Shelter for the urban poor

Evaluation covers the period 9/78-12/80 and is based on site visits and document review. INVA has been strengthened in three areas: planning and management (e.g., an expanded internal reporting system and improved budgeting); designing, constructing, and delivering low-cost housing (e.g., a new information/accounting system operational and eligibility made more responsive to the needs of the poor); and financial management (e.g., the value and number of delinquent loans reduced 66% and 62% respectively). Shelter construction and improvement have been less successful. The first subproject (Hato de Enmedio in Tegucigalpa) did not begin until 6/81 -- 29 months late; none of the 1,300 new shelter units or 1,300 home improvements due by 1980 were achieved; and it is likely that an 18-month project extension will be needed. Because delays have driven costs up, 12% (646) fewer total units will be built, and INVA is considering using differentiated mortgage interest rates (poorer families will pay 9%, the more affluent will pay 14%). The evaluators found it difficult to establish a clear relationship between A.I.D. actions and construction delays. Rather, delays seemed due to the Honduran Government"s lack of commitment to the project, weak management capability, and inability to obtain necessary assistance from other government agencies, especially utility companies. To address these problems, USAID/H will: (1) develop an INVA project monitoring capability according to A.I.D./Office of Housing guidelines; (2) assure formalization of a (maximum) $10.5 million housing guaranty; (3) promote the earliest possible start-up of construction activities at Hato de Enmedio; (4) obtain a clear policy statement from INVA on providing affordable shelter for the urban poor; and (5) encourage INVA to adopt improved internal performance standards and controls, construction project management methods, and turn-key procedures for project execution.