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PRESS RELEASE

US$ 100 Million Additional Financing for Rural Livelihoods Project in Bihar, India – Expected to Directly Benefit 1.5 Million Households

May 31, 2012

More than 90 percent of poor women mobilized belong to vulnerable groups such as scheduled caste, scheduled tribes and backward castes

WASHINGTON, May 31, 2012 – The World Bank today approved a US$ 100 million credit to scale up the ongoing Bihar Rural Livelihoods Project, named Jeevika (or `livelihood’ in Hindi), aimed at enhancing the social and economic empowerment of the rural poor in Bihar.

The additional financing will help consolidate and expand the Project to cover all the blocks in the existing six districtscovered under the Project. This is expected to directly benefit 1.5 million households.  This will not only allow the Project to cover all the villages in the existing districts, but also provide a comprehensive district wide model for poverty alleviation in Bihar, a predominantly rural state with 89 percent of the population living in rural areas.

So far the Project has mobilized 515,000 poor women into 46,000 self-help groups (SHGs) and 3,500 village organizations. Of these, more than 90 percent belong to vulnerable groups such as scheduled caste, scheduled tribes and backward castes. These community organizations are managed by nearly 30,000 trained grassroots women leaders and 8,000 para-professionals, resource persons and functionaries trained in the areas of institutional capacity building, bookkeeping, providing linkage with commercial banks and livelihood support services. 

The focus now will be on consolidating and increasing investments in different livelihoods sectors such as agriculture, dairying, job creation for migrant youth and nonfarm sector employment; investments will be made in cross-sectoral delivery of services through convergence with various GOI/GOB development programs; partnerships with civil society, social entrepreneurs and private sector will be strengthened for innovative practices in social, financial and economic inclusion; and the monitoring and evaluation systems will be strengthened to capture change. 

“Effective targeting of the poor, especially the most vulnerable groups, has been a major focus of the ongoing Project,” said Mr. Roberto Zagha, World Bank Country Director for India. “This additional financing will not only help expand the social mobilization strategy to newer blocks, but also deepen the social inclusion impact in the existing blocks,” he added.

These SHGs of the poor have so far cumulatively saved over US$ 5.5 million, and accessed US$ 22 million credit from commercial banks. A strong partnership has been built with mainstream financial institutions through signing of Memorandum of Understandings (MOUs) with four commercial banks and three regional rural banks.

“The additional financing will help the project develop scalable models in key livelihood sectors such as agriculture, dairying, job creation for migrant youth and nonfarm employment and also ensure access to safety nets for the poor through convergence with government programs,” said Parmesh Shah, the Project’s Task Team Leader and Lead Rural Development Specialist, World Bank.

A recent independent evaluation of the impact of Jeevika on socio-economic outcomes based on a survey of 4,000 randomly selected households show that the Project has positively impacted the savings of project households with 58 percent more households starting regular savings. It has led to increased food security with a 27 percent reduction in the duration of food shortage and has increased ownership of assets like cows (by 59 percent) and bullocks (by 177 percent).

The Project has initiated a number of interventions on a pilot basis through convergence with other government programs and enabled access to public entitlements for the poor. These include access to social security pensions for nearly 29,000 households in partnership with the social welfare department and access to wage employment under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in partnership with the rural development department for nearly 5000 SHG women.

The Project will be financed by a credit from the International Development Association (IDA) – the World Bank’s concessionary lending arm – that provides interest-free loans with 25 years to maturity and a grace period of five years.

 

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PRESS RELEASE NO:
2012/494/SAR