Final evaluation : small scale enterprise component community enterprise and development project, contract no. 685-0260-C-00-3381-00

The evaluation covers the period 1/90-7/31/93. The project achieved its objectives. The project has been institutionalized, with the establishment by law on 5/9/93 of a private financial institution (Agence de Credit pour l'Entreprise Privee -- or ACEP) in Dakar to continue SSE credit activities in the project area; all project assets were transferred to ACEP, which will commence operations as of 1/94. ACEP's staff were fully trained and their abilities to manage the project were demonstrated over the past year, during which period the project was under total Senegalese management and continued to be successful and profitable. In fact, the profitability of lending to SSEs in Senegal has been clearly demonstrated, as the project posted net profits of CFA 19.970 million in 1991, CFA 63.625 million in 1992, and CFA 56.368 million as of 7/31/93. Numerical targets were exceeded by far. A total of 3,793 SSEs in five major economic sectors received a total of 5,412 loans; evaluations of 2,209 of these loans showed that 2,477 new jobs had been created. At this rate -- 1.12 new jobs per loan -- it is conceivable that 6,061 jobs may have been created. The outlook for sustainability of ACEP is very good: ACEP's financial position has improved steadily over the past 3 years, showing net profits and keeping non-performing and trouble loans within manageable parameters; the Ministry of Finance has reaffirmed its support for the credit union and its expansion into the agricultural sector; and the Canadian Government has agreed to provide TA to ACEP over the next 3 years to assist in the establishment of credit union networks and guide ACEP in its new operations. Finally, it is noted that the National Project Committee (NPC), comprised of representatives from USAID and Government of Senegal (GOS) ministries (Ministry of Finance, Ministry of Interior, and Ministry of Women, Children, and Family), performed an important function in helping to develop consensus on policies regarding ACEP's mandate and operations. Lessons learned included the following. (1) Future similar project grant agreements should clearly define the disposition of project assets at the end of the project period. (2) USAID needs to expedite approval and implementation of policy decisions; for example, Amendment No. 6 to the present project, a request to allow the GOS to contribute $1.7 million (an action unprecedented by the GOS) to the project, took a full year to be finalized. (3) USAID should give more weight to the advice and expertise of its contractor in regard to the project and its institutionalization. (4) In projects where monitoring of profitability is important, USAID should ensure that the project establish at the outset an accounting system that can be effective within the legal and regulatory context of the host country.