RURAL COOPERATIVE UPGRADING GRANT

Evaluation covers the period 5/77-4/78; no methodology is given. Under the project, 106 subloans have been made to 59 different co-ops (for approximately $13 million or 87% of A.I.D. loan funds), with $450,000 of rollover funds used for 27 additional loans to nine co-ops. The average subloan size was $127,100. Over half of the subloans were made to A.I.D."s target group of campesino, artisan fisher, and reform sector co-ops. Mixed member co-ops received the other subloans. Around $230,000 of technical assistance was provided to the Instituto de Financiamento Cooperativo (IFICOOP), the implementing agent, and its sub-borrower co-ops. IFICOOP also was provided with approximately $44,000 worth of office machines, including a telephone switchboard. IFICOOP has overcome its financial crisis of 1/77 that was mainly caused by an over-commitment of loans to worker co-ops. Under a provisional administrator appointed by the Superintendent of Banks, IFICOOP has renegotiated its debts to local commercial banks, began liquidating unprofitable or marginal ventures, reduced personnel by 50%, instituted a financial management control system, obtained Central Bank financial support, and adopted more stringent subloan collection procedures. USAID also reimbursed IFICOOP for $1.1 million, as the contributions of sub-borrowing co-ops exceeded the agreed host country contribution. Moreover, IFICOOP agreed to a separate revolving account to relend A.I.D. funds and IFICOOP contributions. To avoid high delinquency levels, IFICOOP should maintain a balanced portfolio of profitable loans and development loans. The project has received no funding since the 6/28/77 termination of U.S. assistance to Chile, limiting the number of co-ops involved without changing project objectives or the intended beneficiaries. Improved evaluation procedures would help IFICOOP support other loan requests, but cost/benefits should be reexamined in view of IFICOOP"s financial state. IFICOOP"s financial recovery should be closely monitored.