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Financial Participatory Approach

What is the Financial Participatory Approach (FPA) and How Does it Function?


The Financial Participatory Approach (FPA) uses direct financial resources for mobilizing local populations to take charge of their own development.

The Financial Participatory Approach (FPA) is designed to generate autonomous development dynamics which are constructive, inclusive, and very participatory at a family, community and regional level.


The purpose of FPA is:

  • To break through the cycle of environmental degradation and rural poverty

  • Achieve improved living conditions for rural communities and families

  • Help them manage their natural resources in a sustainable manner

Many individuals and communities are naturally driven to acquire new experience, to learn new skills and to increase their development capacity that best fits their situation. The FPA is all about facilitating discovery and recognition (the feeling of “ah ha…!”). It is about adaptation and about acquiring meaningful experiences that can propel a community into sustained development.

The Financial Participatory Approach fosters empowerment, uses transparency, and builds trust through the implementation of community development projects.

Empowerment is supported through the direct involvement of local communities in the design, implementation, and evaluation of project activities. The FPA process respects and uses their knowledge and abilities to define what is best for them, without overwhelming inputs from outside technical knowledge and “imposed” solutions.

Transparency means that the "rules of the game” are defined and implemented by the people, for the people and enforced in a transparent way (decisions are explained, the processes recorded).


Trust is demonstrated by the project through direct payments to the local community (members) for the best achievements. At the heart of the approach are subsequent contests promoted and conducted by communities. And in return, through implementation of the contests, trust towards the project grows as well as the responsibility and sustainability of project results.


FPA corresponds to core development strategies through a people-centred approach to community development. It is a holistic approach at many levels (inclusiveness, FPA principles, FPA tools, and FPA cycles). FPA enables incorporation of existing practices as well as supporting innovation since it is open to the needs and challenges the people and their environment faces. There are no restrictions to the fields of action as long as it corresponds to the main project goal (and legal restrictions).

The proposed Financial Participatory Approach, has been found innovative and effective in similar projects funded by KfW.

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Possible Steps in Implementaion of FPA
Main Stages of FPA
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Origins of the FPA


As an approach to socio-economic development, the FPA originated in Latin America in the late 1980s.

The original name for the FPA is “Raymi”, which in the Quecha language means “fiesta”, because the competition tools it uses literally creates a “festive” environment in the communities which take part. Over the years the FPS has proved to be so successful in triggering sustainable socio-economic development that became the main-stay of socio-economic development in Latin America for major donors such as the EU and IFAD.

KfW has also worked extensively with it in Latin America. Gradually the FPA is being applied also outside Latin America because its principles are not bound by cultural or socio-economic contexts but are universally human.

Recent case examples may be found in Bangladesh, Laos, Tanzania, and the Southern Caucasus.

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