructure.4

Poverty Alleviation Fund (PAF) aims to enable thepoor, women and vulnerable groups including Dalits,ethnic minorities and other socially excluded groupsto gain access to community infrastructures andadvocates demand led community based approach forthe implementation of community infrastructures.Thus community themselves identify, demand, takepart in planning, implementation, operation andmaintenance of community infrastructures.There are two types of community infrastructuresbeing demanded and implemented by communities.Those are: (1) Social Infrastructure which providebasic services contributing to improving basic health and enhancing human capital such as: drinking watersupply, sanitation facilities, health post, school, community building, biogas, improved stoves etc. and (2)Economic Infrastructure which contribute to increasing agricultural production, ensuring access to the marketcenters, providing energy to run cottage industries and small enterprises etc. such as; irrigation, rural road,trail, bridge, culvert, micro-hydro etc.1.4.4 Capacity BuildingCapacity Building and Human resourcedevelopment is one of the main thrusts of PovertyAlleviation Fund. Effective capacity Building/Human Resource Development is the key to PAFsuccess. Effective and efficient capacity buildingprocedure will reinforce to sustainable developmentfor communities for their livelihood incomegenerating and infrastructure efforts continuously.The success of PAF-I largely depends upon howmuch the community members are intelligent to utilize their available resources and able to establish linkageswith other groups.The main objective of capacity Building and Human Resource Development is effective implementation ofPAF’s overall activities for Poverty Reduction of the targeted group through motivated, committed andtrained manpower and to strengthen the community member’s capability for sustainable development byinvolving the poor themselves to undertake their needs for poverty alleviation and improved quality of life.The concept of Capacity building is “Help the communities to help themselves.”5

PAF ANNUAL REPORT 2007/08PAF Areas of Capacity Building are as Follows:The capacity building of Community organization (at the grassroots level).Capacity building of Partner organizations.Capacity building of PAF staffs.Observation study tour for staff and Board Members.Briefing and Reporting information to the concerned line Ministries, Prime Minister’s Office, Auditor,Generals office, National Planning Commission, Ministry of Finance, Financial Comptroller General Office,Ministry of Local Development; World Bank.Programme Orientation for the local bodies and Micro entrepreneurs.Interaction workshop with RB Bank for Fund flow Mechanism.Dissemination and coordination with INGO and NGO.Linkages development and access to available local resources1.5 Operational Modality1.5.1 Partnership With POsDistrict selection is done on the basis of district level poverty monitoring indicators developed by the CentralBureau of Statistics of the National Planning Commission. CBS has categorized all 75 districts of Nepal intothree groups, each group consisting of 25 districts, based on values of overall composite indices computedconsidering 28 relevant socio-economic indicators. PAF works in all 25 districts belonging to GroupC–categorized as most deprived districts. VDCs prioritization follows the district social assessment andvulnerable community mapping. Prior consultation is done with District Development Committee and differentstakeholders at district level for VDC selection.1.5.2 Selection of District and VDCBased on the eligibility criteria, PAF first selects POs working its working districts. Community basedOrganizations, Non-governmental Organizations (NGOs), Private Sector Organizations (PSOs), Local bodiessuch as District Development Committee (DDC), Municipality and Village Development Committee (VDC)are the potential POs for PAF. PO helps in social mobilization, facilitation, capacity building and technicalassistance to CO. They facilitate COs to identify, plan, design, execute, operate and maintain the communitysub-projects. It also provides necessary technical support for successful completion of the sub-project, andcarries out monitoring of the sub-projects.1.5.3 Selection of Households/SettlementsPO is assigned in one or more VDCs to identify the settlements with higher concentration of PAF’s targetcommunities. Participatory social assessment is done at selected settlement. All households of a settlement arecategorized into hardcore poor, medium poor, poor and non-poor based on participatory well-being ranking.6

1.5.4 Community Organization (CO)Community Organization (CO) is formed with membership from the defined household during socialassessment. Only hardcore poor, middle poor and poor are organized into CO to ensure “poor take decision”for themselves. At least, 80 per cent of the CO members are to be poor women, Dalits and Janjaties. It is alsomandatory that 50 per cent members of a CO should be women, and key positions—chairman, treasurer andsecretary—must be fulfilled by poor women, Dalit and/or Janjaties. COs seek necessary help and facilitationand apply for registration in PAF.1.5.5 Community Sub-project Preparation and FundingCO with active participation of each member enlistsproblems, interest, needs and aspiration. Afteracquiring necessary and relevant information, COidentifies prioritized community sub-projects basedon informed choice through a participatory manner.CO also seeks necessary help and facilitation fromPO for technical assistance, particularly in survey,design, market study, pre-feasibility and feasibilitystudies. Economically, socially and environmentallyviable community sub-projects, prepared withparticipatory Community Action Planning (CAP)process, are selected and developed into thecommunity proposals.Upon acceptance of such community sub-project proposals from registered COs, the proposals are assessed and approvedfor funding. However, such community sub-projects must be either already incorporated in the VDC/DDC plan orensured to be incorporated in the coming fiscal year VDC/DDC plan. An agreement is signed between PAF and CO.Soon after the agreement signed, the fund is disbursed directly to the CO’s non-operational account. While the firstinstallment is transferred to operating account immediately, the successive installment are made after the CO accomplishedsome progress and meet key milestones, which include submission of physical progress report, financial progressreport, PO monitoring report, status of community contribution and revolving fund, among others.1.5.6 Community Sub-project ImplementationCO or beneficiary community is wholly responsible for implementation of an agreed community sub-project.If required, CO revises community action plan (CAP) and ensures community contribution by developingcommunity contribution plan, purchasing plan and revised implementation schedule. In doing so, CO sometimes,seeks necessary help from PO. PO facilitates CO for smooth implementation by ensuring necessary technicalassistance and capacity building. However, Community is fully responsible for the operation and managementof the sub-project and its sustainability.7

PAF ANNUAL REPORT 2007/081.5.7 Monitoring of the ProgrammeParticipatory monitoring and supervision is adopted to monitor PAF activities in the field and ensure timelyand effective implementation of the community sub-projects. PAF monitoring system monitors regularly andperiodically at COs, POs and PAF levels. PAF adopts participatory planning, monitoring and evaluation systemto ensure participation and inclusion of the poor in their development activities. A system of public auditingand public display of community sub-project information is mandatory to ensure transparency1.6 Salient FeaturesPAF possesses distinctive beauty apart from other institutions/organizations. Its salient features are as follows: Poorest of the poor and socially excluded group plan and manage their programme by themselves. Quick response to meet demand of poor after project formulation. There is flexibility to formulate projects asper local needs and potentials (meet district development plan). Direct funding is ensured to poor to manage their schemes. Both income generation and infrastructure sub-projects are meant for improving the livelihood of target community. There is as much as necessary flexibility for linkages and partnership to fetch synergy and quick discernible impact. Improved transparency and governance in service delivery. Community Institutional Development for long-term sustainability1.7 Organizational OverviewPAF is an autonomous, independent and professional organization under PAF Act 2063.The 12 members governing board, chaired by the Prime Minister, is responsible for policy guidance andprogramme approval.Vice-chairperson and 5 members are appointed by the government from among the development professionalswhile other 5 - ex-officio members includes National Planning Commission (NPC) Secretary, Chairman of theAssociation of District Development Committees of Nepal (ADDCN), Association of Village DevelopmentCommittees of Nepal (AVDCN), National Women Commission (NWC), and National Dalit Commission(NDC). PAF Executive Director works as the Secretary to the PAF Board.1.8 The Programme CoverageInitially, in the Fiscal Year 2061/062, PAF started programme implementation in six districts (Siraha, Ramechhap,Pyuthan, Darchula, Kapilvastu and Mugu). Based on the experience gained in these six pilot districts, PAF hasexpanded programme coverage to an additional 19 districts from the fiscal year 2062/063. These districtsinclude Achham, Baitadi, Bajhang, Bajura, Dadeldhura, Dailekh, Dolpa, Doti, Humla, Jajarkot, Jumla, Kalikot,Mahottari, Rasuwa, Rautahat, Rolpa, Rukum, Sarlahi and Sindhuli, thus covered all 25 districts belonging to thecategory of most deprived districts in Nepal.Based on the experience gained in those six pilot districts and remaining nineteen districts of category-C of CBS,from fiscal year 2064/065 BS, PAF has expanded programme coverage to an additional 15 districts falling incategory-B of the CBS. The new districts include Bardiya, Salyan, Parsa, Bara, Dhading, Sindhupalchwok, Dhanusa,8

Solukhumbu, Okhaldhunga, Khotang, Udayapur, Saptari, Taplejung, Terathum and Panchthar. It is also beginningspecial programme in the VDCs bordering with India. Thus in 2064/065 BS, PAF has covered 40 districts.Besides its regular programme districts, PAF has also been working in other districts through innovative SpecialWindow Programme to capture innovative initiatives of different organizations/communities at different places.PAF is all set to extend the regular programme in other additional 15 districts within this FY 2008/09 to cover 55districts and poverty pocket programmes in remaining 20 districts which are ranked from one to twentyaccording to CBS ranking based on composite indices. Thus by the turn of 2009/10, PAF will cover all 75 districtsof Nepal with its programme.HumlaDarchulaBaitadiBajhangBajuraMuguDadeldhuraKanchanpurDotiAchhamKalikotJumlaDolpaMustangNKailaliDailekhJajarkotRukumManangSurkhetMyagdiBardiyaSalyanRolpaBankeDangPyuthanBaglungGulmiArghakhanchiPalpaKapilvastuRupandehiParbatSyangjaGorkhaKaskiLamjungRasuwaTanahunNawalparasiChitwanDhadingMakwanpurParsaBaraInitial 6 Programme Districts (FY 2004/05)Additional 19 Programme Districts (FY 2005/06)Additional 15 Programme Districts: PAF II, Phase I (FY 2007/08)NuwakotKathmanduLalitpurRautahatSindhupalchowkBhaktapurKavreSindhuliSarlahiMahottariDhanushaDolakhaSolukhumbuRamechhapOkhaldhungaKhotangUdayapurSirahaSaptariSankhuwasabhaTaplejungBhojpurDhankutaSunsariTerhathumPanchtharIllamMorangJhapaAdditional 15 Programme Districts: PAF II, Phase I (FY 2008/09)Additional 20 Poverty Pocket Programme Districts: PAF II, Phase II (FY 2009/10)9

PAF ANNUAL REPORT 2007/08Chapter 2IMPLEMENTATIONSTATUSThis chapter discusses the annual achievements against the target and overall implementation status of thedifferent programme components that includes both the reporting year and cumulative achievements2.1 Annual Achievements Against TargetsPAF had set a definite target in relation to its key programme components—social mobilization, incomegeneration, community infrastructure activities, capacity building and innovative sub-projects.For the reporting year FY 2007/08, the target on community organizations and sub-project agreements havebeen met while in the case of POs selection, the achievement has remained far below the mark. PAF hadtargeted to select 130 POs but achievement was only 46 (35 per cent). This was due to the delay in the selectionof POs for the newly added 15 districts.Under innovative sub-projects, PAF had set annual outputs of 450 sub-projects, while the achievements hasremained only 46, owing to PAF’s special focus on the programme districts in the reporting year.10

Table 2.1: Achievement Targets of Block GrantComponentOutput IndicatorsReporting Year(FY 2064/65)Target Achievements1. Block Grant to Community Organization (CO) & Partner Organization (PO)1. 1 Income Generating (IG) & Infrastructure Project in PAF DistrictsNo. of POs selected 130 197a. Social Mobilization No. of COs formed 2,210 3,066in PAF Districts No. of COs registered under PAF 2,210 3,003No. of COs entered into agreement 2,210 2,904b. Income Generating No. of sub-projects (SP)Sub-projects agreement with CO 2,100 2,825c. Small Infrastructure No. of SPActivities agreement with CO 950 3811.2 Innovative SpecialProgrammesa. Social Mobilization- No. of POs selected 25 49Innovative No. of COs formed 450 133No. of COs registered under PAF 450 79No. of COs entered into agreement 450 49b. Innovative SubProjects No. of SP agreement with CO 450 75PAF had set a target of 2,210 CO formations, 2,210 CO registrations and 2,210 CO registrations and COagreement, against which, the achievements has stood at 3,066, 3,003, and 2,904 respectively.In the case of income generating sub-projects, PAF had set the annual target of 2,100 sub-projects agreementwith CO while the achievements has been recorded to be 2,825 sub-projects, high above the target.In case of small infrastructure activities, PAF had set the annual outputs of 950 sub-projects agreement withCO, against which it has made 381 sub-project agreements with the COs.Further to the above, PAF had set annual target in social mobilization component under innovative specialprogrammes, which include selection of 25 POs, formation of 450 COs, registration of 450 COs, and agreementwith 450 COs and su-project agreement with 450 COs, against which, it has achieved 49, 133, 79, 49and 75respectively.In capacity development front, the achievements have remained far above the set target. Only 75 socialmobilization and leadership trainings were projected, but there have been 2,871 such trainings recorded in thereporting year. Similar is the trend in the case of orientations/trainings to COs for developing demand ledproposals and trainings on savings and Credits. In the same line, 1,122 POs orientations were held against thetarget of 351, 776 ToT were imparted to POs against the initial estimation of 211, and 127 district programmereview and coordination meetings were held against the initial target of 75.11

PAF ANNUAL REPORT 2007/08Table 2.2: Detail of Capacity Development Related ActivitiesComponent Output Indicators Reporting Year (FY 2064/65)Target Achievements2. Capacity Building and Implementation Support2.1 Capacity Building of COs/Beneficiaries2.1.1 Social Mobilization andLeadership Training to COs No. of COs 75 2,8712.1.2 Orientation/Training to COs forPreparation of Demand-Led Proposal No. of COs 875 3,1002.1.3 Accounts/Book KeepingTraining to COs by POs No. of COs 875 3,6332.1.4 Training on Saving andCredit to COs by POs No. of COs 525 2,6972.1.5 Technical Training to COs by POs No. of COs 88 1,0552.1.6 Study Visits of COs No. of Visits 18 1182.2 Capacity Building of POs/Local Bodies etc.2.2.1 Orientation to POs No. of PO staff 351 1,1222.2.2 TOT to PO No. of PO staff 211 7762.2.3 District Programme Review andCoordination No. of Meetings 75 127In the case of M&E, PAF had set annual outputs consisting of baseline survey in 35 districts, environmental andsocial assessment of 3,500 sub-projects, follow-up baseline for monitoring in six districts, monitoring of 7,000sub-projects including both appraisal and monitoring, evaluation (“e”) of one sub-project, four special studies,a strategy planning and review meeting/workshop, and conduction of three internal audits.During the reporting year, a total of 19 baseline survey, 2,054 environmental and social assessments wereconducted while 5,587 sub-projects were appraised and monitored. Similarly over two dozens of strategicplanning and review meeting/workshops were held during the reporting year—that includes both at thenational level and district level.2.2 Component-wise Progress Status2.2.1 Social MobilizationPAF programme starts with rigorous socialmobilization at the settlement level. PAF partnerorganizations are also working in selected areas todisseminate information about the programme,mobilize community groups, work with themfacilitating in developing sub- project proposals anddevelop their skills in project management, financialmanagement (FM), procurement, implementation,operation and maintenance.12

