Agricultural credit bank project

Joint Government of Liberia (GOL) and USAID/L evaluation covers the period 11/79-9/80 and is based on a site visit, document review, and interviews with project personnel. Although the ACDB has proven its ability to meet rural Liberia"s critical need for a modern banking system, its short-term ability to meet the needs of small farmers and cooperatives (co-ops) is uncertain due to small farmers" limited credit needs, the ineffectiveness of co-ops as a mechanism for channeling credit to farmers; and the small differential between interest paid on savings and charged on loans. The major project output, a bank development plan, is 5 months behind schedule due in part to uncertainties created by the 4/80 change in the GOL and also due to the fact that the four-member Checchi and Company advisory team, although fielded in a timely manner, could not carry out all its functions after losing its two rural credit advisors to illness. Although a personnel management and salaries plan and a study of the potential role of agricultural marketing co-ops were completed and a credit policies/procedures manual was begun, the credit supply/demand study was cancelled because necessary data were lacking. An ACDB employee is receiving U.S. graduate training and another will soon start; four staff received short-term overseas and in-country training. It is recommended that ACDB: (1) broaden its rural loan portfolio and services to ensure long-term viability; (2) expand farmer outreach; (3) evaluate lending through credit unions; (4) increase the number and mobility of branch office personnel; (5) intensify and institutionalize on-the-job training; (6) educate farmers on credit use; (7) raise interest rates; and (8) make its legal instruments understandable to farmers. It is also recommended that the contractor fill the vacant rural credit advisor position by 12/31/80; A.I.D. extend the rural credit advisors" terms 1 year; the feasibility of assigning development project credit staff to co-ops be studied; and capital stock acquisition by co-ops and credit unions be required.