Aid to entrepreneurs : an evaluation of the Partnership for Productivity Project in Upper Volta

Special evaluation covers the period 1977-1981 and is based on document review, interviews with and a survey of selected beneficiaries, and interviews with personnel from USAID/UV and Partnership for Productivity (PfP), the PVO implementing the project. Due to lack of development in Eastern Upper Volta, the project focus shifted from promoting self-sustaining enterprises to providing credit for small-scale economic activities. Disbursement of 416 loans (40 were projected) totalling $275,000 to 313 clients has helped meet a large demand for commercial credit, but was marred by credit fund decapitalization, high administrative costs, and inadequate collection of baseline data. The loans have had few tangible effects on local communities. The loan repayment rate was less favorable than reported (77% rather than 90%), and provision of management training to loan clients was generally unsuccessful. A legal complication is likely since PfP lacks authority to make interest-bearing loans in Upper Volta. Activities at the two project sites were independently managed; Fada n'Gourma operations were largely unmonitored and undocumented, and management at Diapaga, while better, was still inadequate. Although PfP has begun to address some of these deficiencies, income-generating and indigenization activities planned for Phase II seem extremely risky. It is recommended that A.I.D. analyze the feasibility of planned income-generating activities and consider establishing a small enterprise development fund at a Voltaic institution, which in the long run may be more effective than a fund initiated by an expatriate organization. A.I.D. should also maintain stricter monitoring and evaluation standards for credit projects. PfP should: (1) increase supervision of field staff; (2) adjust policies regarding delinquent loans, loan criteria, and client equity contributions; (3) continue to collect balance sheet data on clients; (4) test the impact of certain management practices on selected clients; (5) assess administrative costs; (6) analyze the loan fund's portfolio quality; and (7) manage potentially profitable activities separately from the loan fund.