Chad : evaluation of the VITA private enterprise project, phase II -- final report

VITA was the implementing agency. External evaluation covers the period 2/87- 3/90. The project has played a vital role in rebuilding a national economy devastated by war and internal strife. VITA has created a new financial institution with a revolving loan fund, a trained Chadian staff, an operational management structure, and a framework to provide business and advisory services to clients. In comparison with other small enterprise credit activities in Africa, this project is one of the most successful, especially in terms of its high percentage of on-time loan repayment collection (80%) and its low estimated percentage of unrecoverable loan principal (6%). Major project achievements include: expansion of small private enterprises, including some in agriculture; improved quality of life for low-income people in target areas; increased number and capability of private sector activities, primarily in the urban and outlying rural areas of N'Djamena and rural areas around the city of Bongor; increased self-sufficiency of client entrepreneurs through assistance in business planning and agricultural technology. The project has acquired an excellent reputation among donors, beneficiaries, the Government of Chad, and the banking, business, and development communities. On the negative side, the project has avoided becoming involved in business brokering and is not very active in providing market information to customers. Sustainability is in question, since VITA has not yet selected a turnover mechanism or tried to incorporate its credit programs into the Chadian financial system. An agreement needs to be made with donors on a plan and timetable for institutionalizing the project. Continued A.I.D. support for at least 3 more years (Phase III) is recommended. Recommendations for VITA focus on improving management and information systems; providing the technical, credit, and computer consultants suggested in the Phase III Concept Paper immediately after Phase III agreement is reached; and taking concrete steps to institutionalize the project, e.g., by recruiting a Chadian Project Director, creating an indigenous Advisory Board, etc.