MUNICIPAL ENTERPRISES DEVELOPMENT

EVALUATION IS BASED ON AITEC REPORTS, INTERVIEWS WITH AITEC AND THE MUNICIPAL DEVELOPMENT BANK (INFOM), AND PERSONAL EXPERIENCE OF THE USAID EVALUATOR. APART FROM AN INITIAL DELAY IN INFOM"S ASSIGNING OF COUNTERPARTS AND THE NEED FOR TWO EXTENSIONS (ONE FOR 30 DAYS TO REVIEW THE PROJECT FOR PHASE II, THE OTHER TO ALLOW COMPLETION OF THE FEASIBILITY STUDIES), IMPLEMENTATION OF PHASE I WAS COMPLETED ON SCHEDULE. AITEC HAS PROVIDED IN-SERVICE TRAINING TO INFOM PERSONNEL IN THE METHODOLOGY OF IDENTIFYING, DESIGNING, AND EVALUATING MUNICIPAL DEVELOPMENT PROJECTS, HAS PRODUCED MANUALS ON THESE SUBJECTS FOR INFOM, AND HAS ESTABLISHED A MUNICIPAL ENTERPRISES UNIT WITHIN INFOM. INFOM"S INSTITUTIONAL CAPABILITY HAS BEEN STRENGTHENED IN THESE AREAS. BASED ON A SURVEY OF 100 MUNICIPALITIES, INFOM IDENTIFIED 79 POSSIBLE PROJECTS, 25 OF WHICH WERE SELECTED FOR PROFILE. FEASIBILITY STUDIES WERE CONDUCTED ON THREE OF THESE, AS TARGETED. IN ORDER TO ENSURE IMPLEMENTATION OF THESE PROJECTS, THE MISSION HAS ESTABLISHED AS CONDITION PRECEDENT TO FUND DISBURSEMENT THAT INFOM: (1) ESTABLISH A CREDIT POLICY FOR MUNICIPAL ENTERPRISES; (2) RESERVE ITS OWN FUNDS FOR THE EQUIVALENT OF THREE ENTERPRISES IN THE AREAS NOT AFFECTED BY THE 1976 EARTHQUAKE AND WHICH ARE THEREFORE INELIGIBLE FOR FINANCING UNDER LOAN 520-W-027; AND (3) ENDORSE A CONTINUATION OF THE PROJECT TO PHASE II. INFOM HAS MET THESE CONDITIONS AND THE MISSION HAS AUTHORIZED PHASE II IMPLEMENTATION. A LESSON LEARNED FROM THE PROJECT SO FAR HAS BEEN THE IMPORTANCE OF PERSONAL RELATIONSHIPS FOR TASK ACCOMPLISHMENT. ONCE AITEC AND INFOM PERSONNEL BECOME BETTER ACQUAINTED, INITIAL DIFFICULTIES WERE SPEEDILY RESOLVED.