Ethiopia SOCODEP CE - main report - IFAD

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Aspect Table 3. SOCODEP Numerical Targets and Achievements Appraisal Target Revised Target (at MTR) 12 Achieved Percentage of MTR Percentage of Appraisal Cooperatives Coops restructured (No.) 200 150 267 178 134 Credit Individual loans for inputs 60000 6,219 10 WIGA loans 10000 7,600 76 Ox loans 50000 14,579 29 Flour mills & maize shellers 170 23 14 Coops with loans for Marketing 75 98 131 Coops with loans for Stores 75 0 Coops with loans for Shops 200 66 33 Credit disbursed (US$m) 7.68 Reduce by US$1.4m 2.96 43 39 Small-scale Enterprise Development Vocational Training (trainees) 215 316 147 Jobs created 2,100 Negligible Loans for SSEs (EB) 2,200,000 55,456 3 Veterinary Revolving Drugs Fund Veterinary drugs (US$m) 1.89 Increase by US$0.58m 0.29 12 15 Roads Rehab to RR 30 standard (km) 250 Reduced to 125km 122 98 49 Heavy maintenance (km) 450 0 0 Health and Sanitation Health facilities upgraded 8 N/A 8 100 Human RDF locations 8 N/A 8 100 Household latrines 1,000 N/A 2,320 232 Household refuse pits 1,000 N/A 269 27 Water Supply Waterpoints - new and rehab 164 N/A 171 104 * Source: Appraisal Report, MTR, internal PCR, external PCR C. Restructuring of Service Cooperatives 37. Restructuring of Service Cooperatives (now known as Multi-Purpose Farmers’ Cooperatives). At Appraisal it was recognised that the Cooperatives Promotion Division of SRAB had experience of supporting cooperatives under a socialist economy, but that there was no experience of supporting cooperatives established “…in accordance with international principles of cooperation”. It was further recognised that “…even before disturbances at the time of the change in Government, which resulted in looting and destruction of some cooperatives’ property, SCs were not operating efficiently”. SOCODEP therefore aimed to turn SCs into financially viable autonomous organisations which would provide sustainable services in the future. The Cooperative Development component of the Project had three sub-components, namely training, small-scale enterprise promotion, and institutional support. SOCODEP would train and equip Government Cooperatives staff, appoint professional managers to SCs, train Cooperatives officers and members. 38. The Project more than met its numerical targets in terms of re-organising SCs under the new legislation. The Appraisal target of 200 cooperatives restructured 19 was exceeded by about 30 per cent. A great deal of training of SC staff, executive committees and members was also carried out 20 . It is estimated 21 that almost 57,000 individuals in Government or cooperatives received some form of 19 This target was reduced by the MTR from 200 to 150. 20 Project Completion Report, June 2006, Annex II, Table 2 reproduced as Appendix 2 of this Report. 21 External PCR, June 2006, Annex II, Table 2.
