Asia and the Pacific.ppt

Importance of Rural Non-Farm (RNF) Enterprises for Poverty Reduction Rural non-farm sector and employment is a vital source of income and employment Non-farm economy accounts for 40-60% of employment, and rural non-farm economy accounts for up to 50% of rural employment in Asia Non-farm economy is particularly important for households with less than 0.5 hectare (earn 30-90% of income through non-farm sources) Importance of RNF Enterprises for Poverty Reduction RNF Self-employment and casual and regular wage employment comprise: Household or livelihood enterprises Micro-enterprises Small-enterprises RNF fosters linkages with farm sector through production, consumption, capital, and labour linkages Linkages between rural and urban areas through supply of inputs, marketing of outputs, and subcontracting between rural and urban enterprises IFAD’s Experience in Promoting RNF Enterprises Since 1978, IFAD has supported 60 projects and programmes with components on developing rural micro and small enterprises (RMSEs) In 2003, a third of IFAD’s ongoing projects in in the Region included RMSEs-related activities IFAD-supported projects promote RMSEs by Facilitating access to financial and non-financial services Improving access to markets Creating a supportive institutional environment IFAD’s Experience in Promoting RNF Enterprises: Financial Services Microfinance has historically been central in IFAD-funded projects as a catalyst to empower rural poor – especially women – and building local institutions Channels of credit: Individuals Self-help groups Linkage banking Equity financing through apex institutions Second-generation credit for the rural poor IFAD’s Experience in Promoting RNF Enterprises Rural microfinance alone, though, is not a panacea in the fight against poverty Two issues: its effectiveness in reaching the extreme poor and the “missing middle” of entrepreneurs its suitability for longer-term investments and poverty reduction For R