Project assistance completion report [: close out report for the small business development project no. 522-0205]

Although one of the executing agencies was new and the other had no development experience, significant accomplishments were made. A commercial finance company, called Financiera Industrial y Agropecuaria, S.A. (FIA), was established to provide credit to SME"s. FIA reached a loan portfolio level of only L9.2 million instead of the planned L12.7 million due to the infeasibility of a planned cofinancing mechanism with shareholders. Nonetheless, FIA is a sound financial institution which operated responsibly and conservatively, and generated some 950 new jobs through 332 loans to SME"s. The TA coordinator, the National Association of Industrialists (ANDI), exceeded targets. A business assistance system developed by ANDI"s small business enterprise unit (PYME) attracted 22 participating organizations, compared with a planned 6. Direct TA was provided by PYME to 3,746 SME"s, compared with a projected 525. It is estimated that these activities resulted in the creation of 5,226 jobs. The project teaches several lessons. (1) The lack of development experience on the part of FIA and ANDI led to a slow start-up and other problems. (2) The PYME Committee members seemed more committed to SME development than did the majority of ANDI members. This is probably because PYME was created by ANDI in response to an A.I.D. initiative. Ideally, A.I.D. should support programs that grow out of the commitment of a group. (3) Since the Pan American Development Foundation"s advisor"s contract was with A.I.D. and he was not paid by ANDI/PYME he was not accountable to ANDI -- which led to confusion about his role. A.I.D. should allow NGO"s more involvement in contracting TA.