Subject:- RETENTION OF MICRO CREDIT REVOLVING FUND

UNDER DERA GHAZI KHAN RURAL DEVELOPMENT

PROJECT (DGK-RDP) AND BARANI VILLAGE
DEVELOPMENT PROJECT (BVDP)

On the request of Chief Executive, NRSP received through

CM Secretariat a summary was initiated by Planning & Development
Department for retention of Rs. 158.00 million by NRSP which was
provided to them for implementation of the Barani Village
Development Project (BVDP) and Bahawalpur Rural Development
Project (BRDP) in Barani Area and Bahawalpur respectively.
The summary was routed through Finance Department and
Secretary Finance has raised certain observations on the proposal in
the light of provisions of the agreement and the PC-I. Finance
Department has proposed an evaluation of the two projects to
ascertain their impact as per conceived objectives (original summary
placed below).
The following information has now been obtained from the
Project Directors in the light of observations of Finance Department
(PUC-I, II).
i. Details of loan advanced to NRSP, amounts actually
recovered, number of cases in which the amount is yet to
be recovered, reasons for deviations from contractual
obligations.
ii. Financial statement of the two projects to ascertain the
amount actually recovered by the NRSP against the micro
credit advanced to the beneficiary farmers.
iii. Minutes of tripartite annual review meeting held by PMU,
NRSP and ADB.
iv. Exit strategy prepared by NRSP for BVDP project.
v. Evaluation of the two projects if conducted by PERI or some
other agency.
vi. Status of PC-IV of the two projects.

It is proposed that the information provided by Project

Directors may be discussed in a meeting to be participated by the two
Project Directors and the representative of NRSP for adopting further
course of action on the issue. Working paper for the meeting is being
prepared in Regional Planning Section.
 May please indicate the time and date of the proposed
meeting.

(Dr. Mahmood Khalid Qamar)

Chief (Regional Planning)
04.06.2009
Secretary, P&D
Subject:- MINUTES OF THE MEETING HELD ON 12.06.2009
UNDER THE CHAIRMANSHIP OF SECRETARY, P&D
DEPARTMENT REGARDING RETENTION OF MICRO
CREDIT REVOLVING FUND UNDER DERA GHAZI KHAN
RURAL DEVELOPMENT PROJECT (DGK-RDP) AND
BARANI VILLAGE DEVELOPMENT PROJECT (BVDP)

Minutes of the meeting held on 12.06.2009 under the

chairmanship of Secretary, P&D Department regarding Retention of
Micro Credit Revolving Fund under DGK-RDP and BVDP projects are
placed below for approval/order.
Submitted please.

(Dr. Mahmood Khalid

Qamar)
Chief (Regional Planning)
19.06.2009

SECRETARY, P&D
Subject:- DECISIONS TAKEN IN THE MEETING HELD ON
12.06.2009 UNDER THE CHAIRMANSHIP OF
SECRETARY, P&D DEPARTMENT REGARDING
RETENTION OF MICRO CREDIT REVOLVING FUND
UNDER DGK-RDP AND BVDP-NRSP’S RESPONSE

This PUC is about the study undertaken by Sustainable

Policy Development Institute (SDPI) as per decision of that
meeting held on 12.06.2009 in P&D Department. As per decision
NRSP was supposed to furnish names of three institutions alongwith TOR
before proceeding on tjis study . NRSP has only provided us Study Report
conducted by above referred institution SDPI.
Salient finding of that study is as under:-
i. NRSP has put in place all the best practices in
terms of efficiency, productivity, risk management
and transparent financial reporting.
ii. Due to good financial management practices, the
fund has been recycled to reach a maximum number
of poor clients.
iii. NRSP has also demonstrated ability to inculcate a
culture of good repayment as it has kept the default
at below 1%.
iv. By leveraging the revolving fund NRSP has
created access for a large number of poor
households to micro credit who would not get it
otherwise without a tangible collateral.
v. In terms of outcomes of the programme NRSP’s
micro credit has shown positive results in terms of
increasing incomes, generating employment,
increasing women participation, improving nutrition,
health and education.
vi. Overall NRSP has managed the available funds in
an effective manner thereby increasing the impact of
the project deliverables.

Study recommends to extend loan too.

Comments of RP Section

1. TOR of the study were not got approved by NRSP from P&D
Department.
2. Exist strategy is not incorporated in the study.
 3. Interest rate being charged by NRSP from the farmers at
quite high rate 33% not highlighted in the report.
4. Previously advance was provided to NRSP because loaning
through NRSP was project requirement. But when Punjab
Government has to provide loan from its own resources
interest rate with other loaning agencies is to be compared.
5. Punjab Government may also have to assess its resources for
provision of loaning facilities and extending the same
considering by budgetary position.

As report is also sent to Finance Department, so Finance

Department may be requested to send their comments on the same to
proceed further on this issue.
Recommendations as in para may be approved.

(MUHAMMAD ASLAM CH.)

Chief (Regional Planning)
11.09.2009
SECRETARY, P&D
Subject:- RETENTION OF MICRO CREDIT REVOLVING FUND UNDER
DGKRDP AND BVDP-NRSP’S RESPONSE

Para 192-195 may be perused.

The Impact and Portfolio Assessment Study regarding NRSPs D.G. Khan
and Barani Village Development Projects as conducted by SDPI was sent to Finance
Department for comments who has observed that the report prepared by SDPI does not
address the specific observations of Finance Department incorporated in the summary.
We may, therefore, convey the observations of Planning & Development
Department (para 191/N) and Finance Department to NRSP for action on decisions of
the meeting held under the chairmanship of Secretary P&D Department on 12.06.2009
(Flag “X”).
DFA is placed below.

(Dr. Mahmood Khalid Qamar)

Chief (Regional Planning)
07.11.2009

SECRETARY, P&D