92782 February 21, 2007


                                                                   Links:
                                                                   - What is IDA?
                                                                   - Our Work in India


                                                                   More on India:
                                                                   - Borrowing History
                                                                   - Data & Statistics
                                                                   - Research
                                                                   - Contact Us




India has some of the poorest social indicators in the world. In the state of Andhra Pradesh,
these indicators are lower still: In 2000, 30 percent of the population lived below the poverty line;
malnutrition among children aged 0-6 years was about 30 percent; and the female literacy rate
was 33 percent, one of the lowest in India. Decades of government anti-poverty programs had
failed.




The Andhra Pradesh District Poverty Initiatives Project and the Andhra Pradesh Rural Poverty
Reduction Project were designed to enable the rural poor to improve their livelihoods and quality
of life and to reduce their vulnerability to shocks like illness, a death in the family, crop failure,
livestock disease etc. To this end, the projects facilitated small group organization and self
management within rural communities, with a particular focus on women. The design also
envisaged increased financial access for the poor by attracting private sector interest to this
potentially large but overlooked market. Key to the management of risk was that poor women in
self-help groups act as a guarantee both for each other and for banks.




Incomes increased for close to 90 percent of poor rural households, including around 8
million women, in the state of Andhra Pradesh.


Highlights:
- The number of households with access to credit increased to more than 6 million in 2006 from
less than 500,000 in the year 2000.
- A financial sector for the poor is emerging in rural Andhra Pradesh as banks, now lending 20
times more to the rural poor than before the project, have identified a vast new client base.
Annual credit flow to poor households increased from less that US$23 million in 2000 to US$445
million in 2006. The cumulative credit flow from commercial banks since 2000 is US$1.1 billion.
- Cumulative savings of poor households reached US$292 million in 2006.
- More than 1.2 million rural poor have death and disability insurance coverage, up from less
than 1,000 before the project.
- Nearly 8 million poor women in rural areas have been organized into 629,870 self-help groups
and 28,282 village organizations. The project is expected to organize all rural poor households
by 2008.
- Some 20,600 young people were trained and offered placement in the service and construction
sectors through partnerships with private companies.
-The projects helped community organizations get better market prices for their produce and
services.
 




- US$261 million since 2000.
- The strategy for IDA investments in Andhra Pradesh is to leverage investments from the public
and private sectors to enable the poor to be risk-, credit- and investment-worthy. The projects
invest on average US$140 per household but this small amount leverages about US$3,450 of
investments in loans from commercial financial institutions.
- IDA has provided technical assistance for institution building, development of financial products,
facilitating market linkages, monitoring and evaluation;
- These programs build on the UN Development Programme South Asia Poverty Alleviation
Project and the State government’s decade-long experience with women self-help groups.




The implementation capacity of self-help groups strengthened by these IDA projects has swung
into action in areas of need outside the immediate project. For example, about US$20 million
were channeled to help restore livelihoods affected by the tsunami, within six months of the
disaster, using community targeting and micro planning established under these projects.
Similarly, self-help groups serve as franchises for various public programs including AIDS
awareness.


To lift most poor households out of poverty and ensure that Andhra Pradesh achieves the
Millennium Development Goals (MDG) by 2015, about US$600 million is needed. This will help
develop good quality institutions and leverage more resources from commercial banks and other
financial agencies. Due to the success and scale of these projects, there is a demand for similar
operations in South Asia, particularly from the poorer states in Eastern India, Pakistan,
Afghanistan, Nepal, Sri Lanka and Bangladesh.




Andhra Pradesh District Poverty Initiatives Project (2000-06) and Andhra Pradesh Rural Poverty
Reduction Project (2002-07)
Project documents I  |  Project documents II | Text-only factsheet | Feature story (March 8, 2007)