World Relief Corporation : 1993-1998 matching grant for microenterprise development -- final evaluation

Participating primary country programs included Honduras, Burkina Faso, Mozambique, and Rwanda. Liberia also participated. Each country program exceeded nearly every grant target. Over 56,000 people benefitted directly, vs. a target of 20,100. The total number of community banks at the end of the grant period was 1,002. Average loan size ranged from $57 to $160, with the total outstanding loans totaling $1.97 million. The repayment rate has been 87%-100%. Member savings total $1.36 million. Some 94% of program participants were women, vs. a target of 91%. During the course of the matching grant, WRC has developed an expertise in initiating microfinance programs in the wake of complex disasters. This is evident by its work in Liberia, where clients continued to repay their loans in the midst of civil strife; in Mozambique, where everyone said it could not be done; and in Rwanda, where the population was highly mobile and insecure following the genocide and return of refugees. Even in Burkina Faso, the program continued in the face of drought. A painful test of the resiliency of the community banking approach and of the microentrepreneurs themselves will be made in the coming months in Honduras following the devastating hurricane and floods in October 1998. WRC has also established successful microenterprise development (MED) programs in non-matching grant countries in political turmoil (Cambodia and Peru). WRC has been recognized within the microfinance and donor communities for its achievements, particularly in demonstrating that microfinance can be a successful developmental tool in complex disaster situations. The role of the matching grant in achieving this impact has been crucial, enabling WRC to continue to work with partners as well as with country offices during a downturn in overall institutional income, and to provide TA to non-matching grant countries. It has also influenced thinking in other program areas and promoted collaboration across program areas and departments. Key lessons learned are as follows: (1) Microcredit can work in complex disaster recovery situations. (2) No program is immune from external forces. (3) Bad practices of other programs can undermine the best practices of one's own program. (4) What works draws attention. (5) Institutional capacity building takes time, especially when complex disasters break down local systems and organizations and there are losses of trained human resources. (6) Technical capacity at headquarters level must be sufficiently deep to be able to support the variety of situations and partners on a timely basis. (7) Methodology evolves continuously. (8) Prudent new product development is essential to meeting client needs and to promoting institutional sustainability. (9) New issues are emerging that need to be addressed, such as legal status, security of staff and clients, fraud, product development, etc, (10) Partners need capacity building in strategic and business planning. (11) The importance of a good management information system (MIS) grows as the institution and its portfolio grows. (12) Better financial management is required as the programs become larger and more complex. (13) Community banking can work with male clients, although there may be compelling reasons to focus on women. (14) Many significant achievements and impacts are not reflected in proxy indicators and must be described rather than quantified. (Author abstract, modified)