Summarizes the mid-term evaluation (PD-ABA-337) of USAID/Kenya”s private sector program. It consists of 24 separate activities and 3 general program thrusts — finance and equity market development, entrepreneurship and management development, and policy dialogue activities. The key lessons learned are as follows. (1) More program resources should be provided for structural solutions and policy reform opportunities arising from projects, particularly capital markets and international trade and investment. The synergy between project activities and policy dialogue is one of the strengths of the program”s comprehensive approach to private sector development. (2) A.I.D. should work with financial institutions that will lend to target markets with lower subsidies than are currently provided, and should restrict the size of credit projects for small and medium-scale enterprises to amounts that allow commercial banks to experiment with changes in lending procedures without incurring unacceptable costs or risks. (3) Emphasis should be shifted from institutional development to institutional performance, concentrating resources on institutions that demonstrate greatest effectiveness and prospects for sustainability. greater provision should be made for sustainability of projects by targeting lower risk small and medium-scale enterprises, providing loans, not grants, for PVO lending programs, and encouraging NGO”s to charge fees for services. (4) TA/training activities should focus on supporting program-level objectives in policy reform and capital market development, and include training of trainers in the program. (5) A.I.D. should ensure that the impact data reporting requirements of implementing agencies are strictly enforced. See also abstract of PD-ABA-337. (Author abstract, modified)
