Mid-term evaluation of the rural enterprise program of the rural private enterprise project (615-0220) : Kenya

Mid-term evaluation covers the period 6/84-6/87 and is based on document review, site visits to 14 subprojects (SP"s), and interviews with project and NGO officials. The REP is off to a good start, especially in strengthening Kenyan institutions that promote micro and small enterprise development. Although field activities are only just underway, SP agreements have been signed with 14 NGO"s (6 more agreements are expected soon) serving about 4,500 entrepreneurs, half of whom are women. Another 19,400 individuals are indirect beneficiaries. Linkages have been established with 40 NGO"s in all, and the beneficiary figures are expected to double by 1989. As of 6/87, about $1 million in loan funds had been made available to entrepreneurs through the SP"s, which are implemented by a variety of NGO"s ranging from the National Council of Churches of Kenya (NCCK) to a small group of tinsmiths in the western highlands. Loans had been made to 76 groups and 707 individuals, with an average loan size of $1,277. These were largely uncollateralized and provided working capital. Since the SP"s are in the early stages of implementation, repayment rates are not known; interest rates charged by the intermediaries typically are 14%, the maximum allowable in Kenya. Some 2,000 new jobs have been created via the credit programs. Training and TA are at the heart of REP, including (1) training of businessmen and women in credit administration, financial management, bookkeeping, etc. before providing them credit and (2) TA to NGO"s, and indirectly to entrepreneurs in market analyses. To date, REP has worked closely with two dozen NGO"s in the areas of SP design, market analysis, management and financial advice, credit management assistance, and training of both NGO staff and entrepreneurs. Moreover, some 225 staff from 40 NGO"s have participated in training workshops. A.I.D. funding has been approved through 1994, and REP, which was recently registered as a Kenyan corporation, is aggressively seeking other funding sources. However, to be sustained over the longer term, REP will need increased Kenyan and donor funding. Staffing should be increased, linkages with other small enterprise projects developed, and a Kenyan director should eventually be appointed. Project success should not be measured in terms of the number of successful SP"s mounted, but rather in terms of progress towards goals for income generation, job creation, and efficient loan management.