Transition from income generation towards small enterprise development : an evaluation of the OEF women - in - business program in Costa Rica and Honduras

Overseas Education Fund/International (OEF/I) implemented the project. The evaluation covers the period 3/85- 1988. Of the women assisted, slightly fewer than half maintained or improved their enterprises, while the others are experiencing serious problems or have ceased activity. Costa Rican beneficiaries showed more promise than those in Honduras, largely due to Costa Rica's more favorable economic and institutional environment. Training and loan administration costs are excessively high -- $4,070 per beneficiary trained and $21 per dollar lent -- and OEF/I spent more than half of grant funds on its Washington office, a higher percentage of non-local charges than other small enterprise PVO's in Costa Rica and Honduras. Credit resources were underutilized, with less than half of available funds disbursed, and training and credit were not well integrated, since only 19% of trainees obtained a loan. The project also failed to provide adequate technical support to field activities. Despite these weaknesses, it is recommended that the project receive funding for an additional three years, the ordinary length of time required for establishing such programs. The project did make noteworthy accomplishments, including an increased institutional capability in small enterprise development at OEF/I, and the publication of two monographs about feasibility study and marketing strategy. Moreover, the project fills several institutional gaps. For women it is one of the few, if not the only, sources of credit and extension, as well as assistance in integrating their family and economic roles. It is also one of the few providers of rural nonagricultural credit and business support services for subsistence producers.