The partner organizations are identified through a rigorous and transparent eligibility criteria. They are expected to share the same values as the PPAF and must have the capacity to implement the project components in a professional and pro-active manner. The eligible partner organizations are also expected to have demonstrated track record, financial sustainability and participatory development within their functions. The selection of partner organizations is an on-going process, whereby new ones are added and others who have not performed may be excluded.

Policy for Establishing Eligibility Criteria

  • The CEO, together with the Core Executives, is responsible for establishing and assessing the validity of eligibility criteria in relation to the vision, mission and objectives of the PPAF, and recommending changes therein to the Board of Directors whenever necessary
  • The Board of Directors, upon recommendation of the CEO, is responsible for authorizing changes in the eligibility criteria for partner organizations.
  • The CEO is responsible for obtaining agreement on the eligibility criteria and any changes therein from donors with whom such understanding has been reached.

General Eligibility Criteria for Partner Organizations

Partner organizations are all those NGOs, RSPs, CBOs, private sector institutions and entities that are involved in the work of poverty alleviation through income generating activities. Their role in the implementing methodology of the PPAF is described in section 2.4.2. They will be selected through transparent pre-selection criteria. In order to be eligible for support from the PPAF, potential partner organizations have to meet the following eligibility criteria established by the Board of Directors of the PPAF:

  • The potential partner organization must be registered under one of the existing registration laws of Pakistan. Preference will be given to organizations registered under the Voluntary Social Welfare Agency Ordinance 1961, the Societies Registration Act 1860, or Section 42 of the Companies Ordinance 1984.
  • It should be involved in income-generation activities focusing on micro-credit/micro-enterprise and/ or small-scale community physical infrastructure.
  • It must have a proven track record of at least two years in the area of micro-credit/micro-enterprise, and three years for small-scale community physical infrastructure development financing.
  • It should be involved in participatory development at the grass-roots level, have the capacity to expand its outreach and have a well-developed strategy and work plan for the future.
  • The sources of present funding should be transparent and the structure of governance must be democratic.
  • The organization must have a proper accounting system supported by balance sheets and profit and loss account statements or income and expenditure statements with the minimum requirement of a cash-book supported by a bank statement.
  • The organization must have micro-credit/ micro-enterprise, small-scale community physical infrastructure and/or capacity building programs for women.
  • The organization awarded loans or grants will be required to submit regular monitoring reports and should be willing to submit to monitoring and evaluation by the PPAF or any outside agency appointed by the PPAF for this task.
  • The organization must have a system of internal controls and external audits, in accordance with the relevant laws of its registration, with audit scope acceptable to the PPAF and annual audits by a reputable firm. It should be willing to accept mandatory external audits by a firm of Chartered Accountants acceptable to the PPAF.
  • The organization must be financially sustainable, or on the path to sustainability. In this regard, it should have a realistic business plan for achieving self-sufficiency, and show steady progress towards that goal.
  • The mark up charged by the organization for its credit program should ultimately cover the following: operating (including administrative) costs, financial costs and the cost of bad debts.
  • The organization would be willing and able to maintain all relevant records, documents and information in respect of financing received from the PPAF, and to furnish these to the PPAF

Eligibility Criteria for Beneficiaries of Partner Organizations

  • In line with the different operating methodologies of partner organizations, beneficiaries may consist of community based organizations, village organizations, women's organizations, self-help groups, credit groups, etc. Regardless of type, the beneficiary community must meet the following conditions:
  • The community should be considered poor under the definition of poverty adopted by the partner organizations (caloric-intake, basic needs, income poverty, poverty of opportunity, and/ or the human poverty index) till the time PPAF develops a more specific working measure of poverty at the district level.
  • The community should conduct their affairs in an equitable manner and in accordance with sound and transparent administrative and financial practices.
  • The community should maintain and provide, upon request, to the partner organization concerned all relevant records, documents and information in respect of the sub-projects for which loans have been made to them.
  • The community should have a record of regular meetings.
  • The community, preferably, should have a savings program.
  • Decision-making, especially with respect to identification of infrastructure schemes, must be made through an open and democratic process.
  • Women should be active participants in decision making.
  • The beneficiaries, if they have previously availed of any loans, should have serviced such loans efficiently and promptly.

Additional Eligibility Criteria Specific to Micro-Credit

  • Micro-credit activities funded by the project should be in compliance with Pakistan's laws and regulations relating to health, safety and environmental protection and comply with the Environmental Management Framework of the PPAF.
  • Any single loan provided by the partner organization to an individual, under financing from the PPAF, shall not exceed Rs.30,000 .
  • If the beneficiary/ community has previously availed micro-credit, it should have satisfactorily concluded it with a very low default rate.
  • The beneficiary/ community must be willing, if called upon, to collateralize their savings against the loan facility granted.
  • Projects on PPAF's negative list will not be funded.

