EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) EVALUATION OF THE USAID/HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) PROGRAM August 1, 2012 This publication was produced for review by the United States Agency for International Development. It was prepared by Mendez England and Associates    EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) Summative Evaluation of the Haiti Integrated Financing for Value Chains and Enterprises (HIFIVE) Program Final Report Prepared under RFTOP No. 521-12-00005 Under the Evaluation Services IQC Submitted to: USAID/Haiti August 1, 2012 Submitted by: Tom Easterling (Team Leader) Wasmith François (Evaluation Specialist) Contractor: Mendez England & Associates 4300 Montgomery Avenue, Suite 103 Bethesda, MD 20814 Tel: 301- 652 -4334 www.mendezengland.com DISCLAIMER The authors’ views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) CONTENTS EXECUTIVE SUMMARY ......................................................................................................... i Findings: ............................................................................................................................ i Conclusions: ..................................................................................................................... ii Recommendations: .......................................................................................................... iii 1.0 INTRODUCTION .......................................................................................................... 1 2.0 BACKGROUND ............................................................................................................. 2 2.1 Haiti Situation Overview ...................................................................................... 2 2.2 Overview of Micro- and Agricultural Finance in Haiti ........................................ 3 2.3 Project Description ............................................................................................... 5 2.5 HIFIVE Project Extension .................................................................................... 8 2.6 Evaluation Objectives ........................................................................................... 8 2.7 Evaluation Methodology ...................................................................................... 9 2.8 Data Collection and Analysis ............................................................................... 9 2.9 Limitations to Evaluation Methodology ............................................................. 10 3.0 PROJECT RESULTS .................................................................................................. 11 3.1 Increased Availability of Value Chain Finance .................................................. 11 3.1.1 Gaps in HIFIVE-Supported Credit for Value Chains ........................... 13 3.2 Improved Access to Financial Products and Services in Rural Areas ................ 14 3.2.1 HIFIVE Activities to Increase Rural and Agricultural Lending ........... 15 3.2.2 Gaps in Agricultural Credit ................................................................... 16 3.2.3 PMP Indicators and Targets .................................................................. 16 3.3 Increase Effective Use of Remittances ............................................................... 17 3.4 Encourage the Use of ICT to Increase the Level of Financial Inclusion ............ 19 3.4.1 Support to Microfinance Institutions .................................................... 19 3.4.2 Haiti Mobile Money Initiative .............................................................. 21 3.5 Develop Effective Linkages with Other USAID Projects .................................. 23 3.5.1 Anchor Firm Development ................................................................... 24 3.5.2 PMP Results .......................................................................................... 24 4.0 ANALYSIS .................................................................................................................... 25 4.1 Project Effectiveness .......................................................................................... 25 EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 4.1.1 Credit for Value Chains and MSMEs in Rural and Agricultural Areas ..................................................................................................... 25 4.1.2 Effectiveness of ICT Interventions and the Launch of the HMMI ....... 26 4.1.3 Linkage with Other USAID-funded Initiatives ..................................... 26 4.2 Project Sustainability .......................................................................................... 26 4.3 Indicators of Program Impact ............................................................................. 27 4.3.1 Achievement of PMP Targets ............................................................... 27 4.3.2 Impact Beyond the Numbers ................................................................. 28 4.4 Project Relevance ............................................................................................... 29 5.0 GENDER ISSUES ........................................................................................................ 30 5.1 HIFIVE Gender Indicators and Targets .............................................................. 32 6.0 FINDINGS ..................................................................................................................... 32 6.1 Findings from the Evaluation Team Field Survey .............................................. 32 6.2 Summary of Findings ......................................................................................... 35 7.0 SUMMARY OF CONCLUSIONS .............................................................................. 37 8.0 RECOMMENDATIONS ............................................................................................. 38 ANNEXES ANNEX 1: Information Sources ANNEX 2: Financial Institutions Supported by HIFIVE for Value Chain and Agricultural Finance ANNEX 3: Technoserve Client List as of March 31, 2012 ANNEX 4: Evaluation Work Calendar ANNEX 5: HIFIVE Project Organization ANNEX 6: HIFIVE Project Performance Monitoring Plan ANNEX 7: HIFIVE Project Grants Summary ANNEX 8: HIFIVE Project Cost Summary ANNEX 9: Method of Data Collection and Analysis ANNEX 10: People Met by the Evaluation Team ANNEX 11: Summaries of Interviews with Financial Institutions and Focus Groups ANNEX 12: Scope of Work ANNEX 13: HIFIVE Evaluation Methodology Plan ANNEX 14: HIFIVE Evaluation Team Expertise EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) TABLES TABLE 1: HIFIVE Main Objectives TABLE 2: Comparison of HIFIVE Project Objectives for Three-Year Base Period with Those of the Two-Year Extension Period TABLE 3: Achievement of HIFIVE Project Targets for Increased Availability of Value Chain Finance as of March 31, 2012 TABLE 4: Effect of HIFIVE Interventions on Le Levier Agricultural Loan Portfolio TABLE 5: Achievement of HIFIVE Project Targets for Improved Access to Financial Products and Services in Rural Areas as of March 31, 2012 TABLE 6: Estimated Values for Agricultural Value Chain Lending TABLE 7: Achievement of HIFIVE Project Targets for Increased Use of Remittances As of March 31, 2012 TABLE 8: Grants Disbursement Report for ICT Push Fund as of June 1, 20112 TABLE 9: Achievement of HIFIVE Targets for Increased Use of ICT Solutions for Financial Inclusion as of March 31, 2012 TABLE 10: Achievement of HIFIVE Project Targets for Effective Linkages with Other USAID Projects as of March 31, 2012 TABLE 11: Achievement of Primary PMP Targets as of March 31, 2012 TABLE 12: Distribution of Microfinance Credit Portfolios by Gender TABLE 13: Achievement of PMP Targets for Gender as of March 31, 2012 TABLE 14: Evaluation Team Field Survey EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) LIST OF ACRONYMS ACME Association Pour la Coopération avec la Micro Enterprise AED Academy for Education Development AIC Alternative Insurance Company ANIMH National Association of Haitian Microfinance Institutions ASAVIS Association des Aviculteurs du Sud BDS Business Development Services BRH Banque de la République d'Haïti CAPOSOV Caisse Populaire Solidarité des Verrettes CEC Caisse d’Epargne et du Crédit CECACHE Caisse d’Epargne et du Crédit en Appui au Changement Economique CIDA Canadian International Development Agency CPF Caisse Populaire de la Fraternité CODECREM Coopérative d’Epargne et de Crédit de Mirebalais DCA Development Credit Authority DCM Haiti Diaspora Marketplace Project DEED Développement Economique pour un Environnement Durable FBOs Farmer-Based Organizations FESO Foundation for Female Solidarity FIELD-Support Financial Integration, Economic Leveraging, Broad-Based Dissemination and Support FINNET Financial Services Network for Entrepreneurial Empowerment FHI360 Family Health International 360 FONKOZE Fondasyon Kole Zepòl FTF Feed the Future HCF HIFIVE Catalyst Fund HIFIVE Haiti Integrated Financing for Value Chains and Enterprises HTG Haitian Gourd Currency HMMI Haiti Mobile Money Initiative ICT Information and Communications Technology IPCCF Inter Project Coordinating Committee on Finance KEKAM Kes Epay ak Kredi pou Avansman Mamlad KNFP Konsey Nasyonal Finansman Popile KOFIP Collectif Financement Populaire LOP Life of Project LPG Loan Portfolio Guarantee EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) LSPs Local Service Providers LWA Leader with Associates MAMEV Caisse PopulaireMen Ale Men Vini MARNDR Ministère de l’Agriculture des Ressources Naturelles et du Développement Rural MarChE Market Chain Enhancement, a USAID Project MCC Micro Credit Capital MCN Micro Crédit National MFIs Micro-finance Institutions MOUs Memoranda of Understanding MSMEs Micro, Small and Medium Enterprises NAIP National Agricultural Investment Plan SMEs Small and Medium Enterprises PAP Port-au-Prince PDAs Personal Digital Assistants PADF Pan American Development Foundation PMPs Performance Monitoring Plans PRET Program for the Recovery of the Economy in Transition POS Points of Service RFP Request for Proposal SCOCENTER Societé Coopérative du Centre SFF Sèvis Finansye Fonkoze S&L Savings and Loan SOKOLAVIM Sosyete pou Koperativ Lavi Miyo SOGESOL Société Générale de Solidarité TNS TechnoServe USAID United States Agency for International Development WINNER Watershed Initiative for National Natural Environmental Resources WOCCU World Council of Credit Unions EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) i EXECUTIVE SUMMARY This is a report on the Summative Evaluation of the Haiti Integrated Financing for Value Chains and Enterprises (HIFIVE) program funded by USAID/Haiti. HIFIVE is a financial sector service program designed to expand financial inclusion by increasing the availability of financial products and services to individual entrepreneurs and to micro, small, and medium enterprises (MSMEs) in targeted value chains in semi-urban and rural areas of Haiti. USAID/Haiti awarded HIFIVE in June 2009 as a 36 month (base period) Cooperative Agreement (No. 521-A-00-09-00025-00) with two one-year extension options. In May 2102, USAID extended the project life for an additional two years, until May 31, 2014. HIFIVE is managed by FHI 360, and administered in the field by the lead implementing partner, the World Council of Credit Unions (WOCCU). A second implementing partner, TechnoServe (TNS), provides business development services enterprises within the selected value chains. The summative evaluation of HIFIVE was conducted during the period June – July, 2012. The purpose of the evaluation was to provide information on: 1. The performance of the project in meeting its primary objectives; and 2. Its effectiveness in increasing the availability of financial products and services to USAID project beneficiaries and third parties, particularly in rural areas, and those engaged in USAID-supported value chains. It is anticipated that the evaluation findings will also be used to inform USAID programming during the HIFIVE extension period. The main objective of the evaluation was to review the effectiveness of the HIFIVE program as well as the sustainability and viability of its accomplishments to date. Of particular interest was to analyze the permanence of the changes that have occurred in the availability of finance for MSMEs, and in the financial services that are provided to them. In addition, the evaluation had to respond to three specific questions related to: 1. The effectiveness of the project’s work to strengthen value chains and provide financial services to them; 2. The extent to which the project provided access to credit to the agricultural sector; and 3. The extent to which the interventions of the project have contributed to the viability of mobile banking in Haiti. Findings: 1. HIFIVE’s work to provide value chain finance is highly effective. 2. HIFIVE-supported credit initiatives carried out by its financial partner institutions are sustainable. 3. HIFIVE’s work to provide financial products for value chains is highly relevant. 4. HIFIVE’s work to provide value chain financing in rural and agricultural areas has great impact on the livelihood of micro- and small-scale borrowers. 5. Some credit products provided by the HIFIVE partner institutions are misaligned with agricultural production cycles and, consequently, with the credit needs of the micro- and small-scale clients of these institutions. 6. Gaps in HIFIVE-supported credit include: a) insufficient production technical assistance is being provided to small producers; b) the perception by financial institutions on the need for crop insurance to mitigate the risks of agro-lending; and c) the agro-technicians who work for some of the financial institutions need training. For the producer associations, one of the major constraints is the limited availability of working capital financing. 7. The agro-lending portfolio of financial institutions is generally quite limited. EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) ii 8. The rotating funds created by the financial institutions from HIFIVE grants are an effective stimulus for agro-lending. 9. Support programs for agriculture value chains also stimulate agro-lending, as do directed credit programs such as HIFIVE grants for agricultural lending and USAID/ Development Credit Authority (DCA) Loan Portfolio Guarantee programs. 10. HIFIVE has made impressive gains in agro-lending during the three-year project base period. 11. The “Anchor Firm” value chain structure provides a good model for agricultural development in Haiti. 12. The main gap in the work of HIFIVE to support agricultural lending is the perception by commercial banks, microfinance institutions (MFIs) and Caisses Populaires (CECs), that agro-lending is extremely risky and should be avoided. 13. The assumptions upon which HIFIVE’s activities to capture remittances for investments in Haiti are based, proved invalid. This activity’s performance fell far short of its objectives. 14. The launch of the Haiti Mobile Money Initiative was quite successful. However, its residual impact is limited. 15. The mobile money facility is not presently sustainable. 16. HIFIVE’s strategy to support mobile money over the two-year project expansion period is well founded. 17. Females account for a larger share of savings and of the number of clients of US Government (USG) - supported financial institutions than do males. 18. The HIFIVE project has had a substantial impact on females that is not reflected in the Performance Management Plan (PMP) data. 19. The policy of some financial institutions to provide loans to cooperative organizations (for re￾distribution to individual members), instead of providing loans directly to the individual members themselves, is often detrimental to individual borrowers within the cooperatives. The reason is because individual borrowers cannot renew their loans until all the cooperative members have repaid their loans to the financial institution, which penalizes those individuals who repay their loans early. Conclusions: 1. Directed credit programs are needed to increase agro-lending by banks, MFIs, and CECs. 2. Anchor firms linked to small-scale producers that serve as contract growers for the anchor firm, supported by HIFIVE grants that facilitate production credit for the small producers, is an excellent model for agricultural value chain development. 3. HIFIVE credit facilitation and business development services (BDS) should incorporate additional support for production technical assistance to the loan recipients. 4. The greatest impact that HIFIVE can have on the sustainability of the mobile money initiative in Haiti would be to help create a clear, well-defined, transparent, and supportive legal and regulatory framework. 5. A second important impact by HIFIVE would result from project support for mobile money use to value chain operators, as well as to HIFIVE-supported financial institutions and their members and clients. 6. The HIFIVE staff has worked diligently for the past three years to develop a strong network of financial institutions that are reliable partners. This network is a valuable resource for project implementation during the extension period. EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) iii Recommendations: 1. It is recommended that USAID facilitate an orderly transition of HIFIVE activities from the three-year base period to the extension period. Those projects that were substantially underway at the end of the base period should be brought to an orderly completion during the extension period. 2. USAID should analyze the possibility of expanding its DCA loan portfolio guarantee program to support agricultural credit with the MFIs that operate in its targeted development corridors. 3. Since not all financial institutions are highly suited for agro-lending, it is recommended that HIFIVE select its strongest MFI partners to participate in lending programs for agricultural value chains during the project extension period. 4. HIFIVE should work through TNS to develop a pilot program for technical support for small-scale agricultural producers that can be expanded if proven successful. 5. In order to have the greatest impact on agricultural value chain development, it is recommended that HIFIVE create partnerships with other development projects and initiatives to jointly provide the range of support services needed to fully develop agricultural value chains within the USG-supported corridors. 6. Jointly with its partner financial institutions, HIFIVE must review the possibility of providing export financing of potential high-volume value chain products to producer associations. 7. HIFIVE must jointly review the agro-lending policies of its partner financial institutions, to ensure that the terms of their agricultural loans fully support and encourage agricultural production for the targeted value chain crops by small farmers. 8. HIFIVE should support mobile money during the project extension period by working to create a favorable legal and regulatory framework, and to introduce the use of mobile money to its agricultural value chain beneficiaries as well as to the members and clients of the financial institutions that are supported by HIFIVE. 