Paper
European Initiative for Performance Evaluation of African MFIs: Conclusions of a Pilot Programme
A look at the importance of performance evaluation for microfinance institutions
This document presents the conclusions and recommendations, which were the result of a workshop that analyzed the lessons learned from a pilot program, called The European Initiative for Performance Evaluation of African Microfinance Institutions (MFIs).
The pilot program aimed to:
- Regularly evaluate the performance of nine African MFIs;
- Reinforce their performance;
- Increase the efficiency of their services;
- Strengthen their credit worthiness among donors and private investors;
- Test the willingness of MFIs to take part in such a process on a regular basis.
The pilot program had the following features:
- Operating principles:
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- MFI contribution at evaluating costs;
- Payment of co-financing to the MFI.
- Selection of a set of criteria to test the MFIs.
- Participation of nine African MFIs and four professional evaluation agencies.
The paper lists the following lessons learned from the pilot program:
- Performance evaluation is a complex process;
- MFIs are confused about the concept and its definition;
- Regular performance evaluation is important for an MFI and the entire sector;
- There is a need for:
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- Precision on key elements like terms and ratios,
- A professional, open, competitive and transparent market.
The paper concludes the following recommendations:
- Continue the evaluation process on a regular basis;
- Define the final objectives, terms and ratios;
- Continue the informal dialog between evaluation agencies and African MFIs;
- Maintain the principle of progressive participation.
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