2.2.1.1 Demand Driven Community Proposal and Direct Funding1. Community Organizations, Sub-projects and InvestmentsTill the end of the reporting year, a total of 8,423 community organizations (COs) were registered with PAF(2,222 in Mountain, 3,344 in Hilly region and 2,550 in Terai districts and 307 through Innovative WindowProgramme Districts).Of the total registered COs, PAF inked agreements with 7,784 COs (2,134 in Mountain, 2,930 in Hilly regionand 2,451 in Terai districts and remaining 269 in Innovative Window Programme Districts) to carry outdifferent IG and community infrastructure related projects.Table 2.3: CO Registration, CO Agreement and Sub-project AgreementFY 2064/65(Reporting Year)CumulativeCategories No. of Agreement No. of AgreementRegd. COs No. of COs Sub-projects Regd. COs No. of COs Sub-projectsMountain 852 858 987 2,222 2,134 2,387Hill 1,287 1,161 1,308 3,344 2,930 3,126Terai 868 885 911 2,550 2,451 2,482InnovativeDistricts 79 49 75 307 269 297Grand Total 3,086 2,953 3,281 8,423 7,784 8,292In 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 tomicro-irrigation, link road, culvert/bridge, rope way, electricity/micro-hydro, water mill, water supply,sanitation, school and health post building.The agreements made with 7,784 COs amounts to NRs 3,604 m, of which NRs 3,028.9 m was for IG sub-projectand NRs 575.6 m was for Infrastructure sub-projects. Till the end of the reporting year, NRs 3,114 m has beenalready disbursed to community non-operating account while NRs 2,487 m has been disbursed to communityoperating account.13

PAF ANNUAL REPORT 2007/08Table 2.4: PAF Investment in The Community Sub-projectsFund Disbursement (in million)Categories FY 2064/65 CumulativeIG sub- INFRA Total IG sub- INFRA Totalprojects projects projects Sub-projectsMountain 347.5 88.0 435.5 779.1 229.0 1,008.1Hill 533.2 126.8 660.0 1,230.4 165.4 1,395.9TeraiInnovative 320.8 32.5 353.3 926.7 152.6 1,079.3Districts 18.0 20.1 38.1 92.8 28.6 121.3Grand total 1,219.5 267.4 1,486.9 3,028.9 575.6 3,604.6Year-wise break down shows that in FY 2061/62 (2004/05), the agreements were made with 595 COs amountingto NRs 240 m while in FY 2062/63 (2005/06), the agreement was signed with 1,070 additional COs amountingto NRs 526 m. Similarly in the FY 2063/64 (2006/07), the agreements were made with 3,311 additional COsamounting to NRs 1,347 m and in the reporting year ie FY 2064/65 (2007/08), the agreements were made with2,808 additional COs amounting to NRs 1,491 m.The community sub-projects are in different stages of implementation. Second level of demand and proposalshas also started coming after the completion of first sub-projects. Communities have also started to buildnetwork of COs and co-operatives.In addition to the regular programme districts, PAF had considered financing 12 out of 20 winning innovativeproposals of Nepal Development Market Place (NDM) -World Bank 2005. Agreements were made with thoseselected 12 POs that amounted to NRs 16 m to work in 25 VDC of Bajura, Dolakha, Kathmandu, Myagdi,Parsa, Saptari, and Syangja districts serving over 8,999 poor households till the end of the reporting year, NRs14 m have been already disbursed. Further PAF had monitored the World Bank financed remaining 8 NDMprojects in Dang, Khotang and Tanahun districts.Recently, PAF has also considered financing 25 winning innovative proposals of Nepal Development MarketPlace (NDM)-World Bank 2008. Agreements have been made with those 24 POs that amounts NRs 32 m towork in 52 VDC of Chitawn, Dhading, Dhanusa, Dolakha, Jhapa, Kalikot, Kanchanpur, Kathmandu,Kavrepalanchok, Khotang, Lalitpur, Morang, Panchthar, Parbat, Sankhuwasabha, and Sarlahi districts servingover 3,900 poor households.14

Hotel transforms Dalitcouple’s lifeHira Mani Biswokarma ofKhalanga VDC-1, Rukum spent 15years in the different cities of Indiafor employment. He wascompelled to move out to Indiabecause of his weak financialposition. His wife Kaushila alsoused to work as a labor in the areasaround Khalanga.Success Story 1But, neither has Hira Mani gone toIndia over the last one and a halfyears, nor is Kaushila forced towork as a daily wage worker. Theypresently run a hotel in Khalangaitself. “Why should I go to Indiawhen this hotel fetches me anincome of NRs 12,000 a month?”says Hira Mani.The credit of this transformationgoes to PAF. Kaushila is associatedwith Sanjivani CommunityOrganization formed under theaegis of PAF. She started a hotelbusiness taking NRs 30,000 in loansfrom the organization.PAF is present in Rukum from thelast two years. Facilitation worksof the local Human Rights,Environment and DevelopmentMovement and Research Centerhas poor like Kaushila to enjoybenefits of PAF programme.From the income, Hira Mani andKaushila have already paid back theirfirst installment to the revolving fundof the CO. They have further taken aloans of NRs 50,000 for hotel’sexpansion. Of this amount also, theyhave already repaid NRs 20,000.“Earlier, no one used to give anyloan to us,” says Kaushila. “Withhotel’s income to back us up, noweveryone is ready to lend us.Income is good. We do not haveany problem now,” she added.With the income, this dalit couplehas also witnessed a radicaltransformation in their social lives.“People used to say bad wordswhen I used to work for others.Now that we have a hotel, peoplecall me as sahuni (respected wordfor hotel operator). The hotel hasearned us respect along withmoney,” relates Kaushila.Owing to a handsome income, thisdalit couple has enrolled theirchildren at a school and givingthem a good education.15

PAF ANNUAL REPORT 2007/082. Programme Cost Sharing (Investment—IG Vs Infra, PAF Vs Community)PAF alone has invested in 1,219.5 m in IG activities inthe reporting year against the total cumulativeinvestment of 3,028.9 m till the end of the reportingyear. In case of Infra schemes, PAF invested 267.4 mduring the reporting year while cumulative investmentstood at NRs 575.6 m (See Table 2.4).CHART 2.1:PAF Investment:IncomeGeneration Vs.InfrastructureInfra(16.0%)In overall scenario, out of the total PAF investment,84 per cent has been made in income generating subprojectsand 16 per cent has been funneled inInfrastructure related sub-projects.IG(84.0%)In terms of region wise PAF investment, PAF hasinvested the highest amount for IG sub-projects in hillyregion while the mountain region has enjoyed thehighest investment in infrastructure related projects(See Chart 2.1).In cumulative average, community sharing is 14 percent (7 per cent in cash and 7 per cent in kind) of thetotal sub-project cost whereas other organizationsmainly VDCs and DDCs have shared 2 per cent of thetotal sub-project cost.CHART 2.3: Overall Cost SharingCO Cash(7.0%)CO Kind(7.0%) Others(2.0%)CHART 2.2:Per cent9080706050403020100PAF Investment Share inIG and INFRA byProgramme AreaIncome Generation88.185.977.322.711.914.1Infrastructure76.423.6Mountain Hill Terai InnovativeDistrictsPAF(84.0%)16

In case of income generating sub-projectss only, community has shared 8.6 per cent in cash and 3.6 per cent inkind whereas in Infrastructure sub-projects, it has remained 1.3 per cent in cash and 23.1 per cent in kind. TheContribution of other organisation such as (VDCs and DDCs) remained nominal (0.2 per cent) in IG relatedsub-project in comparission to contribution (8.4 per cent) in Infrastructure sub-projects (See Chart 2.4 and 2.5) .CHART 2.4:Community Cost Sharingin IG Sub-projectsCHART 2.5: Community Cost Sharingin INFRA Sub-projectsCO Cash(8.6%)CO Kind(3.6%)Others(0.2%)CO Kind23.1%Others8.4%PAF67.2%PAF(87.5%)CO Cash1.3%In terms of region-wise cumulative analysis, the COs have contributed highest in mountain region andinnovative districts with more infrastructure sub-projects. The community contribution is nearly equal in boththe hilly region and Terai region with 15 per cent.Similarly on a regional basis, PAF has invested 85 per cent of the total project cost in Terai, followed by Hillyregion with 84.3 and Mountain region with 82 per cent respectively against the community contribution in therespective region. .CHART 2.6:PAFOverall Cost Sharing byProgramme AreaCommunity/OthersPer cent908070605040302010082.018.084.315.785.015.077.422.6Mountain Hills Terai Innovative17

PAF ANNUAL REPORT 2007/083. Facilitation of Community Through POsPartner 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 planningactivities, carry out detailed feasibility, survey design & estimates, and proposal preparation during preparatoryphase, and provide technical assistance and monitoring feedback support during implementation phase.As such, 246 Partner Organizations (POs) are working with communities (51 for Mountain Districts, 80 in hillyDistricts, 66 for Terai districts and 49 for Innovative Window programme including Innovative NDM-WorldBank Programme). 10 POs were terminated due to their poor performance.Table 2.5: Details of POs StatusDescription No. of POs No. of POs No. of POs No. of VDCsSelected Terminated working coveredMountain 56 5 51 193Hill 83 3 80 299Terai 68 2 66 238Innovative Districtsincluding NDM 49 0 49 133Total 256 10 246 863Till the end of the reporting year, the POs are involved in facilitation works in total 863 VDCs (193 in MountainDistricts, 299 in Hilly Districts, 238 in Terai Districts and 133 in Innovative Window Programme includingNDM-World Bank Programmes) and Community Organizations of Poor (COs) are working in those VDCs.2.2.1.2 Reaching out to The Poor and Social Inclusion1. CO MembersDuring the reporting year, PAF has been able to reach out 80,115 poor HHs to carry out different activitiesaimed at improving their livelihood, through the facilitating support of different partner organizations. Tillthe end of the reporting year, a total number 239,244 HHs were benefited from the PAF assistances.Table 2.6: CO Member BeneficiariesProgramme Areas FY 2064/65 CumulativeMountain 17,347 66,455Hill 39,069 97,590Terai 20,773 66,479Innovative District 2,926 8,720Total 80,115 239,24418

Of the total 239,244 CO members till the end of thereporting year, a region-wise break down of the COmembers shows that Hilly region holds the highestshare with 40.8 per cent, followed by Mountain andTerai region with 27.8 per cent each, while innovativedistricts have a meager share of 3.6 per cent.2. CO Members by Poverty RankingCHART 2.7: CO Member Distribution byProgramme AreaTerai(27.8%)Innovative District(3.6%)Mountain(27.8%)PAF has taken the strategy to support the idea thatpoor community should be organized themselves toprepare, implement and manage their programmeand they should be in the driving seat, with decisionmaking authorities.Hills(40.8%)Participatory social assessment and community well- being ranking process identified the poor communitymembers as primary beneficiaries at the settlement level. They are organized into community organization toplan, implement and manage the sub-projects.Among beneficiaries members in Community Organizations of Poor (COs), 67.4 per cent members falls underthe hardcore poor category (food sufficiency less than 3 months among other criteria fixed by the communityitself), 24.5 per cent members falls under medium poor category (food sufficiency more than 3 months but lessthan 6 months among criteria set by the community), 8 per cent members falls under poor category (foodsufficiency more than 6 months but less than a year among criteria set by the community) and 0.2 per centmembers falls under marginal Non-poor category.CHART 2.8: CO Member-Beneficiaries byPoverty Rank [Cumulative]Medium Poor(24.5%)Poor(8.0%)Marginal Non-Poor(0.2%)Hardcore Poor(67.4%)19

PAF ANNUAL REPORT 2007/08CHART 2.9:Distribution of Members in Programme Area by Poverty RankingPer centCHART 2.10:PAF Benefitted PoorHouseholds (HHs) in 25districtsSimilarly in terms of distribution of members byprogramme area, Terai region has the highest numberof hard core poor with 73 per cent, followed byMountain with 65.5 and Hilly region with 64.9. In caseof Innovative programme districts, 68.3 per cent of themembers are hard core poor followed by 23.3 per centmedium poor (See Chart 2.9).A close observation to the PAF coverage of poor inregular districts (25 districts) versus the Poor HHs inthe districts reveals that PAF has only succeeded tocover 56.8 per cent of the total poor households in itsprogramme districts.Total DistrictHHsTotal DistrictPoor HHsPAF BeneficiairiesHHs (56.8% ofdistirct Poor HHsCHART 2.11:CO Members by CasteEthnicity3. CO Members by Caste and EthnicityOut of the total 239,244 CO members householdstill the end of the reporting year, 35.2 per cent areDalit, 28.4 per cent are Janajatis, 1.9 per cent areMuslim, 28.3 per cent are Brahmin/Chhetris and 6.2per cent in other different categories (See Chart2.11). Gender wise, a whopping 68.9 per cent arefemale in Community Organizations (COs).20

Caste and ethnicity wise distribution of CO members in terms of region shows that Dalit dominates in both theTerai and hilly region (with 41.2 and 36.4 per cent) while Janajatis are highest in numbers in case of innovativedistricts (68.6 per cent). In case of mountain region, poor Brahman and Chettris CO members are highest with53.8 per cent, followed by 29.5 Dalits and 14.2 per cent Janajatis (See Chart 2.12).CHART 2.12: Distribution of Members in Programme Areas byCaste/Ethnicity-wiseWhen compared the PAF beneficiaries’ composition with that of the total ethnicity composition of 25 districts,the trend is encouraging. Of the total 15.8 per cent of Dalits population in 25 programme districts, the PAFbeneficiaries’ population stands at 36.8 per cent. Similarly Janajati beneficiaries stand at 26.8 per cent againsttheir total population in regular programme districts.CHART 2.13: District EthinicityComposition Vs PAFCoverage [25 District]Per centPer cent21

PAF ANNUAL REPORT 2007/084. CO Members by GenderFemale CO members have the lion share with 68.9 per cent. They are highest in Terai with 76.1 per cent,followed by Hilly region with 68 per cent and mountain region with 63.6 per cent.CHART 2.14:CO Member byGenderCHART 2.15:Gender-wiseDistribution of Members byProgramme AreaPer cent5. Key Position Holders in COsThere are a total of 22,304 key position holders within the community organizations supported by PAF againstthe reporting year progress of 7,630. A region wise breakdown of the number of key position holders is givenin Table below. The President, treasurer and secretary are considered as key positions in every individual COs.Table 2.7: Number of Key Position Holders in COsProgramme Areas FY 2064/65 CumulativeMountain 1,777 5,901Hill 3,481 9,173Terai 2,128 6,604Innovative Districts 244 626Total 7,630 22,30422

Caste and ethnic representations in key positions shows that 40.9 per cent are Dalits, followed by 28 per centof Janajatis and 24.9 per cent of Brahmans and Chhetris.CHART 2.16:Caste/Ethnicity-wise Key Position Holders inProgramme AreaPer cent0.0 0.0Of the total 22,304 key position holders in PAF supported COs, 57 per cent are female, in accordance with PAF’saffirmative approach for the empowerment of the poor women.At the regional level, Dalits dominates in key position holders in both Terai and Hilly region with 53.8 and 40.4per cent respectively. In case of Janajati, they have the highest numbers of key position holders in the innovativedistricts with 83.1 per cent. They stand in second position both in hilly and Terai region while stand third inMountain region, where Brahmans and Chettri holds the largest share with 52.5 per cent.CHART 2.17:Key Position Holders byGenderCHART 2.18:Key Position Holders byCaste/Ethnicity23