9. HIFIVE must review its PMP indicators and targets for the project extension period and make the necessary changes to track the amount of agricultural value chain finance facilitated by the project, and the number of mobile money transactions that are completed. The evaluation team extends its heart-felt gratitude to the staff at USAID/Haiti and the HIFIVE team at WOCCU and TNS for their cooperation and assistance. We would also like to thank all individuals who shared their time and insights into economic development in Haiti. EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 1 1.0 INTRODUCTION This is a report on the summative evaluation of the HIFIVE program that is now underway with funding from USAID/Haiti. HIFIVE is a financial sector service project designed to expand financial inclusion by increasing the availability of financial products and services to individual entrepreneurs and to MSMEs in targeted value chains in semi-urban and rural areas of Haiti (see map). USAID/Haiti awarded the project in June 2009 as a 36 month (base period) Cooperative Agreement (No. 521-A￾00-09-00025-00) with two one-year extension options. In May, 2102, USAID extended the project life for an additional two years, until May 31, 2014. The USAID contracting mechanism under which HIFIVE was awarded is a FIELD support Leader with Associates (LWA) Cooperative Agreement.1 USAID initially awarded the contract to Academy for Education Development (AED) and a consortium of partners that are now being led by the prime recipient, FHI 360. HIFIVE is managed by FHI 360, and administered in the field by the lead implementing partner, WOCCU, which provides direct in-country management and oversight of the HIFIVE program. WOCCU manages the several grant funds available under the project and leads the effort to build the capacity of the commercial banks, microfinance institutions, and financial cooperatives to develop value chain financial products and services. A second implementing partner, TNS, works to provide BDS to high potential MSMEs within the selected value chains. TNS seeks to improve these firms’ access to finance by making them more “bankable” through enhancements to their capacity and performance potential. TNS also works closely with the WOCCU team to provide financing to the project-supported entrepreneurs and MSMEs. TNS is a sub-grantee to WOCCU. The organizational chart for the HIFIVE project staff is shown in Annex V. The authorized level of funding for the five-year HIFIVE program is $37,169,702. The approved budget for the three-year base period was $18,587,272 (per Mod 8). Actual expenditures for the base period were                                                              1 FIELD-Support (the Financial Integration, Economic Leveraging, Broad-Based Dissemination and Support) is a Leader with Associates (LWA) Cooperative Agreement awarded by USAID to advance the state-of-the-practice of microenterprise development and microfinance and to assist USAID Missions and other operating units to support sustainable economic growth with poverty reduction. It was awarded to AED and a consortium of partners—now led by prime recipient FHI360—to advance the state-of-the-practice in microenterprise development and microfinance and assist USAID Missions and other operating units design, and implement innovative, integrated, market-based approaches to sustainable economic growth with poverty reduction. Associate Awards are cooperative agreements or grants, which USAID Missions or regional bureaus develop with the "Leader." The "Leader" is the lead organization which successfully competed for the LWA, and which is primarily responsible for implementation of the project under the LWA. Since the Leader has already secured the grant or cooperative agreement via a competitive process, Missions can create their own agreements with the Leader, without going through a competitive (or sole source justification) process. Moreover, the Mission has full control over the development and management of the Associate Award. EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 2 $17,021,653; with the two-year extension until May 31st, 2014, the present planned funding level for the HIFIVE activity is $37,169,702. A comparison of actual and budgeted expenditures by line item for the five￾year project life is shown in Annex VII. As described in greater detail in the following pages of this report, HIFIVE achieves its results primarily through grants provided to its development partners and counterpart organizations, composed of financial institutions, non-government organizations (NGOs), and private companies. Through HIFIVE grant support, these organizations carry out activities that contribute to HIFIVE’s project objectives. Consequently, the project implementation area corresponds to the operating areas of its grantees. The map on the previous page shows the locations where HIFIVE-supported financial institutions carry out their operations. A list of HIFIVE grantees is shown in Annex IX. The mid-term evaluation of HIFIVE was conducted during the period June – July 2012 by a team of four consultants composed of the Team Leader/agribusiness specialist, an evaluation specialist, and two data collectors who worked during part of the evaluation period to help organize, conduct, and interpret the results of the field surveys of selected financial institutions and MSMEs. The purpose of the evaluation was to provide information on the performance of the project in meeting its primary objectives, and its effectiveness in increasing the availability of financial products and services to USAID project beneficiaries and third parties, particularly in rural areas, and those engaged in USAID￾supported value chains. In addition to providing USAID with an assessment of the current results of this high profile project, it is anticipated that the evaluation findings will be used to inform USAID programming during the HIFIVE extension period. Furthermore, the evaluation was conducted to help guide and optimize the effectiveness of future USAID programming in the financial sector. This evaluation was originally planned to be a final evaluation of the HIFIVE project activity during the 36- month base period (June 2009-May 2012). However, after USAID extended the project life for an additional two years, the evaluation requirement changed to that of a mid-term evaluation of an ongoing project. 2.0 BACKGROUND 2.1 Haiti Situation Overview Haiti is a country within the Greater Antilles island group that occupies the western third of the island of Hispaniola with a territory of 27,750 square kilometers. Based on 2003 census projections by the Haitian Institute for Information and Statistics, Haiti’s population in 2010 was estimated to be 9.9 million inhabitants, of which, 50.5% were women. In 2010, Haiti’s gross domestic product (GDP) was $ 6.7 billion, corresponding to a per-capita GDP of about $ 676. Largely due to the earthquake in 2010, the country’s GDP growth rate for that year was a negative 8.6% and the average inflation rate was 5.7%. For that same year in the Dominican Republic, which shares the island of Hispaniola with Haiti, real GDP was $46.7 billion, GDP per capita was $8,300, and the inflation rate was 1.4%. An estimated of 54% of Haitians live below the income poverty line of $1 per day, making Haiti the poorest country in the Americas. Furthermore, based on a report by Haiti’s National Council for Food Security (CNSA), EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 3 approximately 20% of Haitians, or 1.9 million people, are malnourished. The estimated rate of unemployment and underemployment varies from 40% to over 65% of the workforce. The country also suffers from a significant deficit in basic social services, including education, health, water, and sanitation. In 2007, the shortfall in water coverage was estimated at 54% in Port-au-Prince, 46% in secondary cities, and 48% in rural areas. Moreover, nearly half the population is illiterate, estimated at 45% of its men and 49% of its women. National public finance is often in deficit, despite large inflows of international aid. The budget deficit for 2010 was reported to be $162 million, caused largely by the earthquake. The government depends on international aid to finance approximately two-thirds of its budget. In 2009, as a result of the Heavily Indebted Poor Countries Initiative, the World Bank and International Monetary Fund (IMF) canceled the amount of $1.2 billion of Haiti’s international debt. In early 2010, the country’s foreign debt was estimated by Oxfam International to be $890 million. Remittances from Haitians working abroad are an important source of foreign exchange for the country, accounting for an estimated of one quarter of GDP and twice the value of its exports. For 2010, the IMF estimated remittances to be $1.65 billion. Haiti’s vulnerability to natural disasters including cyclones, floods, and earthquakes is notable. The earthquake of January 12, 2010, was the largest earthquake ever recorded in this country and left 200,000 dead and millions homeless. It is within this context that the HIFIVE began to implement its activities. 2.2 Overview of Micro- and Agricultural Finance in Haiti A rapid desk study by the evaluation team is summarized in this following, brief overview of micro-lending and agricultural finance in Haiti. Much of the following information is drawn from the USAID-funded study on microfinance conducted by the Strategic Management Group (SMG)2 . 1. Historical overview :  For a 36-year period, from 1946 to 1982, the only microfinance institutions providing formal lending services in Haiti were cooperative savings and loan organizations, commonly known as "caisses populaires."  In the early 1980s, the microfinance industry began to evolve with the creation of diverse institutions such as the Haitian Fund for Assistance to Women (FHAF-1982) and the Haitian Foundation for Development (FHD-1982). Meanwhile, other non-cooperative microfinance organizations began to emerge, including associations, foundations, and NGOs. These employed a broader product mix including credit, insurance, funds exchange, and transfers.  In the late 1990s, the commercial banking sector began to engage in microfinance services, largely through the acquisitions of existing service providers. For example, Sogebank created SOGESOL, its microfinance subsidiary through the acquisition of the Ecowas Bank for Investment and Development (EBID) that specialized in micro-credit. Similarly, Unibank entered the industry through the acquisition of Micro-Credit Nationale.  The collapse of pyramid schemes, disguised as cooperatives in 2001, prompted Haiti’s financial regulators to accelerate the adoption of the 2002 Law on Cooperatives for Savings and Credit (the 2002 CEC Act). They later created a specialized unit for supervision and regulation of the CEC at Haiti’s Central Bank, (BRH). Thus, microfinance no longer was able to operate outside the formal financial sector.                                                              2 Lermithe Francois, Strategic Management Group (SMG). Recensement sur L’Industrie Haitienne de la Microfinance en 2009-2010. August 2011 EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 4 2. Haiti’s microfinance institutions are integral part of Haiti’s national financial system, consisting of the following organizations:  The Haitian Central Bank (BRH) that performs the functions of supervisor and regulator  Eight commercial banks  One housing bank  Two development financial institutions  One business bank  Twelve insurance companies  One trust company  Twelve transfer offices  Six pension funds  Nearly two hundred institutions and subsidiary organizations that provide microfinance as follows: – One hundred seventy-five credit unions – Twenty NGOs, foundations, and professional associations – Four subsidiary organizations that are specialized microfinance units within commercial banks 3. As described in the 2009-2010 Microfinance Survey, the size and scope of the micro-finance sector in Haiti is the following:  At September 30, 2010, the market size of micro finance was HTG 9.1 billion in terms of assets, HTG 4.7 billion in terms of portfolio of witch HTG 1.78 billion for credit unions, and HTG 3.9 billion in terms of deposits.  The number of borrowers in the sector in 2010 was 208,998, of which 48,905 corresponded to credit unions (CECs), while the number of savers was 991,667.  The portfolio at risk in the sector was around 13.18% during the survey period, but it increased to around 30% after the earthquake.  The microfinance sector accounts for at least 213,086 direct jobs, consisting of more than 4,088 employees of microfinance institutions and 208,998 in small businesses. Compared to the banking system, the assets of the microfinance sector is 6.6% of that of commercial banks, while the amount of gross microfinance portfolio is 15.25% of the banking system. The number of borrowers in the microfinance sector is three times than that of banks, while the number of depositors is 46.5% of banking clients.  Microfinance providers offer six additional financial services in addition to the normal services of savings and credit. These include remittance transfers, foreign exchange, check cashing, safe deposit box, and insurance.  Credit unions account for 64.40% of microfinance deposit amounts and 64.26% of the number of depositors, which equates to HTG 2.5 billion and 637.204 depositors. Thus the average deposit per depositor is HTG 3.960, which represents about 11% of the average loan amount per borrower for this type of microfinance institution. In other words, a total of 637.204 48.905 depositors finance the borrowers served by the CECs.  50.40% of the number and 88.56% of the amount of microfinance loans are made to individual borrowers (instead of groups). This type of credit dominates all the different types of microfinance institutions.  The average size of a microfinance institution in Haiti in 2010 was HTG 46.4 million in assets and HTG 24.04 million in its amount of gross portfolio. This varies greatly from one type of financial institution to another. For example, the average amount of assets and gross portfolio was HTG 413.7 million and HTG 358.2 respectively, for microfinance institutions that are linked to commercial banks as subsidiaries, satellite operations, or specialized departments. In comparison, a medium-size CEC had an average of only HTG 17.8 million in assets while the average size of its loan portfolio was HTG 9.9 million.  In 2010, microfinance institutions in general had a balanced financial structure with average equity amounting to 22.24% of average total assets. However, this capital ratio varies greatly from one type of EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 5 institution to another: it was 58.48% for financial NGOs and 16% for foundations, associations, and other non-cooperative microfinance institutions.  For the 2009-2010 period, microfinance institutions in Haiti generated consolidated gross revenues of HTG 2.9 billion (including income from non-credit sources) and a consolidated net profit of HTG 232.8 million. This represented a positive net margin of 7.94%, a return on assets of 2.56%, and a return on equity of 11.51%. This compared to return on assets of 4.02% and a return on equity of 17.52% for the period 2008-2009.  Comparing the results of 2010 (post-earthquake) with those of 2009 (pre-earthquake) shows that the earthquake of January 12, 2010, did not have a significant impact on the sustainability of Haiti's microfinance sector. The capitalization ratio remained stable; the non-productive portfolio experienced only slight deterioration (12% in 2009 against 13% in 2010, corresponding to an increase of only one percentage point). Separately, total return on assets fell 1.4 points, while the liquidity of the institutions was significantly strengthened. Where the earthquake seems to have had a serious impact was in administrative efficiency (management) with the ratio of administrative expenses to gross portfolio increasing from 27% in 2009 to around 47% in 2010. It should be noted that the good results shown for most microfinance performance indicators after the earthquake is due in part to the national and international organizations that contributed to the recapitalization of those microfinance institutions that were most affected, in an amount ranging from US $10 million - US $15 million.  The author of the 2009-2010 study3 estimated that during the period 2008 – 2009 the potential market for micro-loans in Haiti was more than HTG10 billion, compared to an actual portfolio of HTG 4 billion in micro-loans for 2008.  Microcredit has expanded dramatically as the result of the elimination of the ceiling on interest rates in 1995. 4. Agricultural sector financing  Access to loans is low for the agricultural sector. The amount of credit provided by the banking system for agriculture is estimated to be less than two percent (BCR records show the amount for agricultural lending to be less than one percent). Loans from commercial banks are made primarily for trade (27- 30%), manufacturing (20-28%), and services (19-23%).  Agricultural lending is provided in marginal amounts by all financial providers, including micro-finance institutions and cooperative savings and loans. Based on the SMG study cited above, 81.7% of the MFI loan portfolio in 2008 was for trade (primarily for imports), whereas credit for production (including agriculture) was only 4.5%.  Financing for agricultural production for the medium to long term that is required to produce many crops such as bananas, cassava, and tree fruit, is almost non-existent in Haiti. Furthermore, interest rates as much as 30-60% per year, and sometimes more, are too high for most crop production. These severely reduce the profitability of agricultural production.  The amount of available credit for rural areas (including agriculture) meets no more than 15% - 20% of the credit needs of the rural populations. 2.3 Project Description HIFIVE works with financial institutions to increase the availability of financial products and services with a focus on rural areas, primarily by targeting high potential value chains, including agricultural value chains. Through the program base period of its first three years, HIFIVE also worked to encourage investments in Haiti by its diaspora, composed of around 1.5 million Haitians living in other countries largely for economic reasons. In addition, HIFIVE has supported the use of information and communications technology (ICT) as a means to strengthen the financial sector, thereby increasing the availability of financial products and services for rural borrowers and MSMEs. The program also seeks to maximize the synergies with other USAID projects through the process of facilitating credit to their beneficiaries.                                                              3 Ibid EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 6 WOCCU, the lead implementing partner, works to improve the capacity of a core group of financial organizations, including strong microfinance institutions (MFIs), caisses populaires (credit cooperatives, known by their French acronym as CECs), and selected commercial banks, particularly those that are USAID partners in the loan guarantee facilities provided by DCA. Through WOCCU, the program also supports financial sector associations as well as insurance companies serving the needs of the rural poor. HIFIVE helps these partner organizations to design and deliver appropriate financial products to value chain participants and other bankable enterprises. Additionally, by working jointly with financial institutions and with relevant ICT providers, HIFIVE encourages the development of electronic and mobile financial services that increases their availability in rural4 and agricultural areas. TNS, the project’s sub-grantee under WOCCU, supports the expansion of financial products and services to those MSMEs and entrepreneurs operating in selected value chains, including agricultural value chains. The primary thrust of the TNS’ activity is the delivery of technical assistance, capacity-building and market facilitation to create profitable and sustainable relationships between the financial institutions and the participants in the different value chains. In some cases, the financial institutions that are themselves supported by HIFIVE are assisted by the project to provide technical assistance and training to the selected MSMEs and entrepreneurs that constitute the potential clients (borrowers) of these financial institutions. In other cases, HIFIVE, led by TNS, facilitates business development services to the MSMEs and entrepreneurs by channeling technical support through their respective associations. The HIFIVE project has five main objectives: Table 1: HIFIVE Main Objectives Objectives HIFIVE Activity Objective 1: Increased Availability of Value Chain Finance. HIFIVE works with those MFIs and financial institutions best positioned to expand the delivery of financial services to priority geographic areas and productive MSMEs to create and to introduce appropriate financial products for participants within difference value chains. Objective 2:  Improved Access to Financial Products and Services in Rural Areas. HIFIVE promote the expansion of financial coverage in rural zones, and the increased availability of financial products and services for rural enterprises. Objective 3: Increase Effective Use of Remittances. The project has worked with financial institutions and members of the Haitian diaspora to improve the efficiency of remittances and to develop innovative strategies for increasing the development impact of remittances. Objective 4:   Encourage the use of ICT to increase the level of financial inclusion. HIFIVE encourages the use of ICT solutions to broaden and to deepen access to financial services for Haiti’s poor and rural populations Objective 5: Collaboration with other USAID Projects. HIFIVE works to create demand driven strategies for financial products and services based on the identified needs of other USAID programs focused on agricultural and other value chains. The primary means for achieving the project’s development goals is the HIFIVE Catalyst Fund (HCF). This $22.5 million fund is used to implement a range of project activities that support the specific results and objectives of HIFIVE. Different categories or “windows” of the HCF have supported: a) increased availability of financial products to MSMEs and entrepreneurs within the supported value chains; b) the post-earthquake recovery and stabilization of microfinance institutions; c) the use of ICT to expand the outreach of financial                                                              4 HIFIVE’s definition of a rural area is any location outside Port-au-Prince and Departmental capitals. In other words, even those living in smaller towns and villages within locations outside the major cities are considered to be rural inhabitants. EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 7 products and services; d) training for capacity building within the financial services industry; and e) increased capacity of the financial service providers to incorporate risk management practices in their lending, thereby encouraging them to expand into new markets and to offer financial services to new clients. The HIFIVE project has had to overcome two major challenges during its relatively short life. The first of these was the damage caused by the January 2010 earthquake. Fortunately, there were no fatalities or injuries to project staff as a result of the earthquake although the project office was destroyed, and a considerable amount of office equipment was damaged and some information was lost. The second challenge was the chronic shortfall in USAID project funding for a period of nearly two years: from June 2011 until March 2012. This problem was finally overcome when, in March 2012, USAID obligated funding for an entire year of program activity. Part of the problem was caused by the legal difficulties that the FIELD LWA and primary grantee, AED, was undergoing with USAID/Washington at that time as a result of its work in other countries. Legal issues caused USAID funding to AED to slow to a trickle, including funding for its work in Haiti. Additional funding delays were caused by the long funding supply line from USAID over which project funds have to flow to finally become available to the HIFIVE project for grants and other project costs. The flow of project funds is the following five-step process: This long funds supply chain makes the management of HIFIVE grant funds provided to its financial institution partners quite difficult, and doubly so when the flow of funds is intermittent and insufficient for project requirements. 