Microenterprise innovation program : cooperative agreement no. 940-0406-A-00-5246 [with Catholic Relief Services] -- close-out report

Catholic Relief Services (CRS) and NGO partners implemented the project. The project"s main achievement was providing an opportunity for teamwork and interchange of ideas among the diverse microlending institutions, resulting in a certain level of mutual trust. In terms of outputs, the project: designed and implemented the Credit Risk Bureau (CRB) -- which is expected to exist as an independent self-sufficient institution -- for NGOs in seven project institutions (a database of 5,800 delinquent clients); completed the diagnostic of the management information systems; installed an evaluation and impact system in four project institutions; developed training sessions; served as liaison with other institutions regarding research, lobby, TA, and forums for the sector; and completed eight sectorial and other studies. Although 34,463 active customers were being served by participating credit institutions at the PACD, the overall portfolio did not show a great increase of active clients, and some institutions showed fewer clients at the end. One of the reasons for this is that some institutions implemented write-off exercises. Also, several institutions dropped out of the program. For its part, CRS made an important change in its portfolio, in 1997 initiating a new credit program, called ENLACE, in alliance with only 5 of its original 12 counterparts. Overall, project results were more qualitative than quantitative. The main intention of the executive directors of the participating institutions was to improve the quality and variety of the services offered. A follow-on effort by CRS has been approved under the Rural Financial Markets Project (5190435). The following lessons were learned: (1) For a project to be funded by USAID/Washington and managed by USAID/El Salvador, communication and coordination between the two parties is key. (2) When different institutions participate in the same project, each must have a clear understanding of the purpose of the project and their participation. Institutions should also share common interests and commit themselves to fulfilling project goals. (3) Not all projects can be measured by the same indicators, especially when expected results are based on broad and loosely integrated activities and indicators are financial and very specific. (4) Project reorientation for achieving planned goals or concentrating efforts in fewer areas could have led to better results in less time. (5) Decisionmaking by the project board took place by consensus or by majority vote. This allowed the project to be appropriated by its member partners and provided the opportunity to renew commitments to joint ventures. (6) The tactical levels of operation were those most systematized by the project and were regulated by the Board at its monthly meeting. A strategic approach was taken during the last phase of the project, identifying priorities according to accumulated abilities and to common interest within member partners. This exercise was very productive. (7) The institutional profiles were important in developing confidence and institutional ties. On the other hand, those leading the coordination effort allowed a full debate within a framework of respect for the game rules established. (8) Confidence within the partner institutions met with some resistance when it involved sharing information related to the partners" operations. Good coordination and the development of trust are critical for achieving goals in this type of effort. (9) Strategies should have been assessed at least once a year in order to adjust the project to both the changing environment and the partners" satisfaction. The budget should have also been adjusted in order to emphasize strategic activities with greater impact.