Technical Guide for the Analysis of Microenterprise Finance Institutions
By SDS/MSM (11/99, SDS/MIC, En, Es) See also Microenterprise
The Inter-American Development Bank has been carrying out an extensive program of support to micro and small enterprises in Latin America for many years. First, under the Small Projects Program, the Bank has funded financial and technical assistance to non-governmental organizations (NGOs) servicing microenterprises since 1978. Subsequently, beginning in 1990 with the Seventh Replenishment, the Bank intensified its concern and efforts to foster the development of the micro and small enterprise sector creating the Microenterprise Division, substantially expanding the Small Projects Program, and introducing other operations specially designed to extend credit and technical cooperation to the sector. Bank support to the microenterprise sector under the Seventh Replenishment reached a total of 399 operations and US$321.6 million. This represents, in the four years of the cycle (1990-1993), an amount of resources three times as large as the cumulative total for the period prior to this Replenishment (1978-1989).
The qualitative changes in micro and small enterprise support brought about by the Seventh Replenishment are as striking as the quantifiable accomplishments. The operations of the last four years have emphasized institutional strengthening of the intermediary organizations, their administrative and financial self-sufficiency, accountability and responsibility in the management of loan portfolios, and the elimination of distortions in resource transfers to the microentrepreneurs. New credit management techniques have been incorporated in the design of programs in order to reduce the costs of servicing microenterprises, to induce more financial institutions to provide services to this clientele, and thereby expand microenterprise access to formal finance.
These changes in Bank operations characterize the relationship that has developed during this period between microenterprise finance organizations and the institutions that support them. The traditional donor-recipient relationship has given way to a partnership built on the common interest in creating sustainable microenterprise finance institutions. In this emerging context, the Technical Guide was developed in the interest of providing rigorous analytical methods and standards for the design, management, monitoring and evaluation of finance institutions specialized in servicing micro and small enterprises. The Technical Guide is a management and evaluation tool that establishes a technical basis for the analysis of microenterprise finance institutions as well as the design of the externally-funded programs through which they are supported.
Last updated: 05/08/07