2.4 Earlier Support to Microfinance in Haiti For over fifteen years, USAID and other donors have financed numerous initiatives to improve the delivery of financial services in Haiti. USAID began a key private sector initiative in 1995 with its Program for the Recovery of the Economy in Transition (PRET). Under this program, USAID supported initiatives to increase commercial bank services and also worked to strengthen microfinance service providers upon which the country’s informal sector depended for financial services. After the end of PRET activities in 1999, the following USAID program was the Financial Services Network for Entrepreneurial Empowerment (FINNET) program, which provided direct technical assistance to a group of 37 financial institutions to improve their financial operations. The FINNET initiative was followed by the Support to Haiti’s Microfinance, Small and Medium Enterprise Sector (MSME) project, which was implemented between 2006 and 2009. MSME had four primary objectives: 1) build strong institutions, 2) improve the microfinance enabling environment, 3) promote the development of new financial products and services, and 4) support the expansion of MSMEs into new markets. After the completion of MSME in 2009, USAID initiated the HIFIVE project as its latest effort in a sequenced strategy to enhance the capacity of the country’s financial service sector to serve the informal sector. Additionally, a number of Haitian financial institutions, including commercial banks and microfinance providers, are participants in USAID’s DCA loan guarantee program. This effort further encourages these financial institutions to serve new markets in rural areas and to reach out to the small and medium scale business sector. While USAID’s support to the Haitian financial sector has been considerable, it is not the only donor providing significant support to the sector’s development. The Canadian International Development Agency (CIDA) has considerably supported and strengthened the country’s savings and credit cooperatives through a ten-year technical assistance program implemented by Développement International Desjardins. Additionally, the French Development Agency, Agence Française de Développement, has provided support to the National Association of Haitian Microfinance Institutions (ANIMH) to enhance professionalization and regulation within the sector. EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 8 2.5 HIFIVE Project Extension Shortly before this mid-term evaluation was initiated in June 2012, USAID decided to extend the HIFIVE program from its three-year base period until the end of an entire five-year term. Consequently, the current anticipated HIFIVE program ending date is May 31, 2014. For the extension period, HIFIVE program objectives were modified along with substantial consolidation of project activities. The following table compares the HIFIVE program objectives during the initial three-year base period with those that recently came into effect for the final two-year extension period. Table 2: Comparison of HIFIVE Project Objectives for Three-Year Base Period With Those of the Two-Year Extension Period No. HIFIVE Base Period HIFIVE Extension Period 1 Increased Availability of Value Chain Finance Support rural and agricultural value chain access to credit and other financial products and services 2 Improve Access to Financial Products and Services in Rural Areas Support to financial institutions, mobile network operators, third party solution providers, technology companies and other actors to develop products and services using mobile money. 3 Increase Effective Use of Remittances 4 Encourage the use of ICT to increase the level of financial inclusion. 5 Collaboration with other USAID Projects During the two-year extension period of the program, its activities will be refocused geographically to concentrate on increasing access to finance for MSMEs, households and other actors in targeted value chains, including agricultural value chains in the USG-assisted corridors of Cul-de-Sac, Saint- Marc, and Cap Haïtien. Some of the HIFIVE activities will be restructured to support the USAID Feed the Future (FTF) Initiative in Haiti. Among the important activities that HIFIVE proposes to carry out during the extension period is its continuing focus on strengthening strategic alliances and partnerships with private entities. However, this is not a formal project objective during the HIFIVE extension period. 2.6 Evaluation Objectives The main objective of the evaluation was to review the effectiveness of the HIFIVE program as well as the sustainability and viability of its accomplishments to date. Of particular interest is to analyze the permanence of the changes that have occurred in the availability of MSME finance, and in financial services that are provided to these MSMEs. In addition, the evaluation intends to answer the following specific questions the posed in the USAID Request for Task Order Proposal (RFTOP): 1. How effectively did HIFIVE work with financial institutions and other USAID projects to implement key initiatives that will strengthen USAID-supported value chains and to provide financial products that will improve the profitability and productivity of those value chains? What issues and gaps still need to be addressed in order to improve the access, use and quality of financial products and services in the areas targeted by HIFIVE? 2. To what extent has HIFIVE contributed to the improvement of access to credit in the agricultural sector? Factors to be examined include the availability of value chain finance, especially in the rural areas targeted by HIFIVE. 3. To what extent has HIFIVE (through the public-private partnership with the Gates Foundation) been able to establish commercial viability for mobile banking in the near, medium or longer term in Haiti? To what extent have HIFIVE interventions contributed to the viability of the mobile banking sector, i.e., EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 9 the level of interest of the cell phone companies and banks in maintaining and advancing the mobile banking sector? 2.7 Evaluation Methodology As described in the following paragraphs, the methodology used for addressing the evaluation issues was largely qualitative, consisting of open-ended interviews with individuals and meetings with focus groups composed of beneficiaries of HIFIVE-supported loans and technical assistance. The evaluation team reviewed relevant documents such as USAID/Haiti country strategy and HIFIVE project report including work plans, the HIFIVE PMP, quarterly progress reports, and technical reports generated by the project. The evaluation team interviewed key actors through open-ended questions and responses. These included USAID and HIFIVE staff, its subcontractors, as well as key project partners and grantees. These interviews provided information on the effectiveness of project implementation, project impacts, and synergies developed. The team also interviewed other key actors that have been involved in e-banking and mobile banking. These include technology and telephone companies associated with mobile money, participating banks, NGO mobile money users, and members of the HIFIVE project team that are involved with the Gates Foundation funding for this initiative. During the second and third weeks of the evaluation, all four members of the evaluation made site visits to Porte-au-Prince, Les Cayes, Gressier, Petit-Goâve, Saint Marc, Marmelade, Mirebalais, Cap Haïtien, Leogane, and Labadie. The four team members divided into two sub-teams, each containing two persons. The first sub￾team met and interviewed focus groups of 8-12 small farmers and participants in rural value chains that had obtained credit as a result of HIFIVE support provided to their respective financial institutions. The second sub￾team interviewed the management of micro-finance institutions, and focus groups composed of beneficiaries of other USAID-supported projects, including the Cap Haïtien Taxi Association and the Les Cayes Poultry Producers Association. In its list of counterpart organization, the HIFIVE program includes a total of 30 micro-finance institutions (see Annex II). The team interviewed executives of 15 of the 30 microfinance providers that are HIFIVE counterparts, or 50%. Those selected were chosen based on their importance to HIFIVE, the accessibility of their field locations, and the time they have worked with the program. A list of the people interviewed by the team and their contact information is shown in Annex to this report. The logistics plan for the evaluation is shown in the calendar contained in Annex IV. This calendar provides a time line for the tasks that were carried out to complete the evaluation. 2.8 Data Collection and Analysis As described in the preceding section, apart from a review of available project background information, the main source of information analyzed by the evaluation team was obtained from open-ended interviews, supplemented whenever possible by quantitative data. The summary of responses to the interview questions provided by the focus groups of small traders, service providers, small producers and other micro-enterprises as well as the information derived from the interviews with financial institutions and other project grantees, and key actors in the Haiti Mobile Money Initiative project, provided the basis for the team’s findings, conclusions, and recommendations. To facilitate the analysis, the data analysts compiled and tabulated the responses to the questions on a spreadsheet that facilitated the comparison of responses; which helped to define response patterns and to determine the similarity of the different responses. Since the questions were largely open-ended, supplemented where possible by quantitative information provided by the respondents, they drew a wide range of responses that had to be compared and analyzed. The judgment and experience of the evaluators were key factors in interpreting the results of the interviews and the determination of the findings and conclusions. This process can be described as follows: EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 10 2.9 Limitations to Evaluation Methodology Selection of interviewees: Instead of a random selection, the financial institutions the team interviewed were pre-selected based on recommendations of the HIFIVE project staff, and the members of the focus groups met by the team were pre￾selected by the same financial institutions that were interviewed by the team. The focus group members were selected based largely on their availability and willingness to participate in the interviews, and their proximity to the location where the interviews were held. These procedures were used in view of the limited time and budget for the evaluation, and the team's desire to minimize the disruption and data burden on the HIFIVE project staff and its partner organizations. Particularly for focus group members, a random selection would have been difficult to arrange, given the remote locations where many people live. In addition, a few financial institutions initially recommended by HIFIVE were not visited due to their isolated locations. Interviews with Haitian Government officials: The team attempted to interview Central Bank officials key to the Haiti Mobile Money initiative, as well as those involved in data collection for Haiti's financial sector. However, these officials did not respond to requests by HIFIVE for meetings with the evaluation team. Furthermore, based on the team’s discussions with HIFIVE staff, no other Haitian government officials were identified as directly relevant to the HIFIVE project. Consequently, no government officials were interviewed for the evaluation. Sample size: The team conducted thirteen focus group meetings over the course of the evaluation, which was the maximum number that could be arranged given the logistics difficulties and the time required to organize and assemble these groups. Each focus group was composed of 8-12 members, chosen from the population loan clients of those financial institutions that had received HIFIVE grants. Altogether, a total of 157 people participated in these discussion groups. This is a small sample of the entire population, when compared to the 12,300 clients who have receive assistance in US Government-supported value chains as indicated in the project's Performance Management Plan (PMP). However, the focus group interviews were based largely on open-ended questions and provided information on the perceptions of the group members on issues such as project effectiveness, impact, relevance, and sustainability, and the conclusions drawn are considered to be valid. Data limitations: Not too surprisingly, it was not possible to obtain "hard" data from small borrowers on the impact of the loans they received from HIFIVE-assisted financial institutions. The team wanted to compile data on the amount of sales revenue, income, and employment resulting from these loans but this information was not available. Instead, the team was able to obtain general impressions of the impact (e.g., "sales increased by about three times as much as before") from the focus group meetings. Many of the financial institutions the team interviewed did not respond to our request for data on changes in their portfolio amounts as a result of HIFIVE's intervention, and the respective weight of the different sub￾sectors such as agriculture, within their total portfolio. In hindsight, it would have been better to have channeled these requests to the financial institutions through the HIFIVE project in the early days of the evaluation. The HIFIVE PMP does not track the progress of mobile money use in Haiti, nor does it track the amount of project-supported agro-lending. Recommendations to this effect are included in the report. EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 11 3.0 PROJECT RESULTS 3.1 Increased Availability of Value Chain Finance The HIFIVE program uses its powerful grant mechanism to increase the availability of financing to selected value chains. It chooses its potential partners from those MFIs and savings and loan (S&L) cooperatives (known by their French acronym, CECs) that provide financial services within the intervention areas, and also to the targeted value chains. HIFIVE selects the strongest financial institutions with the greatest capabilities for value chain lending as its partner organizations. The final selection of its partners is based on an analysis of their institutional capabilities using background information obtained from a comprehensive checklist. This disciplined and methodical selection process has produced a strong network of financial institutions that serve as HIFIVE partners for value chain finance. Table 1 in Annex II lists a total of 30 financial institutions to which HIFIVE has provided grant assistance that helps them increase their lending for targeted value chains and agricultural MSMEs. As shown by this table, these financial institutions have benefited from HIFIVE grants provided through different grant “windows.” For example, five MFIs, including the Le Levier Federation of financial cooperatives and ACME, a leading MFI, received emergency earthquake recovery grants to help stabilize their respective portfolios and to help them rebuild after the January 2010 earthquake. As another example, four of the financial institutions shown in the table in Annex II received ICT grants to help them improve their management and customer service delivery with this new technology. Once HIFIVE has selected the financial partner to provide financial services to a particular value chain, it works with that organization to develop financing mechanisms that best serve the value chain participants. The objective is to create financial products and services that not only meet the needs of the value chain operators, but also are structured to facilitate repayment of the loans. For example, most agricultural loans are closely linked to the crop cycle for the specific agricultural product that is being financed. Loans are provided at the beginning of the production season and a single balloon loan payment is required at the end of the season in the entire amount of principal and interest due, after the crop has been harvested. In addition to developing value chain financing programs, the HIFIVE grants also cover the cost of institutional strengthening of the partner financial institutions. HIFIVE’s grant guidelines specify that at least 15 percent of the grant amount should be used for institutional strengthening of its partner organizations. Strengthening activities include staff training, the purchase of computers, ICT equipment and software, and in some cases, the purchase of vehicles. Grants to the partner institutions normally have a component for technical training and support for borrowers as well. These training interventions are generally to increase the level of financial literacy of the borrowers, to support their business planning, and generally, to enhance their capabilities as financial creditors. The residual amounts of the HIFIVE grant to a particular financial institution, usually around 60 percent of the entire grant amount, is used to create a rotating fund for directed credit by the MFI or CEC grant recipient. The residual grant amount increases the asset base of the financial institution, and thereby increases the amount of loan funds available for lending. Loans can be provided from these funds by the financial institution to qualified borrowers in groups, subsectors, and at locations that support HIFIVE’s objectives. This is an excellent strategy to channel credit on a commercial basis to those value chain activities supported by HIFIVE. A second method that HIFIVE uses to provide financing for value chains is through BDSs provided by TNS. Through this process, TNS selects a promising value chain that can be organized and strengthened by providing BDS, usually in the form of assistance to value chain participants for business planning. Upon completion of the business development phase, TNS works to facilitate credit to the value chain participants, by linking them to the same financial institutions that have received HIFIVE grants. While the TNS support program is considerably more “labor intensive” than simply working through the partner financial institutions to provide value chain credit, it is an extremely valuable resource when additional support is required to help prepare the MSMEs and individuals operating in the value chains to become responsible and reliable borrowers. One of the senior members of the TNS team interviewed by the evaluation team estimated that the amount of project time EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 12 and effort required to support a value chain through the TNS approach is roughly four times more than that required to support the value chains by working directly with the financial institution. Table 2, Annex II, shows the TNS support projects that are presently underway as well as those that have been completed. As the table indicates, two projects have been completed and 10 projects are underway at different stages of development. Fourteen projects that were initiated during the base period have been dropped or placed on hold for different reasons: sometimes due to changing USAID priorities; other times because the activities were not viable, project financing was not available, or the counterpart organization decided not to continue the project. Based on our field interviews and a review of the procedures for developing the HIFIVE grant proposals, the evaluation team has found the support program for MFIs to be well founded and based on a solid strategy. Grant concepts are normally conceived by the MFI and developed jointly by the MFI and the HIFIVE technical staff. A HIFIVE technical staff member becomes the “champion” of the proposed intervention and guides it through internal processes for evaluation and approval. The outcome is a well-designed, practical concept to increase the availability of value chain finance. This process also helps to ensure that the financing program meets the needs of the borrowers. For example, for agricultural production, in most cases the growing costs for the crop are financed in a standard amount required to produce and harvest the product, and loan repayment is made in a single balloon payment after harvest. This financing mechanism is much more viable to farmers than, say, a monthly repayment of principal and interest as would be required for commercial loans. A typical grant to a MFI or a CEC will be used in part to: provide institutional strengthening including staff training and equipment for the MFI; for administrative costs to develop the proposal, including studies and consulting services; and for a limited amount of technical training for the MSMEs and entrepreneurs operating in the value chain. The residual amount of roughly 60% of the entire grant will be used by the MFI to create a rotating fund for lending to the groups and sub-sectors that are specified by the grant agreement with HIFIVE. The rotating fund, in effect, becomes an on-deposit guarantee fund provided by HIFIVE that gives the MFI the flexibility to create a targeted loan program with the specified group or sub-sector. Since many of HIFIVE’s MFI partners are member cooperatives for S&Ls, their lending programs are tied to their deposit accounts. In other words, borrowers must have a deposit account, and the amount borrowed by an individual is limited to a multiple of the amount that person has on deposit. The amount borrowed normally ranges from three to five times the amount on deposit, with lower deposits required for those borrowers with longer records of satisfactory repayment. However, by establishing a separate rotating fund from the HIFIVE grant, the CEC has greater flexibility to on-lend to targeted groups specified by the grant agreement, than would otherwise be possible through its normal lending procedures. The result is a direct stimulus for lending to the targeted groups and sub-sectors, while at the same time working through an established, formal financial structure that encourages savings and imposes the discipline of reliable loan repayment. The participating S&Ls also receive considerable benefit from this program, by institutional strengthening, increased membership from the new borrowers, and the expansion of their loan portfolios resulting from the HIFIVE grant. A summary of project achievements to increase the availability of value chain finance through the HIFIVE three-year base period is shown by Table 3, below5 . Table 3: Achievement of HIFIVE Project Targets for Increased Availability of Value Chain Finance as of March 31, 2012 Indicator Actual Target Number of MSMEs receiving BDS from USG assisted sources 372 330 Number of new financial products and services successfully launched 70 30 Number of new value chain financing solutions introduced 35 14                                                              5 The three-year base period for the HIFIVE project ended on May 31, 2012. The quarterly report for March 31, 2012, is the final progress report to be published during the base period. EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 13 Table 3: Achievement of HIFIVE Project Targets for Increased Availability of Value Chain Finance as of March 31, 2012 Indicator Actual Target Value of gross loan portfolio outstanding ($000) 125,700 97,000 Number of financial service providers newly engaged in  value chains 19 20 Percent increase in the number of clients at USG‐assisted MFIs 80.4% 60.0% 3.1.1 Gaps in HIFIVE-Supported Credit for Value Chains The evaluation team’s meetings with the management and technical staff of the financial institutions and with the various focus groups revealed a number of problem areas they believe should be addressed to increase the availability of value chain finance, particularly in agricultural and rural areas. These are summarized as follows: 1. First, those within the financial institutions believe strongly that much more technical support is needed than is presently provided in order that the value chain producers will be able to ensure production success, and, of course, the successful repayment of their loans to the financial institutions. The technical support to the small producers and micro-entrepreneurs provided by TNS and through HIFIVE grants to its financial partner institutions are provided primarily for business services such as business planning and financial literacy, and are not designed to cover production technical assistance. Although HIFIVE is a financial services project, not a production services project, there may be limited steps the project could take to overcome this limitation. These are discussed in the section on recommendations. 