Katalysis North/South Development Partnership : matching grant II -- final evaluation : project no. 938-0155 [i.e. 938-0158] -- cooperative agreement no. FAO-0158-A-00-3043-00

The evaluation focuses on three of the four project partners -- Cooperacion para el Desarrollo Rural Occidental (CDRO) and Asociacion de Mujeres en Desarrollo (MUDE) in Guatemala, and Organizacion de Desarrollo Empresarial Femenino (ODEF) in Honduras. The Belize Enterprise for Sustainable Development (BEST) was terminated from the partnership in 1996. Since the midterm evaluation, Katalysis has undergone a notable transformation that has enhanced its capacity to support partner NGOs in poverty reduction. The key change has been a shift from a multi-focus to a single program focus. Katalysis has strengthened its program in terms of personnel, system development, program planning, and partner TA. Decisionmaking has been decentralized by creation of a regional field office and a headquarters management team, and by broadening the board of directors. Each partner has received Katalysis training and support to strengthen its financial management and accounting systems, strategic planning capacity, and fundraising capacity. Use of partnership exchanges and the cross-training of partners in microcredit methodologies have been strong and well-received. A notably weak area, as also noted in the midterm evaluation, has been the development of monitoring and reporting systems. Katalysis provided substantive assistance in developing the agriculture training and extension (AGTE) aspects of partner programs. A major achievement was the co- establishment with ODEF of the Herencia Verde agricultural center. After refocusing its programming, however, Katalysis eliminated AGTE support. Consequently, ODEF and CDRO decided to continue agricultural programming on their own, MUDE to eliminate it. With completion of the microcredit team in late 1997, Katalysis has adopted a more aggressive stance in partner application of microlending methodologies. This more rigorous approach has been an important catalyst for partners in refining and consolidating their community banking efforts. Despite the delays encountered, Katalysis has created a context for community banking and has met the aggregated measures specified in the detailed implementation plan (DIP). Both ODEF and CDRO met the revised DIP goals for establishing community banks; only CDRO has lagged, completing less than 2/3 of its DIP targets. Overall, more than twice the DIP target number of community banks were established and the amount of credit disbursed totaled over $1.2 million, against a goal of $364,000. Discussions with bank members and observations at a few bank meetings attest to the transformative power of community banking that has been cited by Katalysis and in a related impact study. In all three partner programs, bank members report higher standards of living for themselves and their families, a goal of the matching grant. In rural areas, community banks have been active in sponsoring community wide activities such as local clean-up campaigns, school repair, and community center construction. It appears that many community banks, especially those associated with ODEF, are becoming local "engines of development" through loans provided to non-members from the internal accounts. In moving forward to strengthen its own and its partners' capacity in microcredit, Katalysis has begun to implement long-overdue standards and systems that will enable partners to strengthen their programs and ensure client performance. The difficulty is to maintain a flexibility appropriate to distinct partner programs while ensuring quality of service. The issue has been as much "how" these new strategies are implemented as "why." Katalysis's shift to a single program focus and its realignment not only of an institution but also of a partnership network pose three key challenges: (1) to strike a balance between consultation and direction in helping partners implement best practices; (2) to ensure an appropriate balance in the partnership core and microcredit focus that plays to Katalysis's strength and strategic competence; and (3) to maintain a workable balance of breadth and depth in Katalysis's programming of a network vision.