PAF ANNUAL REPORT 2007/086. Community Institutional BuildingCommunity institutionalization process is also emerging in some of the pilot districts where community felt a needto federate themselves for certain function. Multi-purpose co-operatives, co-operatives for single function andfederation of COs are formed as per communities need. The following table shows institutions formed and objectivesof those institutions.Table 2.8: Some of The Institutional Building Initiatives in DistrictsDistrict Type Institutions Formed Specific objectives/activities(Federations/Cooperative)MuguCooperative:One cooperative has been registered inShrawan 2064, in Joint efforts of 11 COsmembers of three VDCs, namely Shreenagar,Karkiwada, PinaTo provide agro-vet services to its members Toestablish hatchery and make available chicks indistrict for its members To run dairy at districtheadquarter collecting milk from its members.SirahaFederation6 COs in Bishnupurkalti VDC has beenfederated to run a chilling CenterCOs in Dhodhana and Bhadaiya VDCsCooperative3Cos in Muskar VDC is in process to registercooperative.To establish & run Chilling Center for marketing ofmilk products from its memberTo run a Breeding CenterTo run saving credit and provide technical servicesto its membersKapilvastuCooperative:One cooperative has been registered in jointefforts of COs at Dhankauli and Rajpur VDCs.Federation357 buffalo raising farmers of five VDCsnamely Ganeshpur, Biddhyanagar,Bhagamanpur, Sirshihawa and Ramnagarhave been federated and formed. ShivamDugdha Utpadak Community OrganizationMultipurpose cooperative, it is in process torun agro-vet services and collection &marketing of milks from its membersCollection, Chilling and produce milk productas well as marketing. (Plant and Machineryof Chilling Center is under installation)To run community insurance scheme for itsmembers.24

Success Story 2A worker is now a mill ownerA resident of Bariman,Mahadevesthan VDC-2, KrishnaMajhi, 50, used to lead a hard life until3 years ago. He worked in a grindingmill in a nearby village as a dailywage laborer and was singlehandedly raising five children,including a daughter, as his belovedwife departed from this world eightyears ago.Though a traditional fisherman,Majhi stopped fishing since the deathof his wife and eked out livingthrough daily wage. Now he isconsidered an exemplary figure inentire Bariman and Barabise area forcoming out of the gridlock of povertywith his hard work and dedication.This transformation became possibleafter Sincdhuli featured in PAF'sregular programme three years ago,because of its high poverty incidenceand equally high population of ethnicpeople. Through the facilitation ofGrameen Bikas Sewa, a partnerorganization of PAF, the peopleaccessed PAF's support by forminga community organization -"Godawari Sewa SamudyicSamstaha".The CO included 37 households asmembers, of which 33 are fromethnic Majhi communities andfour are Dalits - so called lowercaste. The members demandedsupport for different incomegenerating activities like buffaloraising, cow raising, ox raising,and pig raising and goat raising.The change in life of Majhi haddawned with financial support ofNRs 6,750 he received from thecommunity organization and hispurchase of 3 goats. In the spanof next one-and-a-half year, hesold 4 castrated goats and stillhas 7 goats in his shed.With the earning from the goatand a loan from the communityowned revolving fund, he theninstalled a de-husking andgrinding mill in front of hishome. The mill is providingservices to the 70 households ofSunaghani and Badiman villages."While working in others' mills, Ialways dreamt of owning a millin the future. And that dream hascome true," related Majhirecalling his old days.Nowadays, Majhi earns aboutforty thousand rupee a yearfrom the mill and he has stoppedworking as daily laborer.The increased income is assistinghim to send his youngestdaughter to school, own a Radioand meeting the daily householdneeds. He is also planning to sendhis youngest son to a college andthe second son abroad for work."All this has become possiblewith the little assistance that Ireceived from PAF and I amthankful to it for this", said Majhi.25

PAF ANNUAL REPORT 2007/082.2.2 Income Generation and Micro enterpriseIncome generation is one of the major componentsof PAF programme as 84 per cent of PAF investmenthas been made in this domain. Since PAF iscommunity demand driven programme, a widerange of income generation activities have beendemanded and supported on the basis of theirpotentials and opportunities available at the localcontext. The local potentials include the availabilityof raw materials, resources, access to market, skilland traditional occupation.Partner organizations provide information to community members and facilitate them to identify potential incomegeneration activities. Nepal being an agricultural country, more than 80 per cent of its population relies on agriculturesector. Income generation activities supported by PAF are related to agriculture and livestock as majority of Nepalese arelandless or nearly landless but make their sustenance through different agriculture related activities.1. IG activities—Sector, HHs and InvestmentBy the end of FY 2064/065, PAF has made agreement with 7,784 COs to implement 8,292 sub-projects. Out ofthem, 7661 sub-projects are related to income generation activities. The ratios of number of IG sub-project tothe total number of sub-projects, increased from 55 per cent in FY 2061/62 to 83.64 per cent in FY 2064/65.In terms of investment, the ratios of IG sector increased from 63 per cent in FY 2061/62, 92.9 per cent inprevious fiscal year and 82.0 per cent in FY 2064/65.CHART 2.19: Trend of Investment in IG/Infra26

The trend of PAF investment in income generation activities is presented in graph. It shows that investment onIG sector has continuously increased up to FY 2063/64 and it suddenly decreased in FY 2064/65.2. IG Activities Investment by Sector and RegionIncome 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 beenpresented in table and charts below. The following data on PAF investment in income generating sub-projectsdoes not include the investment related to COs’ capacity building and CO’s institutional management cost.Table 2.9: Sector-wise Income Generation Activities by Households andPAF InvestmentS.N.SectorsFY 2064/65Cumulative AchievementsHHs Amt % of % of HHs Amt % of % of(in m) HHs Invest. (in m) HHs Invest1 Agricultureand forest related 5,496 61.7 6.9 5.4 23,207 165.1 9.7 5.82 Livestock related 62,554 803.5 78.1 69.8 172,567 2,049.1 72.1 72.03 Trade related 8,885 2,26.1 11.1 19.6 28,805 477.8 12.0 16.84 Service 1,899 39.6 2.4 3.4 7,560 102.2 3.2 3.65 Manufacturingand others 1,282 20.1 1.6 1.8 7,105 53.0 3.0 1.9Total 80,115 1,151.1 100 100 239,244 2,847.2 100 100CHART 2.20:Investment in IGAby SectorEither with marginalized land holdings or landless,the rural people, have limited access to basicinfrastructures like road, electricity, market as well asinformation. Therefore, majority of incomegeneration sub-projects are livestock related.Livestock is the largest portfolio of IG activities byinvestment as well as HHs involved. About 72 per centof PAF support is disbursed in this sector and 72.1 percent of IG beneficiaries’ households are engaged onlivestock related activities., followed by trade relatedactivities with 16.8 per cent, agriculture related with 5.8per cent service sector with 3.6 per cent, manufacturingand others activities with about 1.9 per cent.Out of total households involved in livestock, about 30 per cent is engaged in milk production through buffaloand cow raising, 64 per cent in meat production, 4 per cent in ox /he buffalo raising either to do farming orbreeding purposes and the rest 2 per cent for transportation purpose. Data interpretation and figures showthat the communities are themselves smart in selection of activities based on accessibility, existing naturalresources, and potential markets.27

PAF ANNUAL REPORT 2007/08Table 2.10: No of Households Involved in Livestock Sector by CategoryYear 2064/65 Cumulative till 2064/65Category Unit Mountain Hill Terai Total Mountain Hill Terai TotalOverallMilk Production HHs 1,221 10,133 8,384 19,738 4,034 19,606 27,418 51,059 29.6%Per cent 6.2 51.3 42.5 1.00 7.9 38.4 53.7 100.0Farming/Breeding HHs 1 1,325 2,012 3,338 8 2,081 5,561 7,649 4.4%Per cent 0.0 39.7 60.3 1.00 0.1 27.2 72.7 100.0Transportation HHs 354 1,230 - 1,583 1,331 2,270 25 3,626 2.1%Per cent 22.3 77.7 0.0 1.00 36.7 62.6 0.7 100.0Meat Production HHs 2,354 30,604 4,936 37,895 8,606 82,531 19,198 110,336 63.9%Per cent 6.2 80.8 13.0 1.00 7.8 74.8 17.4 100.0Total HHs 3,931 43,292 15,331 62,554 13,986 106,537 52,146 172,670 100.0%Per cent 6.3 69.2 24.5 1.00 8.1 61.7 30.2 100.0In Terai region, market of fresh milk is relativelyhigher and accessible as the milk products can beeasily marketed with little time and efforts forcollection and transportation. Nearly, 52.6 per centof total households pursuing livestock as part of theirincome generation activity in Terai region are rearingbuffaloes and cows for milk products, followed 36.8per cent for meat production and remaining 11 percent for farming and breeding purpose.CHART 2.21: HHs Involved in Livestock Sector in Programme Area28

Similarly in Hilly region, 77.5 per cent HHs have been found engaged in meat production by rearing goat, pig,and poultry, among others. In the same region, 18.4 per cent of livestock raising is done for milk productionpurpose followed by 4 per cent for farming/breading and transportation purposes. In the case of Mountainregion, 61.6 per cent of households are involved in meat production, followed by 29 per cent in milk productionand remaining 10 per cent for transportation purpose.In addition to animal husbandry, PAF has provided support in its associated areas such as animal treatmentfund, establishment of veterinary services, developing village level health workers to supplement livestockcomponent. In view of the largest investment portfolio in livestock sector, due emphasis has been laid toestablish linkages with market and services.Apart from livestock, diverse activities in the agricultural sector have been demanded by the communities. Theactivities thus demanded includes; System of Rice Intensification (SRI), vegetable farming in open field totunnel house, seed multiplication, cash crop production, and fruit farming. Households involved in differentagriculture and forest related activities have been presented in the Chart 2.22.CHART 2.22: HHs Involved in AgricultureSector by Activities29

PAF ANNUAL REPORT 2007/08Out of total 23,213 HHs, 55.5 per cent households are engaged in vegetable farming, followed by 18 per centin fruit farming, 13.1 per cent in agro-forestry, about 5.8 per cent in bee keeping and rest in cash crop, fisheryetc. PAF investment in different activities and number of involved households are presented in table belowTable 2.11: PAF Investment in Agriculture Sector by CategoryFY 2064/65CumulativeSub-sector HH Per cent Amount Per cent HH Per cent Amount Per cent(in m) (in m)Agro-forestry 621 11.3 3.8 6.2 3041 13.1 13.4 8.1VegetableFarming 3331 60.6 40.1 65.0 12883 55.5 107.3 65.0Fruit farming 764 13.9 7.6 12.3 4178 18.0 17.5 10.6Beekeeping 291 5.3 4.9 7.9 1346 5.8 14.7 8.9Cash Crop 368 6.7 3.1 5.1 952 4.1 6.9 4.2Fishery 71 1.3 1.7 2.8 279 1.2 4.0 2.4Cereal crops 11 0.2 0.2 0.3 209 0.9 0.7 0.4Others 33 0.6 0.2 0.4 348 1.5 0.8 0.5Grand Total 5,496 100.0 61.7 100.0 23,213 100.0 165 100.0Vegetable farming has been found very lucrative and effective to increase the income of poor within a shortinterval 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 full time employment to them.In Mugu district green vegetables were considered impossible during the winter season before PAF intervention.But after PAF arrival, it has become possible to grow commercial vegetables even in winter season with theintroduction of pit green house and solar tunnel house. Such vegetable farming technology/methodology hasbeen successfully demonstrated and this proven and tested case has induced high potential of scaling up inother areas in the days ahead.30

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 forscaling up this intervention in coming days.Further to the above, trading is the second largest portfolio on IG. Altogether, 28,812 HHs are engaged intrading business, whilst PAF has invested NRs 477.8 m in this sector. Of the total investment, 46 per cent isredirected in Terai districts, followed by 49 per cent in Hill districts and 5 per cent in Mountain Districtsrespectively.Analysis in trading sector shows that retail business has largest investment in all ecological belts, whichaccounts more than 71 per cent in Terai, 85 per cent in Mountain districts and more than 90 per cent in Hilldistricts. Animal bushiness, wood product business, agriculture inputs, food items related business are othermajor activities in this sector.Overall, 7,562 HHs are engaged in service sector,where PAF has invested about 102.2 m Out of totalinvestment, 49 per cent has been made in Teraidistricts followed by 45 per cent in Hill and rest 6per cent in Mountain districts.In Hill districts, 51 per cent of investment has beenmade in tailoring, followed by repair and maintenancerelated services (13.25 per cent), transportationservices (12.85 per cent), and small hotels/teashops(12.7 per cent) and rest in different activities.CHART 2.23:PAF investment inTrading by EcologicalRegionCHART 2.24:PAF Investment inService Sector byEcological Region31

PAF ANNUAL REPORT 2007/08Similarly in Mountain districts, 82.55 per cent of investment has been directed in hotels/tea shops relatedbusiness followed by 15.86 per cent in tailoring and rest in other activities. In Terai regions, transportationservices has been the major activities in terms of investment having 60.35 per cent of total investment followedby repair and maintenance services (10.63 per cent), tailoring (8.57 per cent), small hotels & teashops (8.57 percent) and rest in other different activities.A total of 7,107 HHs are involved in manufacturing related business, and PAF investment is about 53.0 m inthis sector. Out of total investment, about 47 per cent has been in non-agro products related manufacturingactivities, followed by 30 per cent in agri-products, 16 per cent in knitting and weaving and rest about 7 per centin occupational manufacturing.Listing of income generation activities show that there are diversified IG activities undertaken by the communitymembers. 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 selectsuitable IG activities based on their need, local resources, knowledge, skills and available market potentials. Alion’s hare of investment in livestock sector demands more concentration to develop mechanism to provideadequate veterinary services at rural areas. It is unambiguous that to sustain the diverse interventions asspecified above, PAF should accord higher priority to enhance the qualitative capacity of both partnerorganizations and community organizations.3. Foundation of Revolving Fund at COCOs have created the revolving fund at theirorganization. The fund amount is produced throughtwo means. They are: (i) interest incurred through theamount lent to the CO members for their incomegenerating activities, and (ii) principle loan amountrepaid by the CO members against income generationactivities (IGAs). However, it is mandatory to pay backthe investment amount supported by PAF for IG subprojects.COs have created and managed the revolving fundaccording to their investment plan. It is established as a sustainable source of fund to provide fund access to theCO members (poor households) at the settlement level to embark on their IGAs.Furthermore, CO revolving fund has been supposed to be the milestone for the COs financial linkages withMFIs in the upcoming days, either in the form of cooperatives among COs or linking directly.In this reporting year, PAF has developed the revolving fund management guideline to smooth the progressof CO revolving fund management.32

Success Story 3Goats have changedRam Bahadur’s lifeRam Bahadur Dhimdhonghas 30 goats in his goat shedand also a milking buffalo.People who meet him thesedays do not believe he onceused to fulfill his needs throughdaily wage earning and hadjust a goat and no buffalo.More so when they are told allthis change transpired justwithin three years.Sindhuli, the district whereDhimdhong lives, was addedas a regular programmedistrict of PAF three years ago and his village, a poorsettlement of Dalit and janjati, was one of the firstpriority areas of PAF. The local NGO, SindhulimathiSewa Pratisthan had facilitated formation of a COincluding Dhimdhong and other 27 poor householdsand helped them come up with different set of projectdemands within their scope and potentiality.Based on their demand the CO received 450 thousandrupees from PAF to carry out different incomegeneration activities for raising their livelihood.Dhimdhong took 18 thousand rupees from hiscommunity organization, Janakalyan SamudyicSamstha, to buy a buffalo at 7,000 rupee and fivegoats at 11 thousands rupee. And within the spanof 2 years, he has earned 20,000 through the saleof goats and another 9,000 through the sale ofthree baby buffaloes. Currently he possesses goatsworth 100,000 rupees and buffaloes worth 35thousands rupees. These all total to 155,000 rupee- a property that Dhimdhong had never dreamtof possessing before.Father of 4 sons and 3 daughters, Dhimdhong alwaysused to have a loan of 12 to 15 thousand rupees everyyear just to meet the daily needs at the interest rateof 48 per cent. Now that situation has ended and he iseven planning to replace thatched roof of his housewith tiles.This positive transformation of life has not come toDhimdhong alone. His neighbors also share thesame story.Guna Maya Biswokarma, 60, also owns 30 goats andhas earned well over 20 thousand rupee so far. Theincreased income is assisting her to send her grandchildren to school and she also dose not take any loanfrom the local money lenders.“The villagers have already managed to earn wellthrough goat raising. This has given confidence tothem to fight against the grinding poverty,” saysHari Dhakal, a social mobilizer assisting thevillagers to manage the assistance and carry outfacilitation job.The villagers have also demanded a drinking waterscheme in the second cycle of their demand and thereare already running water tap stands in the village.They have also monthly savings and a revolving fund,created from the repayment of the loan that theindividual members paid.33

