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**PHN** 1992 Sector Review

age. The project employs a poverty targeting methodology developed with UNDP support, which permits the assessment of poverty through the analysis of key indicators: health, education, housing, and employment. Prior to appraisal each subproject will be screened two times: first its geographical location will be evaluated against regional level poverty maps, and second its specific location will be considered and evaluated against indicators available at the village level, tailored, where possible, to the type of subproject proposed. During the subproject appraisal visit, SIMAP staff will verify the level of need of the population as well as the fit between SIMAP's targeting criteria and intended beneficiaries. The Guyana SAR notes a lesson of experience which calls for a modification of the demand-driven format of social fund projects and greater care in targeting investments to those in greatest need. Guided by regional and village level indicators, SIMAP's promotional strategy to stimulate demand and determine priorities will accommodate that lesson.

3.32 That same lesson is also emphasized and reflected in the Honduras Second Social Investment Fund project. Sixty percent of the funds of the first project, which targeted its subprojects based on a poverty map, went to poor regions, falling short of its initial target of 73 percent. Experience has shown that, for a number of reasons, it is difficult to ensure that a sufficient proportion of social funds are allocated to the poorest. Where targeting is not used, larger proportions of funds will in all likelihood be absorbed by wealthier municipalities with larger demand for projects and greater capacity to prepare proposals. NGO-sponsored projects tend to be developed in more advantageous municipalities. Furthermore, promotional activities have been insufficient in poorer municipalities and subprojects are usually smaller in poorer areas. To ensure that subprojects would be more accurately targeted, therefore, the second project will: increase promotional activity; pay subproject-related wages aligned with the market rate for unskilled labor to ensure participation of 'he lowest deciles of the income scale; allocate funds on the basis of a poverty map and a departmental/ municipal index of poverty; ensure that social services subprojects receive at least 20 percent of overall program funds; make more funds available to finance projects most demanded by the poor; and give priority to high social returns projects.

3.33 The Rwanda Food Security and Social Action project has clearly defined but varied target groups reflecting the diversity of interventions supported by that project. Target groups include: (a) individuals with insufficient earning capability (landless farmers, poor femaleheaded households, AIDS-afflicted families, orphans); (b) farmers faced with acute food insecurity; (c) farmers with land less than 0.2 hectare needing off-farm employment to survive; and (d) micro-entrepreneurs. For the labor-based works component, the forty-three poorest communes were selected using an index of vulnerability, which ranks communes on the basis of indicators/needs in terms of poverty alleviation and which will be reviewed at the project's midpoint.

3.34 Category 2 projects, aimed at the provision of basic services to poor and vulnerable segments of national populations, target the poor using geographic criteria. A number of these projects target particularly vulnerable groups within those populations, notably women of childbearing age and children under five years of age. They reach these groups through well-targeted IEC programs to stimulate demand and by strengthening the services tailored to the specific needs of those groups.

# _4. Reforms in Policy, Financing and Organization_

3.35 A number of projects will develop capacity and support initiatives to monitor social poverty indicators and the impact on those indicators of policies and strategies of a _macroeconomic or multisectoral_ nature. The social