Developing Business for the Rural Poor Project in Cao Bang Province Vietnam Date of Validation by IOE: February 2017

Project Completion Report Validation Developing Business for the Rural Poor Project in Cao Bang Province Vietnam Date of validation by IOE: February 2017

I. Basic project data

Approval (US$ m) Actual (US$ m) Asia and the Pacific Region Division Total project costs 25.265 23,957 IFAD loan and percentage Country Vietnam of total 17.217 69.5% 16.279 67.95

Loan number 741-VN Borrower (Vietnam Grant Number 997-VN Government) 2.532 10% 2.846 12%

Type of project (subsector) Rural Development Cofinancier 1 (Lux VIE/029) 3.489 14% 3.296 14% Financing type Loan Cofinancier 2 (VBARD) 500 2% 418 1.7%

Lending terms HC Beneficiaries 1.025 4% 1.116 4.6% Date of approval 13/12/2007 Date of loan signature 16/01/2008 Date of effectiveness 06/05/2008 Other sources Number of beneficiaries (if appropriate, specify if Direct: 48 436 Loan amendments 25/01/2012 direct or indirect) 119 185 (total) Indirect: 70 749 Loan closure extensions n.a. Country programme managers Henning Pedersen Loan closing date 31/12/2014 Thomas Elhaut Regional director(s) Hoonae Kim Mid-term review 03/06/2011 Project completion IFAD loan disbursement at report reviewer Manuela Bucciarelli project completion (%) 94.55% Project completion report quality control Date of the project panel Michael Carbon completion report 31/12/2016 Source: President Report (2007), Project Completion Report (2014), Final Appraisal Report (2007) * There are four types of lending terms: (i) special loans on highly concessional terms, free of interest but bearing a service charge of three fourths of one per cent (0.75%) per annum and having a maturity period of 40 years, including a grace period of 10 years; (ii) loans on hardened terms, bearing a service charge of three fourths of one per cent (0.75%) per annum and having a maturity period of 20 years, including a grace period of 10 years; (iii) loans on intermediate terms, with a rate of interest per annum equivalent to 50% of the variable reference interest rate and a maturity period of 20 years, including a grace period of 5 years; (iv) loans on ordinary terms, with a rate of interest per annum equivalent to one hundred per cent (100%) of the variable reference interest rate, and a maturity period of 15-18 18 years, including a grace period of three years.

II. Project outline 1. Introduction. The Developing Business with the Rural Poor Programme (DBRP) was approved by the IFAD Executive Board in December 2007 and became effective on 6 May 2008. Activities ended on 30 June 2014, for a total duration of six years. The loan was closed on 31 December 2014. A mid-term review (MTR) was held in 2011, after the first three years of implementation.1 2. Project area. DBRP was funded by IFAD in accordance with Loan 741-VN and Grant 997-VN to Cao Bang and Ben Tre provinces2. The project in Cao Bang was implemented in 50 poor communes chosen from the 199 communes in the province. These 50 communes are located in 10 of the 13 districts in the province. All project communes are located in remote and difficult to reach areas; Cao Bang is sparsely populated with very poor infrastructure and transport. Cao Bang’s rural population is made up of 28 ethnic groups living together with significant language barriers and cultural differences. The target area is characterized by one of the highest poverty rates in the country with 48 per cent of the province population below the poverty line and, in the poorest district, 72 per cent below the poverty line. The dominant economic sector in the province is agriculture, which has declined in its share of gross province product from 46 per cent in 2000 to 39 per cent in 2005. Other key challenges in the province, as reported in the project appraisal report, are access to markets and market information for farmers, high cost of inputs, limited access to land, and limited opportunities for off-farm employment. 3. Project goal, objectives and components. The project was designed to sustainably and equitably reduce rural poverty, a goal which echoes the policies and strategies set out in Vietnam’s Socio-Economic Development Plan (SEDP) 2006-2010. The purpose of the project was to empower rural poor households to benefit from profitable, socially equitable and environmentally sustainable business opportunities. The project has 4 main components: Component 1: Improving the Business and Investment Environment (total disbursement: US$1.07 million, equal to 4.4 per cent of total project disbursements) the main purpose of this component was to strengthen policy implementation in accordance with the existent provincial strategies and procedures. This was to be accomplished by supporting activities to raise the Provincial Competitive Index (PCI) and strengthening private sector participation in the pro-poor business environment. Component 2: Rural Business Development Services (US$4.99 million, 20.8 per cent of total project disbursements): the purpose of this component was to improve business development services in order to support farmers and increase the contribution of enterprises to the commune and provincial economies. This component focused in particular on value chain development, farm productivity improvement services, and rural financial services. Services provided to farmers included input supplies, technical production knowledge, business management training, and marketing training. The enterprises providing such services also required entrepreneurship knowledge, business management, accounting and auditing and technical skills. This component also had a rural finance sub- component with a credit line established through the Vietnam Bank for Agricultural and Rural Development (VBARD) branches at the provincial and district levels. Component 3: Amplification of Market Access for the Rural Poor (US$12.19 million, 50.8 per cent of total project disbursements): the objective of this component was to build up the rural poor’s capacity to participate fully in markets

1 The Project Completion Report (PCR) was prepared in December 2014 by Cao Bang Provincial Project Management Board (PPMU) with technical support from national consultants, after consultative completion workshops organized in 10 project districts from 29th September until 3rd October 2014, with representatives from project beneficiaries, CIGs, project and non-project communes, DPCs and enterprises. 2 The original Appraisal Report focused on Ben Tre and Cao Bang projects in one document. A separated PCR was produced for Ben Tre Province. This PCRV only focused on the PCR for Cao Bang Province.

and to plan and manage market-oriented investments. The first step toward this goal was the establishment and management of common interest groups (CIGs). The project trained CIGs in group management and formation, value chain approaches, marketing, and savings and credit. A fund, the commune investment fund (CIF) was also allocated to the communes to be used for investment priorities identified by the CIGs. The CIGs cater particularly to women in order to help them market their produce, improve local-level planning, select investment priorities, and make these investments. The aim is to train the rural poor for larger market interaction and for better resource management at all levels, including the resources pertaining to the CIF. Component 4: Project Management (US$5.71 million, 23.8 per cent of total project disbursement).This component supports the efficient management of the 3 above components in order to increase the capacity of the province’s institutions. 4. As per design, Cao Bang province assumed overall responsibility for implementation, with the Provincial People’s Committee (PPC) in charge of supervision and coordination. The PPC established a Province Project Steering Committee for coordination among government agencies, mass organizations and the private sector. The Provincial Department of Planning and Investment (DPI) was the project owner and was in charge of coordinating implementation. The PPC also established the Provincial Programme Management Unit (PPMU) with 28 staff members to assist ongoing management. The PPC appointed the Programme Director and key PPMU staff and assigned implementation responsibilities to existing institutions. In the interests of efficiency and of developing their capacity. IFAD provided ongoing technical support and directly supervised the project through missions in 2009, 2010, 2012, and 2013. A mid-term review (MTR) was held in 2011 and some changes have been implemented after the review, as outlined below. 5. Target group. The project targeted rural households with small land holdings and limited productive assets, ethnic minority groups, and households headed by women. The target population fell within the following criteria which were set to bring a strong poverty focus to the project: (i) geographic targeting (the 10 districts in Cao Bang have the highest incidence of poverty, according to Provincial Departments of Labour, Invalids and Social Affairs data); (ii) self-targeting (sub- components and selection of activities were designed to be highly relevant to the marketing problems of the poor) and; (iii) ensuring access of the poor to the programme services and to the wider range of opportunities which it will create. 6. Financing. The total project disbursal was US$23.95 million, accounting for 94.82 per cent of the total project budget. IFAD loan and grant disbursement was US$16.27 million (67.95 per cent of the total budget), the corresponding government funding was US$2.84 (11.88 per cent), VBARD disbursement was US$0.41 million (1.7 per cent), and the beneficiary contributions totaled US$1.16 million (equal to 4 per cent). The Government of Luxembourg technical assistance (LuxDev) project LD VIE/029 ran from 2009 until June 2014 and contributed US$3.29 million (13.7 per cent). Financier contributions are shown in Table 1 in Annex 3. 7. Component 3 (Amplification of market access for the rural poor) has the largest proportion of disbursement (50.8 per cent of the total), followed by component 4 (Project management) with 23.8 per cent, component 2 (Rural business development services) with 20.82 per cent and, component 1 (Improving the business and investment environment) with 4.5 per cent. Planned and actual (disbursed) costs per component with disbursement rates are shown in Table 2 in Annex 3. 8. Changes and developments during implementation. A number of changes were introduced after the project’s mid-term review in 2011. Firstly, the project

