LOAN COMPLETION REVIEW REPORT

Loan assists the development of a self-sustaining private cooperative federation, the Federacion de Cooperativas de Ahorro Y Credito de El Salvador (FEDECACES), with capital to finance sub-loans to eligible unions for: 1) relending to small farmers, artisans, industries, and commercial enterprises; 2) relending personal loans; and 3) financing improvements in the office"s equipment or management of eligible unions. Evaluation methodology not defined. Audits and independent team assessments during the project revealed that the baseline data in the Capital Assistant Paper were erroneous and overstated. Reviewers thus provided USAID/ES with more realistic and accurate bench marks against which to measure FEDECACES viability and progress. Although completion of loan commitments were behind schedule making it necessary to extend the project two years beyond the contract, FEDECACES has been relatively successful in achieving its purpose. FEDECACES has operated at a profit for the last two years and projected that its finances viability will continue even after it begins to repay the AID money. Evaluator recommends that since the original loan conditions and covenants relating to disbursement, warranties, project execution, procurement, etc are now obsolete, they should be eliminated from USAID/ES"s monitoring scope. Mission should continue to monitor funds and other resources to be provided by FEDECACES, and FEDECACES"s payment of El Salvador taxes. AID should continue to provide consultation and assistance with maintenance and auditing of records. AID should also have the right to inspect the project and all records, documents, goods, and services associated with it. FEDECACES should in turn be required to inform AID of any facts and circumstances that may affect the project.