Audit of USAID/Egypt"s small and microenterprise development activities

The program comprises the Small Enterprise Credit Project begun in 1996 and the Small and Emerging Business Project begun in 1997. USAID/Egypt has administered small and microenterprise development activities in accordance with USAID guidance. For example, in accordance with Automated Directives System (ADS) Chapter 219, the Mission"s small and microenterprise development activities reached poor people and women. Mission-supported microfinance institutions also reached full financial sustainability and had annual audits of their financial statements. Specific accomplishments for CY 2001 included the following: (1) 48% of loans were poverty loans (i.e., loans of $300 or less) against the target of 50% established for USAID by the Microenterprise for Self-Reliance and International Anti-Corruption Act of 2000 (USAID uses a proxy indicator to define the poor as individuals who received a poverty loan); (2) 43% of loans went to women, in accordance with the guidance of ADS 219. The percentage also indicated that the Mission"s activities were targeting and reaching women. Program results for CY 2001 were mixed. One indicator (poverty loans) exceeded its target by more than 90%, but another indicator (value of loans disbursed) fell short of target by 15%. Also, the Mission had underreported poverty lending results in its 2002 annual report, and results for two banking institutions could not be verified. To address the results that could not be verified, the audit recommends that in future annual reports the Mission not report lending results reported by two banking institutions until data quality assessments of the results can be performed.