shifted its focus to short value chains linked to local markets in 50 communes to ensure successful implementation of the value chain approach. Second, the project established value chain task force (VCTF) led by the Department of Agriculture and Rural Development (DARD). Third, the project pushed for further decentralization of small-scale infrastructure works for community using the "force account" method of procurement that consists of the use of the borrower’s own personnel and equipment to perform construction works. Fourth, the project established a development fund managed by the provincial Women’s Union (PWU) in order to provide CIGs with better financing access that would supplement the VBARD credit line. Fifth, a manual for the CIG development fund was finalized in 2013. The project financing agreement was also amended and the authorized allocation from IFAD increased from US$1.25 million to US$2.5 million. Finally, the project removed the last sub-component on environmental planning after the PPC approved the environmental management plan because activities in this sub- component were not considered highly relevant and required resources beyond capacity of the project. 9. Intervention logic. The goals of DBRP were to reduce rural poverty and improve the livelihoods of the rural poor. Poverty reduction would be measured using the standard IFAD indicators: changes in PCA index, reduction of child malnutrition, reduction of poor households, and increase in income. DBRP goals were to be achieved through the improvement of food security, increased employment rates, increased cash-commodity ratios and cash-commodity outputs, and an improvement of farm-gate prices. 10. The project was designed to achieve these results by empowering rural poor households to benefit from profitable, socially equitable and environmentally sustainable business opportunities. Each of the four components was to lead to a particular output. Component 1 was to lead to the improvement of the business environment, while component 2 would result in improved business development services along the value chains. Component 3 was to result in the rural poor having better access to the market and investment planning skills. Component 4 would enable provincial institutions to manage programmes and projects more effectively. The logical framework of the project assumed that the provincial departments would be ready to cooperate and that private stakeholders were interested and had the technical capacity and resources available to invest in partnerships with public institutions. The logical framework also assumed that demand and purchasing capacity of markets could absorb increased agro-industry commodities; that climate and environmental condition changes would not offset increases in productivity; and that rural producers would react positively to the possibility of improving their production and business quality. 11. Delivery of outputs. A detailed analysis of the actual project progress on output is presented in Annex 4. The project performed well in all its components: component 3 had an average performance rate above 200 per cent, followed by components 1 and 2. The PCR rated component 1 “moderately satisfactory” and the other components as “satisfactory,” with most of the outputs in component 3 rated “highly achieved.” Quality of outputs would need to be assessed in depth. There is also a risk of double-counting of beneficiaries and the calculation of indirect beneficiaries (especially for infrastructure works) remains quite nebulous. III. Review of findings A. Core criteria Relevance 12. Relevance of Objectives. The objectives of DBRP align with the priorities of IFAD engagement in Vietnam, as stated in the COSOP-2012. They correspond particularly to the overall premise that rural poor people need improved access to financial services, competitive markets for inputs and produce, and opportunities

for off-farm enterprise development. Project activities were in direct alignment with Vietnam government policy on poverty alleviation as elaborated in the SEDP for 2006-2010, which calls for the creation of economic opportunities and market development through the establishment of an environment that fosters business and investments. The support from DBRP in improving the business environment, value chain development and business development services is consistent with the provincial and national poverty reduction policies and strategies as presented in several Government National Targeted Programs (NTP) for sustainable poverty reduction3. As confirmed in the appraisal report (2007), these priorities are highly relevant when addressing the needs of Cao Bang province, which is one of the poorest provinces in Vietnam. 13. Relevance to the needs of beneficiaries varies depending on the components. According to the PCR and the results of a survey conducted in 10 project districts,4 component 1 (Improving business environment) was not much appreciated by stakeholders. This is due to the fact that the province has one of the lowest PCIs and efforts to attract increased investment have been limited. The PCR reports that beneficiaries considered financial services as mostly not relevant whereas increasing agricultural productivity service was assessed as very relevant (94.9 per cent of the respondents said so), as was value chain development (ranked second at 92.8 per cent)5. Component 2 (Value chain and agricultural productivity services) was highly appreciated by beneficiaries, but some concerns related to the absence of stable markets for some products such as corn, pork, vegetables in Phuc Hoa and Trung Khanh districts; this might have decreased this component’s relevance. Beneficiaries rated component 3 “Amplification of Market access for the Rural Poor” as the most relevant component. They highlighted the particular relevance of participatory processes for SEDP development and the focus on increasing female participation in village meetings as particularly important. Beneficiaries considered small infrastructure projects highly relevant as they have been directly involved in their implementation and could benefit from them. The PCR reports that more small-scale infrastructure work implemented right at the beginning of the project would have better served beneficiaries’ needs. 14. Relevance of project design. The mid-term review conducted in 2011 determined that the project design, consisting of the 4 interlinked components, was relevant. The review suggested some modifications to the project design that would ensure that activities reached the intended target group of poor farmers. Supervision mission reports highlighted that the project design was constrained by low organizational capacity at the district and communal levels and the project design document failed to pay due attention to the critical issues of human resources constraints, qualification and skills of staff engaged in the project. Contrary to the project design, many activities were still carried out by line agencies at the provincial level without much engagement of the district line agencies. The project appraisal document also assumed that improving the management of select equitized companies for certain commodities would benefit these commodities’ value chains. This assumption did not take into account the low incentive for private companies in developing market linkages with poor families, and the fact that there has been a very limited private sector engagement with the DBRP especially at the beginning. The establishment of the Investment Promotion

3 NTP on vocational training for rural labourers; Decision No.62/2013/QD-TT on "policy to encourage collaborative development, production linkages associated with trading of agricultural products, and construction of larger scale field” et al. 4 This reference is taken from the PCR. No further details on these surveys are provided. 5 The low relevance attributed to rural finance services is due to the high interest rates and collateral requirements to access the loan from VBARD, as reported in the PCR and in the 2014 supervision mission report. Even though the CIGs development fund allocation had been increased, however the fund was still limited (VND 4.5 billion only) compared to needs of the poor.

Center after the mid-term review helped to support these value chains and their respective businesses. 15. The initial logical framework of the project was assessed in the MTR as poorly structured and recommendations were made to introduce appropriate indicators and associated targets which helped the project M&E process. 16. Both the VIE/029 Evaluation and PCR recognize the importance of the capacity development support provided by the VIE/029 project, but the evaluation argues that a prior strategic capacity building plan based on a thorough assessment of capacity needs (skills, knowledge and attitudes) should have been implemented and argues that there is a need for a stronger M&E system where capacity building is concerned. 17. A number of adjustments to the project were made after the mid-term review in 2011, as detailed above (paragraph 8). Among those, the removal of the environmental planning sub-component after the PPC approved the environmental management plan, could be questionable from a relevance perspective. In fact, the appraisal report identified some environmental concerns for poor households, given the specific topography of Cao Bang (see rural poverty impact section). 18. Targeting. The design of the project at appraisal envisaged that DBRP would indirectly benefit more than 55,000 households and the RIMS for 2014 further specifies 23,395 beneficiary households as target. The appraisal report was not clear on the number of direct beneficiaries; the increase in the number of reached beneficiaries can be attributed to the fact that the formulation of the project dates back to 2007 and after the mid-term review significant progress was made. Nevertheless, the PCRV agrees with the PCR’s statement in terms of ambitious targeting: the project intended to reach many communes in a very large geographical area and it would have been better if the project had focused on fewer districts, given the remoteness of the target communes. Also, the goal of 70 per cent of CIG members being from poor households was an overly ambitious target because most of the target population came from ethnic minority households that were less inclined to participate in groups and business development activities. This was not adequately addressed in the project design. 19. In summary, the DBRP objectives and design supported government policy on poverty alleviation and were relevant to the needs of beneficiaries, though local capacities have been overestimated and targeting was overambitious. Also VIE/029, which complemented the IFAD loan was rated as relevant (Score 2) in the VIE/029 Evaluation. Therefore the PCRV assesses the overall relevance of the project as satisfactory (5) which is the same rating assigned by the Programme Management Department (PMD) to this criterion. Effectiveness 20. At the time of project completion there were 119,185 (48,436 direct and 70,749 indirect) project beneficiaries, equal to approximately 22 per cent of Cao Bang province’s population. The RIMS for 2014 reports at the end of 2014 that the project reached 38,316 households (123 per cent of the original target of 23,395 households). The following paragraphs discuss the project’s achievements as they relate to the four components and four related objectives. 21. Objective 1: Improving the Business and Investment Environment. The PCR and supervision reports (2012 and 2014) agreed that the overall score of the PCI has worsened compared to other provinces, with the province’s rating going from 52nd to 61st place, out of 63 provinces at the end of the project.6 Thus Cao Bang’s

