Impact and performance evaluation of the USAID/Colombia rural finance initiative (RFI) : final evaluation report

The initiative, established in 2015 and covering 197 municipalities, works side-by-side with financial and non-financial institutions, providing technical and financial assistance (grants) to: • Improve rural financial intermediation • Reduce the barriers that rural inhabitants face for accessing rural financial services • Modernize the financial environment • Implement learning, knowledge management, and communications strategies to identify, document, systematize, and share best practices and lessons learned The purpose of this evaluation is to assess whether the RFI’s interventions, deliverables, and outcomes were accomplished according to the work plan and theory of change and to what extent they are relevant based on the current national and local contexts. The evaluation comprises two components: impact and performance evaluations, both relying on mixed methods. The impact evaluation is mainly based on a Differences in Differences quasi-experimental approach with data from a survey of 3.047 households, complemented by the analysis of secondary data from the program and government sources. The RFI performance evaluation is based on the analysis of i) 109 interviews conducted at the national and local levels with financial institutions and rural inhabitants; ii) a digital survey of 322 local bank branches; and iii) project monitoring data and relevant qualitative documentation. We identified over 250 findings, leading to 60 conclusions and 41 recommendations. The main conclusion from this evaluation is that the combination of financial and technical support from RFI contributed to (i) accelerating the establishment of financial institutions (FIs) in rural areas through traditional and non-traditional channels, (ii) the improvement of internal processes of FIs, (iii) the adoption of digital technologies, and (iv) the adaptation of financial products (mainly credit) to the specific needs of the rural market. However, RFI generated little change in current savings and insurance mobilization trends at the aggregate (municipality) level. Opportunities remain for more directly orienting future support towards financial inclusion results, aligning incentives to privilege goals related to capturing new clients and the incremental financial services and resources offered to these.