Final Evaluation of the Microenterprise Development Activity

This paper assesses the progress made by FINCA Incorporation to achieve increase in income and productive employment opportunities for microenterprises. This is to enable them to better contribute to and share in the benefits of economic growth in El Salvador. The project was funded by USAID.

The project implementation involved the creation of village banks that are peer groups of 20-40 members who receive three critical services by using a community-based system. This system is based upon mutual support and seeks to encourage self-worth. The important services that this provides are:

• Working capital loans to finance self-employment;
• Mechanism to promote savings;
• Other need based financial services.

Using information from a survey of 225 clients of the village bank and 80 clients of the microenterprise program, the paper undertakes a detailed study of the various activities taken up during the course of the project:

• Analyzes village banking program;
• Evaluates microenterprise program;
• Examines current activities;
• Analyzes impacts on beneficiaries;
• Discusses integration of women.

In conclusion, the paper presents detailed recommendations for the following:

• Improving the efficiency of the village-banking program;
• Improving the microenterprise-lending program;
• Ensuring financial sustainability of village banks;
• Managing efficiently the village banks.