Kabul —The World Bank has approved a $30 million IDA grant to support the Afghan government’s new initiative to boost employment and incomes for residents of rural areas, accounting for 70 percent of the country’s total population. Called Afghanistan Rural Enterprise Development Project (AREDP), the scheme aims to enhance participation of the rural poor in economic activities by providing business development services, improving their access to finance and strengthening market linkages and value chains.
The World Bank office in Kabul said the project would support the establishment of 13,000 Savings Groups, 6,500 Enterprise Groups (EGs) and 1,300 Village and Savings Loan Associations. In a statement, it said the EGs would help maximise the economic potential of rural entrepreneurs to improve market access, deliver technical knowledge, raise basic business skills and leverage economies of scale to increase the value of their sales.
In addition to working with 750 Small and Medium Enterprises (SMEs), likely key drivers of rural employment, the project will support SMEs in building skills, promoting market development and encouraging business linkages into the rural economy. The World Bank senior rural development specialist and project team leader said: “The project will assist these institutions to build their own capacities, increase the value of trading, ensure production is oriented towards identified market opportunities, and create access to credit.”
Qazi Azmat Isa added: “The pilot phase of this programme demonstrated that such an intervention can have an enormous impact in terms of improving employment opportunities and income of rural men and women. We have also seen in many other countries - in South Asia and beyond - that promoting synergies between private companies and rural enterprises provides a powerful force for boosting rural incomes. According to the WB statement, AREDP will be implemented under the overall leadership of the Ministry of Rural Rehabilitation and Development (MRRD). With the initial $87.3 million budget envelope, it will roll out in seven provinces: Kapisa, Balkh, Nangarhar, Herat, Bamyan, Kandahar and Helmand. It will later be scaled up, with additional funds, to all 34 provinces of the country. In addition to IDA’s $30 million grant, the UK’s Department for International Development (DFID) has pledged ?12 million through the Afghanistan Reconstruction Trust Fund (ARTF) for the initial rollout. The Danish Government has also committed $2 million under a bilateral agreement. The remaining funding requirements will be met through the ARTF.—NNI
