RURAL CREDIT II

closed

The project's central objective is to continue the rehabilitation and strengthening of the network of rural savings and loan cooperatives initiated under the First Rural Savings and Loan (S&L) Rehabilitation Project (IDA Credit 2086-BEN). The project supports the development of a privately-owned financial intermediation system in rural areas, organized along mutualist lines. Globally, it is expected that the Network reaches full financial viability and autonomy only in the longer term (10 to 15 years). The specific objectives of the project assist the Network in establishing an efficient institutional structure and making substantial progress toward financial viability. It is expected that by the end of the project, all primary level cooperatives (CLCAMs) will not only break even financially, but also finance up to 30 percent of the Network's regional and national levels, in charge of providing policy guidance, assistance and supervision to CLCAMs. The project supports: (i) the establishment of efficient service units at the Regional Union of CLCAMs (URCLCAMs) to provide CLCAMs with the necessary technical backstopping (accounting and financial management) and training; (ii) the establishment of a National Federation of S&L Cooperatives to be the Network's policy-making and supervisory body; (iii)technical assistance, equipment, training and annual audits; and (iv) funding for completing the financial restructuring of CLCAMs and providing limited financial assistance to a few CLCAMs operating in the poorest areas of the country and having a potential to reach a deposit base necessary to break even financially.