Close out report for the National Development Foundation of Honduras (FUNADEH) - OPG no. 522-ESF-0263

The project was largely a success. A 10/86 evaluation found FUNADEH to be a cost-effective, well-managed organization with a highly qualified and trained staff. achieved in regard to number of loans made, number of direct and indirect beneficiaries, number of direct women beneficiaries, number of clients becoming eligible for credit from other financial institutions, and income and employment increases. On the negative side, due to insufficient funding FUNADEH did not reach a total loan portfolio of $2.2 million, nor did it reach self-sufficiency. Nonetheless, it is expected that self- sufficiency goals can be met during 1990. Several lessons were learned. (1) Private sector leadership is key to the organization and support of programs such as FUNADEH. (2) Well organized management information and computerized data base systems are essential to track clients' enterprise development, monitor impacts, and manage the loan portfolio and finances effectively. (3) Self-sufficiency in credit and in training should be separate issues. (4) Although close loan supervision can lower loan delinquency rates, it requires an intensive use of staff resources, which can also lower client coverage. Future projects should analyze this trade-off before adopting the FUNADEH model in its entirety. (5) The strategy of hiring and paying competitive salaries to extension officers with strong academic backgrounds contributed to the program's success and should be employed in similar programs.