Rural Microfinance Support Project (RMFSP)

This paper presents an overview of The Rural Micro Finance Support Project (RMFSP) - a joint project of International Enterprise for Development of Rural Micro Finance Services (DRMFS-International) and Bank Keshavarzi (BK), the agricultural bank of Iran.

The paper describes the project:

• Objective - to expand microfinance services in poor and deprived regions of Iran by leveraging BK's resources and institutional capacity in partnership with civil society organizations;
• Target group- the rural poor, in general, rural women and youth, in particular;
• Implementation(phase I ) -
  • DRMFS-International provides technical assistance in the form of development services;
  • BK provides credit and supervision;
  • Local NGOs provide basic social mobilization and group guidance services.
• Channelling groups -of 10-20 members who guarantee each others' loans;
• The loans are used for a variety of purposes, but mainly for individual livestock projects;
• All group members have to open savings accounts, but there are no mandatory savings;
• Credit is disbursed by the nearest BK branches;
• Actual accomplishments during phase I have exceeded project targets by a wide margin.

The paper lists the following project:

• Weaknesses:
  • Lack of a conducive policy environment;
  • Lack of experience in microfinance among governmental and non-governmental organizations in Iran.
• Strengths:
  • BK's capacity and willingness to expand financial services from its own resources to new market segments in rural areas through mutual guarantee groups.

The paper concludes with recommendations to DRMFS-International for the second phase of RMFSP.