Small farmer credit; profitability and repayment

Final project evaluation covers the period 9/77-9/81 and is based on a review of project documents and discussions with project participants. A number of project outputs were achieved. Three methodologies for analyzing credit programs were developed. Crop enterprise budgets developed numbered 163 in Honduras and 101 in the Dominican Republic (DR); farm record books were utilized in both countries. In Honduras, 112 participants completed a course on variable and fixed costs, enterprise budget synthesis, and farm financial analysis; a second course on partial budgeting, present value, grain storage and marketing, and livestock investments was completed by 83 participants. Training in the DR consisted of eight 3-day courses on budget system methodologies and administration attended by 112 trainees. Colorado State University (CSU) and Oklahoma State University (OSU) prepared 14 project papers; 1,000 enterprise budgets were distributed in the DR, and farm record books and enterprise budgets were widely disseminated in Honduras. Despite these accomplishments, little improvement was made in credit institution operations and project results were not disseminated to other LDC"s. Progress was hampered by CSU"s difficulty in locating a host country, by inadequate pre-project design and budget preparation, and by the lack of cost-effective management techniques and a uniform reporting format. Host country credit institutions were handicapped by frequent personnel changes, liquidity problems, the lack of a profit motive, and low managerial capabilities. The project taught that: quantifiable goals should be specified; having two equal contractors causes management problems; LDC credit agency solvency goals should be clear before attempts are made to institutionalize new procedures; new ideas are more readily accepted by individuals participating in groups; and that farm record keeping is not a cost-effective data collection method. It is recommended that: project methodologies be marketed as part of a comprehensive LDC credit institution management and improvement package; applied research projects be initially confined to a small area; and that A.I.D. fund OSU or CSU to prepare a manual summarizing project results.