Evaluation of the impact of AID on small business and micro - enterprise in the Dominican Republic

Specifically, it examines changes experienced by beneficiaries of loans provided by the Association for the Development of Microenterprises (ADEMI) and the Fund for Industrial Economic Development (FIDE). Since 1983, ADEMI and FIDE have been the principal programs through which USAID/DR has executed its strategy in the small-scale enterprise sector. The experience of ADEMI and FIDE beneficiaries has demonstrated that loans for working and fixed asset capital and related assistance have a dramatic economic effect on micro and small businesses. The loans have generated substantial employment at low cost, and have contributed substantially to the small entrepreneur's and his/her family's economic and social welfare. A few examples are illustrative. The case of Jose Heromi Suero shows how loans to micro enterprises can have a dramatic impact on the business and the beneficiaries. Mr. Suero sold vegetables, meats, and fruit from a tricycle in Santo Domingo. Three loans from ADEMI, ranging from 300 to 12,000 pesos (US$95 to US$3,800) led to a doubling of his monthly sales. The loans enabled him to purchase a food stand and hire a full-time employee. Moreover, his income increased to a level enabling him to make major purchases for his home and to cover several large emergency expenses. Loans to small businesses have also shown dramatic results. Nine years ago in Moca, a small town in northern Dominican Republic, Agustina Mercedes Taverez set up a small garment workshop in her backyard with only one sewing machine and two employees. In 1985, at the time of her loan from the FIDE program, she had 20 workers and assets of nearly 79,000 pesos. In the two years since her loans, her work force has increased by 25 percent and her monthly sales have more than doubled to 20,475 pesos (nearly US$6,500). As a result of the Caribbean Basin Initiative Program, she buys material from New York for her line of children's clothing and sells exclusively to a distributorship in Puerto Rico. Mercedes Taverez has been able to build her own house and buy a new car. Soon, she plans on taking out a line of credit with a commercial bank. These two clients exemplify some of the characteristics and types of impact which are representative of two broad categories of small-scale enterprise: microenterprise and small business. USAID assisted the microenterprise segment through the ADEMI program and the small business segment through the FIDE program. Each program is designed quite differently to meet the specific needs of these two separate target groups. Throughout this report the results of the survey are presented in a comparative form showing ADEMI client versus FIDE client performance and impact. It is important to emphasize that the ADEMI-FIDE client data compare not only the results of these two service programs, but also the size categories of micro and small businesses assisted by ADEMI and FIDE respectively. Brief case studies of the 100 program beneficiaries interviewed for the present report are included among the appendices. (Author abstract)