NICARAGUAN DEVELOPMENT FOUNDATION

This special evaluation covers FUNDE from its inception in 1969 through 6/80 and was based upon a review of files, interviews and site visits. The FUNDE cooperative system presents an extraordinarily effective and proven vehicle for meeting the wide-ranging needs of its members. FUNDE's activities, which have assisted 46,020 people, have been geared toward the rural poor (averaging $500 per capita), particularly those involved in small (on- and off-farm) enterprise development. FUNDE has supported community activities and its affiliates have become an effective vehicle for savings mobilization and rural capital formation. Donor financing has been vital to this operation, providing over 90% of FUNDE's costs. FUNDE's highly professional and extremely well-managed staff maintains good channels of communication with its affiliates and is flexible, enabling FUNDE to respond quickly to cooperative needs. FUNDE's Research and Development Center is especially valuable given FUNDE's rapid growth, but is deficient in gathering socioeconomic data and developing long-range planning. Its Training Center is effective, although it excludes non-FUNDE members. FUNDE affiliates, while barely viable financially -- in 1979, only 34 of 58 cooperatives showed net surpluses -- display good leadership and management characteristics. The evaluation also covers FUNDE's technical assistance, commercialization, housing, audit, and rural family care components. Although demand for FUNDE's services has accelerated and expanded into new areas such as agriculture, commerce, and housing, FUNDE's growth is constrained by a lack of personnel and financial resources. Over the next 5 years, FUNDE is faced with a budget shortfall of $665,000. Besides capital and budget assistance, FUNDE also needs assistance in finance and organization and in developing, for purposes of diversification, a multi-service model based on the primary credit cooperative system. Support through a three-phase consortium approach is recommended.