Summary of TSP Performance in Countries Visited

The experiences of the TSPs in each country visited during the evaluation illustrate a range of different issues.

Morocco, with Save the Children as TSP, may be considered a base case, both because it has the longest track record and because the program fits MicroStart's original plain vanilla model. SCF has operated through a series of training workshops followed by on-site visits from the workshop providers. These are supplemented by monitoring visits from the LTSP. Because the selected MFIs are at very different stages, it has been a challenge for SCF to pitch its assistance at the right level. Much of its work with the smaller organizations has focused on lending methodologies while its work with Zakoura has dealt with internal operations and systems. In each MFI visited, there were many clear examples of practices the MFIs had adopted that came directly from SCF's work. In some cases (particularly Zakoura and AMSSF) the organizations gave SCF credit for helping them solve specific key problems that were constraining their growth. One issue in Morocco concerns the elements needed to develop a productive relationship between TSP and MFI. In several cases SCF determined that the conditions for effective transfer of knowledge did not exist and recommended withholding funding from those organizations. Given the lack of clarity in grant agreements concerning conditions under which funds could be withheld, these recommendations caused confusion and bitterness. The other major issue in Morocco, raised by the UNDP office, is that of the high cost of services -- a sense that the $500,000 TSP contract has not stretched as far as hoped.

The Ivory Coast, as mentioned above, presents an entirely different picture. The TSP is Socodevi, a credit union promotion organization. Socodevi chose to place an expatriate in-country full time, using some of its own funds to supplement the MicroStart budget. It focuses on the subjects it knows best: governance and financial management of credit unions. The recipient MFIs have apparently been applying these lessons. The central issue in Ivory Coast concerns the extent to which the MFIs (credit unions) should be required to introduce microfinance credit products -- particularly small group loans to women. The parties in the Ivory Coast, including Socodevi and the UNDP office, are operating under the premise that the purpose of MicroStart is to promote small group loans to women. Accordingly, Socodevi and the MFIs are attempting to add these products. Unfortunately, however, Socodevi staff in Ivory Coast have little experience in this area, and as a result, the organizations are moving ahead with what look like faulty methodologies.

Management Information Systems There may be some special considerations regarding MIS systems for very young organizations. In such a program, basic operating systems for managing transactions are often poorly designed -- either too cumbersome, or not providing relevant information, or lacking in appropriate controls. ASA's paper-based system focuses on getting these systems right before moving on to computerization. In other Microstart programs, the search for a workable computer-based MIS has soaked up time and yielded frustration. Perhaps an ASA-type approach makes more sense. SUM may want to place this item on its learning agenda.





ASA, the TSP in the Philippines has developed a very ambitious program, involving five permanent on-site advisors and 17 participating MFIs, far more of both than any other MicroStart program. ASA's focus is on teaching the Philippine MFIs the secrets of its own success -- a branch operating structure and paper-based management information system based on high efficiency, decentralization, and rapid growth. Its strategy is for each organization launch a pilot branch using the ASA model, with a plan for that branch to cover its costs by the end of one year. During the second and third years of the program the emphasis will shift to determining how or whether to adopt ASA's systems into the mainstream operations of each MFI. Although this program is just getting started, the MFIs unanimously express great enthusiasm for it and praise the value and manner of ASA's assistance. Several have already begun to implement suggestions from ASA into their main operations. The pilot branch strategy has high potential because it engages the MFIs very actively and practically. The main limitations are (a) the limitations of the organizations chosen, which will constrain how far they take what they learn, and (b) ASA's lack of focus on institution building at the senior management level.

A common element in all the countries studied is that the MFIs appear to be implementing suggestions from the organizations. There is no question that the TSPs are having an impact. The question is whether the impact is sufficient to move the organizations substantially forward.

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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