Mid-term evaluation : Project Hope village health bank program

Mid-term evaluation covers the period 9/92-5/95. Progress has been made, despite the difficulty of bringing a credit-led mechanism into a health-focused program environment. A total of 54 VHBs have been established: 30 in Honduras, 24 in Ecuador. HOPE's "credit-plus" VHB model represents a major expansion of the traditional village banking concept in that it offers poor women not only microenterprise loans, but health education and nonformal business education as well. However, neither HOPE nor the technical consultant it hired to develop this innovation fully appreciated the programming required to integrate health and banking technologies in a sustainable way. In the first half of the project, HOPE has focused primarily on developing the credit, savings, and financial systems necessary for sound village banking practices. A good foundation has been laid in developing a policy and procedural framework for VHB financial management. Most women seem to be using the added income from their loans to support their households, though some are investing in their businesses, which are expanding with real growth. However, not all guidelines and policies have been enforced with the same rigor, either within or between countries. The Honduras program has facilitated sound growth with prudent levels of savings and capital absorption in most VHBs, whereas in Ecuador risky lending practices and poor monitoring by some promoters have put VHBs in a vulnerable position, though serious effort has been made to correct these weaknesses. Linkage of village banking with child survival has been awkward to realize, different in each country, and prone to miscommunication both at HOPE Center and in the field. Nevertheless, field experience, from Ecuador in particular, suggests that this integration is a viable strategy for achieving health impacts. Recently, HOPE recruited a health education specialist in child survival; her assignment in developing VHB health education represents an important transition in HOPE's efforts to integrate health and bank technologies. The nonformal business training component has not been developed or realistically implemented. This component is very weak and urgently needs TA. In regard to sustainability, portfolio management, and therefore income reporting, is taking place primarily in the field. A comprehensive Financial Management Information Center has been established, consisting of extensive financial reports in the key areas of portfolio analysis, impact, and sustainability, but there is still no analysis of the income and portfolio system; the accounting system is weak in meeting management information needs. Key issues affecting sustainability are cost recovery (at the end of February, Ecuador had achieved a sustainability rate of 22.02%, Honduras, of 34.83%), cost-cutting, and program development costs (the funds budgeted for TA to develop a VHB methodology were inadequate).