Lesotho credit union development

Final external evaluation covered the period 2/84-3/86 and was based on site visits, interviews with LCCUL personnel and staff and members of CU"s, and document review. About two-thirds of the project"s quantitative/qualitative objectives have been met. Specifically, management of the LCCUL and the 15 CU"s has been substantially improved through intensive short-term training of some 514 CU board and committee members in all aspects of cooperative credit management. In-kind credit procedures, less restrictive loan policies, and loan appraisals are being applied in 12 of the 15 CU"s. LCCUL self-sufficiency has reached the project goal of 36%, and 776 farmers have been trained in the application of improved agricultural practices and the effective use of production credit. Efforts to decrease CU loan delinquency to 24%, however, were not successful, nor was the target for membership increase reached. LCCUL and CU loan collection efforts still need improvement, and delinquency remains a major problem, particularly for the LCCUL, due to a number of external factors (e.g., drought and the Government"s write-off of public sector agricultural loans) which have adversely affected farmers" ability/willingness to repay loans. A.I.D. assistance to LCCUL will continue through the Agricultural Production and Institutional Support Project (6320221). Seventeen action decisions are made, to improve LCCUL loan administration (particularly loan collection), overall management operations, and training, and to increase the membership base of the CU"s. As this project shows, institutional development is a slow process, and if success is to be achieved a long-term commitment on the part of the participants in this process is required. Focusing limited resources on fewer CU"s, as was done in this project, can help speed development.