MUNICIPAL DEVELOPMENT PROGRAM

This final evaluation covers the period 6/75-1/80 and is based on evaluations made by a contractor (9/75) and by USAID with the host government (11/79). The project achieved its purpose of reforming BANMA, thereby enabling it to assist 27 targeted polar and sub-polar municipalities to function more effectively. BANMA financed approximately 110 projects; turned its first profit over in 1979; cut its delinquency rate from 9% to 2.5%; increased its capital assets to over $15 million; increased its municipal deposits; and expanded its loan portfolio to over $23 million. BANMA also provided technical assistance to 64 municipalities; set up an ongoing technical assistance program for county officials; produced seven procedural manuals based upon its own administrative reform; and established formal communication links with government offices concerned with municipal development. Services aimed at the rural poor received 55% of subproject financing. Markets and slaughterhouses were built in 18 of the 27 targeted municipalities. Municipalities raised the percentage of their income spent on administrative (to 12%), market (to 47.2%), and potable water (to 14.6%) projects; while 14 of the 27 raised their income allocation for such investments to 35% per year. Double entry accounting systems were installed by 11 municipalities; tax billing and accounting systems were adopted by 30 others, including the 27 targeted, with an average increase of 100% or more in taxes. In addition, project activities resulted in 3,100 temporary jobs and 300 permanent jobs. Shortfalls included the inability to form eight intermunicipal road maintenance cooperatives, due to local and central government differences, and to develop a planning and budgeting capacity, due to high personnel turnover rates. One lesson learned was the positive impact of municipal banks upon activities that fall between sector programs. A follow-on project is planned.