6 The PPC issued a directive on improving the PCI score and the business and investment environment. A PCI action plan was then developed, workshops were organized to evaluate factors affecting PCI, but these interventions were not very effective in identifying specific issues and challenges faced by enterprises. The Investment Promotion

PCI requires continued support from the Cao Bang PPC. It is important to note however that Cao Bang’s economy mostly relies on agriculture, while the PCI includes indicators from all the other sectors and mostly from the industrial economy which is very limited in the province. The use of the PCI as key performance indicator might have been a flaw in the original design. 22. The project supported the Department of Agriculture and Rural Development to conduct research on 9 pro-poor policies, six of which have been applied in the course of the project period.7 The project supported research on four enterprises to improve their competitiveness, business planning and to establish linkages with CIGs. This has contributed to increased income for rural households participating in the CIGs, as described in the impact section. The supervision mission reports expressed concerns on the insufficient documentation that showed a lack of transparency and would limit the project’s ability to replicate this support for other lead firms. 23. Objective 2: Improving Rural Business Development Services. According to the PCR, the project achieved significant results in terms of value chain development (Subcomponent 2.1). However, as identified in the 2014 supervision mission report, the Value Chain Task Forces at the district level lacked the experience and capacity needed to identify business and market opportunities. It was therefore challenging for them to help value chain actors foster the linkages with CIGs that are essential to addressing rural poverty. Also, at the time of the MTR, understanding about value chains was limited at all levels of the DBRP, resulting in fragmentation of implementation and the MTR considered this factor as the critical link across all the components. 24. As highlighted in the evaluation of the VIE/029 component, key provincial actors in the value chain did not receive capacity building until late in the project and the capacity building activities did not follow a strategic plan. This negatively affected the sustainability of the project. The PCRV is unable to fully ascertain whether the capacity building support that the DBRP and VIE/029 provided to the VCTF members contributed to the achievement of value chain development related results, due to non-availability of verifiable information. 25. The planned support to enterprises through business development services (BDS) providers had a slow start, as reported in the mid-term review, because there were no suitable BDS providers in the province. The project managed to overcome this challenge and provide BDS, as stated in the PCR, through Women’s Unions (WUs) and Farmers’ Unions (FUs).8 The project achieved its goal of providing 325 family enterprises and MSMEs in the province with access to BDS. 26. As stated in the PCR and confirmed in the supervision mission report 2014, the project successfully provided vocational training that resulted in 234 people finding stable employment after the training. The component of job creation still poses sustainability questions, as reported in stakeholders consultations. In collaboration with DARD, the project trained 17,780 farming households, more than the target designated in the project design, to apply advanced farming and processing techniques to improve agricultural productivity.

Centre (IPC) has been focusing on studying the PCI index rather than supporting individual enterprises. The Viet Nam Country Programme Evaluation (2014) also notes the small involvement of private businessmen or representatives of private business associations in business promotion activities aiming at increasing the competitiveness in the province. 7 These policies support fishery development, veterinary services, and extension service. 8 These unions, along with the Veterinary Division and Plant Protection Division, trained 175 people (46.3 per cent females) on business skills for agriculture. 150 representatives of CIGs were also trained on product production, marketing, and how to add value to products (PCR).

27. In terms of rural finance, IFAD loans disbursed by VBARD totaled 90.024 billion VND, equal to 77.6per cent of the plan. Almost 50 per cent of beneficiaries were from poor or near poor households (47.5 per cent female), but the loans remained unattractive for CIG members due to high interest rates and collaterals. The 2014 supervision report notes that VBARD was not motivated to use the IFAD credit line because the annual interest rate (equal to 6 per cent) was higher than the cost of saving mobilization and VBARD staff was not fully prepared to handle lending procedures. To address these challenges, the project made efforts to train the VBARD staff on pro-poor financial procedures and practices, as well as rural financial management practices for CIGs members and communities, as reported in the PCR. 28. Objective 3: Amplification of Market Access for the Rural Poor. With regards to CIG enhancement, both the PCR and the RIMS for 2014 rated this sub- component as highly satisfactory (rate 5). There are approximately 10,000 members of 475 CIGs formed over the course of the project; most of these members are from minority ethnic groups in the Cao Bang province, 40 per cent of the members are women, and 51.8per cent of CIG members are from poor households. The goal set at the time of project appraisal was to have 70 per cent of members from poor households, but this proved challenging due to the requirements for CIGs participation. Women counted for approximately 41 per cent, meeting the target. 29. The PCR reports that CIGs, through joint business practices which in turn strengthen their contractual power, have contributed to an increase in crop and livestock outputs and have helped provide better access to production tools, inputs, extension services, financial services and output markets.9 Despite initially challenging group management as reported in the MTR, the 2014 supervision report notes the achievements made by the CIGs and highlights the importance of the CIGs as vehicles for value chain development in the province. 30. The adoption of Socio Economic Development Plan (SEDP) in the province is rated as satisfactory. DBRP organized training on SEDP for district, provincial and commune officials.10 The PMR reports that 50 SEDPs were approved by District People’s Committees (DPC) for implementation and reflect the CIGs plans. As noted in the latest supervision report, remaining challenges include consolidating the SEDP database software developed in 2012, and updating the SEDP manual. 31. DBRP, the Provincial Department of Planning and Investment, Department of Finance, and the Provincial Treasury, with support from VIE029, developed and rolled out the “Manual of Financial Management Applied to Operation and Maintenance in CIF Schemes." The PCR reported satisfactory results in terms of staff trained in CIF management using the Manual. 32. Numerous civil works (including 154 km of roads, 55 irrigation schemes, 5 water supply systems, 6 rural markets, and 5 low-voltage electricity lines) were implemented, many of them using the force account method. This large number of civil works exceeded the initial project plans. These small-scale infrastructure schemes directly benefitted a large number of households,11 with traffic road schemes reportedly benefitting the most beneficiaries (65 per cent of the total beneficiaries). There were, however, issues with delayed payment on these projects

9 According to the PCR and 2014 Supervision Report, these results were due to TOT provided to members of the Women Unions, Farmers Unions, and Cooperatives Alliance on topics such as value chain approach, group management, CIG savings and loans. Provincial workshops were also conducted on these topics. 10 The PCR reports that 1,391 people were trained, far more than the initial target of 500; CIG members were trained on SEDP procedure, production, business planning, and integration of CIG business plans into the commune SEDP plan. 11 2,498 households in 2011 and 13,178 households in 2014 were reported as direct beneficiaries of small scale infrastructure projects. No details are provided on the calculation of direct beneficiaries of infrastructural schemes.

