INTRODUCTION The land privatization process brought about the creation of almost 400 000 small village farms and activities. The lack of farmers financial means to finance the development of their farms. The lack of possibility for the classical financial institutions to meet the great number of new demands for financial means. Solution: Microfinance institutions adapted for this kind of clientele.
Characteristics of the Rural Credit Program implemented by RFF (ADF) The oldest and the most extended Project in the Albanian rural areas. The community function as a solidarity group that guarantees the individual loans. Delegation of the responsibilities to the communities in the decision-making process. Continuous adaptation with the general environment in evolution. Support to the traditional organization of the Albanian village. Cooperation of both parties: the elected bodies by village community (VCC) and RFF representatives. Clear and comprehensive eligibility criteria.
Actual Project of Rural Microfinance (funded by World Bank) Objective: To increase the possibilities for investments in the village farm through the creation of Saving and Credit Associations network and their Union, that will gradually become self sustainable. Project Description Summary o Transformation of existing structures in the village into SCAs, based on the Law for the Saving and Credit Associations. o Creation of new SCAs. o Extension of the area covered by RFF (350 SCA until year 2004). o Diversification and extension of RFF financial services. o Support of the newly created village institutions with training and technical assistance. o Creation of the SCAs Union.
INDICATORS OF RFF ACTIVITY as of 30 June 2001 Total value of loans disbursed so far (USD $) Total number of loans disbursed so far Outstanding loan portfolio (USD $) Number of active clients (30.06.2001) Average loan size (USD $) Repayment rate Number of districts covered by RFF (30.06.2001) Number of villages covered by RFF (30.06.2001) Number of SCAs in these villages (30.06.2001) 12,051,424 24,055 3,218,662 4,915 839 97,5 % 8 167 37
LESSONS LEARNED 1. The success of the Rural Credit Program is explained with the commitment for creating institutions (SCAs( SCAs) ) based on traditional structures in the village level and on the good relations with them, consisting in: - the trust in delegating to them the decision making process; - the ongoing transfer of competencies; - finding the mechanisms that stimulate the reciprocal responsibility on the results; - the participatory method in preparing all the regulations and methodologies; - the clear common vision of the perspective.
LESSONS LEARNED 2. The impact of different interventions could be more visible if: different projects would take into consideration the existing structures in carrying out their activities; the responsibilities are delegated to communities which is very cost effective, since it allows to keep the intermediary structures lean; there is a good coordination of different projects intervening in the same area; a strong effort would be put to the community driven development, even in the financial projects like ours; the local government would make possible the representation of the community and its interests in the decision making process.