PAF ANNUAL REPORT 2007/082.2.3 Community InfrastructureDue to the farthest isolation of scores of communities and the virtually no public infrastructure servicesavailable, small investments in rural infrastructures and services can make significant relief to the poorcommunities. The communities are habitually clear on what they need, and are willing to contribute withintheir capacity. Partner organizations (POs) facilitate the process of community organization and to build upcapacity of community in the preparation of sub-project proposals. Examples of sub-projects implemented todate under PAF include footbridges, culverts, micro hydro power, water supply schemes, community buildings,schools, health facilities and other small-scale infrastructure, among others.1. Number, Types and Distribution of Sub-projectsPAF has supported for various community infrastructure sub-projects ranging from dumping site tomicrohydro. For the convenience of analysis, all types of sub-projects have been categorized into six differentcategories.Building construction: This category constitutes the different types of construction and maintenancesupports for schools, health posts, community buildings, milk chilling and collection centres etc.Energy production and extension: This category consists of support for microhydro schemes, electricityextensions, solar systems and other energy related sub-projects.Irrigation: This category consists of construction and maintenance of different types of irrigation systemslike dhikki pump, boring, paddle pump, surface irrigation, water harvesting tanks etc.Transportation: Different type of trial bridges/bridges (mechanized/RCC/wooden), culverts (RCC, Humepipe), extension and rehabilitation of rural roads, roads, link roads have been categorized into this category.Water supply and Sanitation: This category consists of construction and rehabiliatation of differenttypes of drinking water supply systems such as gravity flow schemes, tubewells, handpumps, shallowwells etc.Other Structures: This category constitutes of different types of micro infrastructures like dumping site,fencing, river training, rice mills, ghatta, bio diesel expeller etc.34

During the reporting year 2064/65, PAF provided support to a total of 356 infrastructures sub-projects. Ofthem, 338 were from regular programme districts and 18 from innovative programme districts.Till the end of the reporting year, overall 2,445 infrastructures sub-projects were supported by PAF. Out ofwhich, 2,328 sub-projects belong to regular districts and the remaining from innovative programme districts.Table 2.12: Type, Number And Distribution of Sub-projectsCategoriesFY 2064/65CumulativeTerai Hill Mountain Total Terai Hill Mountain TotalBuildingConstruction 0 1 14 15 33 22 77 132Energy Productionand extension 0 1 20 21 54 22 112 188Irrigation 166 9 22 197 669 31 90 790Transportation 2 0 5 7 153 7 14 174Water Supply &Sanitation 19 26 51 96 549 76 250 875Others 2 0 0 2 44 31 94 169Total 189 37 112 338 1,502 189 637 2,328In case of reporting year, a total of 338 infra schemes were supported by PAF in regular districts, of which 189were in Terai region followed by 112 in the Mountain and 37 in the Hilly region respectively (Table 2.12). Tillend of the reporting year, a total of 1,502 sub-projects are supported in Terai region followed by 637 in theMountain and 189 in the Hilly region respectively.2. Distribution of Schemes by TypeIn terms of distribution of schemes by sector in the fiscal year 2064/065, irrigation schemes (197) stands at thetop followed by drinking water (96) and energy production and extension (21) sub-projects.CHART 2.25:Distribution of Subprojectsby Type [FY2065/65]CHART 2.26:Distribution of Subprojectsby Type[Cumulative]35

PAF ANNUAL REPORT 2007/08But in the cumulative figure, the number of sub-projects under the category water supply and sanitation (875sub-projects) comes at the top followed by the category irrigation (790) and energy production and extension(790) among others.3. PAF Investment, Community Contribution and Beneficiary HHsOf the total infrastructure related investment of 363.1 m during the reporting year, PAF invested 247.3 m against thecommunity contribution of 81.2 m. The contribution from other sources (mainly DDC and VDCs) stood at 34.6 m.Table 2.13: PAF Investment and Community Contribution in INFRA Sub-projectsPAF Investment and Community Contribution (in million)RegionsFY 2064/65CumulativePAFCommunity ContributionPAFCommunity ContributionCash In-Kind Others Cash In-Kind OthersMountain 88.0 1.1 30.6 7.8 229.0 3.6 71.0 24.7Hill 126.8 5.8 36.8 25.4 165.4 6.0 57.3 32.3Terai 32.5 1.0 5.8 1.5 152.6 1.3 59.0 2.7Total 247.3 8.0 73.2 34.6 547.0 10.9 187.3 59.8Likewise region wised distribution of PAFinvestment(547m) till the end of reporting year,mountain has the highest share with 41.9 per centfollowed by Hilly region with 30.2 per cent and Teraiwith 27.9 per cent.CHART 2.27:PAF Investment in INFRASub-projects by Regions[Cumulative]Of the total NRs 805 m combined cumulativeinvestment by PAF, community and other sources,PAF has invested 68 per cent while communitycontrubution has remained at 24.7 per cent-thatinvolves both cash and kind contribution. Theremaining 7.4 per cent was met by different sourcesincluding the VDC and DDCs (See Chart 2.28).36

A further region wise analysis shows that Terai has drawn the highest share of investment by both PAF andcommunity with 70.8 and 28 per cent respectively (See Chart 2.29).CHART 2.28: Share of Investment inINFRA Sub-projects[Cumulative]CHART 2.29: Share of Investment inINFRA Sub-projects indifferent regions[Cumulative]Per cent4. Beneficiaries HouseholdsA total of 82, 646 HHs have benefited by 2,328 different community infrastructure related projects till the endof the reporting. In case of reporting year 35,109 HHs were registered as beneficiaries from 338 different subprojects.Region wise analysis shows that the Terai has highest number of beneficiaries members (33,200),followed by Hilly region with 25,064 members and Mountain with 24,382 members (See Table 2.14)37

PAF ANNUAL REPORT 2007/08Success Story 4A rural road that has replacedMarijuana with potatoesDhumsikharga, inhabitedlargely by ethnic Tamangcommunity, was once rated aninaccessible village, but nomore. A 4.5-km rural road thatconnects the village with anearest old bazaar, Dandabas,has connected Dhumsikhargato the larger world, brining infresh hopes in the lives of thepoor farmers - thanks to“Pakanikharka Rural RoadUser’s Committee” that thenine different communityorganizations of Agra,Gogane and DarakharkhaVillage Development Committees (VDCs) formed toexpedite the construction of the lifeline two years ago.The road alignment connects three districts namelyMakawanpur, Dhading and Chitwan, and injectednew life to the villagers, more than 80 per cent ofwhom are the people of ethnic origins (Tamang,Chepang, Magar and Gurung) and are living underthe worse form of poverty.Because of the high poverty prevalence and equallyhigh population of ethnic people, Makawanpur wasselected for support under PAF’s special windowprogramme.PAF agreed to finance NRs 3.50 m for constructing2.5 km of the road upon the request of thecommunity organizations and the communitiesextended the road to 4.5 km connecting more villages.The project is benefiting more than 8,000 populationsdirectly. The number of people enjoying benefitsindirectly is still more. Villagers are now farmingpotatoes, beans and different kinds of greenvegetables after the road link was constructed.Considered as a golden triangle for farmingmarijuana, these remote villages had no otherlivelihood options before. Its remoteness hadmade it a perfect site for such illegal farming.Many farmers who were unable to pay ‘due share’to the police often ended up in jail, serving termsfor many years. And the story was repeatedevery year.Now the case is different. The farmers have begunfarming potatoes and vegetables, and are leading adignified life, without the fear of police intimidation.“Poverty was the sole reason why we used to growmarijuana”, Sun Bahadur Lama, 40, also a memberof the users committee for the road construction toldus. Before farmers used to plant maize and now theyhave switched to many varieties of vegetables thathave more commercial value.38

“Previously, we used to walk 4 - 5 km to reach thenearest road and it cost us more than 5 rupee perkg. Now the cost does not stand even a penny.”Lama adds.“I have expanded vegetables farming in all 7 ropanisof land I own. Before it was only in 3 ropanies” saysChiring Thing, 45, a resident of Dumsikharka.This has increased Thing’s earning to more than NRs10,000 from NRs 5,000 of the past. And this increasedincome is helping him to raise his 7 children.“This has contributed a lot in their education. I neednot borrow loans from the local moneylenders at anexorbitant interest rate as well.” Thing is a memberof Namuna CO, a member of the functional groupamong the nine COs.The villagers say that each individual household areearning NRs 80-90 thousand a year in an averagebecause of road connectivity. This has also enabledsome villagers to send their kids in the Hetauda andPalung Bazaar to get better education.The road was inaugurated 10 months ago by thelocal political leaders and representatives of theConstituent Assembly.Inspired by the present benefits, the villagers saidthey want to connect the road to Bhandara inChitwan district, joining more than four additionalVDCs. They are hopeful that the enhancedconnectivity will open new avenues and increaseprospects for further raising their living standard.The Dhumsikharka villagers enthused by the roadsupport have recently demanded a drinking waterschemes. PAF has provided NRs 1.3 m for theproject that benefits 45 households. The communityhas contributed over NRs 0.92 m in the form oflabor.The villagers are also in the process of installingbiogas in their villages. They are setting up a microhydro as well and are also seeking to raise goats.“We want to make this village ‘an ideal village’,”says Jit Bahadur Moktan, 61.39

PAF ANNUAL REPORT 2007/08Table 2.14: Beneficiaries HHsRegionsFY 2064/65CumulativeDalit Janajati Others Total Dalit Janajati Others TotalMountain 1,785 529 6,472 8,786 6,478 2,018 15,886 24,382Hill 4,840 5,577 9,924 20,341 6,446 7,623 10,995 25,064Terai 1,292 2,152 2,538 5,982 10,400 11,425 11,375 33,200Total 7,917 8,258 18,934 35,109 23,324 21,066 38,256 82,646Individual household cost analysis shows that PAF investment has remained lowest in Terai region which hasthe highest number of beneficiaries. In contrast to this, the mountain region enjoyed the highest per capitainvestment mainly due to the high transportation cost and different terrain.Table 2.15: Summary of Investment, Beneficiaries and Per HH CostRegionsPAFInvestment (in million)Community andOtherBeneficiaries HHsPAF Investmentper HHMountain 229.0 99.3 24,382 9,392.2Hill 165.4 95.6 25,064 6,599.1Terai 152.6 63.0 33,200 4,596.4Total 547.0 257.9 82,646 6,618.65. Environmental AssessmentMajority of the sub-projects (Income Generating and Infrastructure activities) supported by PAF are of smallscale, so they are not required to carry out any environmental assessment in pursuant with the prevailing lawof Government of Nepal. However, Integration of Environmental and Social Assessment (ESA) process duringsub-project appraisal and implementation is mandatory under World Bank’s requirement. Hence, PAF hasinternalized the process of ESA to ensure environmental and social soundness and sustainability of subprojects.Thus, prior to the implementation, all the sub-projects of PAF are required to carry out environmentaland social examinations. Measures to mitigate the adverse impacts identified during such assessment arepracticed during the implementation of sub-projects.To streamline these efforts and make the sub-projects environment friendly, PAF has prepared andimplemented Revised Environmental Management Framework (REMF) since January 2008. The REMFoutlines the process to screen the level of environmental assessment required for PAF’s sub-project andprovides guidelines for the COs and POs to identify generic environmental impacts and plan mitigationmeasures for them.Orientation on REMF has been provided to PMs and POs and the use of the REMF have been made necessaryin all sub-project proposals.PAF and Department of National Parks and Wildlife Conservation (DNPWC) have inked an MoU in order tocollaborate and enable PAF implementation in protected areas. As of 064/65 Initial Environment Examination40

(IEE) of three infrastructure sub-projects (2 Roads and 1 Ropeway) has been accomplished. Environmentaland Social Monitoring and Evaluation of 72 IG sub-projects and 47 Infra sub-projects with field visit of 6districts have been completed so far during year 064/65.Table 2.16: Number of Sub-projects with Environmental andSocial Monitoring and EvaluationDistrict Number of Sub-projects Monitored (064/65)Cumulative Number of Sub-projectsMonitoredIG Infra IG InfraMugu 7 9 10 13Pyuthan 23 8 31 13Darchula 10 10 15 13Ramechhap 6 3 12 4Kapilvastu 6 7 12 14Siraha 20 10 20 10Total 72 47 100 672.2.4 Innovative Special Window Programme and Learning1. OverviewPAF has been implementing special window programme (Innovative) besides its 25 regular districts. Thisprogramme has laid emphasis on adopting innovative concept, ideas, process, and technology, among othersfor livelihood improvement of targeted community. In the fiscal year 2063/064, PAF had continued its regularinnovative programme and none of the new cases were selected. Among the selected cases, most of them havebeen extended and some are already closed after attaining the stated objectives.2. Status of Special Window Sub-projectsThe COs and agreement with COs consist of innovative pocket programme in 10 additional districts.Furthermore, PAF considered financing 12 out of 20 winning innovative proposals of Nepal DevelopmentMarket Place (NDM) -World Bank 2005. Agreements were made with those 12 POs that amounts NRs 16 m towork in 25 VDCs of Bajura, Dolakha, Kathmandu, Myagdi, Parsa, Saptari, and Syangja districts serving about8,999 poor households. Till date, NRs 14 m is already disbursed. Further PAF monitored the World Bankfinanced remaining 8 NDM projects in Dang, Khotang and Tanahun districts.PAF is also mulling to finance 25 winning innovative proposals of Nepal Development Market Place (NDM)-World Bank 2008. Agreements are made with those 25 POs that amounts NRs 32 m to work in 52 VDCs ofChitawn, Dhading, Dhanusa, Dolakha, Jhapa, Kalikot, Kanchanpur, Kathmandu, Kavrepalanchok, Khotang,Lalitpur, Morang, Panchthar, Parbat, Sankhuwasabha, and Sarlahi districts serving about 3,972 poor households.Till date, NRs 14 m has been already disbursed and implementation is in different stages.41

PAF ANNUAL REPORT 2007/083. LearningPAF holds the belief that adoption of innovative approach including new ideas, process, and technology in thepreceding years can certainly improve the livelihood of targeted poor community. Enthused by this conviction,PAF has made a plan to receive new innovative cases by collecting letter of interest in coming years andincrease its coverage in a cluster basis where regular programme is yet to be implemented. PAF is alsoconsidering replicating its innovative concept in regular districts as well.2.2.5 Capacity DevelopmentCapacity Building and Human resource development is one of the main thrusts of Poverty Alleviation Fund.Effective capacity Building/ Human Resource Development is the key for PAF success. Effective and efficientcapacity building procedure will reinforce to sustainable development for communities for their livelihoodincome generating and infrastructure efforts continuingly.The success of PAF will largely depend upon how much the community members are able to utilize theiravailable resources, and to establish linkages with other groups.The main objective of capacity Building and HumanResource Development is effective implementation ofPAF’s overall activities for Poverty Reduction of thetargeted group through motivated, committed andtrained manpower and to strengthen the communitymember’s capability for sustainable development byinvolving the poor themselves to undertake theirneeds for poverty alleviation and improved quality oflife. The concept of Capacity building is “Help thecommunities to help themselves.”1. Capacity Development of Community Organizations in the Year 2064/065PAF organized training for CO members on different topics including social mobilization and leadership,orientation/training to COs for preparation of demand-led proposal, accounts/book keeping, savingsand credit and technical training. During the reporting period, by and large 13,356 CO members havereceived training.In addition, PAF also organized 118 events of study visits to CO members across different best practices of PAFprogramme areas.42