which require further attention, as reported in the supervision mission report in 2014. 33. Objective 4: Project Management. As part of the overall support to the first three components, many trainings were organized for district, provincial and commune staff on internal control, budget management, monitoring and evaluation, results-based management, settlement of small-scale schemes using the force account method, settlement of completed works, and preparation for project account closure. High quality technical assistance by the VIE/029 project was satisfactory. The revisions to the initial log frame and the update of RIMS indicators to better track project activities allowed for better documentation of project results but the last supervision mission report recommended that successes as well as bad practices needed to be thoroughly documented upon project completion. 34. In summary, the project has achieved most of its objectives in terms of empowering rural poor households to benefit from business opportunities in Cao Bang province. The PCRV rates effectiveness as satisfactory (5), in agreement with the PMD rating. Efficiency 35. The assessment of the project’s efficiency is described below and key aspects are highlighted. 36. Time lapse. The PCR reports that DBRP became effective four months after approval; this is significantly quicker than the IFAD average of 12.3 months. However, as stated in the 2014 supervision mission report, the transfer of funds to the project account was delayed due to the IFAD HQ approval process. This resulted in some funding shortages during implementation. Technical assistance of the VIE/029 project was operationalized 18 months later compared to DBRP project’s start: the evaluation of VIE/029 recommends that the Government of Luxembourg engage with IFAD from the initial project design phase. 37. Time overruns. The project closed as per loan closing date in the appraisal report without delays. 38. Project costs. The total project cost was US$23,957, which was 94.82 per cent of the original budget at the appraisal (US$25,264). Of the estimated monetary contributions, IFAD disbursed 94.55 per cent of its expected loans, the government provided 112.41 per cent of its expected contribution, and beneficiaries contributed 108.92 per cent of the amount expected from them. Project investment activities and funds disbursement started quite slowly. In fact, the 2011 MTR reports a cumulative disbursement of 25 per cent of the IFAD loan in April 2011, as compared to 10 per cent in September 2010. Given the innovative approach adopted (market linkages through value chain development), the slow disbursement rate in the first two years of implementation does not negatively reflect on the efficiency of the project. By 2014, as highlighted in the supervision report and in the PCR, the disbursement rate was satisfactory. 39. After the MTR, the authorized allocation was increased from US$1,250,000 to US$2,500,000, as indicated in the amendment to the Programme Financing Agreement dated 25 January 2012. This increased amount was allocated to ensure adequate liquidity to meet the significant increase in CIF activities. The MTR also reported that management of communes’ funds was inefficient at the beginning of the project due to the limited capacity of commune staff. Efforts made to create a more decentralized management structure after the mid-term review improved project efficiency. The 2013 supervision mission noted that the force account method was adopted by the project effectively, which led to local resource mobilization resulting in significant savings for the project.

40. Cost per beneficiary. Given a number of targeted direct beneficiaries, equal to 102,938, the cost per beneficiary at design stage was estimated at US$167.2. Taking the total number of beneficiaries reported in RIMS for 2014 of 149,807, and the reduced project's actual cost of US$16.279 million, cost per beneficiary decreased to US$114.9.12 This seems to be low compared to other IFAD funded projects in the region. 41. Economic Internal Rate of Return (EIRR) at project completion. Economic and financial analyses of select value chains in Cao Bang and of various infrastructure schemes’ investment efficiency were conducted throughout project implementation and included in the PCR. The internal rate of return (EIRR) for rural works was very high, as reported in the PCR (EIRR for transportation schemes was 71.5 per cent; 50 per cent for irrigation schemes and 64 per cent water supply works). These rates show high investment performance, higher than the initial success criteria of 10 per cent EIRR reported in the appraisal document (which seems quite conservative). Investment in agricultural value chains has been characterized by high Return on Investment (ROI) for the beneficiaries, with the highest ROI in cow rearing (6 time higher than before the project), followed by white pigs (155.99 per cent), black pigs (108.9 per cent), vegetables (251.54 per cent), peanut (139.52 per cent), and tobacco (134.62 per cent).13 42. Project Management costs. Component 4 of the project dealt with strengthening project management and the management capacity of project staff. The project management was the second most costly component, with a total cost at completion of 2,266.51, equal to 13.9 per cent of the total project cost, compared to 17 per cent of the total costs at design (Appraisal Report). This is slightly higher than the average project management recorded in IFAD projects, reported in the Asia Pacific Region Portfolio Performance Reviews (2012-13 and 2013-2014) and the average programme management costs for the entire Viet Nam portfolio equal to 10.8 per cent of total costs.14 The higher project management costs can be justified by the large geographical areas covered by the project which implied high implementation costs. 43. In summary, the project became effective and was implemented in a timely manner, had a low costs per beneficiary and achieved very good investment performance, despite relatively high management costs. The PCRV agrees with the rating of the PMD and assigns to the efficiency criterion a rating of satisfactory (5). Rural poverty impact 44. Household assets. The PCR reports that poor rural households in Cao Bang benefitted from infrastructure works, especially road construction, which lowered the cost of agricultural inputs and increased access to markets. According to the PCR, household ownership of physical assets also increased, but there are some discrepancies across reports about this (MTR, RIMS 2012, 2013 and 2014). The percentage of people with access to household equipment such as refrigerators, TV, mobile phones, and motorbikes increased according to the PCR data, but the RIMS did not report on these specific assets. 45. In terms of financial assets, the RIMS show that only 14.6 per cent of households reported having access to IFAD loans (81.7 per cent from VBARD), and only 47 per cent used the loans for investments in agriculture production. On the other hand, positive results reported in the PCR were confirmed in beneficiary surveys about

12 Costs considered here are only IFAD loan costs planned and actually disbursed. Costs per beneficiaries are calculated for all beneficiaries (direct and indirect). The appraisal report did not indicate the number of direct beneficiaries, so RIMS data were used. It is also important to note that the PCR (in the table in page) report as total number of beneficiaries: 119,185 (48,836 direct and 70,749 indirect). The PCRV was not able to explain these discrepancies in the reporting. 13 Source: PCR. 14 IFAD Vietnam Country Programme Evaluation, 2012.

household saving; 10.3 per cent of project beneficiaries reported having savings, as compared to 1.7 per cent outside the project. Increased savings implies improved economic and financial sustainability and also decreased household risk. 46. Food Security, Nutrition and Agricultural Productivity: The RIMS for 2014 reports a reduction in the percentage of children suffering from chronic malnutrition from 44.2 per cent in 2011 to 38.9 per cent in 2014.15 Households experiencing one hungry season did not decrease significantly (from 20 per cent to 18 per cent), but the duration of the first hungry season slightly decreased from an average of 3.4 to 3.1 months. These improvements in food security can be attributed to higher agricultural yields (especially for sugarcane and peanuts), improvements in livestock production and a general increase in income to be spent on household consumption which was recorded in the whole province (see Paragraph 44). 47. Farmers reported that the production of certain food crops increased during project implementation; peanut total production in target areas reached 1,345 tons in 2014, up from 73 tons in 2010 (incremental change of 1739 per cent). The RIMS for 2014 reported an increase in the livestock production of white pigs, black pigs, cows, and buffaloes, compared to numbers before project implementation and numbers reported by non-project households. 48. Income. According to the General Statistics Office (2010-2013), per-capita income in the entire country and in Cao Bang increased over the timeframe of project implementation from 749 to 1,054 US$ per year (40 per cent increase) in Cao Bang and from US$1,387 to US$2,000 per year in the whole nation (44 per cent increase). This data shows that there is a general positive trend in per-capita income levels in the country, but the change in Cao Bang province was still lower than the average growth in the country. The PCR also states that the percentage of income from non-farming activities increased significantly for project households; the RIMS for 2014 confirms that 82 per cent of the households had at least one source of income from non-agricultural activities, compared to 11 per cent in 2013.16 49. Human and social capital and empowerment. The PCR confirms that education levels, and literacy in particular, increased in project areas for both males and females. These achievements are attributed to higher incomes as well as improved access to food and markets, all of which are connected to project activities. These linkages are quite weak and more explanation of this impact pathway is recommended. The PCR also notes that the major reason for enhanced social capital was the participation of poor households in production groups. The collective economy model of CIGs allowed business linkages with enterprises to be established in product value chains while also paving the way for savings and credit activities. The most important developments, however, were knowledge transfer, vocational training, and job connections, which enabled beneficiaries to effectively implement socio-economic development activities in the province. 50. Through the 475 CIGs established, the rural poor could benefit simply from being a member of a group by participating in collective action when negotiating prices with suppliers and businesses; this is also an important development in the social capital that the project generated. Through the bottom-up SEDP planning approach, poor households and women could participate in local development

15 Project children had slightly lower malnourishment rates than non-project children (40.6 per cent), and the percentage of underweight children decreased from 31 per cent in 2009 to 21 per cent in 2014 amongst project beneficiaries. 16 The PCR includes a table on household classification in the project area based on household PCA Index: the analysis described is quite confusing, as it states that the different quintiles of the population (ranging from very poor to rich) decreased or increased from 2009 to 2014.

