Evaluation of the credit union development project

Special evaluation covers the period 1/82-8/83 and is based on document review, site visits, and interviews with LCCUL staff and others. With the satisfactory achievement of most of its objectives, the project has had an important effect on the development of the Lesotho CU movement. Although unrealistic targets, a focus on strengthening existing CU's, and a lengthy CU formation process kept growth in new CU's and in CU membership lower than planned, CU shares and savings (the latter up 54%) showed strong increases. Nearly all LCCUL positions have been staffed (women, 70% of the 26,000 CU members, play a substantial role as CU directors/clerks and as LCCUL senior staff and committee members); 47 new CU clerks have been hired, with salary assistance for 29 from Catholic Relief Services. Detailed LCCUL job descriptions and a personnel manual have been completed and 32 statements standardizing loan processing procedures are being developed (although implementation of the latter has been inadequate). With the addition of a field manager, supervision of LCCUL field officers (FO's) has been increased and FO's have redirected their efforts from village campaigns to providing TA/training to CU staff. Extensive training, mostly on-the-job, has also been delivered to LCCUL staff, FO's, and committee and board members in CU management, bookkeeping, accounting, loan appraisal, etc. Other activities have included: expanding the Small Farmer Production Credit program (agricultural committees are operating in 19 CU's); promoting CU's in weekly radio programs; and building 16 CU offices in 1983 (15 are budgeted for 1984) with funding from MISERIOR (acronym not identified). However, despite efforts to improve control, LCCUL collection of loans/interest due has been poor; loan delinquency has averaged 25%. Resulting tight lending policies (restricted to member savings) and a lack of viable applications have kept loan volume low. LCCUL financial self-sufficiency has also been hampered by inadequate billing and collection of LCCUL dues and a low level of capitalization. Nineteen recommendations are included.