AID microenterprise stock-taking : Bangladesh field assessment

This assessment of WEPD, which is managed by the Bangladesh Small and Cottage Industries Corporation, finds that program impact has been appreciable; in a 1987 survey, 57% and 75% of WEPD clients reported increases in income and productivity, respectively, while 36% reported increases in employment. On the other hand, measurement of impact is constrained by lack of data on program services and client activities. WEPD's financial sustainability is a problem. The program does not generate any interest income to offset its operating expenses and by assisting clients with the loan approval process, WEPD is actually subsidizing the banks which provide the loans. Further, because its clients are mainly small entrepreneurs, WEPD is unlikely to collect fees for its services and in fact sustains significant losses in providing per diem and pocket money for its client trainees. Other factors hindering WEPD sustainability include the policy and regulatory environment governing capital markets, WEPD's cumbersome administrative practices, and the government's practice of cancelling interest payments after floods, which has has been partially responsible for a drop in the loan recovery rate from 80% to 47%. Policy- and program-related lessons taught by the WEPD program conclude the report.