Supporting Innovation in the Field: The Role of IFAD's Support in the Sustainability and Commercial Transformation of FINCA's Village Banking Programmes
This paper describes lessons that FINCA International Inc. (FINCA) learned during the implementation of a technical assistance grant (TAG) from International Fund for Agricultural Development (IFAD).
In September 1998, IFAD awarded a three-year TAG to FINCA. The US $600,000 program focused on capacity building and institutional strengthening of FINCA's village banks. The TAG helped FINCA's village banks to:
- Access commercial funding;
- Diversify funding sources and strengthen asset management;
- Enter the new and unfamiliar terrain of managing commercial liabilities;
- Seize benefits of commercial funding;
- Develop a host of other activities and objectives;
- Deal with investor perception of risk and expectations of return;
- Improve transparency and establish ongoing relationships with key individuals in the banking sector.
Overall, the success of the TAG rested on a combination of factors. The flexibility in program design was reflected in the broadly-defined goals and objectives that did not restrict the project. The program was adapted to local needs. At the same time, FINCA brought a clear vision to the project and specific methodology for village banks development.
