Microfinance as an Instrument of the Austrian Development Co-operation

This paper examines microfinance interventions of the Austrian Development Cooperation (ADC) in Uganda, Zimbabwe, Mozambique and Namibia.

The document presents findings of an evaluation that examined ADC's support to microfinance in various areas. It discusses:

• Austrian microfinance policies and strategies;
• Performance of various MFIs that the ADC supports;
• Lessons from Austrian interventions about key elements of successful MFIs;
• Role of contextual factors in microfinance;
• Technical assistance and capacity building;
• Sustainability and institutionalization;
• Role of donors and donor co-ordination;
• Policy dialogue;
• Impact and gender;
• Institutional framework for microfinance;
• ADC's structural and communication options;
• Minimum reporting information.

The main finding of the evaluation study is that MFIs with strong organizational base of support and know-how perform better. MFIs that have not adopted internationally established good practices have poor performance indicators. Structural reasons for non-adoption of good practices include inadequate technical assistance and failure to detect capacity deficiencies.