AID LOAN 515-T-025, EVALUATION OF IFAM COMPONENT (1/77- 3/77)

USAID"s loan-financed credit, training, and technical assistance is designed to expand IFAM"s capacity to help local governments provide services and physical infrastructure to the rural population. Evaluation was a joint USAID-IFAM effort during the first quarter of 1977, and is based on staff meetings and field trips. There have been significant delays in subproject approvals, disbursements, and in general project implementation. IFAM has disbursed only 25% of the total loan. IFAM"s "Rural Window" program is not functioning well. An aggressive outreach promotion strategy to municipalities, particularly the more isolated rural municipalities, is lacking. It is also unclear how useful the broad planning and training activities are in identifying and preparing subprojects. Additionally, once projects are identified, effective follow-up with subproject preparation, approval, bidding, and construction is lacking. Reasons for this may be lack of control and coordination between IFAM"s divisions and an insufficient number of persons working on the Rural Window program. The rural feeder roads program was eliminated from the loan. Feasibility studies showed a very high cost for the roads, and rather than face the political difficulties of financing roads in some areas and not others, IFAM decided to postpone the program until sufficient funds became available. The IDB has now approved a loan to IFAM to finance the program. Under contract with IFAM, the Accion International Tecnica produced studies of 56 rural cantons to assist in the selection of projects. IFAM has chosen not to use the studies, however, believing that they do not always reflect the political realities of municipal development. IFAM will most likely need additional capital to cover its commitments over the next 2 or 3 years. These additional loans should be negotiated on the basis of already identified projects in order to avoid the problems of slow disbursements found under 5150118 and 5150120.