SMALL FARMER SUPERVISED CREDIT

Evaluation covers the period 3/1/78-5/31/80 and is based on evaluations by the Center for Agricultural Studies and a joint U.S./Tunisian team (PD-AAG-130-C1 and -131-A1). The project is making significant progress. Over 3,000 loans totalling $3.5 million have been granted and 95% of the applications have been supported by a farm production plan developed by the farmers and credit agents. Benefits to the farmers are apparent as evidenced by yield increases, decreases in land left fallow, and increased incomes. Supervised credit has been institutionalized by the creation of the Office of Medium and Small Farmers (DAPME) to implement the project. In-service training of DAPME field personnel in the areas of credit management and development of farm plans has been accomplished. A supervised credit manual has been produced. Initial difficulties, which have since lessened, included the need to train a new staff due to the creation of a new DAPME office; a shortage of vehicles; and the lack of previous credit experience by farmers. Ongoing difficulties include the lethargy of the Bank of Tunisia (BNT) in processing loans; failure of the Local Organizations for Farm Credit (SCMA) to guarantee loans; and the insufficiency of the interest rate to meet the needs of the project. Recommendations include: (1) a 2-year project extension to meet initial target goals; (2) intensified efforts to recruit U.S. advisors and raising of their rumber to 36; (3) authorization of FY 1981 loan funds and of additional financing for vehicle procurement; (4) modification of farmer loan terms; (5) increased use of Arabic in and simplication of farm loan documents; (6) strengthening of project management staff to permit decentralization and improved supervision; and (6) improvement in BNT"s processing of loan applications and repayment of suppliers for materials supplied to lenders. A special need exists to make SCMA"s more participatory in nature. If this cannot be done, their role should be reduced.