planning processes and communicate directly with local authorities, with positive effects in terms of social empowerment. 51. Institutions and policies. The project was supposed to impact policy in multiple ways: the institutional capacity available to make and implement social-economic development plans (SEDP) in project communes has increased significantly and high satisfaction levels in household surveys with the annual SEDP confirm this increased capacity. Business development providers have been strengthened to support CIGs in business plan development and business management. There are some remaining challenges, though; supervision reports still reported that involved agencies had insufficient training in market analysis and forecasting, the VC approach was not fully mainstreamed and the project was not able to significantly improve the policy environment for agricultural enterprises and investments. 52. In summary, the project managed to generate a satisfactory impact by improving income levels, increasing beneficiary assets, building social capital, and empowering poor households, including ethnic minorities. It was also successful in improving agricultural productivity and food security. The project was moderately satisfactory in terms of strengthening institutions and the policy environment. Despite reference to non-project households data from annual impact surveys carried out every year, a rigorous impact assessment was not done and the robustness of the data remains uncertain. In addition, it is important to point out that Vietnam over the last two decades has experienced a steady and substantial growth of per capita income which has lifted large segments of the population out of poverty. It is not surprising, therefore, that there has been a substantial reduction in poverty also in Cao Bang, but still higher than that of other provinces, such as the Northern mountainous and the midland region. Overall the PCRV assigns a rating of satisfactory (5) to the rural poverty impact domain, in agreement with the PMD rating. Sustainability of benefits 53. Political sustainability. Cao Bang province seems to have a strong political commitment to a market-oriented approach: the 2014 supervision report and the PCR mention the development of an exit strategy that defines functions for relevant authorities at all levels. DPI also developed a roadmap to institutionalize the SEDP across the province and has allocated a budget since 2014 to each commune to organize training and apply this procedure. This represents a deep commitment in Cao Bang province to maintain and improve upon this process. The province’s commitment to agricultural development and to the project activities in particular is also re-affirmed by its decision on 17 October 2013 to invest VND 14.275 billion in three value chain development projects (vermicelli, black pig and Hmong cow) between 2013 and 2015 under Decisions No. 1709, 1710, and 1726. 54. Ownership. After the end of the project the CIGs will be managed by FUs, which will help the groups with business planning, credit and savings activities, and enhancing linkages with input companies. The PPC’s establishment of the fund "Together Overcoming Poverty in Cao Bang province”17, allows the province to directly provide funds to CIGs. 55. The PCR confirms that project-initiated infrastructure works continued to be managed and used through Operation and Maintenance (O&M) groups and the integration with other existing programs such as 30A. However the PCR, IFAD supervision mission reports, and LIE/029 Evaluation report that limited capacity of certain actors, like members of the newly set-up value chain task forces (VCTFs) as well as WUs, FUs, CAs, and DPC, could represent a challenge to ensuring

17 The Fund was established under Decision No.645/QD-UBND dated 19 May 2014.

sustainability. In this case, technical assistance and financing from IFAD would be still necessary beyond the timeframe of the project. 56. In summary, based on the evidence provided in the PCR and the documentation available, sustainability is considered quite high thanks to the sense of ownership provincial structures have taken over project activities and the integration of CIGs with local companies. Capacity gaps amongst institutional partners pose sustainability issues and should have been addressed through a structured capacity development plan, as reported in the final evaluation of LIE/029. Overall, the PCRV agrees with the PMD rating and assigns sustainability a rating of moderately satisfactory (4). B. Other performance criteria Innovation. 57. A key innovation of the project design, as confirmed in the PCR and supervision missions and also in the appraisal, was the introduction of CIGs as a way to ensure cooperation between households. The CIGs in DBRP differed from those in other IFAD projects in a few ways. Firstly, the CIGs were classified into three groups (ready to the market, market potential, and food security) so that suitable support strategies could be identified. Secondly, a manual was written with guidelines on how to implement CIGs, integrate saving and credit in the CIGs, and establish CIG strategic development teams in 10 districts. The CIGs made it possible for economies of scale in agricultural input procurement, production, and sale of outputs. 58. The use of SEDP was another innovative feature of the project. Although participatory socio-economic development planning processes were not new in the country, SEDP differs from other approaches in its emphasis on beneficiary/community participation in every step of the process. SEDP encourages beneficiaries and communities to express their views when selecting investment priorities and emphasizes a stronger connection between prioritized activities and budget to ensure the feasibility of the plan. The introduction of the force account method into infrastructure works was very innovative. Compared to the normal bidding, this method encourages beneficiaries to mobilize their own labour and local materials in order to save time and management cost. The involvement of communities increased their feeling of ownership over the project and, therefore, the sustainability of the infrastructural projects. 59. Given the innovative design and features of some interventions and methods, such as the CIGs classification and the force account method, the rating assigned to the innovation criterion is satisfactory (5) in line with the PMD score. Scaling up 60. As per PCR, Cao Bang DPI has applied SEDP procedure in all communes in the province and PPC decided in 2014 to allocate funds to each commune to organize training and apply this procedure. The integration of resources from different programs (such as NTP-NRD, 30A, P-135, etc.) is also a sign of the commitment to scaling up the SEDP model in the entire province. 61. The PPP model, which is covered in the IFAD COSOP 2012-2017, is now being rolled out in some IFAD projects across Vietnam. As noted in the SM 2014, there are areas of this approach that need to be improved. First, the cooperation agreement between companies and farmers needs more detailed articulation (i.e. a binding contract and regulation). Second, quality assurance procedures for the services provided by the companies (training, fertilizer, etc.) need to be introduced. Finally, there is a need to develop coping mechanisms to cope with market fluctuation. 62. The force account method proved successful in terms of investment efficiency and sustainability and can be integrated into other existing programs in Cao Bang, such

as CT-NTM, 135 P phase 3, 30Am. The PPC is developing guidelines to replicate this method. 63. Despite the innovative characteristics of the CIGs and their success in establishing market linkages, CIG maintenance requires technical and financial support from outsiders. The MTR expressed some concerns about the replicability of CIGs in certain areas of the province because of geographical remoteness, ethnic differences, and language barriers. The PCR, however, highlights the replicability of the model and reports that Cao Bang has shared its experiences with other provinces supported by IFAD for successful replication of the CIG model, although this could not be verified in the PCRV process. Based on the information presented above, the PCRV assigns a rating of satisfactory (5) to the scaling up criterion, in line with the PMD score. Gender equality and women’s empowerment 64. Gender mainstreaming received considerable focus in DBRP design and implementation.18 Women and ethnic minorities are explicitly targeted in the project design, and there was gender-equal delivery of all services during implementation. There were not significant findings with regard to gender in the first years of the project. The MTR recommended increasing gender mainstreaming efforts, after which point gender disaggregated indicators were introduced to the M&E system as part of an effort to understand and address gendered participation rates during implementation. The PPMU in coordination with Provincial WU also organized training courses on gender awareness and analysis for stakeholders. 65. The SM also reports that a gender mainstreaming manual was developed and served as a guide for increasing female involvement and empowerment in project activities. As a result, female participation significantly improved toward the end of DBRP.19 The PCR reports 41 per cent overall female participation in CIGs at the end of the project, and 23.8 per cent of the CIGs were headed by women. 66. The initial target for female participation was 40 per cent in the Project Implementation Manual (PIM), thus RIMS data reported in the PCR show that female participation in agricultural and livestock production activities, as well as in social activities, increased compared to non-project communes. These gains helped women take a larger role in decision making, helped ensure equal opportunities for women, and contributed to the equitable reduction of poverty. Challenges in terms of participation rates remained in reaching very remote communities of ethnic minorities and female-headed households. In addition, men still make up the majority in village meetings, which highlights the need for further improvement in the area of gender equality. 67. Based on achievements in terms of targeting and the increased female participation in socio-economic activities described above, the PCRV assigns a rating of satisfactory (5) to the gender equality criterion. This is equal to the PMD rating. Environment and natural resources management 68. The sub-component 1.3 “Environment Planning” was removed after the mid-term review, after which point there were no planned project interventions related directly to the environment or the protection of natural resources. The supervision reports note that most of the techniques introduced by the project under sub- component 2.2 (Farm Productivity Improvement Services) encourage farmers to apply environmentally sustainable practices. Moreover the PCR reports that the project has successfully supported local people as they apply mitigation methods

18 The interest and commitment of the Government of Vietnam to gender equality is expressed in the National Strategy for the Advancement of Women by 2010. 19 The ratio of women in VBARD activities was 47 per cent, in SEDP was 48 per cent, and in vocational training was 74 per cent. In terms of female participation in management, the PCR reports that women accounted on average for more than 30 per cent of managers at all levels (in the PPMU 39.3 per cent, DPMO 38.7 per cent, and CDB 43.4 per cent).

