Evaluation of the USAID-Kosovo SME and Agriculture - Economic ...

Development Associates, Inc.ready for them. and d) regularly intervene in what is meant to be—to ensure sustainability-- acommercial operation. 264. Were activities coordinated?KBS and KBF were sister projects, even co-locating offices in a Serb minority region. In theearlier days, there were regular meetings between the two projects and mutual examination of thebankability of KBS clients. In later years, KBS was fulfilling an AID-directed target to send 20referrals a month to ABK. In 2003, for example, this required number would have exceeded thetotal list of KBS current clients, most of whom had already been submitted for funding.Fulfilling this target changed the relationship from one in which KBS was invested, and had realinsights into the company’s operations, into one in which there was far less direct contact andability to explain the company’s prospects.5. Cost effective implementation?The contract contained three CLINs as follows with the expenditure figures for August2003:CLIN 1: Technical Assistance: $9,969,799.07CLIN 2: Loan Funds: $5,000,000.00CLIN 3: Bank Startup Costs $4,098,690.00Total: $19,098,498.07Certain contract costs were paid with funds from the proceeds of the bank sale, a total of$1,551,096.02, which appears to be the approximate difference between the Obligated andExpended project funds. Raiffeisen paid $8,500,000 for the bank and its portfolio, includingloan capital, costed at $19,000,000 (the above expenditure figure). Since it is not possible tovalue the portfolio that was sold to Raiffeisen Bank, a good approximation is to ask whether, for$10,500,000, Raiffeisen, or any bank, would have been willing to set up operations, train staff,obtain agreements and begin lending. And if they could have done so, would the SMEcommunity be as well served as they have been by KBFF and ABK? The evaluation teamcannot answer those questions but it important for USAID to consider them before undertakinganother similar project.IMPACT1. Assessing performance against targetsModification #10, signed in December 2002, contains benchmarks against fee award. One suchaward fee benchmark was, “Percentage of Total Share Capital in Banking Institution Owned byReputable Foreign Financial Institution”. Deloitte met this goal at 100% foreign equity. The26 This directed method of intervention by USAID was common to all projects in this SO category. “Partners” wererequired to concentrate excessively, they argue, on achieving specific numerical targets in their contracts and grants,rather than focusing on the overall objectives of the projects and allowing some flexibility and adjustments in targets to fit thechanging realities of implementation.Evaluation of the USAID/Kosovo SME 63 May 2004and Agriculture/Agribusiness ProgramsVolume I