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

Development Associates, Inc.IMPLEMENTATIONWere activities properly targeted to identify and support products that can compete againstimports and/or compete against imports and/or hold potential for exports:FINCA/K has targeted its activities to accomplish the above goals and objectives laid out in theoriginal USAID Cooperative Agreement. In the beginning of the project a great deal ofresources were used to target producers. Although this was not a stated goal in the originalCooperative Agreement with USAID/DC it supported USAID/K and pursued with vigortargeting the development of Kosovo’s production base. This goal was eventually supplanted byan objective of diversification and rapid growth of the portfolio in order to meet thesustainability requirements outlined above. However, FINCA/K still maintains a sizeableportion of producers in its portfolio (approximately 30 %) accounting for a majority of the smallenterprise loans. The Evaluation Team visited several FINCA producers who are struggling dueto cheap imports. They are overcoming this obstacle by specializing in a niche market andsurviving nonetheless (see Exhibit 15, success stories and client visits).STRENGTHS OF FINCA KOSOVO1. Self-SustainabilityFINCA/K is only one of only three MFIs that have accomplished self-sustainability in the short(3-year) period while concurrently supporting rapid geographic expansion and customeroutreach.2. Institutional Capacity/OutreachOnly the Director is expatriate, all other staffs are highly trained and professional local hiresincluding 66 loan officers and support staff providing financial services to Micro and Smallbusiness. FINCA/K has developed extensive outreach with a lending network of 15 point ofsales and service (5 full offices and 10 meeting points) covering 21 of 30 municipalities inKosovo. With its trained local workforce, incorporating members of the major minority groupswithin Kosovo, FINCA/K has the institutional capacity to expand the current outreach to coverthe remaining municipalities.3. Access to International Sources of Loan CapitalFINCA/K participated in a 2 year due diligence (3 missions) with KfW. Of all the MFIs inKosovo KfW chose FINCA for its credit line. So far, FINCA/K is the only MFI to obtain a KfWcredit line. This is a short-medium term, 5 year, Euro resource. The drawbacks of thisinternational source of funds is that they are more expensive than the local savings market andthere is a certain dependence on KfW development goals for Kosovo, i.e. some funds areearmarked for certain sectors (eg. housing credit line which is not for business development).Additionally, FINCA/K has access to FINCA Internationals Village Banking Capital Fund forLoan resources.Evaluation of the USAID/Kosovo SME 71 May 2004and Agriculture/Agribusiness ProgramsVolume I