Country-Level Effectiveness and Accountability Review (CLEAR): Nicaragua

The CLEARs are Country reviews that build on CGAP's aid effectiveness work to examine funders' role in developing local financial systems. Following a gap analysis of the three levels of the financial system, it provides specific recommendation to funders on how they can best contribute, individually and as a community. CGAP provides inputs through in-country briefings, an overall report and individual letters to heads of development agencies. On demand CGAP continues to support local stakeholders in their efforts to build inclusive financial systems.

Donors have contributed to the emergence of microfinance in Nicaragua, but their uncoordinated funding fragmented the financial system on all three levels (micro, meso, macro). The review found several donor initiatives that funded inefficient retail institutions, and a myriad of private and public apex facilities that create disincentives for savings mobilization. Donors have involved too many ministries in the provision of financial services. The CLEAR Nicaragua report is based on interviews with 140 people representing a broad cross-section of stakeholders, from government officials to microfinance institutions managers and staff to representatives of the full spectrum of donor agencies and donor microfinance projects.

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