$100-mn World Bank loan for Madhya Pradesh

June 25th, 2009 - 1:49 pm ICT by IANS  

Washington, June 25 (IANS) The World Bank has approved a $100-million IDA credit to address rural poverty in Madhya Pradesh, one of India’s poorest states with the lowest rate of poverty reduction.
The credit from the International Development Association (IDA), the World Bank’s concessionary lending arm, approved Wednesday carries a 0.75 percent service fee, a 10-year grace period, and a maturity of 35 years.

The credit is for the Second Madhya Pradesh District Poverty Initiatives Project, designed to empower the poor by organising them into Self Help Groups (SHGs) and help them form cluster-level organisations.

It will develop the capacity of SHGs to start or enhance their livelihood activities, strengthen their business operations through producer-based federations, companies and cooperatives, and thereby access higher value markets and formal financial intermediaries, the World Bank said.

The project builds on a similar scheme that was approved by the Bank in 2000, which covered over 2,900 villages spread across 14 districts.

It has helped organise some 325,000 poor rural households into over 52,000 Common Interest Groups (CIGs), providing them with financial and technical assistance.

“This project has achieved some very impressive results,” said Roberto Zagha, World Bank country director for India.

“For example, we have seen an increase in annual household income as well as value of agriculture production covering 300,000 poor rural households. This project will now scale up its activities to 5,000 villages.”

An impact evaluation conducted at the end of the first project showed it has improved livelihood of participants, reduced their vulnerability, and enhanced social empowerment.

These results include 65 percent increase in annual household income of project participating families, 149 percent increase in value of agricultural production, and 27 percent increase in irrigated land for project families investing in agricultural activities, the Bank said.

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