Abstract
Final evaluation of a matching grant (10/98-9/01) to Mennonite Economic Development Associates (MEDA) to build capacity in MEDA headquarters and in two of its microfinance programs in Mozambique and Haiti. Objectives have largely been achieved. Capacity- building plans at MEDA headquarters included components to increase MEDA's ability to provide financial resources to its local partners, refine methodologies and transfer proven techniques to its programs through TA, and develop and deliver training modules. These plans were achieved almost completely, a remarkable feat in a rapidly changing environment. The Sarona Global Investment Fund has tested and revised its structure to deal more effectively with investors, but does not expect to be sustainable until 2002. Through its TA and training, MEDA has developed and delivered the planned tools, although the community banking methodology remains in Creole. In terms of its own sustainability, MEDA has achieved a 114% increase in its fundraising, but has not reduced its dependence on donor funding to the extent desired. However, it has achieved a financial surplus each year. At an industry level, MEDA continues to be an active and reputable participant, and its consulting arm makes its newly developed tools available through training opportunities. MEDA's Mozambique partner is MEDA Mozambique, a registered foreign NGO. This program, which uses solidarity group and individual lending methodologies, received a loan for its microfinance program from the Sarona Global Investment Fund. Initial, unanticipated staffing problems included minor frauds and lack of capacity. However, the program is now poised to scale up, with a solid staff, improved methods and procedures, and a detailed business plan. It is currently hampered by rapid devaluation of the local currency and erosion of its capital fund. Without workable short- and long-term action plans, the program will eventually be unable to pay the annual interest on its capital fund loan to Sarona in hard currency. MEDA has proposed continued support for MEDA Mozambique in its follow-up matching grant proposal. MEDA's Haiti partner is MEDA Haiti, a registered Haitian NGO. In the matching grant area, MEDA Haiti successfully operates a microfinance program using community-banking methodology adapted to the rural Haitian context. The operation financed by the grant is one of three community banking programs that MEDA Haiti manages, and has been combined with literacy training. Short-term plans involve a steep growth curve, developing community bank numbers, and consolidating the three community bank programs into a for-profit, sustainable subsidiary. Longer-term plans include merging the subsidiary with other like-minded rural community bank operations. The staff and management now have the capacity to fulfill the long- term objectives. Until the project achieves sustainability or finds other financing, MEDA will continue to finance the community banks' operation in the project area. In addition to the small amount of money obtained through Sarona for loan capital, MEDA Haiti maintains a line of credit and a fund transfer arrangement with Fonkoze, its literacy partner. The unique nature of MEDA's community bank methodology has caused problems in finding a management information system (MIS) program adequate to handle periodic balloon payments of principal while accepting monthly interest payments. This problem will be remedied within the next 12 months. (Author abstract, modified)