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

Development Associates, Inc.This can be accomplished by taking advantage of:The extensive outreach FINCA has currently created: 66 well trained local staff workingfrom 15 points of sales and service (5 full offices and 10 meeting points) covering 21 of30 municipalities;FINCA/Ks experience lending in Kosovo including agriculture, micro and smallbusiness;FINCA Internationals agriculture base and appropriate lending technology;Experience lending to disadvantaged groups in Kosovo including women and minoritiesas well as Serbian enclaves; andFINCA/Ks lessons learned to date and its new MIS portfolio management software towholly address USAID and Kosovo’s current development initiatives and really have animpact on the rural areas of Kosovo.Being able to accept savings is integral in providing services to the rural areas of Kosovo. As asolution to this issue USAID can either grant FINCA funds to bring it up to the minimumrequirements (1. 4 M Euro) or as a more economical solution convince UNMIK and specificallythe BPK to reduce the requirements for MFIs in order to promote rural development in Kosovo.The overall idea being that when money is invested in FINCA, either in grants or savings, thatmoney is lent out to the villages’ directly promoting grassroots development.USAID could target grant funds to develop and capitalize specific lending products to reach thetarget areas in Kosovo i.e. competitiveness cluster priorities, or agribusiness production capacity.A very important component of the cluster development is the ability for the participants toreceive financing for working capital and asset investments to improve efficiency and quality ofoperations. With the readily available expertise of the FINCA hub (drawing lessons learned, bestpractices, expertise and experience from 9 FINCA affiliates in the NIS/eastern Europe and 22affiliates world wide) it should not be difficult for FINCA to create loan products specificallytargeted at priority areas of the Kosovo economy and expand on its success with women andminority groups. The FINCA hub structure can be better utilized leveraging their knowledgebase to the benefit of the target clients and continuing efforts to control costs.With USAIDs participation in a directed lending program, FINCA/K can be refocused to returnto providing purer business development financial services and minimize its use of preciousresources on non-development lending activities (i.e. Consumer loans and Housing Improvementloans). A priority can also be to use the existing institutional capacity to expand the currentoutreach to cover the remaining municipalities of Kosovo. FINCA could be one valuablecontributor to the rural liquidity needed for a newly developed agribusiness cluster program.Evaluation of the USAID/Kosovo SME 78 May 2004and Agriculture/Agribusiness ProgramsVolume I