(such as building biogas tanks, ensilaging feed for cattle in winter, using drought- resistant varieties or breeds) to ensure environmental sustainability and reduce negative impacts on the environment. 69. One of the concerns reported in the PCR was the CIGs’ construction of drying kilns for agricultural products (e.g. maize, rice, tobacco) because it led to an increase in firewood use. The appraisal document expressed alarms regarding waste from mining industries in the province, although mining is not implemented extensively in the area, but it could still pose problems due to weak enforcement capacity from the provincial authorities. 70. Given the low importance given to the environmental component in a project that aimed at creating sustainable livelihoods in an agriculture-led economy, the PCRV rates this criterion as moderately satisfactory (4), one point below the PCR. Adaptation to Climate change 71. In 2014 the IFAD supervision mission assessed the project’s impact on quality of natural asset improvement and climate resilience as moderately satisfactory. The project has not developed indicators to assess the environmental impact of project activities on the environment and natural resources. Despite this, starting from 2013 farmers have been trained on climate-change related topics and, as mentioned in the section above, mitigation methods have been introduced. 72. Based on these considerations and the removal of sub-component 1.3, the PCRV rates this domain moderately satisfactory (4), one point below the PCR. C. Overall project achievement 73. The project was very relevant to the needs of rural poor households in the province as it facilitated access to input and output markets and successfully linked enterprises with CIGs, through a value chain development approach. Despite a very ambitious design, compared to institutional capacity in the province, the overall achievements are satisfactory: DBRP reached significant results in poverty reduction. In particular, the local rural development practices show significant improvement in the areas of: participatory and decentralized MO-SEDP and subsequent infrastructure development and farmers association’s productivity and market access. The number of beneficiaries reached exceeds the target figure. Nevertheless, concerns still remain about the level of access poor households (especially the poorest ones, with female heads) have to CIGs and to the VBARD loans, as highlighted in the report. This concern limited the effectiveness of component 3. In component 1, the aspects of Competitiveness and business environment improvement (1.1) were not fully achieved: the PCI did not improve and the overall percentage of private investments in the agricultural economy of the province did not grow as envisaged. 74. Despite some weaknesses in the project design, the relevance, effectiveness, efficiency and impact domains are satisfactory and the sustainability criterion moderately satisfactory. The PCRV assigns a rating of satisfactory (5) to the overall project achievement. This is in line with the PCR rating. D. Performance of partners 75. IFAD. The PCR confirms that IFAD has been very successful in Cao Bang province in providing guidance to implementing partners (PPSC, PPMU, DPMOs) who lacked expertise in the new approach introduced by DBRP. The provision of timely recommendations on implementation strategy following the mid-term review in 2011 enabled the project to make significant changes and to achieve its intended results. In particular the PCR highlights that IFAD’s suggestion to focus on short value chains rather than on only the two initial value chains led to an increase of participating communes and was helpful. IFAD was also able to support the project’s decentralized implementation. The PCR further states that the project

should have focused more on strengthening provincial agency capacity so that the services directly supporting businesses would improve, which would in turn ensure sustainability, especially given the slow progress made in improving the province’s business environment. IFAD and other donors’ technical support and capacity building capabilities are especially important for newly established entities like the "Together Overcoming Poverty in Cao Bang Province” fund. Based on the above factors, the PCRV rates IFAD performance as satisfactory (5) the same as the score reported in the PCR. 76. Government. The PCR affirms good cooperation between borrowers (the central ministries, agencies, and PPC) and the project, which strictly adhered to the loan agreement and supervision mission recommendations. Cao Bang PPC complied with the terms of the loan and provided the three-tiered management structure planned during project design, operating at the district, province and commune level. The supervision mission in 2014 reported that a project management structure with 339 staff at the PPMU, 10 DPMOs and 50 commune development boards (CDB) had been developed, and was strengthened during 2013 by further trainings on results- based management, finance management and small-scale infrastructure force account modality. As recommended by the SM 2013, the CDBs and DPMOs held regular monthly and quarterly meetings to discuss work plans and to share experiences. The project management improved the sense of project ownership felt by the province line agencies and promoted decentralization to the District and Commune People’s Committees (DPCs and CPCs). The SM noted the deep commitment of the provincial agencies, DPCs and CPCs, which enabled replication of the project’s innovative approach. Knowledge management and sharing of lessons learned were reportedly areas needing strengthening. Line agencies have made important contributions, especially after the mid-term review, that pushed for further decentralization of project activities. The PPMU took the role of coordinating, supporting and monitoring. Budget for implementation is also allocated in the annual AWPB. However, the PCR states that achieving fully sustainable institutional capacity would require IFAD and other organizations to provide further technical support to partners in the province. The overall government performance is rated as satisfactory (5) the same as in the PCR. 77. Technical Assistance – LD VIE/029. As reported in the final evaluation, VIE/029 has helped to effectively coordinate, plan, budget, and implement technical assistance services to the Province Programme Management Unit, line agencies, districts, and communes. It played a particularly important role in strengthening the PPMU capacity by conducting an initial organizational assessment of the PPMU, and developing training for the PPMU on project cycle management, value chain development, results-based management, establishing efficient M&E systems, and developing AWPBs. However, VIE/029 began two years after DBRP began, at which point the development objectives, management modality, and delivery modes were already defined in the project implementation manual. Capacity building plans directed to provincial authorities and line agencies were only presented to the Steering Committee in January 2013. As stated in the evaluation, there was no clear definition of the collaboration scope or modalities. IV. Assessment of PCR quality 78. Scope. The PCR follows all the sections mandated in the PCR Completion Guidelines, including all Annexes. The PCR is slightly long at 34 pages, but sufficient details are provided for each section. Most of the sections cover the recommended analyses; there is no total number of beneficiaries provided in the project description and implementation arrangements sections. Analysis of the percentages of poor and women is instead present. Some of the sections are quite descriptive and lack deeper analysis, reporting on shortcomings, or statements about replicability or corrective measures. Overall, the rating given the scope is satisfactory (5) in agreement with the PMD rating.

79. Quality. The PCR is based on findings from several reports as well as data from the M&E system, and it constantly refers to RIMS surveys conducted in 2009, 2011 and 2014. No references are made to baseline data and the quality and reliability of non-project beneficiaries data is uncertain, given the absence of a rigorous impact assessment. The PCR also used findings from a consultative completion workshop organized in 10 project districts in September and October 2014, which included project direct beneficiaries, CIGs members, project and non-project communes representatives, DPCs, and enterprises. The main findings of the consultative workshops are reported in Annex VIII of the PCR. These add interesting insights to the PCR report, especially with regard to project component relevance, sustainability, and lessons learned which validate the results indicated in the PCR. It is reported that the PPMU also organized an evaluation workshop with DARD and its agencies on 24 October 2014, but there is no further reference to a workshop report. Data on the number of beneficiaries served by the project is not presented consistently and the initial number of households as designated in project design is not mentioned. Data on poverty reduction rates based on the household PCA analysis are not clearly reported in the PCR and misleading. Financial information is reported consistently in the PCR, except that the total actual project cost is reported as US$23.87 million in the body of the report and as 23.957 in table 1b. The rating for quality of PCR is moderately satisfactory (4), compared to the PMD rating of 5. 80. Lessons. The PCR details lessons learned during project implementation, most of which are taken from the consultation workshops held in each district with relevant stakeholders. More emphasis could have been given to lessons for improving similar projects in the future. The rating for this aspect of the PCR is moderately satisfactory (4) and it is lower than the PMD rating in the PCR, equal to 5. 81. Candour. The PCR provides detailed information on the project’s achievements, which are generally accurate. Most of the information is drawn from RIMS, supervision missions and beneficiary surveys. Views on replicability and sustainability of project activities are also reported and substantiated. There is a tendency to highlight successes and achievement of outputs, and to be less candid and open in presenting the weaknesses. This aspect of the PCR therefore gets a rating of moderately satisfactory (4), compared to the PMD rating of 5 given to this criterion. V. Lessons learned 82. Although the pro-poor value chain approach was a pillar of the project, the PCR and recommendations from the VIE/029 evaluation state that this innovative approach should have focused more on the actors involved rather than mostly on the commodities and specific products. Line agencies’ limited ability to adapt to a market-oriented business environment and enterprises’ limited ability to deliver business development services had been identified already at the appraisal. The district-level value chain task forces lacked experience in identifying business and market opportunities. They were not prepared to assist value chain actors in activities such as fostering linkages with CIGs, which were vital to addressing rural poverty. To this end, a prior understanding of the perceptions, attitudes, institutions, and capacities of the implementing agencies would have unleashed the full potential of DBRP’s innovative market-led development approach. 83. Moreover, guidance and responsibilities to the communes should have been given right at the beginning of the project in order to make them feel more ownership over the project. Giving this responsibility at the onset would have further enhanced their project management capacity, payment and settlement procedure setting, and ability to select contractors. 84. The intended objective of sub-component 1 (improving the business environment) was not achieved and in particular the PCI ranking of Cao Band downgraded: in

