Rural enterprises and agribusiness development institutions (READI)

The evaluation covered the period FY84-9/88. The project has made a positive contribution to the institutional development of INDEFUND, MUSCCO, and DEMATT, enabling these organizations to help start 55 new businesses and expand 150 existing businesses. It has also strengthened coordination between these institutions and public sector agencies by making a study of investment potential available to investors and by preparing investment/financing guidelines for Malawian credit institutions on targeted areas of economic activity (e.g., smallholder cash/export crop production and potential agro- processing or agro-business ventures). In general, the project has raised awareness about the importance of the SME sector, and has identified policy and institutional constraints to SME development. Several lessons were learned. (l) Regulatory procedures or policy concerns such as access to foreign exchange, letters of credit, government procurement procedures, on-lending rates, and registration and licensing procedures greatly affect the speed at which SME development can occur. (2) SME institutions should not be burdened with too many functions during initial project stages. (3) An institutional rationalization study should be conducted to minimize recurrent costs by determining the vital functions of each organization. (4) Future evaluations should analyze gender-disaggregated data, especially regarding the number of women employed, women"s enterprises, and female repayment rates.