Table 2.17: Details of CO Capacity DevelopmentName of TrainingNumber of Participants1. Social Mobilization and Leadership Training to COs by POs 2,8712. Orientation/Training to Cos for Preparation of Demand-led Proposal 3,1003. Accounts/Book Keeping Training to COs by POs 3,6334. Training on Saving and Credit to COs by POs 2,6975. Technical Training to COs by POs 1,0556. Study Visits of COs 118Since inception to date, altogether, 10,762 CO members have received training on social mobilization andleadership. Likewise, 10,318 CO members are provided orientation/training for preparation of demand-ledproposal. Besides, 9,103 CO members are given training on accounts/book keeping followed by savings andcredit trainings to 6,366 members. Moreover, altogether 3,139 CO members have attended technical trainingfollowed by 285 events of exposure visits to CO members in different dates. The entire training and exposurevisit activities are carried out in the facilitation of PAF partner organizations (POs).2. Capacity Building of Partner OrganizationsPartner organizations are the crucial responsible agencies for social mobilization and technical assistance tothe COs at settlement level in order to facilitate them. Therefore, PAF, first, aims to capacitate POs and thenthrough them to capacitate COs, so that they are proficient in implementing IG and INFRA activities for theirlivelihood improvement.During this reporting year, PAF organized orientation to 1,122 POs staffers. Likewise, it also imparted TOTto 776 POs staffers on social mobilization, account management, micro enterprise promotion and publicauditing. Concurrently, PAF also organized altogether 127 district programme review and coordinationmeetings at its programme districts. They include orientation on PAF to POs, political parties, DDC districtline agencies and journalists.Table 2.18: Details of PO Capacity DevelopmentName of TrainingNumber of Participants1. Orientation to POs 1,1222. ToT to POs 7763. District Programme Review and Coordination Meeting 127Altogether, 3,652 PO staffers have been provided orientation on PAF till date. Likewise, 2,626 PO staffers havebeen imparted training of trainer (ToT) on various subject matters. In addition, 387 events of district programmereview and coordination meeting have been organized across PAF programme districts.43

PAF ANNUAL REPORT 2007/083. Capacity Building of PAF SecretariatPAF Secretariat initiated capacity-building of professional staff to enhance knowledge and skill. In the fiscalyear 2064/2065, 10 professional staff participated in workshop, whilst 15 professional staff participated in thetraining of different nature.4. Capacity Development of Local BodiesPAF envisages that for the effective and consequential implementation of PAF programme, there is dire needof coordination and cooperation with and from local government including DDC and DDC. For this task, theircapacity development is equally important. In this respect, PAF organized LDO conference in Kathmandu byinviting all 75 LDOs. The workshop was organized exclusively for improving coordination, and sharing anddissemination of information on PAF activities among DDCs.This apart, PAF has also organized 25 district level workshops in its programme districts followed by twosocial mobilization workshops. In like manner, PAF has also provided support to several DDCs to carry outjoint monitoring in PAF programme sites. Likewise, a series of review and planning workshops have beenorganized during this reporting period.5. In-house Meetings and WorkshopsMore than 20 events of in-house meetings andworkshops were organized in PAF premises duringthis reporting period. Workshops and meetings thusorganized focused on concepts sharing with the groupsand the discussion on capacity building.PAF professional staff participated in various nationalseminars and workshops organized by variousorganizations.A two –day SWOT analysis was carried out in PAFpremises for diagnosing PAF Strength, Weakness,Opportunities and Threats.44

Village getsdrinking waterin 19 daysVillagers of Dandagaun, Arkha VDC-2, Pyuthanhave proved that nothing is impossible if theycommitted themselves to a task. They constructed2,500 meters long drinking water system andestablished a well functioning water distributionmechanism in just 19 days.Success Story 5Previously, the villagers were fetching water from ariver located at a distance of an hour trek. Althoughthere was a distribution system constructed by theDrinking Water and Sanitation Division Office,Pyuthan, landslide three years ago had damaged twoRBTs and four taps, demolishing the system. So, thevillagers were forced to bear the pain of collectingwater from the river. Even the water thus collectedwas dirty and exposed them to various diseases.In the absence of water supply system, locals,particularly women, were compelled to spendmorning hours for collecting water. They couldmanage little time for household chores. To deal withthe situation, every family in the village hadnominated a member for collecting water daily.However, this problem of Dandagaun villagers is nowsolved — thanks to PAF and proactive initiatives oflocal Tikuri Active Youth Group (TAYG).“We constructed an intake at the source, laid down2,500 meters long pipe and built five new taps in just19 days,” said Engineer Manoj Kumar Shah.“Maintenance of RBTs and four old taps too were doneduring the period.”Dandagaun, which lies beyond Aglung VDC of Gulmidistrict, houses 39 dalit households and 24 ethnicfamilies. None of the households produce food enoughfor a year. Under the aegis of TAYG, two groups wereformed in the village two years ago. After both thegroups demanded drinking water system in the village,the drinking water project was started forming aKathalkhola Drinking Water and Sanitation CommunityOrganization (CO).“We had never imagined we can accomplish the taskin just 19 days,” said Santa Bahadur Pun, chairman ofthe group. Now all 63 households of Dandagauncollect pure drinking water in their own quadrangle.“If a contractor was hired, he might probably havetaken 6 months. But our own labor made thatpossible in mere 19 days,” Pun stated.Completion of the project has mainly made womenhappy. It has freed them from the need to spendprecious morning hours to collect water. “Fetchingwater from a distant river used to affect householdchores,” said Ishwori Pariyar, a local. “The projecthas saved ample time. I am planning to use this timeto plant vegetables in my farms,” she stated. Pariyareven added that she has started a process to takeloans from the group for vegetable farming.The CO’s record shows that the project was completedat a cost of NRs 728,000. Of that amount, PAF hadsupported NRs 591,000, while locals had contributedthe rest in the form of labor donation. “We have hadsuch a deep running problem, everyone was eager tomake labor contribution,” said Pun.The CO had expected to save a chunk of finances,however, increase in the price of pipe, fittings andcement did not permit it. Use of the old intake andold taps nonetheless helped it save NRs 150,000. “Weare planning to construct toilets in all the houses withthat money,” said Pun. That is not all. The villagersare also preparing to declare the village a “Villagefree of feces and urine” within a few months.Political instability in the country had long preventedthe residents of Dandagaun from tasting the fruitsof development, but this initiative of PAF has spurreda new hope among them, said Lilu Paudel, a teacherat Arkha Secondary School.He elaborated that the people had approacheddifferent government offices over the last three yearsfor rebuilding the damaged drinking water system.“However, none responded to their calls positively.Thanks to PAF’s support, they are relieved now,”said he, adding that intervention like this alone caninculcate positivity among the people.Kiran KC of TAYG that mobilized the communityfor the purpose tagged the project as an exemplaryproject in whole of Pyuthan district.45

BOX 1PAF ANNUAL REPORT 2007/08PAF in KarnaliPAF has laid special priority for raisingthe living standard of the poor living inKarnali zone. The zone is one of the mostbackward zones of Nepal. PAF isimplementing its programme in all the fivedistricts Karnali—namely Dolpa, Humla,Jumla, Kalikot and Mugu. A total of 27Partner Organizations are facilitating over11 hundred Community organizations tillthe end of the reporting year. Of the totalnumbers of VDCs of the zone, PAF hasalready covered 98 VDCs(73 per cent). PAF has agreed to provide a total of 549 m Rupess to supportthe community demanded different activities in Karnali zone till the end of the reporting year.Similarly, a total of 35, 834 poor households have been benefited through different incomegeneration and community infrastructure related projects supported by PAF.Of the total 55,372 HHs of Karnali zone, the PAF benefited CO member’s householdsStands at 35,831 i.e.65 per cent of the total.CHART B1 (A): PAF Coverage inKarnali DistrictOf the total CO members’ households, 61 per cent of them are hard core poor and 67 per cent ofthem female. Similarly of the total PAF assistance, 87 per cent has been directed to income generationrelated activities while the remaining 13 per cent is related infrastructure related support.46

BOX 2PAF in Terai Border VDCSince the beginning of the reporting year,PAF has laid special focus on Terai borderVDCs of five Terai districts PAF is currentlyworking to uplift the living standard ofthe poor. Of the total 59 VDCs, 17 VDCs(29 per cent) of five bordering districtsare covered by PAF. Facilitated by 14different partner organizations, a total of242 Community organizations arepursuing different income generation andcommunity infrastructure related projectsin these areas, benefiting 50,614 poorhouseholds. PAF has agreed to provideover 110 m Rupees to these communityorganizations. Of the total assistance 84per cent is directed to income generation while 14 per cent is on infrastructure related projects.Of the beneficiaries CO members 70 per cent are female, 65 per cent are hard core poor and 44 percent Dalits, among others.Table B2(A): Details of PAF Work in Terai Border VDCDistrictNo of Border VDCTotalBorderVDCsPAFCoverageBorderVDCsNo. of COAgreementCO MemberBeneficiariesTotal Agreement PAFAmount (in million)Kapilvastu 18 6 127 3695 67.04Mahottari 7 3 47 1008 16.04Rautahat 5 3 19 686 9.81Sarlahi 15 2 15 446 5.71Siraha 14 3 34 839 11.71TOTAL 59 17 242 6674 110.3100% 29%CHART B2(A): Poverty-wise CO Members inTerai Border VDCsCHART B2(B): Ethinicity-wise CO Membersin Terai Border VDCs47

PAF ANNUAL REPORT 2007/08Chapter 3INFORMATION,MONITORING ANDCO-ORDINATIONThis chapter discusses the overview and activities related to Monitoring and evaluation, research anddevelopment, communications and outreach, MIS and partnership and collaboration efforts made during thereporting as well the cumulative progress till the reporting year.3.1 Monitoring and Evaluation3.1.1 PAF Participatory Monitoring SystemConsidering the programme values, approach, geographical conditions, accesses and socio-economic conditions,PAF is adopting participatory monitoring system to monitor, provide feedback for implementationimprovement to achieve project objectives. Monitoring starts at individual or beneficiary level and focuses oncommunity itself for regular monitoring, feedback for improvement immediately for optimum delivery.Different agencies and individuals are involved at different levels in this monitoring system with only oneintention of learning and improving implementation so as to attain intended objectives of the intervention byoptimizing available resources with efficiency and effectiveness.1. Monitoring by CommunityMonitoring sub-committee formed within an individual CO at settlement level monitors each developmentactivities implemented by the community. Findings by the monitoring sub-committee is presented anddiscussed in CO’s regular meeting – at least once a month. Sharing and discussion in CO, recommends correctivemeasures to improve implementation. It provides feed-back and ensures required help in management,pertaining required skills and technology. Assigned social mobilizer in the VDC will be available for necessaryfacilitation and technical assistance for the implementation improvement accordingly.48

About 7,784 monitoring sub-committees at grass root level – settlement level with at least three members ineach sub-committee are directly involved in monitoring of the community sub-project activities implementedby the CO and their members. All these sub-projects are planned by the community, demanded with theirown contribution, implemented and managed by CO or its members.2. Monitoring by PORegular and periodic monitoring mechanism is in operation in all districts - being done with the facilitation of243 different partner organizations. These partner organizations were selected strictly on competitive basis..Monthly POs review meeting at the district level has been devised to share experiences among the POs, helpbuilt capacity and thresh out programme implementation related issues. It has been proved an effective toolto track what is going on in the field level and harness lesions and act immediately for effective implementationof the programme.3. Monitoring by DDC/ StakeholdersPeriodic monitoring by the district stakeholders (DDC, line agencies, representatives of political parties,journalist) has been devised for timely feed back on PAF programme implementation in the district. PO isresponsible to organize monitoring visits by the district level stakeholder in their working areas.District level stakeholders reviewmeeting on PAF Programme in eachdistrict has been organized in DDCunder the leadership of the DDC inevery trimester. District levelstakeholders particularly DDC /VDCs, line agencies (LAs), otherdevelopment partners working in thedistrict, representatives of the politicalparties, journalists and partnerorganizations, representatives of theCOs participate in this review. Eachpartner organization presents their Programme implementation progress status including over all status ofthe district by respective portfolio manger of PAF. Sharing Programme implementation status and discussionamong the different stakeholder creates an environment to listen stakeholders concerns and issues related tothe Programme helps clarify and strengthen coordination to increase effectiveness of the Programme.49

PAF ANNUAL REPORT 2007/084. Monitoring by PAFPAF performs periodic monitoring throughits professional staffs and mobilizing serviceagencies (SAs). Portfolio Managers (PMs) areresponsible for Programme level periodicmonitoring of their assigned district to ensuretimely delivery of PAF services / inputs tothe community through POs. However, thisis a daunting task to cover wide range ofindicators related to the process, inputs, andoutputs – practically a C/PM may not ableto reach each CO of the district additionallyconstrained by the adverse geographicalterrains of the rural areas, mobilized SAs asper requirement.Each CO, priory to the registration of 8,423 COs so far in PAF, appraised rigorously on its formation processand inclusiveness particularly - identification of the poor households, formation of CO, composition of theexecutives etc.Similarly, before doing 7,784 different agreement with COs for support on 8,292 different sub-projects - onincome generating activities (IGAs) and community infrastructure were appraised rigorously going to eachCO, reaching to the particular settlement and doing interaction with beneficiary community. Such appraisalparticularly covers process indicators and indicators related to the community ownership/participation forthe proposed sub-projects. In the case of infrastructure sub-projects, technical proposal of each one werescrutinized and appraised in the field before coming to the decision.Implementation or mid-term monitoring has been devised to monitor each sub-project during itsimplementation phase. In this monitoring, inputs particularly human resources, fund, material inputs, andimplementation process, technical inputs, community contribution/participation were monitored.Furthermore, each physically completed sub-project final subjects to the final or completion monitoring.On the top of above mentioned different monitoring, PAF secretariat teams with 57 professional staffs includingthe Vice-Chairperson (VC) and Executive Director (ED) are involved in periodic monitoring. It covers a widerange of indicators related to the process, inputs, output and outcomes; useful to get feed back from the fieldwith seeing is believing principal and adopt mid-term corrective measures including adopt appropriate strategyand provide policy feedback.50