2. The next gap that is perceived by the management and technical staff at the financial institutions is that, in view of the high risk of agricultural lending, crop insurance should be available to small farmers. While there may be a role for insurance products against catastrophic events such as droughts or floods, insuring small producers against crop failure is merely transferring the same risk of loan default from the banking sector to the insurance sector. Naturally, the financial sector would like to see another entity assume that risk. What is really needed to mitigate the risk inherent in agricultural production is to employ good agricultural practices, irrigation, good soils, suitable inputs, and especially, with linkage to reliable markets. In other words, effective farming practices are the best way to mitigate the risk of crop failure. 3. A third point raised by the financial executives was that in those cases where the financial institution has agricultural specialists to assist and advise their loan officers, there is a strong need for additional technical training in the agricultural aspects of the value chains that are being supported. 4. For the producers, one of the major gaps that constrain value chains is the limited availability of working capital financing for producer associations and cooperatives that have reliable markets but are constrained by the amount of cash required to collect, transform, and sell the value chain product. In cases where funding has been provided to these organizations that lead the value chain, such as for cacao exports, dramatic increases were seen in the amount of sales registered by value chain MSMEs. Findings:  HIFIVE’s disciplined and methodical selection process for its financial partner institutions has resulted in a strong network of partners for value chain finance. Furthermore, the means the project employs to identify grant activities carried out by these partners provide well-designed, effective programs to increase the amount of value chain finance.  Gaps in HIFIVE-supported credit include: a) insufficient production technical assistance is being provided to those small producers that have loans from HIFIVE-supported MFIs and CECs to support their successful loan repayment; b) the general perception by financial institutions as to the need for crop insurance to mitigate the risks of agro-lending; and c) the agro-technicians who work for some of the financial institutions also need training in agricultural production. EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 14  Producer associations that operate in agricultural value chains are generally constrained by a lack of working capital. Many of these have reliable markets but do not have sufficient cash to collect, transform, and sell their value chain products. 3.2 Improved Access to Financial Products and Services in Rural Areas Work carried out by HIFIVE under this objective contributes to an increased access to credit in the agriculture sector and the availability of value chain finance in rural areas. Limitations on rural credit in Haiti, particularly for agro-lending, are well known. In general, Haitians are poorly served by the financial sector. Despite considerable development of Haiti’s financial system in recent years, less than 1% of the credit allocated to the economy by the private banking system is provided for to agricultural activities, including forestry and fishing. Even this small amount of agricultural credit provided by commercial banks tends to be concentrated within the larger agro-processors in the country. Commercial banks provide around 65% of the entire amount of credit in Haiti but they serve only approximately 8% of the total number of clients. Rural credit is provided mostly by MFI in rural population centers as well as rural S&L that are largely located in smaller settlements in rural areas. The estimated amount of agro-lending by MFIs and CECs is estimated to be around 10% of their entire loan portfolio amount. Data on the amount of agro-loans from MFIs and CECs are generally not available, since these institutions tend to track their loan portfolios using general categories such as production (agriculture as well as non-agriculture), housing, consumption, and commercial trading activity. Haiti’s rural areas are underserved by the financial sector, with only a small fraction of the population having convenient access to financial services. For most people in rural areas, visiting a CEC is a major undertaking that requires a walk of several hours, and transporting cash is more difficult and sometimes even dangerous. The Le Levier Federation of financial cooperatives is most likely the Haitian financial institution with the greatest exposure to agricultural lending. HIFIVE has provided assistance to Le Levier to strengthen its institutional capabilities for agricultural lending, and the Federation is also a partner with USAID in its LPG Program with the DCA for micro-lending to the agricultural sector. In view of this support, Le Levier is greatly predisposed to agro-lending, and it is aggressively expanding its agricultural loan portfolio. During its interview with Le Levier executives, the evaluation team was advised that as a result of HIFIVE’s intervention with Le Levier, the Federation was able to substantially increase its agro-lending, from around 10% of its entire portfolio amount to approximately 15% of its portfolio amount. Table 4, below, summarizes this result. Table 4: Effect of HIFIVE Interventions on Le Levier Agricultural Loan Portfolio Portfolio Before  HIFIVE Intervention After HIFIVE Intervention Change Agro‐lending as % of Loan Portfolio Amount   10.02% 14.70% 4.48% No. Agro‐lending Clients as a % of Total Clients 20.0% 28.0% 8.0% Most commercial banks perceive lending to the agriculture sector as too risky; they lack the branch networks necessary to reach into rural areas, and they have neither the skills nor the interest to engage in lending to groups such as farmer based organizations (FBOs), or to individual traders who lack collateral. While MFIs and CECs have considerably greater coverage in rural and agricultural areas than do commercial banks, the availability of their services is limited to the larger rural communes. Furthermore, as described as in the following sections, most of these institutions are reluctant to lend to the agriculture sector in view of their perceptions of the risk involved. MFIs can play an important role in increasing access to finance for agricultural value chains. However, there is significant resistance by these institutions to work with either agricultural value chains or FBOs, regardless of the sector. MFIs and CECs face high real and perceived risks in working with these target populations, and have limited capacity to assess these risks or tools to mitigate them. For example, in 2008, financial institutions that provided agricultural sector loans suffered considerable losses following the four hurricanes that affected EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 15 Haiti that year. Afterwards, these institutions indicated that they did not wish to re-enter the market for agricultural loans unless mechanisms for insurance and/or guarantees are put in place to lessen their risk. Clearly, education, alliance building, and instruments such as loan guarantees or asset-backed transactions are necessary to address the real and perceived risks of working with agro clients. Another factor that limits lending for agriculture is the shortage of loan funds available at the CECs. The capital base of these cooperative financial institutions is generated by member savings, and the amount of available loan capital is limited by the amount of savings on deposit by their members. In general, the maximum amount that an individual CEC member can borrow from the organization is limited to only four times the amount of his or her deposits with the CEC. Furthermore, since many of the members of the CECs in rural areas actually reside in urban centers, loans that are approved by the CEC credit committee tend to favor loans of short duration by borrowers whose activities have a quick turnover, such as urban traders or lending for consumption. Programs that support and encourage rural lending, including those that were supported by HIFIVE grants carried out by MFIs and CECs for rural MSMEs during the three-year program base period, do not necessarily result in the increased availability of agricultural credit. The reason is because HIFIVE defines a rural area as any commune outside Port-au-Prince or the capital cities of the different Departments. Even in these areas, there is a preference by the MFIs and CECs located there to provide urban credit for activities such as trading, over agricultural activities such as crop production. 3.2.1 HIFIVE Activities to Increase Rural and Agricultural Lending HIFIVE works through its partner financial institutions to promote the expansion of financial coverage in rural zones and the development of financial products and services adapted to the needs of rural enterprises and populations. These activities support the diversification of financial products and services by those institutions supporting rural credit, and also guide the replication and expansion of successful pilot programs. As described earlier, HIFIVE’s grant assistance to support value chain financing includes staff training at the partner financial institution to help them better understand the business aspects of value chain finance. This assistance often provides vehicles, equipment, and computer systems to strengthen the institutional capabilities of the partner financial institutions; it enhances the financial literacy and the borrowing capacity of the micro￾entrepreneurs and agricultural producers who are the clients of the financial institutions; and it increases the financial institution’s capital base by helping to create a rotating loan fund that can be targeted on groups or sub￾sectors within the selected value chain. The evaluation team found that while all of these elements are important part of HIFIVE support, the rotating funds created by the MFIs and CECs under the HIFIVE grants are an extremely effective stimulus to agro￾lending. These grants form part of the capital base of the beneficiary financial institutions, and provide flexibility to expand lending into new areas. The grants provide an infusion of additional capital that the financial institution needs to provide agro and rural loans. Since these funds are provided from the HIFIVE grant, the loan amounts are not rigidly linked to the amount of member savings. Maximum loan amounts can be increased beyond the amounts that would be available if the loans were directly linked to the deposits by the CEC members. Additionally, institutional support provided by HIFIVE increases the capabilities of the MFIs and CECs to administer the additional loans to new enterprises and value chains. Furthermore, since the loan recipients are required to become members of the financial institution to qualify for HIFIVE-sponsored loans, the HIFIVE program expands the membership base of the MFIs and CECs. The focus of the current HIFIVE loan program is on agricultural value chains, which also helps to stimulate agro-lending. First, the formal relationships and the synergy resulting from the network of organizations working together in a value chain helps to reduce the risk incurred by the partner financial institution. Next, the credit facility provided by the MFIs and CECs that are funded by HIFIVE grants can be targeted on specific agricultural value chains, in those locations where technical support and production assistance can also be provided. Finally, the USAID/DCA LPG programs can be designed to stimulate lending for agricultural value chains by working through the financial institutions that serve these locations. Highlights of HIFIVE’s accomplishments to date in this task area are the following: EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 16 a. Thirty of the 51 HCF grants awarded through May 31, 2012 contribute to improving the access to financial products and services in rural areas. These grants support the development of new financial products, expanding the distribution of existing products deeper into rural areas, as well as encouraging ICT innovations that benefit rural areas. b. As of May 31, 2012, HIFIVE had increased its number of MFIs and CEC partners to 48 organizations. All these partners operate in rural areas. c. HIFIVE has written MOUs with three leading financial institutions that are involved in rural and agricultural lending: Le Levier, Konsey Nasyonal Finansman Popile (KNFP), and Micro Crédit National (MCN). These three organizations have significant rural outreach, as well as excellent potential for additional penetration of products and services in agricultural and rural areas. d. HIFIVE collaborates with commercial banks that have DCA loan portfolio guarantee programs to support and encourage these organizations to develop products for rural areas and to encourage agricultural lending for small and medium enterprises (SMEs). 3.2.2 Gaps in Agricultural Credit The single most important gap found by the evaluation team in HIFIVE’s work to support agricultural credit is the general perception by just about all the senior executives and technical staff of the financial institutions interviewed by the evaluation team that agricultural credit is extremely risky and should be avoided. Clearly, these perceptions need to be changed through information and training in agro-lending as well as exposure to real-world participants in the selected value chains. This information and contacts should provide a better understanding of agro- and value chain to the management and technical staff of the loan institutions that are involved. Training should include risk analysis for agricultural investments, and should provide financial information on the production and marketing aspects of the targeted value chains. In addition, expanded technical support is needed for the value chain operators to increase their likelihood of success from the value chain investments. From the point of view of the small borrowers of agricultural credit, the most important gap is the misalignment between the loan repayment terms imposed by the MFIs and the CECs, and their production requirements for their different crops. For example, small farmers in Mirebalais would like to diversify their crop production to include bananas, which is a crop that requires from nine to twelve months to bring to production. These farmers advised the evaluation team that an investment of HTG 20,000 in new banana production will return around HTG 80,000 in banana sales some 12 months later. However, neither CODECREM nor SCOCENTER, the two main CECs that serve the Mirebalais area, provide production credit for periods greater than six months. Thus, farmers are unable to obtain credit for banana production, and have to forego an excellent business opportunity. In Gros Morne, maize producers that have production credit from KNFP are forced to sell their maize crop immediately after harvest, when market prices are at their lowest point. KNFP provides credit for maize production for only a three-month period, with no option for extension. With greater loan repayment flexibility shown by theses CECs, farmers could increase their profitability. These rigid and inflexible loan terms result in foregone opportunities and force small borrowers to make costly decisions, such as selling their crop immediately after harvest when prices are at their lowest point. The assessment team has turned these issues over to HIFIVE for corrective action. However, these stories serve to dramatize the impact on small borrowers of rigid, inflexible procedures that are not in the client’s best interest. 3.2.3 PMP Indicators and Targets The main indicators and targets included in the PMP for improved access to rural finance during the base period are shown in Table 5, next page, with results reported through March 31, 2012. As shown by this table, HIFIVE has exceeded all its targets for the base period with the exception of the number of rural clients, which is only 5% below the targeted amount. With the change in the project objectives during the extension period, there will now be considerably greater emphasis on agricultural lending than was the case previously. EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 17 Table 5: Achievement of HIFIVE Project Targets for Improved Access to Financial Products and Services in Rural Areas as of March 31, 2012 Indicator Actual Target Number of Points of Service (POS) 1,206 275 Number of local service providers (LSPs) registered to serve the industry 111 105 Number of new agriculture and non‐agriculture financial products & services on offer in rural areas 68 21 Number of rural clients 453,115 475,000 Portfolio‐at‐risk>30 days 11.1% 17.0% The new objective for this component is “Support rural and agricultural value chain access to credit and other financial products and services.” There will be a need to develop new indicators and targets to better monitor the effect of HIFIVE’s efforts on agricultural value chain lending. For example, the amount of lending provided to MSMEs in the specific agricultural value chains supported by the HIFIVE project should be monitored. Other indicators such as the number of borrowers receiving credit from HIFIVE-supported institutions, the number of financial products and services launched, and the number of financial institutions that are newly engaged in value chain lending should be re-stated to show the impact of the project on agricultural credit. The assessment team has developed the following estimates (see Table 6) for these proposed indicators for agricultural value chain lending, based on our analysis of HIFIVE PMP data for the project base period through March 31, 2012. Findings:  The rotating funds created by the MFIs and CECs under the HIFIVE grants are an extremely effective stimulus to agro-lending.  Working with agricultural value chains is also an effective method for increasing lending to the agricultural sector.  There is a general perception by senior executives and technical staff of the MFIs and CECs that agricultural credit is extremely risky and should be avoided.  In some cases there is a misalignment between the loan repayment terms imposed by the MFIs and the CECs and the production requirements for crops grown by small producers.  The HIFIVE project has made good progress in agricultural value chain lending during the project base period. 