future, in similar project it might be more appropriate to consider other indicators to measure such complex and multifaceted objectives. 85. In addition, the PCR reports that it would have been more efficient and effective if the project area had focused on fewer districts because of the difficulties inherent to implementing the project in remote areas. 86. The PCR and earlier supervision reports confirm that the rural finance component of the project did not fully achieve its goals in terms of increasing access to loans for poor households through the VBARD. This was due to the high collateral requirements and the limited capacity of VBARD staff in lending procedures, according to the PCR and the Impact Evaluation of VIE/029 VBARD credit line. Instead of establishing a credit line through VBARD, a social fund with more pro- poor collateral through women groups may have been more appropriate for the poor to gradually approach the financial services market.

Annex I

Definition and rating of the evaluation criteria used by IOE

Criteria Definition * Mandatory To be rated

Rural poverty impact Impact is defined as the changes that have occurred or are expected to X Yes occur in the lives of the rural poor (whether positive or negative, direct or indirect, intended or unintended) as a result of development interventions. Four impact domains

 Household income and net assets: Household income provides a means of No assessing the flow of economic benefits accruing to an individual or group, whereas assets relate to a stock of accumulated items of economic value. The analysis must include an assessment of trends in equality over time.

 Human and social capital and empowerment: Human and social capital and No empowerment include an assessment of the changes that have occurred in the empowerment of individuals, the quality of grass-roots organizations and institutions, the poor’s individual and collective capacity, and in particular, the extent to which specific groups such as youth are included or excluded from the development process.

 Food security and agricultural productivity: Changes in food security relate No to availability, stability, affordability and access to food and stability of access, whereas changes in agricultural productivity are measured in terms of yields; nutrition relates to the nutritional value of food and child malnutrition.

 Institutions and policies: The criterion relating to institutions and policies is No designed to assess changes in the quality and performance of institutions, policies and the regulatory framework that influence the lives of the poor. Project performance Project performance is an average of the ratings for relevance, X Yes effectiveness, efficiency and sustainability of benefits. Relevance The extent to which the objectives of a development intervention are X Yes consistent with beneficiaries’ requirements, country needs, institutional priorities and partner and donor policies. It also entails an assessment of project design and coherence in achieving its objectives. An assessment should also be made of whether objectives and design address inequality, for example, by assessing the relevance of targeting strategies adopted. Effectiveness The extent to which the development intervention’s objectives were X Yes achieved, or are expected to be achieved, taking into account their relative importance. Efficiency A measure of how economically resources/inputs (funds, expertise, time, X Yes etc.) are converted into results.

The likely continuation of net benefits from a development intervention Sustainability of benefits beyond the phase of external funding support. It also includes an X Yes assessment of the likelihood that actual and anticipated results will be resilient to risks beyond the project’s life. Other performance criteria

Gender equality and The extent to which IFAD interventions have contributed to better gender women’s empowerment equality and women’s empowerment, for example, in terms of women’s access to and ownership of assets, resources and services; participation in X Yes decision making; work load balance and impact on women’s incomes, nutrition and livelihoods. Innovation and scaling up The extent to which IFAD development interventions: (i) have introduced innovative approaches to rural poverty reduction; and (ii) have been (or are likely to be) scaled up by government authorities, X Yes donor organizations, the private sector and others agencies.

Environment and natural The extent to which IFAD development interventions contribute to resilient X Yes resources management livelihoods and ecosystems. The focus is on the use and management of the natural environment, including natural resources defined as raw materials used for socio-economic and cultural purposes, and ecosystems and biodiversity - with the goods and services they provide.

Adaptation to climate The contribution of the project to reducing the negative impacts of climate X Yes change change through dedicated adaptation or risk reduction measures

Annex I

Criteria Definition * Mandatory To be rated

Overall project This provides an overarching assessment of the intervention, drawing upon X Yes achievement the analysis and ratings for rural poverty impact, relevance, effectiveness, efficiency, sustainability of benefits, gender equality and women’s empowerment, innovation and scaling up, as well as environment and natural resources management, and adaptation to climate change. Performance of partners  IFAD This criterion assesses the contribution of partners to project design, X Yes execution, monitoring and reporting, supervision and implementation  Government support, and evaluation. The performance of each partner will be assessed X Yes on an individual basis with a view to the partner’s expected role and responsibility in the project life cycle. * These definitions build on the Organisation for Economic Co-operation and Development/Development Assistance Committee (OECD/DAC) Glossary of Key Terms in Evaluation and Results-Based Management; the Methodological Framework for Project Evaluation agreed with the Evaluation Committee in September 2003; the first edition of the Evaluation Manual discussed with the Evaluation Committee in December 2008; and further discussions with the Evaluation Committee in November 2010 on IOE’s evaluation criteria and key questions.

Annex II

Rating comparisona

Programme IOE Project Management Completion Report Net rating Department (PMD) Validation (PCRV) disconnect Criteria rating rating (PCRV-PMD)

Rural poverty impact 5 5 0

Project performance

Relevance 5 5 0 Effectiveness 5 5 0

Efficiency 5 5 0 Sustainability of benefits 4 4 0

Project performanceb 4.75 4.75 0

Other performance criteria

Gender equality and women's empowerment 5 5 0 Innovation 5 5 0 Scaling up 5 5 0 Environment and natural resources management 5 4 -1 Adaptation to climate change 5 4 -1

Overall project achievementc 5 5 0

Performance of partnersd

IFAD 5 5 0 Government 5 5 0

Average net disconnect -0.17 a Rating scale: 1 = highly unsatisfactory; 2 = unsatisfactory; 3 = moderately unsatisfactory; 4 = moderately satisfactory; 5 = satisfactory; 6 = highly satisfactory; n.p. = not provided; n.a. = not applicable. b Arithmetic average of ratings for relevance, effectiveness, efficiency and sustainability of benefits. c This is not an average of ratings of individual evaluation criteria but an overarching assessment of the project, drawing upon the rating for relevance, effectiveness, efficiency, sustainability of benefits, rural poverty impact, gender, innovation and scaling up, environment and natural resources management, and adaptation to climate change. d The rating for partners’ performance is not a component of the overall project achievement rating.

Ratings of the project completion report quality

PMD rating IOE PCRV rating Net disconnect

Candour 5 4 -1 Lessons 5 4 -1 Quality (methods, data, participatory process) 5 4 -1 Scope 5 5 0

Overall rating of the project completion report 5 4.25 -0.75

Rating scale: 1 = highly unsatisfactory; 2 = unsatisfactory; 3 = moderately unsatisfactory; 4 = moderately satisfactory; 5 = satisfactory; 6 = highly satisfactory; n.p. = not provided; n.a. = not applicable

Annex III

Project Financing Table 1 Project financing Compared Approved Actual (1) % of total (2) % of total (2/1) %

IFAD loan 17.217.90 66.5 16.279.41 67.9 94.55

VIE029 (LUX) 3.489.32 13.8 3.296.63 13.7 94.48

Government 2.532.70 10 2.846.92 11.8 112.41

VBARD 1000.06 3.9 418.35 1.7 83.66

Beneficiaries 1.025.00 4 1.116.40 4.6 108.92

Total 25 265 23.957.71 94.82 Source: PCR, Appraisal Report.