PAF board gives its direction to the secretariat and watch closely on PAF activities. Periodic monitoring by theboard members, not only encourage PAF staffs, POs / Staffs and CO/beneficiaries but also provide opportunityto interact with the community and see what actually happening at the field covering a wide ranges of indicatorsincluding outcomes. It helps refine PAF policy and strategies for effective implementation of the Programme.A programme review workshop has been devised among the POs/ staffs in each development regions toaddress implementation issues. It is an effective tool to discuss and share on what has been achieved and whatcould not be achieved in different geographical and socio-economic conditions. It helps to track programmeimplementation situation, document lessons and explore innovative ideas and develop different strategies.5. Monitoring by GoNPAF is one of the targeted programmes of the government, help to achieve poverty alleviation goal of thecountry by extending services to the poor, empowering them and bring into the mainstream development,creating environment for inclusion at the community level. It directly reports to the Prime minister’s Office(PMO) and a copy to the Ministry of Finance (MoF). Officials from these two offices including National PlanningCommission (NPC) periodically pay visit to the PAF operational areas. This helps to know operational levelstrengths and weaknesses of the programme and suggest accordingly, and also takes stock for policy formulationon poverty alleviation.6. Monitoring by IDA/WBWorld Bank country office - officials payregular visit to monitor PAF activities inthe field. They independently assess theworks of PAF covering wide rangeindicators, issues and provide feedbackto PAF and the Bank. Similarly, biannualsupervision mission from IDA/WB pay field visit – interaction withcommunity and held meeting with PAF,and other stakeholders including GoN.Mission report with feedback helpimprove implementation. Similarly, occasional field visits and field monitoring/study by the specialists of theWorld Bank also help improve programme implementation, refine process, policy and strategies.51

PAF ANNUAL REPORT 2007/083.1.2 Evaluation and Studies1. Case Studies and Issue Based StudiesCase studies of seventeen different cases were done, documented lessons, published and circulated to thedifferent stakeholders and interested audiences. Similarly, issue based study is devised to take up contemporaryissues related to the poverty. As PAF is working in process approach with flexible and receptive mode, thesestudies helps enrich knowledge – capture lessons and improve programme implementation.2. Baseline StudyPAF has established Monitoring and Evaluation baseline data for 25 districts. Central Department of PopulationStudies (CDPS), Tribhuwan University, Kirtipur carried out independent survey to establish the baseline data.However, the first baseline survey of six pilot districts (Darchula, Mugu, Kapilvastu, Pyuthan, Ramechhap andSiraha) was performed in 2006 followed by the second baseline survey for additional 19 districts in 2007. Thosepreceding surveys were accomplished in close supervision and coordination with the World Bank. The baselinedata was collected based on the instrument designed jointly by the World Bank, PAF and CDPS/TU. Thebaseline surveys were done in 200 Primary Sample Unit (PSUs) with 3000 sample households.The main objective of the baseline data is to assess and evaluate changes, particularly outcomes and impact ofprogramme interventions by conducting the follow-up surveys in certain period. Similarly, a study has beendone to develop a system of systematic baseline at the household and community level for impact.3. Evaluation of The ProgrammeMonitoring and Evaluation data has been established derived through the sample households (HHs) baselinesurvey in Programme intervention and control districts, before starting PAF intervention. It will form thebasis to see changes occurred due to Programme intervention at the community/households level. Internalevaluation “e” or mid-term evaluation helps improve implementation to achieve Programme objectives. Anindependent follow-up survey in four pilot districts and two control districts is going on. The result of thestudy could be shared among wider audiences to meet the expectation of all concerned individual/institutionsabout the results of PAF Programme intervention.4. Benefits and ImpactThe follow up survey of the six pilot districts has been planned to carry out in the near future to assess theprogramme impact.52

5. Review WorkshopThe lessons are drawn from workshop organised on POs Programme review in the Far Western Region, Dhangadi.Three days workshop was held in September 2008 on POs Programme review was organized at Dhangadi. Itprovided an opportunity for PO/Staffs for rigorous review and sharing experiences. Workshop identified andanalysed issues, documented lessons and success cases in Programme implementation in pilot districts and furtherrecommended future strategies and actions plans on identified issues including action plan outline.3.2 Communicationand OutreachCommunications is criticalto create demand from beneficiaries ensuretransparency and foster partnership andlearning across stakeholders.PAF communications and outreachactivities are consonance with the updatedPAF communication strategy, which hasclearly prioritized different, set of activitiesfor different tiers of audiences.PAF communication strategy aimed to disseminate PAF approach/procedure/rules to the relatedstakeholders, develop the external and internal communication capacity of PAF and identify and developcommunication messages for PAF, as well as disseminate best practices and success storiesSome of the major activities that were initiated and continued during the reporting years include. Weekly Radio Programme from Radio Nepal, Radio Mithila, Janakpur and Bhek Awaj, Kalikot Fortnightly Radio Programme from Radio Mandavi Pyuthan Partnership with Far West Media Centre for different set of media activities in the 18 districts of far and mid west Fortnightly TV programme from Nepali Television during the prime hour Publication of Newsletter “ Jeevika” –both in English and Nepali on a regular basis. Dynamic websites created, updated regularly Annual Reports/ Brochures, Fact Sheets, Mini Brochures and Calendar 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 Orientations programme and stakeholders consultations at the local level Beginning of publication of “Poverty Outlook”53

PAF ANNUAL REPORT 2007/08Since PAF work is now increased in terms of its coverage and depth, there is a growing need to generategreater awareness based on the results. A proactive communication and outreach strategy will be of highlyimportant in this regard. PAF will work with all stakeholders to keep them abreast of the importantdevelopments and disseminating the information at national and international forums3.3 Management Information SystemPAF envisions Management Information System (MIS) to maintain effective flow of information at all levels(PAF, PO, CO). The major areas of information flow include: the nature and sequence of activities implemented,inputs provided, sources from which the inputs are derived, output expected, target beneficiary and themechanism taken on for interaction with key stakeholders. PAF MIS development was largely focused onfunctional level features as well as data integrity and data security during this fiscal year 2007-2008.1. Programme Management Information System (PMIS)PMIS is developed with the objective of facilitating timely and effective implementation of activities at the fieldlevel. This apart, it is designed in such a way that it could assist in input monitoring and decision makingprocess. In PMIS, information has been established in the following categories during this reporting year: Secondary information (Districts and VDCs) Information related to Partner Organizations (POs) Information related to Community Organization (COs) Information related to TAC/PAF Different Reports based on the data Programme management report (PMR) Monitoring Reports Targeting analysis Fund disbursement analysis Target vs. achievement analysis2. Human Resource Information System (HRIS)Human resource is the crux of any organization that constructs or shatters it. Hence, HRIS is presumed to be mostimportant. In HRIS of PAF, following information is developed and established during this reporting period: Management of all employee information. Leave management Travel management Reporting and analysis of employee information.In addition, other features like employee related PAF documents, HR inventory, among others are underdevelopment progress to make the HRIS comprehensive.54

3. Contract Management Information System (CMIS)PAF has also pursued contract management information system, since it enters into agreement with multiplestakeholders. In this system, PAF has done the followings during this reporting year: Agreements details Monthly reporting Fiscal year wise reporting Contractor wise reporting Procurement method wise reporting4. Financial Management Information System (FMIS)PAF has established correlation between PMIS and FMIS, which has access to the information of POs andCOs of PMIS.PAF has envisioned of creating decentralized database, through which POs will be able to maintain detailinformation of COs. Once it is done so, POs will be made easy in reporting system according to PAF norms.In a similar manner, introduction of Geographical Information System (GIS) is also envisaged with the objectiveof improving the better planning and reporting system of PAF. To start with, PAF has planned to collect VDClevel information of few selected districts to perceive possible result.3.4 Partnership and Collaboration1. Coordination and PartnershipPAF intends to work in a coordinated manner to fight against the poverty. Hence, coordination and partnershipforging is PAF’s working strategy, as a result, MoU have been signed to establish partnership with followingdifferent agencies to achieve synergy effect. MoU with Rastriya Banijya Bank (RBB), as a PAF development partner, is renewed and made arrangementswith Nepal Bank Limited in 5 districts (Dolpa, Jajarkot, Rasuwa, Rolpa and Rukum) where RBB branch donot exits for enabling efficient fund flow to the accounts of community organizations of the poor. MoU is signed between South Asia Foundation, CTEVT and Dhulikhel Hospital in order to utilize MadanjeetSingh Scholarship for ANM in PAF pilot districts MoU is signed with Alternate Energy Promotion Centre (AEPC) on August 10, 2007 for mutual collaboration inPAF and AEPC programme area to enable poor access to micro-hydro and other alternative energy projects MoU is signed with WINROCK on October 27, 2007 for the implementation of ICT GDA project inBajhang and Achham districts. MoU is signed with ROTARY Club and Kavre Health Training Institute for utilizing ROTARY ANMScholarship and follow-up support programme in PAF districts. MoU is signed with Winrock International’s (WI) Renewable Energy Project Support Office (REPSO)Nepal on April 21, 2008 to promote Jatropha oil based pump irrigation systems for improving incomegeneration of poor farmers through increased agricultural productivity in Siraha district.55

PAF ANNUAL REPORT 2007/08MoU is signed between Department of National Parks and Wildlife Conservation (DNPWC) and PAF onMay 2, 2008 in order to collaborate and enable to implement PAF programme in protected areas.An understanding is signed by PAF in a meeting at Ministry of Finance with Ministry of Local Development(MLD) to further enhance co-ordination with Local Bodies at district on April 1, 2008.Further PAF is taking initiative to collaborate with Ministry of Education and Centre for Non-Formal Education;Department of Livestock and Department of Agriculture under the Ministry of Agriculture and Co-operatives.Similarly, endeavours are under way to collaborate with Department of Irrigation; Leasehold Forestry andLivestock Programme-Department of Forest; World Food Programme (WFP); and USAID project Educationfor Income Generation.BOX 3Networking in AchhamOut of 75 VDC in the district, PAF has intervened in 43 VDCs. In 35 VDCs VDC level network hasbeen already established. Most of them have their own office set up with furniture. They haveraised fund from VDC for this purpose. Executives from each CO meet regularly and share theirideas. They have opened account and deposit the grant from VDC in their account. Following aresome of the activities carried out by VDC network.1. Share ideas among themselves. Bi monthly meeting of CO executives helps to share ideas sothat good practices can be replicated. Discussion on many bad practices like superstition andChhaupadi customs are discussed in VDC network.2. Coordination with VDC; Lack of coordination and resource duplication is perennial forDDC/VDC, so leaders from the network deal with VDC office for resource input in theVDC. They further actively participate to allocate the VDC budget in priorities. This alsohelps to avoid resource duplication within VDC.3. VDC level infrastructure; The Demand of infrastructure is increasing. Many infrarelated projects cover whole VDC, so in such cases federation of all COs in the VDCis found practical.4. Community livestock insurance initiation.. Two round orientations has been provided to thecommunity. They are demanding seed money from PAF to start. Community livestockinsurance committee is supposed to be registered under the VDC network and required subcommittees will be formed as and when needed.5. Federation for Cooperatives. Since VDC network hold all information of the COs in theVDC, so segregation of like minded entrepreneur is easy for formation of the theircooperatives.56

Chapter 4FINANCIALMANAGEMENT4.1 Financial Planning and ManagementPAF Financial Management System consists of three pillars namely- Financial Planning, Financial Managementand Financial Reporting. Financial management is directed by Applicable Accounting Standards which isaccepted both by Government of Nepal and World Bank. It also fulfills the requirements of partnerorganizations. 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 andexpenditures. 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 byinternal and external auditors. M/S Sunder & Company is assigned as internal auditor for the FY 2063/64 &FY 2064/65 and external audit is carried out by office of Auditor General.For effective planning and monitoring of funds, PAFhas opened Main account in Rastriya Banijya Bank(RBB). Along with main account, separate bank accountsare opened for PAF operating expenses and forProgramme expenses. Also, RBB and Nepal BankLimited (NBL) have opened Non-operating andOperating bank account for each communityorganization in their concern districts.57

PAF ANNUAL REPORT 2007/08The Funds Flow Modality of PAF withCommunity Organization is as Follows:PAFMain A/CPAF Level(Centre)PAFProgramme A/CPAFOperating A/CCO Level(District)CommunityNon operating A/CCommunityContributionPartner Organization(PO) provide TechnicalAssistance to CommunityOrganization (CO)CommunityOperating A/CPAF prepares Financial Monitoring Report (FMR) on a trimester basis for the purpose of review by internalmanagement and reporting to the World Bank., The report is comprised of different sections including briefdescription of project progress. The Financial monitoring report is the comprehensive report that includesvarious reporting formats, which cover financial, physical progress, contract expenditure and procurementinformation. The report 2A discloses the information on sources and uses of funds. Likewise, 2B providesinformation on uses of funds by project activity and 2C is the section that gives information on IDA eligibleexpenditure and the disbursement status. Section 2D is for reconciliation statement of special account and theprojection for the forthcoming trimester.Review of physical progress section provides all information on the achievement against planned with regardsto major physical indicators set by PAF. Contract expenditure report has two parts- goods and 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 beencategorized as individual consultant and firm consultant. Whether procurement is prior or post review dependsupon the threshold for procurement of goods and consultants.58

4.2 Performance AuditThe first major performance audit conducted by the Office of the Auditor General Nepal (OAGN) to ascertaineconomy, efficiency and effectiveness of PAF programmes has lauded PAF for efficient management of its programmesand bringing in positive changes in the lives of the poor and excluded groups in the rural hinterland of Nepal.BOX 4PERFORMANCE AUDIT BY OFFICEOF AUDITOR’S GENERALThe first major performance audit conducted by the Office of theAuditor General Nepal (OAGN) to ascertain economy, efficiencyand effectiveness of PAF programmes has lauded PAF for efficientmanagement of its programmes and bringing in positive changesin the lives of the poor and excluded groups in the rural hinterlandof Nepal.At the same time, it has also pinpointed various challenges facingPAF and recommended numerous reform measures to sort outexisting weakness. Of the major recommendations, it hassuggested PAF machinery to interact more with the people’srepresentatives and government line agencies, speedily respondon project proposals submitted by the communities, and furtherstreamline operations of community organizations (COs).OAGN had conducted the performance audit with a view to assess and evaluate the status ofprogramme implementation of Poverty Alleviation Fund, and to identify the challenges encounteredin the process of implementation of the project activities. In the process, it had audited the grantprovided to the COs and reviewed the activities of partner organizations (POs). The audit covered 52sub-project agreements of Kapilvastu, 34 sup-project agreements of Ramechhap, 44 sub-projects ofDarchula and 32 sub-project of Jumla district.“The audit covers the activities since the beginning of the project till the date of field audit, March 25,2008,” says the report. OAGN had relied on focused group discussions, interview, field observationand collections and analysis of different evidences to generate primary data. Secondary data weregenerated through the review of PAF documents and sub-project agreements, among others. Theaudit reviewed implementation status of the community sub-projects; disbursement and utilization ofgrant; training, capacity building and income generation (IG) activities; revolving fund managementand loan recovery status; and impact of the programme on income, child enrollment status etc. It alsostudied challenges faced in programme implementation; sustainability mechanism of the programmes;coordination with different entity (DDC, VDC, DAO); inclusion of Dalit, Janajati and indigenous group;women’s participation in the programme; participative community monitoring and monitoringmechanism; transparency and reporting framework; among others.59