3.3 Increase Effective Use of Remittances This HIFIVE results area was designed to capture a substantial part of the very large inflow of remittances sent by Haitians working abroad to their family members living in Haiti. Remittances from relatives living and working overseas are the main source of income for many Haitian families. An estimated one million Haitians Table 6: Estimated Values for Agricultural Value Chain Lending Agricultural Value Chain Finance Indicators Estimated Values as of 03.31.2012 Number of borrowers receiving access to agro‐credit 12,215 New financial P&S created for agricultural value chains 62 Financial institutions newly engaged in agricultural lending 18 Number of new agricultural value chain financing solutions 33 EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 18 live overseas, with about half living in the U.S. Remittances sent by Haitians abroad to their home country amounted to approximately $1.5 billion in 2010. Under this project activity, it was planned that the HIFIVE staff would work closely with Haitian financial institutions and technology providers to link with Haitians overseas to encourage greater efficiency in cash transfers, as well as in implementing innovative strategies for increasing the development impact of remittances. HIFIVE also planned to facilitate the expansion of investment in Haiti by Haitians living overseas, through remittance and investment flows into targeted value chains and other sectors. The planned outcomes from this activity were the following: 1. The creation of financial products designed to increase savings and improve access to financial services for remittance recipients. 2. Provision of ICT solutions to improve the efficiency and reduce the cost of remittance transfers to Haiti. 3. Increase of the amount of investments by Haitians living overseas in value chains and other enterprises in Haiti. It was initially anticipated that HIFIVE activities in this results area would capture remittances in the amount of $20 million over the life of project (LOP) until 2014. It was also anticipated that at least 10 financial products would be developed to facilitate the transfer of remittances to Haiti, and that approximately 75,000 people would participate in the capture and investment of remittances during the five-year program. In hindsight, these targets for remittance activity as a result of HIFIVE program activities were overly optimistic. They were based on the erroneous assumption that it would be possible to channel a sufficiently large quantity of remittance funds through a limited number of financial institutions, while at the same time encouraging the owners of the funds to divert a substantial proportion for investment in Haiti. In actual practice, it was discovered, after this initiative began, that remittance funds are used by the recipients to cover basic family needs for food, shelter, school, and medical expenses, with only very small amounts remaining that could be used for investment. Funds for investment became even scarcer after the 2010 earthquake, when remittances were the sole source of economic survival for many Haitian families. Furthermore, although Haitians living overseas tend to congregate in a very small number of large population centers in the US and elsewhere, they are not a homogeneous group that can be easily reached through social, civic, or economic organizations. They tend to be highly diverse, widely disbursed, and with widely varying investment preferences. As a result, this HIFIVE initiative to capture remittances for investment has fallen far short of the project’s initial expectations. Despite these inherent difficulties, HIFIVE has carried out several activities during the three-year project base period to create a network that, over time, could provide highly positive results. However, these activities will like require a long time period to show results. 1. HIFIVE provided a startup grant to FONKOZE, a MFI that also provides micro-insurance products in Haiti, to fund the development of a business plan for the ZAFEN website that links Haitian investors overseas to promising MSMEs in Haiti. Many of the investment opportunities listed on the website are for investments with a social purpose. 2. HIFIVE, supported by the US office of the WOCCU worked to develop improved access and lower cost remittances for those recipients in Haiti’s rural areas. Through these efforts, Le Levier became a licensed remittance agent, with its own network of MFIs and CEC outlets serving as agents for transferring remittance funds to their respective rural areas. By the end of March 2012, 65 agents of a planned network of 70 agents had been established and were operational. 3. HIFIVE provided a Public Private Partnership grant to the Alternative Insurance Company (AIC), a leading micro-insurance provider in Haiti, to support the development of a financial product for remittance transfers. Haitians overseas can convert remittances into a financial product by purchasing a micro-insurance savings product. This grant also includes an ICT component to use mobile money services to pay for the insurance product. 4. The HIFIVE project made several efforts to work with the USAID-funded Haiti Diaspora Marketplace (HDM) project to establish linkages with Haitians overseas. Unfortunately, none of these attempts were successful. USAID terminated the DCM project in November 2010. EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 19 5. HIFIVE has contributed to the launch of i-Haiti as a component of mobile money technology. When fully operational, this will make it possible to receive remittances via cell phones. HIFIVE is working to overcome the legal barriers for institutions to offer this product. There is a potential for a considerable portion of the $1.5billion remittances value to be transferred at lower cost through mobile money. Despite these considerable efforts, the HIFIVE project has been able to make only limited progress in meeting its targets for the increased use of remittances. As of March 31, 2012, the status of project results compared to its targets for this activity was the following (see Table 7): Table 7: Achievement of HIFIVE Project Targets for Increased Use of Remittances As of March 31, 2012 Indicator Actual Target Number of Financial Products Linked to Remittances 1 7 Number of Clients that Benefit from Remittance Financial Products 111 37,500 Value of Remittance Investments Channeled through MSMEs ($000) $286 $10,000 As a result of the change in USAID development priorities and the slow progress of this results area to gain traction during the project base period, USAID decided not to continue the work to capture remittances for investment purposes. As a result, this project component ended on May 31, 2012. Finding:  The assumptions upon which HIFIVE’s activities to capture remittances for investments in Haiti proved invalid. As described earlier, it was assumed that it would be possible to channel a sufficiently large quantity of remittance funds through a limited number of financial institutions, while at the same time encouraging the owners of the funds to divert a substantial proportion for investment in Haiti. This activity’s performance fell far short of its objectives, and was suspended at the end of the base period of the project. 3.4 Encourage the Use of ICT to Increase the Level of Financial Inclusion 3.4.1 Support to Microfinance Institutions HIFIVE works in collaboration with financial institutions and local, private technology providers to create ICT solutions to problems related to funds transfers and payments, particularly in rural areas. Grants provided under this objective have helped MFI’s and credit unions to reinforce and to update their MIS systems and their ICT environments. Through its grants, HIFIVE helps its financial partners to provide a broader array of financial products and services and to improve the management of their organizations. The grants also support the creation and strengthening of local service providers that are capable of serving the evolving needs of the financial services sector. The project provides targeted grants through the ICT Push Fund window of its HCF grant program, as well as providing technical assistance to partner financial institutions to help them expand their financial services using information and communications technology. Information and communication technologies allow clients to access payments and financial services remotely through the use of a wide range of devices including personal digital assistants (PDAs), smart phones, cell phones, smart cards, and other wireless communications devices. This is extremely important especially in rural areas that are under-served by the financial sector, and where access to financial institutions is difficult. The amount of ICT grants awarded by HIFIVE through May 31, 2012 in support of ICT solutions amounted to $3.31 million, corresponding to 11 grants awarded to 9 different organizations. Seven ICT grants totaling $1.65 million have been provided to individual MFIs and to one MFI network (ANIMH). In addition, grants amounting to $1.66 million have supported the technical development of the mobile money initiative. The following table provides a summary of the grants that have been provided to date from the ICT Push Fund. EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 20 Table 8: Grants Disbursement Report for ICT Push Fund as of June 1, 20112 Status Organization Project Name Amount Obligated ($) Pending Balance ($) Start date End date ICT Support to Microfinance Organizations Closed SFF Paving the road to technology 278,025 0 08.21.09 04.30.10 Closed FONKOZE Internet pathway 32,167 0 02.02.10 02.05.10 Open SOGESOL New commercial model 453,536 0 08.31.10 03.31.12 Open ACME Product marketing and communications 391,799 0 07.15.11 03.15.12 Open ANIMH Credit Analysis Center 243,243 54,054 14.10.10 31.12.11 Closed SOKOLAVIM Estére desktop equip. 70,162 0 11.22.10 03.13.12 Open SOKOLAVIM Marketing in rural areas 178,902 0 10.25.11 04.25.12 Sub‐total Microfinance organizations 1,647,835 54,054 Technical Support for Mobile Money Open Mercy Corps Mobile money integration 558,809 0 10.19.10 03.31.12 Open Yellow Pepper Agent network 537,319 0 04.01.11 12.31.11 Open Yellow Pepper Expanding access 224,939 56,235 10.24.10 04.24.12 Open Transversal Mobile platform 340,769 0 03.15. 11 03.15. 12 Sub‐total Mobile Money 1,661,836 56,235 Grand Total ICT Grants 3,309,671 110,289 The following table shows the achievement of project targets for the increased use of ICT solutions, as reported by the HIFIVE monitoring and evaluation (M&E) team. Table 9: Achievement of HIFIVE Targets for Increased Use of ICT Solutions, as of March 31, 2012 Indicator Actual Target Number of financial institutions adopting ICT tools to increase access to financial services 14 12 Number of ICT tools introduced to increase access to financial services 16 4 Increased number of clients served, as the result of an ICT intervention (000) 1,205 250 Number of banking systems changes realized to accommodate ICT changes 11 12 As shown by Table 9, all but one indicator have been exceeded, most by considerable amounts. During the coming two years of the HIFIVE extension period, project ICT support services will be focused primarily on those activities that support the introduction and expansion of mobile money services nationally. This will include assisting financial institutions, mobile network operators, third party solution providers, technology companies and other actors to develop products and services using mobile money. EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 21 The team has found that the HIFIVE program has made good progress in expanding the use of ICT solutions for financial inclusion, particularly with respect to the use of this new technology by its financial partner institutions. 3.4.2 Haiti Mobile Money Initiative The Haiti Mobile Money Initiative (HMMI) is a partnership between the Bill & Melinda Gates Foundation and USAID that provides a $10 million incentive fund to accelerate the development of financial services by mobile telephones in Haiti. These financial services, known as mobile money, have played an important role in the delivery of cash assistance by humanitarian agencies to victims during their recovery from the devastating earthquake that struck Haiti in January 2010. The $10 million HMMI incentive fund was provided by the Gates Foundation and is managed and implemented by HIFIVE. In addition to the $10 million incentive provided by the Foundation, USAID offers technical and management assistance and other funding totaling approximately $5 million through the HIFIVE program. The incentive fund was created to provide cash awards to companies that offer accelerated mobile money services in Haiti. The first award, known as the First-to-Market award, provided an incentive to deploy mobile money services as rapidly as possible. It provided an award of $2.5 million for the first operator to launch mobile money services within an initial period of six months. The requirement was to processes at least 100 qualifying transactions (i.e., transaction that met the contest requirements) at each of 100 new outlets during the 6 month period. The second operator to meet this requirement received an award of $1.5 million. The second type of award, known as a Scaling Award, provided an incentive to expand mobile money services. For this award, service providers were awarded funds in an amount proportional to their share of transactions that contributed to reaching the benchmark of 100,000 transactions. Additional awards were provided for progressively greater targets of one million and five million transactions. The incentive fund has driven the following achievements:  In December 2010, or six months after the activity’s inception, two mobile money service platforms were launched.  In January 2011, Digicel, a major mobile telephone service provider, was awarded the “First to Market” prize for its “TchoTcho Mobile” mobile money product.  In August 2011, Voilà, a second mobile telephone service provider, was awarded the “Second to Market” prize for its “T-cash” mobile money product.  In October 2011, the first “Scaling Awards” were given to Voilà's "T-cash" and Digicel’s "TchoTcho Mobile" for achieving the 100,000 transaction benchmark.  As of April 2012, awards totaling US $5 million had been provided to the two telephone service providers.  In June 2012, the transaction benchmark of 5,000,000 transactions was reported. This achievement is presently being verified. All those interviewed by the evaluation team who are involved in HMMI, including executives of the two main mobile telephone service providers, agree that the contest was an effective mechanism to stimulate the rapid deployment of a new financial service that could become an important part of Haiti’s financial landscape. They also agree that the excitement and “buzz” that resulted from the contest was instrumental in creating awareness by almost all Haitians of mobile money services. However, it is now clear to those involved that there are a considerable number of business, technical, legal, and regulatory issues that must now be resolved if mobile money is to fulfill its promise to provide financial services throughout Haiti. At present, mobile money has not achieved financial and economic sustainability. Obstacles that must be overcome over the short- to medium￾term to achieve sustainability are the following: a. The “wallet” size limitation of HGT 5,000 imposed by the Central Bank is too small to permit the use of mobile money for many transactions, such as the payment of salaries. b. Changes are required to the legal framework for mobile money. For example, electronic signatures are not recognized, nor are electronic verifications of financial transactions. Changes in Haitian business law are required. However, several bills related to electronic transactions and e-government are EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 22 presently being reviewed by the government and are expected to soon be submitted to Parliament for approval. c. Additional financial institutions need to become actively involved in mobile money services, and linkage need to be established between an individual’s bank account and his or her mobile money account. d. The recent merger between Digicel and Voilà, the two main mobile money service providers in Haiti, must become operational in order that the availability of their services can further expand. This will require the unification and consolidation of their ICT service platforms into a single functional unit. e. While large numbers of mobile money transactions have occurred largely as the result of the Gates Foundation awards, the number of regular users is presently quite small. HIFIVE estimates the number of consistent users to be around 17,000. This is too few to support a program for national service. f. Recent surveys have revealed that although most Haitians know what mobile money is, they do not know how to use the service. Considerable training will be required to expand the base of users. g. The number of mobile money agents presently available (such as shopkeepers and suppliers) to provide cash transactions for mobile money clients is presently limited. Furthermore, during periods of high volume transactions, many mobile money agents have experienced liquidity problems. They simply ran out of money and could not cash out their customers’ mobile money accounts. h. The mobile money service providers have not yet developed a clear pricing strategy that will ensure the expansion of the service throughout Haiti. During the startup phase, “loss leader” pricing is clearly required, but the service providers are still grappling with the pricing issue. The potential benefits that can be derived from mobile money transactions are well known, and substantial. These include cost reductions by avoiding transporting, handling, storing, and accounting for cash; the reduced risk of financial loss and personal danger that results from the elimination of cash transactions; and the value of accurate information that is immediately available after financial transactions have been registered. These benefits are enormous and have national impact. They make the support of the HIFIVE program for mobile money an essential requirement. The HIFIVE strategy for continued project support to HMMI during the project extension period is well￾founded. HIFIVE/HMMI activities will provide support to financial institutions, mobile network operators, third party solution providers, technology companies and other actors to develop products and services using mobile money. Specific activities to be carried out include the following: a. Supporting mobile money service providers to improve their platforms to allow the easy integration of additional services provided by third-party applications. b. Help to develop adequate agent network coverage for mobile money users c. Collaborate with other USAID-funded projects involved in key sectors – for example, HIFIVE and the USAID/WINNER projects are studying the possibility of jointly developing mobile money services for rice producers linked to input suppliers as agents for one of the value chains supported by the Watershed Initiative for National Natural Environmental Resources (WINNER) project. d. Provide grants for activities projects that will drive mobile money usage e. Support and encourage the use of mobile money in agricultural value chains The evaluation team believes these are sound ideas, and would also encourage HIFIVE to look at financial institutions and their members and clients as an additional important opportunity for the introduction of mobile money. The evaluation team also believes that the greatest contribution that HIFIVE could make in support of the introduction of mobile money throughout Haiti would be to work to overcome the regulatory and legal constraints that presently limit the use of mobile money. We believe this to be an extremely important factor that is required for nationwide use of this financial service. We encourage HIFIVE to make this activity its highest priority in terms of its support to mobile money for the remainder of the project. EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 23 Since the HMMI was initiated after the HIFIVE program began, the current Performance Management Plan (PMP) for the HIFIVE program does not contain targets for the development of mobile money. However, the program reports the following results, as of March 31, 2012: MM – Mobile Money The HIFIVE PMP should be revised to formally track the progress of mobile money use in Haiti. Findings:  The potential benefits to be derived by the Haitian people from the successful introduction of mobile money are substantial, and make HIFIVE support to this initiative imperative.  Presently, the HMMI supported by the Gates Foundation and implemented by HIFIVE is not sustainable.  The project strategy to support mobile money over the HIFIVE extension period is well founded. However, the program team is encouraged to give the greatest priority to activities that will overcome the present regulatory and legal constraints to the introduction of mobile money.  HIFIVE’s PMP does not track the use of mobile money. 