Evolution of a process -- the experiences of CHF in Paraguay : cooperative development, home improvement loans and local government strengthening

CHF achieved almost all of the objectives of both CAs. Under the first CA, CHF, after finding Paraguay"s five registered housing cooperatives inactive and institutionally weak, focused efforts on helping CREDICOOP develop as a cooperative housing Technical Service Organization (TSO) and implement and administer the Nande Roga Home Improvement Program (NRHIP). CHF also: helped the cooperative sector participate in the national housing delivery system for the first time in Paraguay; helped negotiate an agreement between the National Housing Council (CONAVI) and CREDICOOP allowing CREDICOOP affiliates to receive credit for home improvement loans under the NRHIP; helped establish a revolving fund in CONAVI to continue to support home improvement programs for cooperatives (though due to a governmental degree that changed CONAVI"s housing finance responsibilities, the fund was eliminated); prepared and disseminated training materials and a program manual in both English and Spanish on the demonstration NRHIP; trained 195 board members and staff of participating credit unions and 17 Peace Corps Volunteers in the NRHIP; and helped design a housing guaranty (HG) loan program in Paraguay. CHF met all of the objectives of the second CA. Specifically, CHF: continued to help CREDICOOP and its affiliated credit unions administer home improvement lending programs through training and information about the proposed HG loan program and the CONAVI and Inter-American Development Bank (IDB) loan program; helped CREDICOOP and its affiliates gain the approval of CONAVI and the IDB to participate in the latter"s housing loan program as intermediate financial institutions (IFIs); helped USAID prepare a HG project paper; helped design and develop local government strengthening and programming approaches, pilot basic health decentralization projects, municipal management training workshops and conferences, and a national health decentralization policy that resulted in new health system legislation; and helped select municipalities to participate in USAID"s local government strengthening activities and participants to attend workshops on the subject. Lessons learned were as follows: (1) The creation of a cooperative housing TSO within CREDICOOP and its successful implementation of the NRHIP have shown that the cooperative sector can play a major role in a national housing delivery system. This is recognized not only in Paraguay but in other countries in the Southern Cone. (2) As the result of its success under the project, CREDICOOP has become the logical representative of the cooperative sector"s negotiation with government agencies such as CONAVI on housing issues. (3) Credit unions and housing cooperatives have a strong interest in, and demand for, loans for home improvement as well as for new construction and home-based microenterprises. (4) A complete understanding of the loan terms and conditions of the housing credits is essential for any credit program. A key difficulty facing cooperatives participating in the NRHIP was the readjustments, made twice a year to keep up with increases in the minimum wage, of the loan capital and monthly payments. Although the borrowers initially agreed to the adjustments, they later said that they had not properly understood the conditions and did not want to accept them. The cooperatives have handled this problem in various ways. (5) Paraguay has yet to develop a grassroots type movement for housing cooperatives. (6) Peace Corps Volunteers were sometimes unable to carry out their responsibilities because of an irregular flow of capital for the NRHIP due to bureaucratic problems within CONAVI. (7) Community participation in identifying and resolving decentralization and urban environmental issues was extremely positive. Municipal governments found this participation most helpful and key to the success of these programs. (8) Municipal and departmental authorities need training in public management. The process of decentralization is still nascent and will require several years to completely take root. Ongoing international assistance will be key in focusing attention on this process.