PAF ANNUAL REPORT 2007/08At the same time, it has also pinpointed various challenges facing PAF and recommended numerous reformmeasures to sort out existing weakness. Of the major recommendations, it has suggested PAF machinery tointeract more with the people’s representatives and government line agencies, speedily respond on projectproposals submitted by the communities, and further streamline operations of community organizations(COs). OAGN had conducted the performance audit with a view to assess and evaluate the status of programmeimplementation of Poverty Alleviation Fund, and to identify the challenges encountered in the process ofimplementation of the project activities.In the process, it had audited the grant provided to the COs and reviewed the activities of partner organizations(POs). The audit covered 52 sub-project agreements of Kapilvastu, 34 sup-project agreements of Ramechhap,44 sub-projects of Darchula and 32 sub-project of Jumla district.“The audit covers the activities since the beginning of the project till the date of field audit, March 25, 2008,”says the report. OAGN had relied on focused group discussions, interview, field observation and collectionsand analysis of different evidences to generate primary data. Secondary data were generated through thereview of PAF documents and sub-project agreements, among others.The audit reviewed implementation status of the community sub-projects; disbursement and utilization ofgrant; training, capacity building and income generation (IG) activities; revolving fund management and loanrecovery status; and impact of the programme on income, child enrollment status etc.It also studied challenges faced in programme implementation; sustainability mechanism of the programmes;coordination with different entity (DDC, VDC, DAO); inclusion of Dalit, Janajati and indigenous group; women’sparticipation in the programme; participative community monitoring and monitoring mechanism; transparencyand reporting framework; among others.4.3 Budget ExpenditureThe total expenditure in FY 060/61 (2003-04), FY 2061/62 (2004-05), FY 2062/63 (2005-06), FY 2063/64 (2006-07)and FY 2064/65 (2007-08) were NRs 5.78 m, NRs 247.32 m, NRs 493.50 m, NRs 1,210.30 m and 1,875.48 mrespectively.The expenditure of NRs 1,875.48 m of this reporting year is 95.17per cent of total budget of NRs 1,970.72 mTotal expenditure of PAF till FY 2064/65 is NRs 3,832.39 mCurrently the PAF Project is funded by IDA Grant with US$ 40.0 m for four years till January 2009. Thisconstitutes initial US$ 15.0 m and additional US$ 25.0 m.Disbursement to this PAF project till date is 75 per cent i.e. equivalent to about US$ 31.37 m (equivalent toabout US$ 14.68 m out of initial US$ 15 m and equivalent to about US$ 16.69 m out of US$ 25 m).IDA grant for PAF Project II of US$ 100.0 m has been made effective on January 31, 2008. Likewise, IFAD grantfor PAF II of US$ 4 m is made effective from July 16, 2008.60

4.4 Financial Progress StatusIn FY-2007/08 (2064/65), total PAF expenditure of NRs 1,875.48 m (95.17 per cent of allocated budget) ascompared to FY -2006/07 (2063/64), where total expenditure is NRs 1,210.30 m which is 96.51 per cent of theallocated budget.CHART 4.1 : Financial Status forFY 2064/65Out of total expenditure in FY 2007/08, 95.89 per cent inprogramme implementation through COs and POs (CO-82.73 per cent and PO-13.16 per cent), 1.68 per cent inmonitoring, training, studies and other support, 0.27 percent in capital investment for PAF and 2.15 per cent inPAF operation/ recurrent cost. Out of the totalexpenditure, 99.57 per cent is from IDA grant and therest 0.43 per cent from GON source.In terms of cumulative expenditure, 2.71 per cent wasspent on under recurrent cost, 2.08 per cent on trainingand workshop, 0.77 per cent on Capital cost and the rest94.44 per cent was under programme cost. ExpenditureTable 4.1: PAF Expenditure Status (in million)Activities FY 2064/65 Share (%) Cumulative Share (%)Programme Cost 1,798.44 95.89 3,619.27 94.44Training workshop 31.53 1.68 79.75 2.08Operating Cost 40.39 2.15 103.69 2.71Capital cost 5.12 0.27 29.68 0.77Total 1,875.48 100.00 3,832.39 100.004.4.1 Disbursement to Community OrganizationsFund 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 uponmilestones.At the request of PAF, RBB and NBL, open two accounts in the name of each CO. Non-operating Account willbe under PAF control and Operating Account under CO’s control. For the sake of PAF accounting purpose,once the fund from the Programme Account of PAF is transferred to the Non-operating Account of the COs,it is treated as expenditure of PAF.61

PAF ANNUAL REPORT 2007/08Table 4.2: Disbursement Expenditure to COs (in million)DescriptionFY 2064/065CumulativeNOA OA % NOA OA %Mountain 472.2 385.1 81.6 884.2 665.5 75.3Hill 660.5 597.7 90.5 1161.2 956.7 82.4Terai 372.6 317.6 85.2 952.9 761.1 79.9Innovative Districts 46.5 48.4 104.2 116.2 104.3 89.8Total 1,551.7 1,348.7 86.9 3,114.5 2,487.7 79.9RemarksBased on the community demand, several activities related to income generation and small infrastructure subprojectsare being implemented. In the FY 2007/08 (2064/65) PAF has disbursed NRs 1,551.7 m to the NonoperatingAccount of COs .Out of the total fund disbursed to the Non-operating account, NRs 1,348.7 m i.e. about87 per cent has been transferred to the operating account. Attempt is being made to minimize the gap between theNon-operating Account and Operating Account for smooth and efficient financial management of PAF.Likewise, in terms of cumulative disbursement in NOA and OA of COs, a total amount of 3,114.5 m has beendisbursed in NOA. Out of total disbursement to NOA, 2,487.7 m i.e. 79.9 per cent has been transferred to OAof COs. The region wise distribution of disbursement shows that the hilly region has the highest sharefollowed by Terai and Mountain regions.4.4.2 Disbursement to Partner OrganizationsDuring the reporting year, altogether 243 Partner Organizations (POs) have been working with PAF tofacilitate and provide the necessary technical supports to the COs in the PAF districts for which PAF hasdisbursed NRs 246.8 m. On the basis of the expenditure on PO, the hilly region has the highest share with 37.1per cent and then Mountain and Terai regions with 27.3 per cent and 25.9 per cent respectively. The innovativeprogramme districts stands with the share of 9.7 per cent of the total expenditure.Table 4.3: Disbursement Expenditure to POs (in million)Description FY 2064/065 % Cumulative %Mountain 67.5 27.3 139.6 27.7Hill 91.4 37.1 165.4 32.9Terai 64.0 25.9 147.2 29.2Innovative Districts 23.9 9.7 51.2 10.2Total 246.8 100.0 503.4 100.0Similarly, by the end of the Fiscal Year 2064/65, the total fund Disbursement to POs has remained at NRs 503.4m Similar to the reporting year, the share of POs from Hilly region has the highest with 32.9 per cent. Butunlike to the previous year, instead of mountain region, the Terai region has the second highest share ofexpenditure with 29.2 per cent and then Mountain region with 27.7 per cent. The innovative programmedistricts have the share of 10.2 per cent of the total disbursement to POs.62

Chapter 5LESSONS AND FUTUREDIRECTIONS5.1 Lessons Learned and ChallengesThere is a high demand for the programme as the sub-projects originate at grass-root levels. Communitieshave demonstrated their keen interest to undertake the programme and make necessary contributions. Thecurrent challenge is to make a trade-off between rapid implementation and institution building enhancing thetechnical capability of the community organizations. In view of the wide varieties of activities undertakenwithin the sub-project, the challenges faced for sustainability of the sub-projects are:Weak Linkage with market for sustaining income-generating activities.Providing appropriate technology support for different activities including linkages with existing service structure Availing Insurance Safety-net particularly for livestock Exploring an alternative to livestock based activities for landless poor Building Community Capacity to Manage Revolving Fund and Operate the Sub-projects Raise awareness of community through functional literacyWhile working towards above challenges, it is inevitable to work with diversified groups of poor communitiessupporting each other and network for linkages and collaboration with other programmes and line agenciesto support communities in different areas of strength of these programmes. Further, legal institutionalizationof Community Organizations through coalition or formation of functional co-operatives and establishmentof strong linkages with VDC/ DDC are also important for sustainability and long-term support to thesecommunity groups.63

PAF ANNUAL REPORT 2007/08PAF is working with its exit strategy focusing on its strategic thrust to enable community to go to sustainedpath to get out of poverty within a stipulated 5-6 years of time.Monitoring, Research and Development needs to be strengthened further to support the implementationincluding capacity building of main actors i.e. CO, PO, Local Bodies and PAF. Based on lessons learned, PAFwill adhere following strategies: Expansion of PAF programme in new VDCs and districts Institutionalization of Community Organizations as co-operative or other forms of institution as pertheir decision and link with financial institution and markets where programme is already inimplementation Capacity Building of community organization, partner organization and PAF Co-ordination and collaboration with other agencies to bring discernible impact in considerablyless time Strengthen monitoring evaluation based feedback and learnings Advocacy of PAF in order to spread its knowledge and working modalities5.2 Lessons LearnedIdentification of the poor through a participatory method in a small social unit using unambiguous but locallyacceptable criteria works effectively.Cultivating demand for community infrastructure requires a different approach and strategy to socialmobilization than that is applied to identification of income generating activities by individual households. Alack of conscious efforts would lead to the poor prioritizing private goods (income generation) for immediatereturns over investments in pro-poor infrastructure, such as roads and irrigation, planning and implementationof which they feel is beyond their capacity.Starting of the follow-on project before the closure of the previous operation has advantage of institutional,staff continuity and smooth transition. On the other hand, it reduces the opportunity and willingness tosystematically and critically draw lessons and reflect them in the new operation.TORs for POs need to pay more attention to capacity building after completion of sub-projects. Milestones fortheir disengagement assessed in terms of CO capacity should be incorporated.Success of intervention has been witnessed, since the communities have taken full ownership of the activitiesdue to demand-driven and community-based programme and transparency at all levels.The current practice of involving POs for providing social mobilization, facilitation and technical assistance tothe COs for their sub-projects implementation with direct funding, if continued, there is no more risk ofmisappropriation of funds.64

Even in complex and conflict situation, intervention are proven to be easily continued, if district based POs arepartnered to implement the programme activities at the community level. POs thus selected are viewedtransparent and capable by the district stakeholders, since they have good track records in the district.Most of the targeted communities identified and organized into CO are illiterate. PAF's approach to work withCO by funding directly to them and make CO responsible for the sub-project implementation / managementdemands communities management capacity including saving and revolving fund management. Hence, theliteracy class to the CO members is essential for capacity building and social upliftment.Initially Programme faced the challenges in managing the contract. MIS is developed on need based, focusingon contract management and producing memo including reports as required. It helped in proper managementof the Programme activities through the improved information system and monitoring.PAF strategy to work though partners harnessing their experience proved appropriate to work in conflictsituation and targeting approach has created an environment to participate by the poor and excluded people.5.3 Future Programme and DistrictCoverage Plan-PAF IIPAF has planned to cover all 75 districts in future. Programme expansion in additional 15 districts is initiated inthe Fiscal Year 2064/65 (2007/08) and identification of Partner Organization (POs) is in progress. Programmewill be expanded in additional 15 districts in FY 2065/66 (2008/09) from the list of deprived districts categorizedby CBS/NPC based on 28 poverty related socio-economic indicators. Remaining 20 districts will be coveredthrough poverty pocket approach.65

PAF ANNUAL REPORT 2007/08ANNEXESANNEX 1: Fact Sheet as of July 15, 2008Main Heading Description Number Amount (in million) Per centCommunity Organisations Registered with PAF 8,423Agreement 7,784 3,604.50PAF Investment in CO Income Generating Sub-projects 6,847 3,028.90Community Infrastructure Sub-projects 1,445 575.60Partner Organisations 246 503.4Districts Covered 45VDC Covered 863CO Member HHs Total 239,244By Poverty Ranking Hardcore Poor (Ka) 161,355 67.4Medium Poor (Kha) 58,329 24.4Poor (Ga) 19,042 8.0Marginal Non-Poor (Gha) 518 0.2By Gender Male 74,324 31.1Female 164,920 68.9By Caste/Ethnicity Dalit 84,272 35.2Janajati 67,835 28.4Others 87,137 36.4Total Beneficiary HHs 287,26766

Annex-2:District-wise CO Registration, CO and Sub-projectsAgreements, PAF Investment and CommunityContribution in Sub-projects (FY 2064/65)SNName ofDistrictsNo. ofCOsRegdAgreement PAF Investment (in million) Contribution (in million)No. ofCOsNo. of SubprojectsIG subprojectsINFRASub-projects TotalCOCashCOKindOthersTotal1 Bajhang 73 50 65 22.3 25.4 47.8 2.1 10.4 0.3 12.72 Bajura 0 0 1 7.9 0.7 8.5 0.8 0.6 0.0 1.43 Darchula 158 162 221 47.9 37.3 85.2 4.1 20.8 1.2 26.14 Dolpa 39 43 43 18.9 18.9 1.7 0.0 0.0 1.75 Humla 110 117 117 48.6 48.6 4.6 1.3 0.0 5.96 Jumla 158 160 171 75.1 5.1 80.2 8.3 1.6 2.7 12.67 Kalikot 234 235 235 101.5 101.5 9.7 8.5 0.0 18.28 Mugu 37 39 82 6.8 19.4 26.2 0.9 7.1 3.9 11.99 Rasuwa 43 52 52 18.5 18.5 1.9 0.0 0.0 1.910 Achham 137 136 146 95.2 14.9 110.0 8.9 3.6 7.5 20.011 Baitadi 160 83 115 31.0 21.4 52.4 3.0 5.2 2.1 10.312 Dadeldhura 86 80 80 45.4 45.4 3.9 4.1 0.2 8.313 Dailekh 55 55 56 36.7 36.7 3.8 0.0 0.0 3.814 Doti 72 89 90 29.0 29.0 2.9 0.0 0.0 2.915 Jajarkot 19 66 85 40.0 17.0 57.0 7.4 6.4 13.8 27.716 Pyuthan 225 225 237 82.6 12.3 94.9 7.3 10.9 1.5 19.717 Ramechhap 253 222 251 74.3 30.1 104.4 10.2 15.1 0.7 26.018 Rolpa 42 42 42 21.8 21.8 2.0 0.0 0.0 2.019 Rukum 109 34 34 13.1 13.1 1.3 0.0 0.0 1.320 Sindhuli 129 129 172 64.1 31.1 95.2 6.1 8.1 0.5 14.721 Kapilbastu 221 223 232 100.4 0.6 101.0 9.5 19.7 0.0 29.222 Mahottari 74 69 69 32.0 32.0 3.4 0.0 0.0 3.423 Rautahat 57 45 54 23.7 12.7 36.4 2.2 3.5 0.4 6.224 Sarlahi 204 205 205 70.7 70.7 7.0 0.0 0.0 7.025 Siraha 312 343 351 94.0 19.3 113.3 10.2 3.9 1.0 15.226 InnovativeDistricts 79 49 75 18.0 20.1 38.1 2.0 9.2 10.2 21.4Total 3,086 2,953 3,281 1,219.5 267.4 1,486.9 125.5 139.9 46.0 311.467