Table 2 Component costs

Planned Actual Disbursement rate (2/1) % (1) % of total (2) % of total

Component 1 1 082 4.1 1 073 4.5 99.16 Component 2 7 673 29.7 4 989 20.8 65.01 Component 3 12 084 46.9 12 186 50.8 100.81 Component 4 4 339 16.8 5 708 23.8 131.55 Unallocated 127 0.4 Contingencies 458 0.8 Total 25 765.8 23 957.71 92.98 Source: PCR, Appraisal Report.

Annex IV

Output Delivery

Output Unit Target Actual %

Component 1: To improve business investment environment

Sub-component 1.1: To increase provincial competition capacity

Number of pro-poor policies studied in Cao Bang Number 8 9 113

Number of pro-poor policies approved and implemented in Cao Bang Number 3 6 200

Number of pro-poor policies approved and implemented in Cao Bang Number 1 1 100

Number of workshop on PCI improvement chaired by PC Number 4 7 175

Number of departments/agencies in the province awarded with ISO 9001:2000 Number 5 5 100

Number of enterprises supported in business registration procedure Number 210 422 201

Sub-component 1.2: Improving Efficiency and Impact of Equitized Enterprises

Number of researches on enterprises in Cao Bang province implemented and applied Number 3 5 167

Component 2: Rural Business Development Services

Sub-component 2.1: Value chain development services

Number of value chains decided by the PPC to be implemented Number 2 3 150

Number of staff of new and existing enterprises in Cao Bang trained on business management and development of project-related value chains Number 100 245 245

Of which, women women 30 112 373

Number of family enterprises and MSMEs in the province accessing BDS Number 200 325 163

Number of months in which 50 communes and 500 CIGs provided with monthly newsletter months 40 40 100

Number of CIGs in the province provided with basic communication tools Number 150 200 133

Number of job fair held in Cao Bang Number 4 3 75

No. of farmers accessed vocational training based on market demand Number 350 319 91

Of which, no. of poor farmer have stable jobs after the trainings Number 200 217 109

Of which, number of women Women 105 253 241

No. of agro-processing enterprises implemented national food safety standards Number 5 5 100

2.2 Farm Productivity Improvement Services

Number of extension staff received refresher trainings Number 450 479 106

Of which, number of women Women 225 205 91

No. of private agents/agencies in the province offered rural extension services Number 50 68 136

Number of demonstrations conducted Number 500 476 95

Number of farmers trained Number 25 000 39 442 158

Of which, number of women Women 7 500 16 881 225

Number of farmers trained on relevant climate change topic Number nt 9 882

Of which, number of women Women nt 4 407

Number of research and extension projects requested by the CIGs implemented Number 10 9 90

23 Annex IV

Output Unit Target Actual %

2.3 Rural Finance

Number of households, CIGs and MSMEs in the province accessed to long-, medium-, short-term loans Number 1 000 2 150 215

Number of VBARD staff in the province trained in IFAD pro-poor financial procedures and practices Number 100 91 91

No. of members of CIGS and mass organizations trained on rural financial management and use Number 10 000 13 812 138

Component 3: Amplification of Market Access for the Rural Poor

No. of CIGs in 10 project districts in Cao Bang formulated Number 500 475 95

No. of CIG members trained on CIG management, value chain approaches, marketing and savings/credits Number 10 000 13 812 138

Of which, number of women Women 4 000 6 286 157

No. of workshops for CIGs in 10 project districts Number 60 53 88

Sub-component 3.2: Participatory Planning and Investment Prioritization

No. of staff at all levels trained on participatory SEDP Number 500 1,391 278

Of which, number of women Women 150 569 379

No. of key CIG members trained on SEDP until 2013 Number 1 000 3 010 301

Of which, number of women Women 300 1 002 334

No. of commune SEDPs established and approved Number 200 200 100

No. of commune proposals for new rural development programme supported and approved Number 50 50 100

No. of staff in all levels, households in villages trained on new rural development programme Number 1 200 1 312 109

Of which, number of women Women 360 365 101

Village households participating in village level planning each year % 75 97.4 130

Sub-component 3.3: Commune Investments

Procedure of CIF decentralisation and mgt established and implemented Number 1 1 100

No. of staff at all levels trained annually on CIF management Number 200 1 566 783

Of which, number of women Women 60 522 870

No. of km of road built Km 145 154 106

No. of irrigation schemes built Number 30 55 183

No. of water supplies schemes built Number 2 5 250

No. of electricity schemes built Number 5 6 120

No. of rural markets built Number 2 6 300

No. of O&M groups established Number 50 50 100

Component 4: Project management system implemented effectively at different levels

Offices at 3 levels equipped Number 61 61 100

Inventory list established and annually updated Number 5 5 100

No. of project staff at different levels trained by subject Number NT 720

Of which, number of women Women NT 293

% of job description for key personnel (PPMU) developed & introduced % 50 100 200

No. of meetings held by PSC Meeting 12 12 100

24 Annex IV

Output Unit Target Actual %

No. of meetings held by PPMU Meeting 144 144 100

No. of meeting held between PPMU and DPMO Meeting 24 24 100

No. of meeting held between CDB and DPMO Meeting 220 220 100

PIM & FMM enacted and implemented Number 2 2 100

M&E and KM systems established & implemented Number 2 2 100

No. of M&E reports submitted as regulated Number 6 6 100

% of audit recommendations carried out annually % NT 70 n.a

25 Annex V

Abbreviations and acronyms

BDS Business Development Services CDB Commune Development Board CIF Community Investment Fund CIG Common Interest Group DARD Department of Agriculture and Rural Development DBRP Developing Business for the Rural Poor DPC District People’s Committee DPI Department of planning and Investment DPMO District Programme Management Office FU Farmer Union IFAD International Fund for Agricultural Development LD Lux-Development M&E Monitoring and Evaluation MTR Mid Term Review NTP National Targeted Programs PCA Principal component analysis PCI Provincial Competitive Index PCR Project Completion Report PPC Provincial People’s Committee PPMU Provincial Project Management Unit PSC Project Steering Committee RIMS Results and Impact Management System SEDP Social-economic Development Plan VBARD Vietnam Bank for Agricultural and Rural Development VCTF Value chain task force WU Women Union

26 Annex VI

Bibliography

IFAD (2015), Developing Business for the Rural Poor Project in Cao Bang Province- Project completion report, December 2015. IFAD (2012). Socialist Republic of Viet Nam Country Strategic Opportunities Programme Report 2012-2017, March 2012. IFAD (2006). Guidelines for Project Completion, PMD, June 2006. IFAD (2015) Evaluation Manual, Second Edition, 2015. IFAD (2007). President’s report-Proposed loan and grant to the Socialist Republic of Viet Nam for the Developing Business with the Rural Poor Programme, December 2007IFAD (2007). Socialist Republic of Viet Nam, Developing Business with the Rural Poor Programme, Cao Bang and Ben Tre Provinces Design Document, Appraisal Report. Volume I: Main Report and Appendices. IFAD (2011). Socialist Republic of Viet Nam, Developing Business with the Rural Poor Programme in Cao Bang Province, Mid Term Review, May 2011 IFAD (2015). Annual RIMS report (2014) IFAD (2014). Annual RIMS report (2013) IFAD (2013). Annual RIMS report (2012) IFAD (2012). Annual RIMS report (2011) IFAD (2014). Supervision mission report (April 2014) IFAD (2013). Supervision mission report (May 2013) IFAD (2012). Supervision mission report (June 2012) Final Evaluation (2014). VIE/029 Technical Assistance towards Program Support, Developing Business with the Rural Poor in Cao Bang, June 2014. IFAD (2013).Asia Pacific Region Portfolio Performance Reviews (2012-13) IFAD (2014). Asia Pacific Region Portfolio Performance Reviews (2013-14) IFAD (2012). Vietnam Country Programme Evaluation (2012).