Introduction - MicroStart: Finding and Feeding Breakthroughs

The Midterm Evaluation Process UNDP's Special Unit for Microfinance (SUM) commissioned a mid-term evaluation of its MicroStart program to take place in September-October 1999. SUM believed that an evaluation at this time would identify areas for improvement while there was still time to make changes. SUM directed us, as evaluators, to focus on the validity of the assumptions underlying MicroStart and on the processes used to implement it, rather than on the impact of the program.

The evaluation consisted of week-long field visits to three of the longer-standing MicroStart programs: Morocco, Philippines and Ivory Coast. In each country we met with the major participants in MicroStart: UNDP offices, TSPs, LTSPs, MFIs, advisory board members, government policy makers, and experts knowledgeable about local microfinance. In addition to the country visits, we interviewed SUM staff as well as several Technical Service Provider staff. SUM also provided MicroStart documents and recent internal evaluations. Between the additional interviews and documents we were able to develop general pictures of MicroStart in most of the countries where it operates.

This report is organized around five key questions MicroStart's conceptualizer, Henry Jackelen, posed for the evaluation: 1) Does it make sense for UNDP to help launch small and new microfinance organizations? 2) Can technical service providers add significant value to such organizations within the framework offered? and 3) Are small capital grants worthwhile? 4) Can MicroStart have a significant influence on policy and the environment for microfinance? and 5) Is MicroStart a Successful Strategy for UNDP Involvement in Microfinance? The final section of the paper goes through the operational steps in the MicroStart process, making specific recommendations to help implement the ideas discussed in the earlier sections. That section may interest a more limited audience than the rest of the report.

The three country studies, on Morocco, Philippines and Ivory Coast, complete the evaluation report. Those studies show in concrete terms the experience that leads to the recommendations expressed here. Due to the limited time spent in each country, the country studies should be considered case studies rather than full evaluations of the country programs. Nevertheless, where we felt they were warranted we have made recommendations at the country level.

We would like to thank SUM for assistance throughout the evaluation. SUM's team have already recognized and debated most of the issues we raise here. Our contribution comes in providing an outside perspective and systematic investigation. SUM staff showed their commitment to making MicroStart as effective as possible through their openness to discuss all issues and their willingness to listen constructively -- but not passively -- to criticism. We appreciate the support and interaction with each of them: Henry Jackelen, John Tucker, Kiendel Burritt, Deena Burjorjee, Maria Paula Carvajal, and Iain Beattie. We are especially grateful to Heather Clark for her leadership in planning this evaluation, and in encouraging everyone involved to dig deeper, question assumptions, and come up with new ideas. The SUM team reflected her positive attitude. MicroStart Regional Advisors, Anne-Marie Chidzero and Pancho Otero also provided valuable insights. A special thanks is due to Mila Co who smoothly handled contractual and logistical arrangements.

We are also grateful to the people who made our country visits possible, both at UNDP country offices and among TSP and LTSPs (listed in each country report). We learned a great deal from our intensive conversations with them, and appreciate the time they spent to take care of our logistical arrangements. In addition, we would like to thank staff of ASA, Socodevi, Save the Children, Freedom from Hunger and Calmeadow who commented on their experiences with MicroStart. Finally, we appreciate the willingness of the MFIs we called on to sit with us at length to answer questions of all sorts.

MicroStart: Finding and Feeding Breakthroughs Midterm Evaluation Prepared for UNCDF/SUM 10 December 1999 Elisabeth Rhyne and Jill Donahue To learn more about this author, visit United Nations Capital Development Fund's Website.

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