PAF ANNUAL REPORT 2007/08Annex-3:District-wise CO Registration, CO and Sub-projectsAgreements, PAF Investment and CommunityContribution in Sub-projects (Cummulative)SNName ofDistrictsNo. ofCOsRegdAgreementNo. ofCOsNo. of subprojectsPAF Investment (in million)IG subprojectsINFRASub-projects Total COCashContribution (in million)COKindOthersTotal1 Bajhang 189 157 200 32.5 40.0 72.5 2.9 16.7 6.7 26.22 Bajura 134 134 160 62.2 17.4 79.6 5.9 10.8 0.0 16.73 Darchula 558 550 643 126.1 95.2 221.2 9.6 50.9 3.9 64.44 Dolpa 119 119 119 57.0 0.0 57.0 5.6 0.1 0.0 5.65 Humla 259 253 271 106.4 3.6 110.0 10.7 3.9 0.6 15.26 Jumla 225 221 233 132.9 24.0 156.9 18.2 1.7 2.7 22.77 Kalikot 338 339 339 149.1 0.0 149.1 14.1 13.4 0.0 27.58 Mugu 168 157 208 31.1 44.6 75.7 4.1 16.3 5.2 25.59 Rasuwa 232 204 214 81.8 4.2 86.0 8.5 3.1 5.9 17.510 Achham 364 361 383 168.1 12.6 180.7 16.2 4.4 7.5 28.111 Baitadi 462 235 274 96.0 26.7 122.7 9.9 7.6 6.0 23.512 Dadeldhura 222 215 216 93.3 0.8 94.1 8.3 4.7 1.8 14.713 Dailekh 192 192 193 93.1 0.0 93.1 9.7 0.0 0.0 9.714 Doti 264 239 242 105.3 2.1 107.4 10.0 2.0 3.5 15.515 Jajarkot 226 205 226 130.8 17.0 147.8 14.0 8.2 14.8 37.116 Pyuthan 433 431 465 153.8 33.6 187.4 13.0 31.9 1.7 46.617 Ramechhap 545 511 542 159.5 33.3 192.7 18.8 32.2 1.0 52.018 Rolpa 49 49 49 24.5 0.0 24.5 2.3 0.0 0.0 2.319 Rukum 199 104 105 40.6 0.0 40.6 3.9 0.0 0.0 4.020 Sindhuli 388 388 431 165.5 39.3 204.8 16.1 10.4 0.5 27.021 Kapilbastu 703 702 712 251.7 102.4 354.1 29.8 74.6 2.1 106.522 Mahottari 382 373 375 142.1 0.0 142.1 14.2 0.1 0.0 14.323 Rautahat 340 303 312 156.0 12.6 168.5 15.1 6.4 0.4 21.924 Sarlahi 363 364 364 135.9 0.0 135.9 12.7 0.1 0.0 12.825 Siraha 762 709 719 241.0 37.6 278.6 24.5 9.8 1.0 35.326 InnovativeDistricts 307 269 297 92.8 28.6 121.3 9.0 14.3 12.1 35.4Total 8,423 7,784 8,292 3,028.9 575.6 3,604.6 307.1 323.3 77.7 708.168

Annex 4:District-wise Number of POs, Working VDCs andBeneficiaries (FY 2064/65)SN Name of DistrictsNo. ofWorkingPOsNo. of VDCs andMunicipaliies inDistrictNo. ofWorkingVDCsNo. of CoMembersBeneficiariesNo. of totalBeneficiaries1 Achham 9 75 35 5,399 8,5502 Baitadi 7 63 30 4,188 4,4143 Bajhang 3 47 18 1,620 5,6784 Bajura 4 27 20 - 4685 Dadeldhura 9 21 18 2,778 2,5616 Dailekh 5 56 25 2,310 2,3537 Darchula 10 41 41 3,280 6,0978 Dolpa 3 23 12 1,228 1,2349 Doti 5 51 26 2,255 2,00710 Humla 5 27 22 2,321 2,60011 Jajarkot 8 30 26 824 11,13512 Jumla 7 30 21 543 5,38513 Kalikot 6 30 22 6,091 6,14714 Kapilbastu 11 78 59 6,130 6,39915 Mahottari 12 77 23 1,972 1,96516 Mugu 6 24 22 644 3,73617 Pyuthan 12 49 37 5,926 6,47718 Ramechhap 11 55 50 6,115 7,59219 Rasuwa 7 18 15 1,620 1,25220 Rautahat 9 97 44 2,279 4,67821 Rolpa 1 51 4 1,337 1,32822 Rukum 3 43 16 3,419 1,00123 Sarlahi 17 100 40 2,994 5,22224 Sindhuli 10 54 32 4,518 7,65425 Siraha 17 108 72 7,398 8,63926 Innovative Districts 49 531 133 2,926 3,501Total 246 1,806 863 80,115 1,18,07369

PAF ANNUAL REPORT 2007/08Annex 5:District-wise Number of POs, Working VDCs andBeneficiaries (Cumulative)SN Name of DistrictsNo. ofWorkingPOsNo. of VDCs andMunicipaliies inDistrictNo. ofWorkingVDCsNo. of CoMembersBeneficiariesNo. of totalBeneficiaries1 Achham 9 75 35 12,026 15,9532 Baitadi 7 63 30 9,809 9,9063 Bajhang 3 47 18 5,276 8,9584 Bajura 4 27 20 5,119 6,1965 Dadeldhura 9 21 18 6,394 6,2756 Dailekh 5 56 25 7,345 7,3457 Darchula 10 41 41 14,048 18,6418 Dolpa 3 23 12 3,714 3,7129 Doti 5 51 26 7,818 7,89910 Humla 5 27 22 6,490 6,52611 Jajarkot 8 30 26 8,436 17,18212 Jumla 7 30 21 8,894 9,11613 Kalikot 6 30 22 9,923 9,88214 Kapilbastu 11 78 59 19,805 29,25715 Mahottari 12 77 23 9,664 9,53816 Mugu 6 24 22 6,810 9,25117 Pyuthan 12 49 37 13,577 14,03518 Ramechhap 11 55 50 13,436 15,14719 Rasuwa 7 18 15 6,181 6,51320 Rautahat 9 97 44 8,773 12,05421 Rolpa 1 51 4 1,547 1,53822 Rukum 3 43 16 3,158 3,17123 Sarlahi 17 100 40 10,698 10,58924 Sindhuli 10 54 32 14,044 16,66725 Siraha 17 108 72 17,539 20,34626 Innovative Districts 49 531 133 8,720 11,570Total 246 1806 863 239,244 287,26770

Annex 6: PAF Coverage (VDC and HHs) in 25 DistrictsRegion/DistrictDistrict LevelPAF CoverageNo. of VDCs Total HHs No. of VDCs No of POs No. of COsNo. of COMembersAchham 75 44,005 35 9 364 12,026Baitadi 63 40,387 30 7 462 9,809Bajhang 47 28,588 18 3 189 5,276Bajura 27 20,378 20 4 134 5,119Dadeldhura 21 21,980 18 9 222 6,394Dailekh 56 41,140 25 5 192 7,345Darchula 41 21,029 41 10 558 14,048Dolpa 23 5,812 18 3 119 3,714Doti 51 36,465 26 5 264 7,818Humla 27 6,953 22 5 259 6,490Jajarkot 30 24,147 26 8 226 8,436Jumla 30 15,850 21 7 225 8,894Kalikot 30 18,487 22 6 338 9,923Kapilvastu 78 72,932 59 11 703 19,805Mahotari 77 94,229 23 12 382 9,664Mugu 24 8,261 22 6 168 6,810Pyuthan 49 40,183 37 12 433 13,577Ramechhap 55 40,386 48 11 545 13,436Rasuwa 18 8,696 15 7 232 6,181Rautahat 97 88,162 44 9 340 8,773Rolpa 51 38,512 4 1 49 1,547Rukum 43 33,501 12 3 199 3,158Sarlahi 100 111,076 40 17 363 10,698Sindhuli 54 48,758 32 10 388 14,044Siraha 108 100,010 72 17 762 17,539Total 1,275 1,004,115 730 197 8,116 230,52471

PAF ANNUAL REPORT 2007/08ANNEX 7: PAF Current Board of GovernersSN Name Designation1 Hon’ble Prime Minister Mr. Madhav Kumar Nepal Chairperson2 (To be appointed) Vice Chairperson3 Mr. Janak Raj Joshi, Secretary, NPC Member4 Mr. Rishi Raj Lumsali, Chairperson, ADDCN Member5 Ms. Mahin Limbu, Chairperson, NAVIN Member6 Ms. Nainkala Thapa, Chairperson, NWC Member7 Mr. Ramlal Bishwokarma, Chairperson, NDC Member8 Dr. Arju Rana Deuba Member9 Dr. Bal Gopal Baidya Member10 Dr. Duman Thapa Member11 Mr. Khalil Miyan Member12 Mr. Shree Krishna Upadhyay Member13 Mr. Raj Babu Shrestha SecretaryEx-Board of Governer during FY 2007/08 and OnwardsSN Name Designation Duration1 Hon’ble Mr. Girija Prasad Koirala,Prime Minister Chairperson 25 Apr 2006 - 18 Aug 20082 Honb’el Mr. Pushpa Kamal Dahal,Prime Minister Chairperson 18 August 2008 - 25 May 20093 Dr. Ram Prakash Yadav Vice Chairperson 10 Feb 2007 - 31 Dec 20084 Dr. Swayambhu Man Amatya, 15 July 2007 - 24 Jan 2008Secretary, NPC Member (16 th -19 th Board Meeting)5 Mr. Dharanidhar Khatiwada, 12 May 2008 - 21 Sept 2008Secretary, NPC Member (20 th -23 rd Board Meeting)6 Mr. Krishna Prasad Sapkota, 05 Dec 2003 - 12 May 2008Chairperson, ADDCN Member (1 st - 20 th Board Meeting)72

ANNEX 8: PAF Current StaffS.N Name Designatin1 Raj Babu Shrestha Executive DirectorCommunity Infrastructure Dev. Unit1 Murari Lal Chaudhary Community Infrastructure Expert (Unit Chief)2 Shankar Prasad Yadav Civil EngineerFinance and Admin. Unit1 Manoj Chipalu Financial Analyst (Unit Chief)2 Dilip R. Joshi Finance Officer3 Mahesh Pokharel Administrative Officer4 Naveen Prasad Procurement Officer5 Prabin Ghimire Finance OfficerHuman Resourse Dev. Unit1 Shiva Bhakta Sharma Neupane HRD Expert (Unit Chief)2 Anita Koirala Micro Enterprise Development OfficerM & E and Research Unit1 Jhank Narayan Shrestha M&E Expert (Unit Chief)2 Kanchan Tamang Lama Research and Dev OfficerProgramme Coordination and Communications Unit1 Ram Prasad Dhakal Social Inclusion Expert(Unit Chief)2 Avishesh Neupane Environment Officer3 Shree Ram Subedi Communications Officer4 Sunita Shakya MIS Officer5 Achut Man Singh Pradhan Portfolio Manager6 Ajay K. Patel Portfolio Manager7 Akhilesh C. Das Portfolio Manager*8 Amar Kumar Pakhrin Portfolio Manager9 Arun Pandey Portfolio Manager10 Bal Krishna Bishwakarma Portfolio Manager11 Bhupananda BK Portfolio Manager12 Bikam Karki Portfolio Manager13 Dawang Sherpa Portfolio Manager14 Deepa Regmi Portfolio Manager15 Dhana Raj Shah Portfolio Manager16 Durga B. Gandhari Portfolio Manager17 Hare Ram Wagle Portfolio Manager18 Ishwari Lal Bishwakarma Portfolio Manager19 Jaya Raj Pant Portfolio Manager*20 Jharendra Bahadur Singh Portfolio Manager21 Kalpana Pradhan Portfolio Manager22 Kamal Bahadur Thing Portfolio Manager23 Krishna Bahadur Sherala Portfolio Manager24 Lal Bahadur Siwa Portfolio Manager25 Lokendra Singh Badal Portfolio Manager26 Mahesh Kumar Shahi Portfolio Manager27 Malati Chaudhary Portfolio Manager28 Manju Singh Rana Portfolio Manager73

PAF ANNUAL REPORT 2007/08ANNEX 8: Cont...SN Name Designation29 Manoj Kumar Gupta Portfolio Manager30 Meena Nakarmi Portfolio Manager31 Nabin Pokharel Portfolio Manager*32 Nirak Bahadur Sunar Portfolio Manager33 Nirmal Pant Portfolio Manager*34 Om Prasad Poudel Portfolio Manager*35 Prabin Manandhar Portfolio Manager36 Pramod Joshi Portfolio Manager37 Rabindra Suwal Portfolio Manager38 Ramesh Lama Portfolio Manager39 Sajada Khatun Portfolio Manager40 Sandeep Nath Upreti Portfolio Manager41 Sanjay Kumar Jha Portfolio Manager42 Sanjay Kumar Mishra Portfolio Manager43 Sumita Malla (Bhandari) Portfolio Manager*44 Tara Pd.Joshi Portfolio ManagerSupport Staff1 Dinesh Gautam Office Assitant (Program)2 Dipesh Ratna Shakya Office Assistant (Admin.)3 Jaya Hada Office Assistant (Program)4 Kapila Prajapati Office Assistant (Receptionist/Secretary)5 Lalita Kayastha (Khanal) Finance Assistant6 Parjun Sapkota Office Assitant (Program)7 Rita Bayalkoti Office Assitant (Admin.)8 Russell Man Singh Pradhan MIS Assistant9 Satish Kumar Chaudary Finance Assistant10 Smriti Sharma Office Assistant (Receptionist/Secretary)11 Suman Kumar Pandit Finance Assistant12 Datta Maharjan Driver13 Devi Kumar Ale Magar Driver14 Krishna Bdr. Khatri Driver15 Prem Lama Messenger16 Rajendra Dhakal Messenger17 Subash Rai Messenger* Coordinating Portfolio Manager74

Annex 9: PAF Participatory M&E System75

PAF ANNUAL REPORT 2007/08Community Infra.Dev. Unit• Community Infra.Dev. Expert (Head ofthe Unit)• Civil EngineerAnnex 10: PAF Organizational StructureBoard of GovernorsVice ChairpersonExecutive DirectorHuman ResourceDev. Unit• Human ResourcesDev. Expert (Headof the Unit)• Micro EnterprisesDev. OfficerMonitoring/Evaluation andResearch Unit• Monitoring andEvaluation Expert(Head of the Unit)• Research & Dev.OfficerProgrammeCoordination &Communication Unit• Social Inclusion Expert(Head of the Unit)• MIS Officer• Communication Officer• Environment Officer• Portfolio Manager (40)Officer Assistant (11), Messenger (3), Driver (4)Finance &Administration Unit• Financial Analyst(Head of the Unit)• Administrative Officer• Finance Officer-2• Procurement Officer76

Annex 11: Financial Statement77

PAF ANNUAL REPORT 2007/08Annex11: Cont....78

Annex11: Cont....79

PAF ANNUAL REPORT 2007/08Annex 11: Cont....80

About the PAFPoverty Alleviation Fund (PAF) is a targeted programme for poor started fromthe year 2004 through the issuance of ‘Poverty Alleviation Fund (PAF)Ordinance 2060’ (2003) and subsequently; ‘Poverty Alleviation Act 2063’(2006). PAF is implemented through a 12 members Board chaired by the PrimeMinister. The major financial support comes from the World Bank. Thisprogramme was initiated under ‘Social Fund’ concept in order to take povertyalleviation program directly to hard core poor who lie below poverty level inthe country. The goal of PAF is to help the poor, find their way on a sustainedpath out of poverty and the target is to reach specifically the poor householdsbelow poverty level in a community; thus it is different from a conventionalcommunity development programme which focuses its activities for thedevelopment of the whole community of a settlement or VDC where the riskis to limit the benefits to only relatively elite group of the society.PAF is aimed to empower the socially excluded and disadvantaged poorhouseholds. It provides them the avenues for changing from “dependency”to “independent” and to “interdependent” level in relationship with traditionallydominant elite of the society and thus empower the poor to become part ofthe mainstream of development.PAF has followed five guiding principles: namely - (a) Targeted to poor(Antyodaya) (b) Social Inclusion (Samabesi) (c) Demand driven approach(Maag Anusar) (d) Transparency (Paradarsita) and (e) Direct funding tocommunity organization of poor (Prataksha bhuktani).PAF is ultimately concerned with socio-economic transformation of the poor.While the short-run objective of PAF is to improve the economic condition ofpoor households through the income generation activities but in the long-termit aims for total transformation of society, where poor could equally find theirdue share and became full partner in the development process.Contact AddressPoverty Alleviation Fund, Nepal (PAF)Gyaneshwor, KathmanduP.O. Box: 9985, Kathmandu, NepalPhone: +977-1-4410041 • Fax: +977-1-4442450E-mail: info@pafnepal.org.npWebsite: www.pafnepal.org.npDesign & process: Media Plan# 4467055