World Bank Provides More Support to Rural Poor Women in Andhra Pradesh, India

WASHINGTON, July 10, 2007 – The World Bank today approved US$65 million in additional financing to Andhra Pradesh Rural Poverty Reduction Project, a program that has improved the lives of some 5.7 million women since its inception in 2003, when the original project was approved by the World Bank.

The project objectives will remain the same as the original project, to enable the rural poor, particularly the poorest of the poor, improve their livelihoods and quality of life. This additional financing will finance critical investments in institution and capacity building which will allow community institutions of poor women become sustainable and self-reliant. It will also support investments in livelihood-based institutions like business franchises and producer companies.

“This project has been critical in developing self-help managed institutions for the poor,” said Isabel Guerrero, World Bank Country Director for India. “Poor rural women in Andhra Pradesh, especially the vulnerable and marginalized, are now making decisions which affect their lives and livelihoods. The results are very encouraging. Rural poverty has gone down, and incomes and savings have increased significantly.”

The project has mobilized some 5.7 million poor women, or 80 percent of the poor in the project Districts, into nearly 470,000 Self Help Groups. The groups have used seed money to pool resources and make small loans to each other help pay for education, medical treatment, food , and other small but important needs. The self-help groups have formed federations, leveraging their finances and influence, and even began to deliver insurance, ambulance, extension, commercial and government services.

The self-managed institutions of the poor have collective savings of US$226.7 million, and leveraged commercial bank linkages of US$883 million since 2003. The average amount of assets owned by a self-help-group member is US$2,835. Two years ago, the value was US$1,641. Correspondingly, there has been an increase in income, from US$355 per annum to US$548 per annum in the same period.

“This additional financing will increase investment on institutional development, which in turn will further reduce the cost of credit access to the poor and enhance income generation opportunities for households,” said Parmesh Shah, World BankLead Rural Development Specialist and project team leader. “This will result in significant impact on increased economic returns from assets, livelihoods and enterprises at both household and community level.”

The credit is provided by the International Development Association (IDA), the World Bank’s concessionary lending arm and has 35 years to maturity and a 10-year grace period.

Source: World Bank