This Column is meant to monitor and report on issues that concern the people of the rural area and their development and welfare. In this edition, we bring to the attention of our readers poverty and Finance in the rural areas.

RURAL POVERTY AND RURAL FINANCE PROJECT The Gambia is one of Africa's smallest and poorest countries. The 2009 Human Development Report of the United Nations Development Programme ranked the country 168th of a total of 182 low-income countries. Poverty is widespread, pervasive and predominantly rural. More than 60 per cent of the rural population is classified as poor. Factors such as ethnicity or village size seem to be irrelevant to poverty, which is substantially uniform throughout the country, although pockets of deep poverty exist. These areas are inhabited by one third of Gambia's poor rural population.

More than 90 per cent of extremely poor people in the country and more than 70 per cent of other poor people depend on agriculture for their livelihood. Every year, poor people in rural areas face the 'hungry season', a two-to-four-month period at the peak of the rainy season, between July and September, when household food stocks are low or depleted. To cover household needs, poor households depend on income generated by groundnuts and other cash crops or on remittances.

Falling market prices mean that households have less money to meet basic needs. The recent global crises (the financial crisis, and soaring food and fuel prices) have meant considerable hardship for poor rural households in particular. These crises have impacted the country's economy tremendously, and have pushed many more people into extreme poverty. For example, in 2008, the price of a bag of rice (a staple food) skyrocketed to a 50 per cent increase over its normal price in six months, making it extremely difficult for many poor households to sustain their normal intake of food, in terms both of quantity and quality.

Groundnut farmers in upland areas are among the poorest people in the country. At least half the country's poor people include farmers and agricultural workers. The incidence of poverty is highest in rural groundnut-producing areas. In the North Bank, Upper River and Lower River regions, about 65 per cent of the population is poor. However, pockets of poverty can be found throughout the country. Compared with men, women have a higher incidence and severity of poverty.

This relationship between gender and poverty is known as the feminization of poverty. Rice farming in both upland and lowland areas is largely the work of women. Productivity is low because of the rudimentary technologies and practices used.

Almost 88 per cent of women farmers are also engaged in horticultural activities (growing vegetables and fruits), and most women keep small ruminants as well, to supplement household food security. Traditionally women do not own or control land, but they bear a disproportionately heavy burden of labour. They often lack access to credit for income-generating activities, and they generally play a limited part in the decision-making that affects their lives. Poverty in The Gambia has its roots in slow economic growth and uneven income distribution.

Rural poverty, in particular, is the result of a poor natural resource base and farmers' dependence on groundnuts as their principal source of income. The primary causes of rural poverty in The Gambia include: -Low and decreasing soil fertility -Low agricultural and labour productivity -Poor access to productive assets such as land and water -Poorly functioning input and output markets -Low prices on world markets for products such as groundnuts and certain types of rice -Poorly functioning rural institutions, including credit institutions, and lack of basic social services -Irregular rains that frequently cause crop losses and yields that fluctuate as much as 40 per cent from one harvest to the next Poor rural people generally produce for home consumption and sell any surpluses at disappointing prices.

Poor farmers are caught in a vicious circle of risk aversion, limited use of inputs, low productivity and low income. In 2008, the International Fund for Agricultural Development (IFAD) approved a total loan ofUS$6.1 million and a grant of US$400,000 to the Government of the Gambia for the implementation of the Rural Finance Project for the duration 2008 to 2014. This project provides carefully targeted support to help strengthen and consolidate existing microfinance institutions in The Gambia, enabling them to deliver financial services to economically active poor rural people.

Microfinance offers a range of financial services to the poorest members of local society, who tend to fear debt and who have little or no collateral. In rural areas, microfinance is mainly handled by institutions operating in the semi-formal market, including: Village savings and credit associations initiated by IFAD in the late 1980s.The network of the National Association of Cooperative Credit Unions of The Gambia. The Gambia Women's Finance Association (GAWFA), which takes a group-lending approach.

The Gambia Microfinance Savings Company Limited, a private, limited-liability financial company. Project activities include training and technical assistance for service providers to develop new financial products and improve advisory and business services for their rural clients.

The project also enhances local communities' access to social and economic infrastructure by linking with initiatives that offer matching grants - such as the World Bank's Community-Driven Development Project and the Social Development Fund supported by the African Development Bank.

In addition, the project assists existing microfinance institutions in broadening and completing geographical coverage of rural areas.

Using an innovative approach, the project mobilizes traditional village groups to reach target populations of poor men, women and young people as clients for microfinance. Upon the project's completion, an anticipated 180 rural branches of microfinance institutions, and almost 3,000 GAWFA groups, will be delivering financial services, including savings, loans and insurance.