Additional Eligibility Criteria Specific to Community Physical Infrastructure

PPAF will contribute towards the cost of physical infrastructure schemes initiated by community organizations. The objective of these schemes will be to demonstrate the level of capacity acquired by the community organizations to manage village level physical infrastructure schemes. Infrastructure schemes that are high priority and benefit a large proportion of the households in the community will be entertained, provided that the community is willing to contribute in the expected cost of the schemes. A detailed list of eligible community infrastructure schemes is provided in Annex 6. In order to be eligible for support for community physical infrastructure, beneficiary communities and partner organizations have to meet the following additional eligibility criteria established by the PPAF:

  • The infrastructure project should be in compliance with Pakistan's laws and regulations relating to health, safety and environmental protection.
  • At least 15 households in each community should benefit from the scheme.
  • The cost of the scheme should not exceed Rs.5,000 per capita.
  • The proposed scheme should:

    • Be equitable (more than 50% of the community should benefit from the scheme)
    • Be sustainable (within the implementation and maintenance capacity of the community)
    • Be technically viable
    • Comply with the Environmental Management Framework of the PPAF
    • Enhance the productive capacity of the community and preferably be income generating
    • Preferably utilise local labour and materials and not be capital intensive
    • Not take more than two years to complete
    • Be free of disputes within the community or with other communities (e.g. land title/ ownership, water/ user rights should be clearly defined)

  • The beneficiary community must have a record of regular meetings and savings program. The subproject selection would be made through an open and democratic process with full participation of women. The scheme must be identified and agreed upon by the community in its general body meeting.
  • Preference would be given to rehabilitation, modernization and/ or extension of existing schemes rather than new schemes where such an option exists.
  • Surveys and costing of the scheme would be conducted by the partner organizationin collaboration and in consultation with the community.
  • When a scheme is approved, terms of partnership would be signed in the community's general body meeting, where responsibilities of the community and the partner organizationare clearly delineated.
  • The beneficiary community would contribute towards the cost of the scheme. Whereas the amount of community contribution is not fixed, the community would contribute according to its capacity. The minimum acceptable contribution is 15% of the total capital cost of the scheme.
  • The beneficiary community must be fully responsible for the operations and maintenance costs of the scheme. This would include periodic collection of contributions by the community from its members to cover these costs.
  • The community and the partner organization would jointly agree on a disbursement profile based on the implementation plan of the proposed scheme. Each release will be contingent on the adoption of a resolution by the community, signed by a majority of its members, and a representative of the PO.
  • If the beneficiary community has previously availed of a community infrastructure grant, the scheme should have been satisfactorily completed and properly maintained. There should also be a satisfactory record of repayment of micro-credit loans availed by the beneficiary community.
  • The partner organization will provide technical and other assistance during identification, planning and implementation of the scheme. It will also provide operations and maintenance training to the community on need basis.
  • The beneficiary community would be required to implement the scheme within the stipulated time period and budget specified in its terms of partnership.
  • Justification will have to be provided by the partner organization for funding cost escalations and/or items not originally budgeted.
  • The community would be required to open a separate scheme bank account, to be operated by at least two signatories, and maintain a record of all receipts and payments relating to the scheme.
  • The community is expected to implement the scheme using its own human and material resources and not sublet construction work to contractors. Only for specialist skills not available within the community would outsourcing be allowed.
  • The partner organization would be required to supervise and certify quality and adherence to specification of construction. In case of sub-standard work, the partner organization would be expected to stop further payment until the sub-standard work has been rectified.
  • Projects on PPAF's negative list will not be funded.

Ineligible Organizations

Any organization or its allied community organization that is political, discriminatory, ethnic, sectarian, or exclusionary in any way would not be eligible for PPAF funding.

Ineligible Activities

Partner organizations will not receive funding for certain activities under micro-credit, community physical infrastructure, and the capacity building windows. A list of these activities is indicated below:

Micro-Credit/ Micro-Enterprises

  • Property/ Real estate development
  • Commercial construction
  • Hazardous toxic waste, plastic bags, radio-active material
  • Tannaries
  • Timber, logging, deforestation
  • Financial services
  • Explosives, armaments, ammunition, mining
  • Cultivation/ processing of poppy and/ or other prohibited varieties
  • Breweries
  • Poaching/ Hunting
  • Informal cross-border trade

Community Physical Infrastructure

  • Metalled roads
  • Hospitals, schools, dispensaries, basic health units, family planning clinics, education centres (activities funded under SAP except water)

Capacity Building

  • High cost vehicles
  • Foreign training
  • Buildings, construction costs

 

 
 

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                  Last updated on: Wednesday, 17 December 2008 (C) 2008, Pakistan Poverty Alleviation Fund