Microenterprise stock-taking : Fundacion Paraguaya de Cooperacion y Desarrollo

The Fundacion has provided loans, training, and other assistance to 711 groups with a total membership of nearly 3,000 microenterprises (with some 60% of program beneficiaries women). This report summarizes the experience of the Fundacion and is divided into two parts -- the main text, which provides general findings, conclusions, and lessons learned, and a set of appendices, which contain more detailed analysis directly related to the Fundacion, brief overviews of two similar activities in Paraguay, and a description of information system improvements which need to be made by the Fundacion. The report cites a number of factors contributing to the success of the Fundacion, including: (1) strong executive leadership and broad base of managerial talent; (2) a politically neutral stance in a sensitive political environment; (3) the knowledge that there would not be long-term A.I.D. support and the absence of a large, low-cost pool of loan funds; (4) a non-charity approach by promoters and trainers; (5) the ability to mobilize resources from local and international sources, instead of being dependent on a single donor; (6) program features that have been well-suited to the needs of the beneficiaries and characteristics of the informal sector; (7) the ability to learn from program failures; (8) the role of the Peace Corps in supplying seed capital and providing much-needed skilled personnel during the formative period of the institution; (9) the fact that similar accounting, client management, and statistics systems were previously developed and could be applied to the project; and (10) the fact that beneficiaries paid positive, rather than subsidized, interest rates. However, the Fundacion also had some setbacks. (1) The organization's small portfolio may have helped the program make realistic program and pricing decisions during its formation, but it will have to grow significantly for the Fundacion to make a major impact on the microenterprise sector in Asuncion. (2) The Fundacion has a tendency to take on ancillary functions and activities without paying adequate attention to the effect of these on personnel and other resources and on its ability to accomplish its basic objectives. (3) Certain donor agency demands have been detrimental to the program's long-term success. (4) Its application procedures are time- and resource-consuming for the borrower.