3.5 Develop Effective Linkages with Other USAID Projects TNS leads HIFIVE’s work to achieve this project objective. TNS works through the Inter Project Coordinating Committee on Finance (IPCCF), whose members include representatives from HIFIVE as well as other USAID projects. Meetings of the IPCCF provide the opportunity for a general exchange of ideas, which can be continued in one-on-one meetings between the TNS team and the other USAID project and programs. TNS works to create strategies for delivering financial products and services focused on agricultural and other value chains, based on the identified needs of other USAID programs. Its goal is to match the demand for financial products and services by USAID-supported MSMEs with the financial institutions that supply these products. TNS facilitates partnerships between HIFIVE and collaborating financial institutions to develop and deliver the financial products needed, and to expand the availability of services to the defined zones and enterprises. TNS uses the team’s resources, supplemented by external technical assistance, to carry out project interventions and to provide market information as required by this result area. It works with financial institutions to define their MSME finance criteria and disseminates these requirements to other USAID-supported enterprise development programs. This information guides the delivery of technical assistance by these projects to their beneficiary SMEs and rural microenterprises Program activities carried out in this results area are summarized as follows: a. HIFIVE provided a grant to the Caisse Populaire de la Fraternité (CPF) that helped small-scale handicraft merchants and artisans in Labadie, a tourist center near Cap Haïtien, to renew their stock of 883,770 17,336 2,290 0 200,000 400,000 600,000 800,000 1,000,000 MM Registered Clients Active MM Clients MM Agents EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 24 tourist merchandise. The CPF grant also provided training to the small artisan shopkeepers in inventory management and selling techniques for foreign tourists. The HIFIVE grant also enabled CPF to provide credit to 80 small merchants and artisans at Labadie. Separately, HIFIVE supported three national tourism fairs at Cap Haïtien for Haiti’s artisans. b. HIFIVE assisted female market vendors who are supported by the Développement Economique pour un Environnement Durable (DEED) project to obtain credit for working capital from SOCOLAVIM, a member of the Le Levier Federation c. The project assisted the Federation of Taxi Drivers that was previously linked to USAID-supported MarChe project in Cap Haïtien to obtain training and financing from Micro Crédit National (MCN) to improve their tourism services. Of 28 drivers that were trained and provided business development services, 13 qualified for MCN loans. d. HIFIVE supported the Pan American Development Fund (PADF), a USAID/Haiti partner, to create a micro-finance program with a female-operated NGO known as the Foundation for Female Solidarity (FESO), composed of female merchant traders in Petit-Goâve. HIFIVE also provided a grant to the Caisse Populaire Solidarité des Verrettes (CAPOSOV) in Verrettes to develop credit products for women’s producer groups who were beneficiaries of PADF’s Livelihoods Program. e. HIFIVE assisted CARE, another USAID/Haiti development partner, to improve food security in Grande Anse by making beneficiary payments with mobile money, along with the creation of a network of users to accept the money. HIFIVE also assisted CARE to create village savings groups that use mobile money technology to make savings deposits. f. HIFIVE assisted the United Nations Development Program (UNDP) to implement its Support Centre for Strengthening of Damaged Houses (CARMEN) program by using mobile money technology to provide e-vouchers for the purchase of construction material. 3.5.1 Anchor Firm Development HIFIVE has worked to support ASAVIS, an association of 160 poultry producers in Les Cayes, to create a value chain for broiler production. HIFIVE strengthened the institutional capabilities of the ASAVIS organization; conducted a market study for broilers in Haiti, and introduced the association to Jamaica Broilers, a large poultry producer in Jamaica that wanted to expand its broiler operations into Haiti. HIFIVE provided business development services to all 160 poultry producers to help them develop business plans to support their loan applications to financial institutions for financing to create poultry farms. A total of 102 business plans were completed, of which 57 have been submitted by the respective association members to different financial institutions. The remaining 45 business plans are pending submission to financial institutions. Once the value chain has been fully organized, Jamaica Broilers will serve as an “anchor firm” that will purchase the entire broiler production output from the association members. The company will also provide technical assistance to the individual producers, and will facilitate the purchase of poultry feed in bulk quantities for the producers. The producers are expected to follow the production guidelines put into effect by the anchor firm, and to sell their entire production output to the company. HIFIVE’s role to strengthen the value chain will be to support the association members to obtain production credit, to monitor the relationships in the value chain, and to solve problems as they occur. This model can be replicated in other agro-industries where anchor firms are available. Although the poultry value chain has not been fully established, the relationships that have been created between Jamaica Broilers and the ASAVIS producers, reinforced by the support provided by HIFIVE for production credit to the producers, is an exciting concept for agricultural value chain development in Haiti. The evaluation team feels that HIFIVE should continue to support this value chain with credit facilitation until it is fully established. Once it has proven successful, it can be replicated in other locations and with other value chain products. This anchor firm model is seen as an excellent strategy for agricultural value chain development in Haiti, which should be replicated whenever possible. 3.5.2 PMP Results The achievement of HIFIVE PMP targets for this activity area as of March 31, 2012 is shown by Table 10, next page. EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 25 Table 10: Achievement of HIFIVE Project Targets for Effective Linkages With Other USAID Projects as of March 31, 2012 Indicator Actual Target Number of financial support needs identified in coordination with relevant USAID‐ supported activities 15 15 Number of interventions to increase access to sustainable sources of financial products and services for client groups 9 12 As of March 31, 2012, the program’s indicator for the identification of needs for financial support had been met. The second indicator for the number of interventions to increase access to financial products and services was below the target amount. Finding:  The anchor firm model is seen as an excellent strategy for agricultural value chain development in Haiti, which should be replicated whenever possible. 4.0 ANALYSIS 4.1 Project Effectiveness 4.1.1 Credit for Value Chains and MSMEs in Rural and Agricultural Areas The evaluation team has found the HIFIVE program to be an extremely effective means for expanding the availability of credit to value chains and MSMEs in rural and agricultural areas. The underlying strategy for this program component is sound, and well formulated. As described earlier, the HIFIVE program supports financial institutions to create revolving credit instruments that are funded through HIFIVE grants. These grants enable the financial institution to develop, with HIFIVE support, specific credit lines targeted on groups, sub￾sectors, or locations specified by the program to help it achieve its objectives. Furthermore, once the financial institution has created a financing program for clients in new sub-sectors such as agriculture, they tend to continue their engagement with this new sub-sector, even after HIFIVE support has ended. The evaluation team learned from its interviews with the management and staff of several financial institutions that nearly all the financial programs developed with HIFIVE support are successful, and have good loan recovery rates. These programs are generally profitable for the financial institutions, and are therefore sustainable. The activities carried out under the grant agreements by HIFIVE’s partner financial institutions are well￾conceived, and provide effective solutions for MSME credit needs. The identification of these activities is made jointly by HIFIVE and the respective financial institution, and the internal review and vetting process conducted by the HIFIVE staff under the grant approval process strengthens the proposed activities that are eventually implemented. The technical and institutional support activities carried out under the HIFIVE grants to its partner financial institutions serve to strengthen the institutional capabilities of these organizations, as well as enhancing the capabilities of the borrowers to become reliable creditors. Furthermore, HIFIVE grants serve to expand the capital base of the participating financial institutions, which leads to larger loan portfolios, increased numbers of clients, and for the financial cooperatives, increased membership. The credit that is provided by the HIFIVE-supported financial institutions, particularly to rural and agricultural areas, provides substantial impact to areas and clients that are generally underserved by Haiti’s financial sector. HIFIVE-sponsored credit fills a tremendous need for those individuals and microenterprises that receive the loans. Without HIFIVE-supported credit, the only option available for most MSMEs in these locations is to borrow small amounts of funds from family and friends, or to obtain short-term credit from informal money lenders at extremely high cost. EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 26 Those executives of the financial institutions that were interviewed by the assessment team expressed their strong belief that the HIFIVE program is extremely effective in increasing the availability of financial products and services to value chains, including agro-enterprises and other rural borrowers. They also perceive the HIFIVE staff to be extremely effective and highly professional. This opinion is shared by the evaluation team. 4.1.2 Effectiveness of ICT Interventions and the Launch of the HMMI The evaluation team has found the ICT support activity carried out by HIFIVE to be a solid achievement with real impact on its financial partner institutions. Based on discussions with representatives from these institutions, HIFIVE has considerably improved their capabilities for information processing and for the management of their business. HIFIVE support to the to launch the Gates-funded HMMI that is now being implemented was quite effective, since it successfully introduced a new financial product in Haiti that potentially can have a positive impact on the lives of almost all Haitians. According to knowledgeable observers, the result of the Gates Foundation contest to introduce mobile money was to accelerate by about one year the amount of time it would have otherwise required to launch this financial product nationally. Furthermore, it created a considerable awareness of a new financial product with significant potential for national impact. Despite its effectiveness in introducing the new product, the contest did little to enhance the sustainability of mobile money as a financial product in Haiti. In fact, the contest became a considerable distraction6 to both Digicel and Voilà, the two main service providers for mobile money, since their efforts became focused primarily on winning the substantial amounts of prize money that the Gates Foundation provided. According to observers, both companies engaged individuals to “churn” mobile money transactions as a means for achieving milestones that provided cash prizes. Now that the initial excitement and “hype” resulting from the contest has largely passed, it is time to get back to the basic task of creating a viable financial service. 4.1.3 Linkage with Other USAID-funded Initiatives TNS has done an effective job of providing business services to those value chains that it has identified through its own initiatives as well as those supported by other USAID projects. HIFIVE’s outreach to provide credit and technical assistance to other USAID project beneficiaries, including DEED, MarChe, CARE, and PADF is extremely effective in its execution. Findings:  With the exception of HIFIVE’s activities to capture remittances by Haitians abroad for investments in Haiti, all components of the HIFIVE program are effective.  The program’s work to expand the availability of credit to value chains and MSMEs in rural and agricultural areas is extremely effective. 4.2 Project Sustainability As discussed in the earlier section of this report related to HIFIVE’s support for mobile money, this important financial service has yet to reach a critical mass of users that is required for economic viability. Thus, the mobile money financial product has not yet achieved financial sustainability7 . However, HIFIVE’s strategy for continued support to mobile money during the project expansion period appears sound, and it seems highly likely that mobile money will achieve sustainability before the project extension period ends in May, 2014. In terms of HIFIVE’s efforts to capture remittances sent by Haitians overseas to individuals in Haiti that could be used as a source of investment capital, project results during the three-year base period were insufficient to justify the continuation of these activities during the extension period. Despite advances by the Le Levier                                                              6 USAID/Haiti feels that without the contest, the mobile network operators may not have offered the product at all. The contest fed the high competition level between the two companies. 7 USAID/Haiti states that among the more than 100 mobile money deployments globally, none were sustainable after 1-1/2 years. EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 27 Federation to transfer remittances to rural Haitians at a very low cost, and despite the work of the FONKOZE MFI to establish an internet-based clearing center for person-to-person lending by Haitians abroad through its ZAFEN website, USAID, supported by HIFIVE, decided not to continue this work into the project extension period. Despite the advances at Le Levier and FONKOZE, this project component did not live up to its initial expectations. On the other hand, however, the evaluation team has found that HIFIVE’s work to increase the availability of finance for value chains and rural areas is entirely sustainable. Through the team’s interviews with the senior executives of the MFIs and CECs, we learned that the credit programs sponsored by HIFIVE with these organizations are fully established and have gone through a trial period of at least one loan and one repayment cycle. With only one or two exceptions, all of the loans provided from HIFIVE grants are successful, with good recovery rates. It was particularly notable that all the MFIs interviewed plan to continue to use those financing mechanism and to continue financing those targeted groups that were established with HIFIVE support. They anticipated that these targeted financial activities will gradually expand over time, since the size of these targeted loan portfolios are expanding through the issuance of loans and the collection of principal and interest. It is also noteworthy that the grant agreements between HIFIVE and its partner financial institution require the MFIs and CECs to continue these lending programs into the future, although not necessarily to the same clients, or even to the same sub-sectors. In the evaluation team’s meetings with the focus groups of borrowers, we learned that these clients of the financial institutions are enthusiastic about the HIFIVE-sponsored lending program and are eager to expand their business activities and to increase their loan amounts. In view of the benefits they have obtained from their association with HIFIVE, the MFIs and CECs are enthusiastic about the results of the HIFIVE-sponsored loan program and want to see it continue. Their asset base and their loan capital availability have increased due to the HIFIVE grant that established the rotating fund. Their capitalization is increasing through loan repayments and interest income. The size of their loan portfolio is increasing; their membership is increased as a result of the new borrowers, they have greater turnover, and they have benefitted from the support for institutional strengthening provided by HIFIVE. Finding:  HIFIVE’s work to increase the availability of finance for value chains and rural areas is entirely sustainable. 4.3 Indicators of Program Impact 4.3.1 Achievement of PMP Targets The achievement of the HIFIVE program in meeting its PMP targets for its first three years of implementation (through March 31, 2011), as well as program progress toward meeting its PMP targets through its five-year program life (May 31, 2014) is shown in the PMP Table in Annex V. As shown by that table, HIFIVE has exceeded the majority of its targets for the first three years of operation. With the exception of project activity related to remittances, all other targets should be achievable over the remaining project life. Table 11 below shows the progress made toward the achievement of the primary indicators for the HIFIVE program as of March 31, 2012. This date is the cutoff for the final reporting period of the base period of the HIFIVE program. Table 11: Achievement of Primary PMP Targets as of March 31, 2012 No. Performance Indicator Baseline (2009) 2012 Target 2012 Actual LOP Target 4.5.2.14 No. MSMEs receiving BDS from USG assistance 0 330 372 550 4.7.0.2 No. MSMEs receiving finance in USG‐assisted value chains 357 8,000 12,300 5,300 4.7.1.4 No. clients at USG‐assisted MFIs (000) 400.9 670.0 723.3 879 EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 28 Table 11: Achievement of Primary PMP Targets as of March 31, 2012 No. Performance Indicator Baseline (2009) 2012 Target 2012 Actual LOP Target 4.7.1.5 Savings deposits held in USG‐assisted MFIs (US $ Million) 33.6 65.0 78.7 75.0 4.7.1.6 No. MFIs supported by USG assistance 34 50 48 65 1.1.1 No. new financial products and services 21 30 70 40 1.1.2 No. new value chain financing solutions 9 14 35 20 1.2 No. new financial service providers for value chains 0 20 19 33 1.4.1 Value of loan portfolio (US $ Million) 65.0 97.0 125.7 120.0 2.1.1 No. of rural points of service 205 275 1206 350 2.1.2 No. of registered local service providers 206 105 111 115 2.2 No. new financial products and services offered in rural areas 11 21 68 26 2.3.1 No. of rural clients (000) 181.4 475.0 453.1 525.0 2.5.3 Portfolio at risk (more than 30 days) 9.7% 7.0% 11.1% 7.0% 3.1 No. products linked to remittances 0 7 1 10 3.2 No. benefiting from remittance products 0 37,500 111 75,000 3.3 Value of remittance investments ($000) 0 10,000 286 20,000 4.1 No. FIs adopting ICT tools 0 12 15 15 4.2 No. ICT tools introduced 0 4 16 5 4.3 Increase in clients served by ICT (000) 0 250.0 1,204.7 325.0 4.4 No. banking system changes for ICT 0 12 11 15 5.1 No. financial support needs identified 3 15 15 20 5.2 No interventions jointly implemented 3 12 9 18 As shown by the above table, with the exception of the indicators for remittances, HIFIVE had exceeded almost all of its primary indicators. The project has considerably exceeded all but one of the most important indicators, described as follows:  A total number of 372 MSMEs have received BDS assistance from the project, which is 13% over the target of 330 for the base period (indicator 4.5.2.14).  A total of 12,300 MSMEs have received finance in project-assisted value chains, corresponding to 54% more than the target of 8,000 for the period (indicator 4.5.0.2).  The number of MFIs supported by the HIFIVE project during the three-year base period was 48, for a 4% shortfall below the target of 50 supported MFIs (indicator 4.5.0.2)  During the base period, a total of 70 new financial products and services were launched, corresponding to an increase of 133% over the target of 40 products and services (indicator 1.1.1).  The number of new value chain financing solutions launched by HIFIVE during the three-year base period was 35, which is an increase of 150% over the target of 20 financing solutions (indicator 1.1.2). 