training, varying in duration from one day to two years, and much of the shorter-term training was targeted at cooperative officers and members. 39. In terms of achievement, it is clear that although the project activities resulted in significant numerical outputs, the quality of those outputs (the extent of cooperative re-orientation and the enhancement of business competence) could have been much higher. Comparison of SOCODEP activities with those of the USAID-supported VOCA/ACE project suggest that an intensive programme of well-designed and structured training by very experienced individuals, with sound monitoring and follow-up, was needed to achieve the project goals. D. Provision of Loans to Cooperatives and their Members 40. Credit. Loans which were initially channelled through CBE (until the withdrawal of this Bank in 2002), and later through Omo Microfinance Institution (OMFI), were used for two main purposes: (a) financing the activities of the Cooperatives themselves (consumer shops, flour mills, purchase and sale of agricultural produce), and (b) individual loans to cooperative members (for purchase of work oxen, purchase of sheep and goats for fattening or rearing, and investment in small-scale enterprises). Because of the weak business skills of many of the cooperatives, the first of these have been largely unsuccessful (except in the coffee producing areas, where marketing of coffee has been lucrative), while many of the individual loans supplied to cooperative members have made a real difference to the lives of the recipients (see sections II.C and III). 41. Loan disbursement and recovery for cooperative activities (flour mills, consumer shops and produce marketing) have generally fallen short of target. Initially, the rehabilitation and installation of 160 flour mills was planned, but only 13 new flour mills were installed and 10 were rehabilitated at a total cost of EB 1.1m. The flour mills performed poorly and the recovery rate of the loans was also very poor at 47 per cent. The operations of most flour mills were discontinued because of poor maintenance and stiff competition from private flour mill operators. A total of 66 loans were provided to SCs for operating consumer shops. The total disbursement was EB 2.1m, i.e. 53 per cent of the EB 4.0m initially budgeted. Although the repayment of the loans was reported to be 93 per cent, at present most consumer shops are not operational due to lack of maintenance and competition from the private sector. The fact that cooperatives cannot generally compete with the private sector in flour mill operation and consumer shops is evidence of their lack of business-orientation. In respect to produce marketing service, 98 SCs received a total loan of EB 2.45m, 130 per cent of the Appraisal target, and the loan repayment was 77 per cent. 42. Loan disbursement for individual activities of SC members generally did better than those for cooperative activities, although repayment rates were often low. In particular 7,600 loans to women for fattening and multiplication of small ruminants, petty trading and other activities were made, and in their case, repayment rates were high, especially after Omo Microfinance took over from CBE. Box 1 sets out two case studies of women beneficiaries, both of whom benefited from loans supplied through small group membership along the pattern established by OMFI. These illustrate in a positive way what is possible. 43. An observation made during the evaluation was that the loan repayment culture differs significantly between the west and east of the project area. In the west, individuals take great pride in repaying loans, and they take great care not to risk going to their graves in debt. In the east and southeast of the project area however this culture does not appear to be so strong, and defaulting is more prevalent 22 . 22 The reasons for this difference in repayment culture are not clear, but the evaluation team was not the first to observe it. 13
Page 1: PROJECT EVALUATION Federal Democrat
Page 4 and 5: Overall Responsibility Lead Evaluat
Page 6 and 7: TABLES 1. Statistical Data 3 2. SOC
Page 8: Ethiopian Birr to one USD 9.50 9.00
Page 12 and 13: into farmer-owned viable business e
Page 14 and 15: large overdrafts on the vehicles an
Page 16 and 17: Institutional Capacity Building 23.
Page 18 and 19: the Derg into farmer-owned viable b
Page 20 and 21: them. The evaluation team is in fav
Page 22 and 23: 5. Quality of project delivery. SOC
Page 24 and 25: approaches be explored, either thro
Page 26 and 27: II. COUNTRY BACKGROUND 2. Ethiopia
Page 28 and 29: Table 2. SOCODEP Objectives Princip
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Page 32 and 33: total of ten of the original 33 pro
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Page 40 and 41: allowances for veterinary assistanc
Page 42 and 43: constructed two motorized water sch
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Page 69 and 70: 49 Reconstructed Logframe for SOCOD
Page 71 and 72: 51 A1.2.6 Development of audit proc
Page 73 and 74: 53 A1.6.1 Organize initial orientat
Page 75 and 76: 55 A2.1.7 Vocational training to en
Page 77 and 78: 57 SO4 Provide credit to meet finan
Page 79 and 80: 59 A6.3.2 Supervision of rehabilita
Page 81: 61 A7.3.1 Provide Training - Number
Page 84 and 85: 64 IFAD implementation workshops PC
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Evaluation Mission Itinerary, 18 th
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Eazo Multi-purpose service cooperat
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Bibliography 73 Appendix VIII Assoc
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Via Paolo di Dono 44 - 00142 Rome,
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