Private sector evaluation : the Dominican Republic

Thus concludes this paper, one of a series of country studies examining A.I.D. assistance to the private sector. After describing historical, geographic, socioeconomic, and public policy factors relevant to private enterprise development in the Dominican Republic, the authors outline the Dominican institutional framework for promoting private sector growth, showing how lenders, training and technical assistance institutions (and organizations that support both credit and training institutions) help to bring about private sector growth as much as do external donors like A.I.D. Case studies of ten lending institutions (four financieras, two commercial banks, and four public sector banks) and of fourteen institutions that serve lenders by providing educational, training, and advisory services to credit recipients are then presented. The authors find that public policy in the Dominican Republic - which has long encouraged the private sector to seek its own solutions - resulted in the private sector's discovery of the central role of training in the capital lending process. Since 1962, the entire private sector effort has been based on the principle that a financial institution must train before lending and an enterprise must be trained before borrowing. Other factors that have abetted private sector growth in the Dominican Republic include: a pervasive spirit of cooperation within the private sector; a high literacy rate and abiding belief in the value of education; and a positive attitude towards foreign assistance. Although the Dominicans have structured and carried out their own private enterprise development program, A.I.D., by being sensitive and responsive to their needs, has made several crucial contributions. Future development of this sector, as programs move to encourage entrepreneurship among lower-income strata, must, however, proceed cautiously, with consideration given to public subsidy of costly lending services.