4.3.2 Impact Beyond the Numbers The available data do not fully capture the impact of HIFIVE interventions on the MSME operators in the value chains, nor do the PMP reports show the impact of the project on the financial institutions themselves. The EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 29 following summarizes the observations of the evaluation team regarding the impact of the project beyond the PMP data system, and reports examples of impact provided by some of those interviewed. Ms. Irmine Sylvain, the Director General of the CECACHE S&L cooperative that received an earthquake recovery grant from HIFIVE in the amount of $370,000, informed the evaluation team that without the support from HIFIVE during that critical period, CECACHE would no longer exist. HIFIVE provided financial support to CECACHE over a seven-month period following the earthquake. It bought the financial institution’s bad debts; it paid staff salaries and office expenses, and part of the grant established a rotating fund that was instrumental in CECACHE’s financial recovery. Before the earthquake, CECACHE had a staff of 22 employees; its loan portfolio amounted to HTG 17 million and it served 1,200 clients. Soon after the earthquake its client base withered to only 600 individuals and its assets were reduced to only HTG 4 million. Today, thanks to the support from HIFIVE’s and the hard work of its staff, CECACHE has fully recovered. Its loan portfolio has now increased to approximately HTG 40 million, and it has almost 2,000 clients. CECACHE is now on a solid footing, and is once again financially and operationally sustainable. At a focus group meeting with clients of the MAMEV S&L cooperative, the evaluation team learned that mango producers receive loans from the CEC for their mango crop. The loans are not used to actually produce mangos; they are used for family consumption. The loan funds make it possible for the producer to hold his crop until the fruit is mature and ready for harvest, when it can be sold at the full market price. Otherwise he has to sell the rights to the crop several months ahead of time to obtain cash for family needs. In this event, the mango producer may receive only 25% of the value of the crop if it were held to maturity. The HIFIVE-supported credit program for the benefit of the KEKAM CEC in Marmelade provided working capital to three associations of coffee producers, which enabled them to re-initiate coffee purchases from their members. This created approximately 170 temporary jobs for coffee harvesters during the three-month harvest period. The training and trade fairs provided by HIFIVE for the benefit of small-scale artisans and merchants for artisan products at Labadie provided substantial impact on their businesses. For example: a) artisans became aware of new artisan products and of different media that could be used to produce these new products, such as recycled materials; b) sales of tourist products increased from 25% - 75% after the merchants changed their product mix by adding more items of small sizes (therefore, more portable) and by providing articles of greater practical benefit to the buyer; and c) training provided to artisans and merchants on effective selling techniques considered changed their behavior towards their customers. Merchants now realize that aggressive sales behavior does not work, and that the culture of foreign tourists is to make purchase decisions without pressure from the vendor. Female entrepreneurs the team met at three focus groups (MAMEV, KNFP, and KEKAM) recounted their experiences in launching their micro-enterprises with loan funds provided by these HIFIVE-supported financial institutions. Through their businesses, they were able to become economically independent. This gave them greater autonomy and social status vis-a-vis males in their respective communities. Most of the people the team met through the focus groups had not previously received formal credit. The loan they had obtained through the HIFIVE-supported financial program was their first experience in dealing with a financial institution. Finding:  The HIFIVE project is making good progress toward the achievement of its targets for its PMP indicators. Furthermore, it is having considerable impact on the lives of micro-entrepreneurs and small traders that are not being captured by the numbers. 4.4 Project Relevance There is a tremendous need for an increased availability of rural and agricultural credit in Haiti, as well for a greater availability of financial services to isolated rural communities, and to serve Haiti’s poor. Access to financial services by rural residents, as well as those members of the poorest segments of Haiti’s population is severely limited. The HIFIVE program seeks to address these limitations through its support for increased financial services in rural and agricultural areas, and to expand the use of mobile money. EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 30 The HIFIVE program works to provide financing to underserved, rural and agricultural borrowers, and it provides viable credit options where formal credit does not exist. The only options otherwise available for most micro-creditors in rural areas would be to borrow small amounts of funds from family or friends, or by take short-term usury credit at very high interest rates. Clearly, the HIFIVE program is highly relevant to Haiti’s needs, and is also extremely timely. Program support has been provided at a critical period, in the aftermath and the recovery period of the January 2010 earthquake. The HIFIVE program supports USAID/Haiti’s Second Intermediate Result under its Post-Earthquake Country Development Strategy for Haiti, which is Improved Food and Economic Security. Specifically, it contributes to sub-intermediate result 2.1: Improved Performance of the Agricultural Sector, and 2.3: Increased Employment. Both of these program areas contribute to USAID’s goals of increased stabilization in Haiti and expanded employment and sustainable livelihoods. HIFIVE also supports Haiti’s National Agricultural Investment Plan (NAIP) that was by the Ministry of Agriculture, Natural Resources, and Rural Development (MANRRD) in May, 2010. HIFIVE’s program support for the increased availability of value chain finance is particularly relevant to the NAIP. Its strategic vision calls for partnerships with private financial institutions and credit to rural agriculture. Finding:  HIFIVE program is entirely relevant to Haiti’s needs for rural and agricultural credit, and it is a key element of USAID/Haiti’s Post-earthquake Country Development Strategy. 5.0 GENDER ISSUES It is well understood that when women have more access to and control over agricultural assets and decision￾making, family outcomes in terms of food security and health are improved. As a result, it is important to promote gender equality so that both men and women have equal opportunity to benefit from and contribute to economic, social, cultural, and political development. If gender concerns are not integrated into a project design stage, it is unlikely that gender concerns will be included or addressed later on in the project cycle. This means that the people involved in the project programming process need to take in consideration: a) how the different roles, responsibilities, and status of women and men affect the work of the project; and b) how the expected project results will affect women and men differently. Addressing those questions takes into account not only the different roles of men and women, but also the relationship between and among men and women and the broader institutional and social structures that support them. Although the HIFIVE project was not designed to address gender concerns, it has contributed to women’s development and their incorporation into the project-supported value chains and rural MSMEs in different ways, as described by the following stories told by some of the people who were interviewed by the evaluation team: 1. The organization Femmes Solidarité de Petit-Goâve (FESO) is a women’s foundation that was created in 2004 in the Communal of Petit-Goâve. FESO is composed primarily of female merchant traders. In February 2011, HIFIVE and PADF provided a grant to FESO in an amount of approximately HTG 9 million to put into place a collection center where FESO members could receive and hold merchandise for resale to the local market. In addition to the collection center, the grant provided training for FESO credit and administrative staff and software for tracking loan repayments. The grant also provided a rotating fund administered by FESO that provides working capital financing to FESO members. This HTG 5 million fund provided credit in the amount of HTG 25,000 each for 200 female members. The members reported that the rotating credit fund had a particularly great impact on the beneficiaries. It increased their purchasing power; they can save more frequently and in greater amounts, and the overall volume of trade has doubled. Some members, who previously had savings of only HTG 500, now have savings accounts of HTG 100,000 and more. With the interest generated by the member loans, FESO is able to pay rent, staff salaries, and increase the amount of its loans. Before the project was initiated with HIFIVE, FESO employed only four people. During the time when the grant agreement with HIFIVE EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 31 was being implemented, FESO employed 14 people. Now that the project with HIFIVE has ended, FESO continues to operate with 9 employees. As a result of the grant, the number of FESO employees has more than doubled. The monthly interest rate set by FESO is 3%; however, if the loan is repaid on schedule, FESO provides a rebate of one-third of the interest charges at the end of the loan cycle. This is less than the available rates at other microfinance providers. 2. HIFIVE provided a grant of HTG 2 million to KOFIP to create a rotating fund for working capital loans to female traders. These loan beneficiaries are members of six cooperative organizations that are associated with FECANO, the Association of Cacao Producers. The team interviewed a focus group of 15 female merchants who are members of the Cooperative Jean Baptiste Chavannes, one of the FECANO cooperatives. All the focus group members had completed their first loan cycle with KOFIP, and were waiting for a second loan cycle to be initiated. However, because their cooperative organization was the creditor for the KOFIP loans, and had on-lent the loan amounts provided to the individual female traders, the individual members could not receive new loans until the cooperative had repaid the entire loan amount owed to KOFIP. This created a bottleneck for those cooperative members who had repaid their loan amounts as scheduled, and were waiting to initiate a new loan cycle. All the women interviewed had substantially increased their turnover and profitability from their trading operation as a result of the working capital loans they received from KOFIP. The extra income they earned was used for household expenses and school fees for their children, and occasionally, to hire casual labor to reduce the workload of their spouse for tending the cacao crop that is sold through FECANO. Three of the females interviewed had obtained earlier loans from other financial institutions, but the interest rate and repayment terms were much less beneficial than the HIFIVE-supported KOFIP loans. The following table, taken from the 2008 Micro-finance Survey conducted by the Strategic Management Group for USAID/Haiti8 , provides a summary of the distribution of micro-finance loan portfolios by gender for the entire country. As the table shows, microfinance credit clients are much more likely to be females than males. According to the survey, 77 percent of micro-finance clients are female, compared to 23 percent male. Table 12: Distribution of Microfinance Credit Portfolios by Gender Type No. Female Clients No. Male Clients Total No. Clients Total Portfolio (HTG000) Average Loan Size (HTG000) Percent Females by Institution CEC 10,229 14,450 24,679 973,143 39.4 8% MFI 15,275 10,881 26,156 1,116,159 42.7 12% Others 105,029 13,499 118,528 989,023 8.3 80% Total 130,533 38,830 169,363 3,078,325 18.2 100% Percent 77% 23% 100% “Others” include credit from NGOs, professional associations, and mutual credit societies Source : Recensement de L’Industrie de la Microfinance Haïtienne, Strategic Management Group, USAID/Haiti, 2008 Women are well-established and credible economic actors in Haiti’s microfinance system. In general, more women than men are business operators, including petty trading. However, there are more male than female beneficiaries for agricultural loans since males have a greater involvement in this sector. The greatest barrier to female participation as creditors in micro-lending is their high illiteracy rate, which is greater than male illiteracy. In addition, especially in rural areas where the availability of property titles greatly influence the availability of credit, women have less access to credit than do men since they are unlikely to hold titles for family property.                                                              8 Ibid. EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 32 5.1 HIFIVE Gender Indicators and Targets The HIFIVE PMP has only three indicators that relate to female project beneficiaries. These are summarized in the following table for the HIFIVE base period. Table 13: Achievement of PMP Targets for Gender as of March 31, 2012 No. Performance Indicator Baseline (2009) 2012 Target 2012 Actual LOP Target 4.7.1.1 Percentage increase in the number of clients at USG‐assisted MFIs 4.7.1.1 Females 81.7% 70.0% 59.4% 70.0% 4.7.1.1 Males 30.0% 130.4% 30.0% 4.7.1.1 Total 98.5% 60.0% 80.4% 100.0% 4.7.1.4 Number of clients at USG‐assisted MFIs (000) 4.7.1.4 Females 302.1 482.6   4.7.1.4 Males 98.0 226.0   4.7.1.4 Total 400.1 670.0 723.3 879.0 4.7.1.5 Total savings deposits held in USG‐assisted MFIs ($ millions) 4.7.1.5 Females 43.0   4.7.1.5 Males 28.0   4.7.1.5 Total 33.7 65.0 78.7 75.0 Note: The total number of clients and the amount of savings deposits shown in this table are greater than the sum of the amounts shown for males and females.   Data for a third category, business clients, are not included in the PMP report.   As shown by this table, there are more than twice as many female clients at USG-assisted microfinance institutions. However, the growth rate for male clients is more than double that of females. Furthermore, the amount of savings deposits held by females in USG-supported financial institutions is 54% more than the amount of savings deposits held by males. Findings:  The HIFIVE project has had a substantial impact on females that is not reflected in the PMP data.  The policy of some financial institutions to provide loans to cooperative organizations (for re￾distribution to individual members), instead of providing loans directly to the individual members themselves, is often detrimental to individual borrowers within the cooperatives. The reason is because individual borrowers cannot renew their loans until all the cooperative members have repaid their loans to the financial institution, which penalizes those individuals who repay their loans early. Females account for a larger share of savings and of the number of clients of USG-supported financial institutions than do males. Similarly, there are more than three times as many holders of microfinance credit in Haiti than there are males. 6.0 FINDINGS 6.1 Findings from the Evaluation Team Field Survey As described in an earlier section of this report, during the second and third weeks of the evaluation the team members conducted a field survey of financial institutions, in addition to their members and clients.For the field EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 33 survey we divided the four-person evaluation team into two sub-groups of two people each. One sub-group interviewed the senior management and staff of the different financial institutions, and the second sub-group conducted focus group meetings with the members and clients of these financial institutions. The clients were generally small traders and agricultural producers who had received credit from the financial institutions through the HIFIVE grants. The following table shows the fifteen financial institutions the evaluation team visited during the field survey, and the related focus group meetings. Table 14: Evaluation Team Field Survey Financial Institution Location MFI Survey Focus Group Meetings CECACHE PAP   MCN PAP   KNFP Gros Mornes; PAP   FESO Petit Goave   MAMEV Gressier   KEKAM Marmelade   CPF Cap Haitien   SOKOLAVIM St. Marc; Marchand   SCOCENTER Mirebalais   CODECREM Mirebalais   KOFIP PAP; Limonade   Le Levier PAP  FONKOZE PAP  ACME PAP  MCC PAP  The team’s findings from these interviews with the executives and staff of the financial institutions and the focus group meetings are summarized as follows: 1. Before the HIFIVE intervention, the agro lending portfolio of the supported financial institutions was very small. Those that received HIFIVE grants to encourage agricultural lending saw substantial increases in their portfolios for agriculture. For example, CODECREM increased the percentage of its loan portfolio dedicated to agro-lending from zero percent to 30 percent as a result of the intervention by HIFIVE. Similarly, SCOCENTER increased its agro lending from only one percent to 40 percent after the HIFIVE intervention. 2. Loan amounts provided to borrowers from the HIFIVE-supported rotating funds are normally no more than HTG 25,000. However, formal groups and enterprises can borrow larger amounts. Many of the CECs lend to solidarity groups of five people. 3. Interest charges on HIFIVE-supported loans provided by the financial institutions normally range from 2% - 3% per month. The clients of the MFIs and CECs consider this to be normal, and are happy to obtain loans at these interest rates. However, loans at interest rates above these amounts are resisted by the clients. EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 34 4. The only alternative source of loan funds available in most rural locations is usury credit, at a monthly interest rate of around 15%. 5. The maximum loan term the team found among the financial institutions that were interviewed was for 12 months. Most available loans were for 3 – 6 months, only. 6. All of the small creditors the team interviewed were quite pleased with the economic opportunity they had been provided through the HIFIVE-sponsored credit. They were eager to expand their loan amounts in order to grow their business. 7. All the HIFIVE grants resulted in increased employment at the financial partner institution, and increased the membership of the CECs. However, the loans provided by the MFIs and CECs to their small-scale producers and micro-entrepreneurs generated very little employment. First, the loan amounts and subsequent investments were relatively small; normally, HTG 25,000 or less. Second, most of the businesses that obtained loans through the HIFIVE grant program are family businesses or sole proprietorships with limited possibility for employing external workers. 8. Most of the small producer and small trader loans provided a substantial increase in income and profitability, on the order of around double the amount obtained without the loans. 9. Loans provided by the CECs and MFIs from the HIFIVE-supported rotating funds are generally provided in relatively small amounts, and with a relatively quick turnover. Thus, they impact a considerable number of small borrowers. Despite this practice, however, one of the main criticisms of the loan program by the focus groups the team interviewed was that the amount of funding available is quite small. In general, the amount of funding provided by the rotating funds is sufficient to meet the needs of only 20% - 25% of the potential borrowers. 10. Other limitations described by the focus group members are 1) the amount of loan capital available at the CECs is extremely limited and very few members are able to obtain credit; 2) in most cases the loan repayment terms imposed by the MFIs and CECs is inadequate for many lucrative crops such as bananas that require longer time to reach maturity, and 3) the cash collateral requirements imposed by the CECs (up to 1/3 of the loan amount) severely limits the ability of the members to obtain larger loans. 11. All the financial institutions the evaluation team interviewed found the HIFIVE staff to be competent and well qualified. They rated very highly (above the 80% level) their experience of working with HIFIVE. 12. All the financial institutions found the HIFIVE loan program to be highly relevant to their needs as well as those of their clients; entirely sustainable without continued HIFIVE assistance, and with a very high impact on the lives of the small producers and micro-entrepreneurs it touched. Overall, they found the program to be very effective. 13. All the financial executives interviewed recommended that the program be continued, and that its grant amounts are increased. 14. The senior managers and staff of the financial institutions believe strongly that loan guarantee funds are required to support and encourage an expansion in agricultural lending. Furthermore, there is a need for crop insurance to mitigate the risk of agricultural lending. 15. There is a need for additional production technical assistance to support small-scale agricultural producers as a means to encourage agro-lending by the financial institutions. EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 35 6.2 Summary of Findings 1. HIFIVE’s work to provide value chain finance is highly effective. Program grants have increased the loan capital base of its MFI/CEC partners, as well as enhancing their institutional capabilities. The program has encouraged lending by the financial institutions to new sub-sectors and groups in rural locations. Through training programs provided through the grants to financial institutions it improves the credit capabilities of the potential borrowers. HIFIVE has substantially improved the availability of credit to MSMEs and entrepreneurs in selected value chains. With the exception of its targets for remittance indicators, HIFIVE has exceeded most of its PMP targets. HIFIVE’s MFI and CEC partners consider the program staff to be well qualified and highly professional. 2. HIFIVE-supported credit initiatives carried out by its financial partner institutions are sustainable. These financing programs were put into place during the project base period and continue to function well. With only a few exceptions they are successful, and have good loan recovery rates. All MFIs and CECs intend to continue these loan programs that were initiated through HIFIVE grants, without regard to future the support by the project. All the micro- and small-scale clients that received loans through these credit initiatives have gone through at least one complete cycle of borrowing and loan repayment, and are eager to expand their loan amounts. The size of the loan portfolios of the financial partner institutions is increasing through reflows of loan payment and interest income, and these institutions have benefited considerably from increased loan portfolios, increased membership, and institutional strengthening. 3. HIFIVE’s work to provide financial products for value chains is highly relevant. The project works to provide financing to underserved rural and agricultural areas where the need is greatest, and it provides credit options where very few options would otherwise exist. The project supports USAID’s intermediate result for Improved Food and Economic Security for Haiti, and the sub-intermediate results for Improved Agricultural Performance and Increased Employment. HIFIVE is also aligned with the objective of increasing the availability of rural credit as described in Haiti’s National Agricultural Investment Plan of the Ministry of Agriculture, Natural Resources, and Rural Development. 