HURRICANE RECONSTRUCTION II : AGRICULTURE CREDIT

Evaluation covers the period 11/78-11/80 and is based on a review of project records. The project was seriously disrupted by the decision to close the BNF, fire its "deadwood" employees, and reopen as the Agricultural Development Bank (BANADESA). All project activities were at least temporarily halted. The amount of credit disbursed has fallen short of the expected number of beneficiaries. Although over 300 cooperatives or agrarian reform groups have received funds, individual farmers have participated to a lesser degree than anticipated. The use of farm plans developed under the small farmer technologies project (522012300) has been an effective delivery mechanism and has generated a higher loan repayment rate. Technical assistance provided in conjunction with the credit has helped insure the effective utilization of these funds. Technical assistance to reorganize the BNF, improve management, and train staff was obstructed by the closing. Counterparts and other trained staff were fired and recommendations could not be implemented. Of the 205 persons trained under the project, 195 did not return to BANADESA. Moreover, without a definite new organizational structure, BANADESA shortly returned to BNF"s inefficient methods. Short-term, on-the-job training was re-initiated after a 4-month delay and is now proceeding well. BANADESA has mounted an aggressive recruitment campaign to try to correct its personnel deficiencies. The consultants" recommendations to BANADESA on how to improve operations, increase outreach, and decrease default should be implemented at once. It is also recommended that A.I.D. determine the form which future technical assistance should take and audit subloans repayments and their use. The project has shown that credit projects should include direct technical assistance to credit recipients, especially individual farmers, even if this means reaching a smaller number of beneficiaries.