4. HIFIVE’s work to provide value chain financing in rural and agricultural areas has great impact on the livelihood of micro- and small-scale borrowers. While the amount of impact is difficult to quantify, personal testimonials by those who have received loans from HIFIVE partner institutions has received substantial increases – on the order of three to four times – of business turnover and profitability. 5. Unfortunately, some credit products provided by the HIFIVE partner institutions are misaligned with agricultural production cycles and, consequently, with the credit needs of the micro- and small-scale clients of these institutions. Furthermore, some of the credit products are not sufficiently flexible to best serve these agricultural clients. Credit for crops that take longer to bring to bearing, such as bananas, is particularly troublesome. 6. Gaps in HIFIVE-supported credit include: a) insufficient production technical assistance is being provided to those small producers that have loans from HIFIVE-supported MFIs and CECs to support their successful loan repayment; b) the perception by financial institutions on the need for crop insurance to mitigate the risks of agro-lending; and c) the agro-technicians who work for some of the financial institutions also need training in agricultural production. For the producers, one of the major constraints to value chains is the limited availability of working capital financing for producer associations and cooperatives that have reliable markets but are constrained by the amount of cash required to collect, transform, and sell the value chain product. 7. The agro-lending portfolio of financial institutions is generally quite limited. Commercial banks, MFIs, and CECs tend to avoid agro-lending due to their perception of the risk associated with agriculture. As a result, lending to the agricultural sector is only a small part of the portfolio of financial institutions, even MFIs and CECs in rural areas. Furthermore, supporting credit programs in rural areas does not EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 36 necessarily lead to agro-lending, since most of the provided by financial institutions even in these areas is targeted on urban activities. 8. The rotating funds created by the financial institutions from HIFIVE grants are an effective stimulus for agro-lending. The grants help to increase the loan capital base of the financial institutions, and the loans can be targeted on any group, such as the participants in a particular value chain, or in any sub-sector, such as agriculture. Since the loan funds are provided by an external source, they are not linked to, nor are they limited by, the amount of individual member savings. In the case of CECs, the borrowers must be members of the cooperative so the use of the rotating fund increases their membership. 9. Support programs for agriculture value chains also stimulate agro-lending. The mutually reinforcing relationships and synergy within the value chains, and particularly their linkage to markets, helps to reduce the credit risk. Furthermore, directed credit programs such as HIFIVE grants for agricultural lending and USAID/DCA LPG programs targeted on agriculture can focus on specific value chains within targeted locations such as development corridors. 10. HIFIVE has made impressive gains in agro-lending during the three-year project base period. As of March 31, 2012: a) approximately 12,215 borrowers received access to agro-credit; b) 62 new credit products had been created for agriculture; and c) 18 financial institutions had become newly engaged in agricultural value chain lending. 11. The “Anchor Firm” value chain structure provides a good model for agricultural development in Haiti. This model is embodied by the ASAVIS poultry producers association that is linked to the anchor firm, Jamaica Broilers. The producers commit to sell their entire production output to the anchor firm, whereas it provides market, production technical assistance, and facilitates input supplies, including poultry feed for the producers. The role of HIFIVE is to facilitate credit from financial institutions to the producers, as well as monitoring the relationships throughout the value chain and solving problems as they occur. This model can be replicated in other agro-industries where anchor firms are available. 12. The main gap in the work of HIFIVE to support agricultural lending is the perception by commercial banks, MFIs, and CECs that agro-lending is extremely risky and should be avoided. 13. The assumptions upon which HIFIVE’s activities to capture remittances for investments in Haiti proved invalid. It was initially believed that it would be possible to channel a sufficiently large quantity of remittance funds through a limited number of financial institutions, while at the same time encouraging the owners of the funds to divert a substantial proportion for investment in Haiti. The performance of this activity fell far short of its objectives, and it was suspended at the end of the project base period. 14. The launch of the HMMI was quite successful. It created a national awareness of mobile money products and services, and it considerably reduced the time required to establish this new service throughout the entire country. However, its residual impact is limited in terms of the number of regular users, the number of available agents, and the number of participating banks. Furthermore, additional work is required by the service providers to merge and consolidate their respective ICT platforms, and considerable work is pending to create an appropriate legal and regulatory framework for the use of this service. 15. The mobile money facility is not presently sustainable. Its customer base and agent network are still too small. While there is a general awareness of the service, few potential users know how to use it. Moreover, its use is constrained by dysfunctional regulations such as the small “wallet” size that limits the amount of funds that can be transacted, and that many electronic transactions are not legally recognized in Haiti. Furthermore, the pricing strategy by the service providers has not yet been clearly developed. However, the potential benefits to be derived by the Haitian people from the successful introduction of mobile money are substantial, and make HIFIVE support to this initiative imperative. 16. HIFIVE’s strategy to support mobile money over the two-year project expansion period is well founded. HIFIVE plans to support the introduction of mobile money transactions in selected agricultural value chains (i.e. rice) as pilot initiatives that can be replicated when proven successful. HIFIVE also plans to help overcome legal and regulatory problems that constrain the use of mobile money. EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 37 17. Females account for a larger share of savings and of the number of clients of USG-supported financial institutions than do males. Similarly, there are more than three times as many female holders of microfinance credit in Haiti than there are males. 18. The HIFIVE project has had a substantial impact on females that is not reflected in the PMP data. 19. The policy of some financial institutions to provide loans to cooperative organizations (for re￾distribution to individual members), instead of providing loans directly to the individual members themselves, is often detrimental to individual borrowers within the cooperatives. The reason is because individual borrowers cannot renew their loans until all the cooperative members have repaid their loans to the financial institution, which penalizes those individuals who repay their loans early. 7.0 SUMMARY OF CONCLUSIONS The following is a summary of the team’s main conclusions derived from the evaluation. 1. Directed credit programs are needed to override negative perceptions of agro-lending by banks, MFIs, and CECs. These include programs such as rotating funds for value chain credit established through HIFIVE grants, as well as DCA loan portfolio guarantee programs. We believe that the successful introduction and implementation of directed loan programs by the collaborating financial institutions will overcome the negative perception of agro-lending by the management and staff of these institutions. 2. Anchor firms linked to small-scale producers that serve as contract growers for the anchor firm, supported by HIFIVE grants that facilitate production credit for the small producers is an excellent model for agricultural value chain development. This should be replicated whenever possible during the project extension period. 3. HIFIVE credit facilitation and BDS services should incorporate additional support for production technical assistance for those MSMEs and entrepreneurs who receive loans from HIFIVE-supported MFIs and CECs. The production TA could be facilitated by TNS, possibly by grants to NGOs or as a component of the grants to the financial institutions themselves. 4. The evaluation team believes that the greatest impact that HIFIVE can have on the sustainability of the mobile money initiative in Haiti would be to help create a clear, well-defined, transparent, and supportive legal and regulatory framework for the use of mobile money throughout the entire country. This would have a dramatic impact by clearing away many of the present obstacles to the use of this facility. 5. A second important impact by HIFIVE would result from project support and encouragement for the use of mobile money payments and transfers by groups of small farmers and MSMEs, including input suppliers that operate within its supported value chains. Another potential area of considerable impact would be to facilitate mobile money payments and transfers between the HIFIVE-supported financial institutions and their members and clients. The existing networks of financial institutions and their clients would provide a strong base for this mobile money initiative. 6. The HIFIVE staff has worked diligently for the past three years to develop a strong network of financial institutions that are reliable partners. These institutions can play a key role in carrying out loan programs supporting agricultural value chains during the project extension period. All those financial institutions interviewed by the evaluation team expressed their desire to continue to expand their credit and financial service as financial partners with HIFIVE. This network is a valuable resource for project implementation during the extension period. EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 38 8.0 RECOMMENDATIONS 1. It is recommended that USAID facilitate an orderly transition of HIFIVE activities from the three-year base period to the extension period. Those projects that were substantially underway at the end of the base period should be brought to an orderly completion during the extension period. Specifically, in view of its potential demonstration value, USAID should approve grant funding to ensure the availability of credit to support the value chain composed of the anchor firm Jamaica Broilers that has been linked to the ASAVIS poultry producers association in Les Cayes. 2. It is recommended that USAID analyze the possibility of expanding its DCA loan portfolio guarantee program to support and encourage agricultural credit in partnership with the microfinance institutions that operate in its targeted development corridors. Specifically, DCA credit guarantees should target those value chains and producer groups that are supported by the HIFIVE program. These new DCA financial partner institutions should be selected from the strongest MFIs that operate in the USG supported corridors. 3. Since not all financial institutions are suited for agro-lending, it is recommended that HIFIVE select its strongest MFI partners to participate in lending programs for agricultural value chains during the project extension period. Those selected should be the strongest financial institutions with the greatest capability, and with the greatest predisposition for agro-lending. Furthermore, HIFIVE should provide training as required to the management and staff of these institutions to improve their analytical and risk management capabilities for financing agricultural products. 4. In addition to the financial services that HIFIVE facilitates to micro-enterprises, small farmers, and other beneficiaries through its financial partners, HIFIVE also provides some training and business development services to these beneficiaries directly through TNS programs or through grants provided to its partner financial institutions. However, there is a strong need for production technical assistance in addition to the business development support that is now being provided. It is recommended that HIFIVE work through TNS to develop a pilot program for technical support for small-scale agricultural producers that can be expanded if it proves successful. This should reduce the risk for crop failure and loan default by the MFI clients, and should therefore increase the availability of agricultural credit. 5. HIFIVE is not a value chain program per se. Instead, HIFIVE is a financial sector support program that helps increase the availability of financial products and services to agricultural value chains in rural areas. Consequently, HIFIVE is not able to provide the entire range of production and marketing services that are necessary for agricultural value chain strengthening and development. Therefore, for the greatest impact on agricultural value chain development, it will be necessary for HIFIVE to create partnerships with other development projects and initiatives to jointly provide the range of support services needed to fully develop agricultural value chains. It is recommended that HIFIVE collaborate with other USAID agricultural value chain initiatives, as well as non-USAID initiatives, during the project extension period within the USG-supported corridors. 6. HIFIVE must review the possibility of providing export financing of potential high-volume value chain products for producer associations, jointly with its partner financial institutions 7. HIFIVE should jointly review the agro-lending policies of its partner financial institutions with these institutions, to ensure that their loan terms support and encourage agricultural production for the targeted value chain crops by small farmers, especially longer-term crops such as bananas. 8. HIFIVE must support HMMI during the project extension period first, by working to create a favorable legal and regulatory framework, and second, to introduce the use of mobile money to its agricultural value chain beneficiaries, as well as the members and clients of the financial institutions that are supported by HIFIVE. 9. It is recommended that HIFIVE review its PMP indicators and targets for the project extension period and make the necessary changes to track the amount of agricultural value chain finance facilitated by the project, and the number of mobile money transactions that are completed. EVALUATION OF THE HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) 1 ANNEXES ANNEX I: INFORMATION SOURCES 1 References Academy for Education Development (AED). Haiti Integrated Financing for Value Chains & Enterprises (HIFIVE): HIFIVE Catalyst Funds Policies and Procedures Manual. Undated The World Council of Credit Unions (WOCCU). Haiti Integrated Financing for Value Chains & Enterprises (HIFIVE): Quarterly Report: January 1, 2012 – March 31, 2012. May 15, 2012 The World Council of Credit Unions (WOCCU). Haiti Integrated Financing for Value Chains & Enterprises (HIFIVE): Quarterly Report: October 1 – December 31, 2011. February 15, 2012 The World Council of Credit Unions (WOCCU). Haiti Integrated Financing for Value Chains & Enterprises (HIFIVE): Quarterly Report: June 30 - September 30, 2010. September 2010 Academy for Education Development (AED). Haiti Integrated Financing for Value Chains & Enterprises (HIFIVE): Performance Management Plan (PMP) Draft. September 25, 2009 Academy for Education Development (AED). Haiti Integrated Financing for Value Chains & Enterprises (HIFIVE): Year Two/Fy11 Workplan. September, 2010 Family Health International. Haiti Integrated Financing for Value Chains & Enterprises (HIFIVE): Performance Management Plan (PMP: Year 3). October 31, 2011 Academy for Education Development (AED). Haiti Integrated Financing for Value Chains & Enterprises (HIFIVE): Year Two/Fy11 Workplan. September, 2010 USAID. Post-Earthquake USG Haiti Strategy: Toward Renewal and Economic Opportunity. January 3, 2011 U.S. Government. Haiti Feed the Future FY 2011–2015 Multi-Year Strategy: The Feed the Future (FTF) Multi-Year Strategies. Document approved May 24, 2011 Lhermite François, Strategic Management Group (SMG). Recensement Sur L’industrie Haitienne de la Microfinance 2008-2009. United States Agency for International Development, USAID/HIFIVE Project, February 2011 FHI360. Haiti Integrated Financing for Value Chains & Enterprises (HIFIVE): HIFIVE Application for Option Period (Two – one year options) Cooperative Agreement No. 521- A-00-09-00025-00. April 23, 2012 The World Council of Credit Unions (WOCCU). Haiti Integrated Financing for Value Chains & Enterprises (HIFIVE): Woccu Program Brief Haiti - Increasing Financial Access to Jumpstart Economic and Agricultural Growth. June 2011 Government of the Republic of Haiti. Action Plan for National Recovery and Development of Haiti: Immediate Key Initiatives for the Future. March 2010 John Jepsen, Development Alternatives, Incorporated. Note From the Field: Reaching the Rural Poor with Microfinance. July 2, 2008 2 The World Bank IFC. Doing Business Report - Doing Business in a More Transparent World, Economy Profile: Haiti. 2012 Banque de la République d’Haïti. Bulletin Statistique 80. Juillet - Septembre 2011 Bill and Melinda Gates Foundation Dalberg Report. Plugging into Mobile Money Platforms: Early Experiences of NGOs in the Field. January 2012 Bill and Melinda Gates Foundation Dalberg Report. From Market Opportunity to Sustainable Business: Market Segmentation in Haiti's Mobile Money Industry. January 2012 Bill and Melinda Gates Foundation Dalberg Report. Haiti Mobile Money: A Point-in-Time Case Study. Undated République d’Haïti: Ministry of Agriculture, Natural Resources, and Rural Development. Haiti National Agricultural Investment Plan. May 2010 Catherine Johnston, Development Alternatives, Incorporated. Support to Haiti’s Microfinance, Small and Medium Enterprises Sector Access to Finance for Haiti’s Agricultural Value Chains: Programming Options. April 2007 ANNEX II : FINANCIAL INSTITUTIONS SUPPORTED BY HIFIVE FOR VALUE CHAIN AND AGRICULTURAL FINANCE Financial Institutions Supported by HIFIVE For Value Chain and Agricultural Finance No. Institution Grant Window; Purpose Department Commune 1 MUCEC Synergy Fund – School credit Sud Camp Perrin 2 SFF ICT Push Fund – Paving the road to technology Ouest Petionville 3 ID Recovery Fund - stabilization Ouest PAP; Cite Soleil 4 AIC Protecta National Risk Management - Micro Insurance Ouest, Nord, Sud, Sud￾est, Centre, Nippes, Grand-Anse PAP, Cap H., Camp Perrin, St. Marc, Jeremie, Jacmel, Cayes, Mirebalais, Miragoane 5 FONKOZE ICT Push Fund Internet Pathway Ouest PAP 6 KNFP Synergy Fund – mango production Artibonite Gros Morne 7 DID Capacity Building – institutional strengthening Nord-Ouest, Centre, Sud, Artibonite, Grand￾Anse St. Marc, Darbone, Camp Perrin, Jeremie, Desarmes, Pte. Riviere, Mole St. Nicolas, Lacahobas, 8 CODECREM Synergy Fund – mango production Centre Mirebalais 9 FINCA Recovery Fund – asset restoration Ouest PAP 10 CEPAR Synergy Fund – salt production Artibonite Anse Rouge 11 CAPODEP Synergy Fund – cacao production Nord Port Margot 12 SOGESOL ICT Push Fund – New commercial model Ouest PAP 13 ACME Recovery Fund – recapitalization Ouest PAP 14 CAPOSAJ Synergy Fund – poultry production Nippes Fonds del Negres 15 KEKAM Synergy Fund – coffee production Artibonite Marmelade 16 KOFIP Synergy Fund – cacao commercialization Nord Cap Haitien 17 Le Levier Recovery Fund - stabilization Ouest PAP 18 SOCOLAVIM ICT Push Fund – marketing financial products in rural areas; equipment support Artibonite L’Estere; St. Marc 19 SCOCENTER Synergy Fund - credit for peanut production Centre Mirebalais 20 Caisse Espoir Jacmel Recovery Fund - stabilization Sud-est Jacmel 21 CPF Synergy Fund – financing Labadee Artisans Nord Cap Haitien Financial Institutions Supported by HIFIVE For Value Chain and Agricultural Finance No. Institution Grant Window; Purpose Department Commune 22 CECACHE Recovery Fund- financial stabilization Ouest PAP 23 SOCEM Synergy Fund – financing shallot value chain Nord-ouest Port-de-Paix 24 MAMEV Synergy Fund – financing mango producers Ouest Gressier 25 CAPOSOV Synergy Fund – female credit in Bas Arbonit Artibonite Verettes 26 FESO Synergy Fund – financing for female merchants in Petit Goave Ouest Petit-Goave 27 ABCAB Synergy Fund – financing coffee exports; equipment Sud-est Thiotte 28 AIC Risk Management Fund – Beyond Borders Ouest PAP 29 MCC Synergy Fund - Nationwide expansion of credit services Ouest PAP 30 MCN Synergy Fund – Opening new branch offices Ouest PAP ANNEX III: TECHNOSERVE CLIENT LIST AS OF MARCH 31, 2012 TechnoServe Clients List as of March 31, 2012 Date Sector Location No. MSMEs Services Status Nov. 2009 Apparel Fond des Blancs 1 Business plan; duty-free access to US market through HOPE Act Active Nov. 2009 Cacao Port Margot 1 Financing for DEED-supported cacao cooperatives Compl. Nov. 2009 Cacao Cap Haitian 1 Financing for 6 cooperatives members of the FECANO cacao federation Compl. Jan. 2010 Poultry Les Cayes 107 Linking poultry producers with anchor firm, anchor firm support, market study, business plans, access to finance Active May 2011 Tourism Cap Haitian 4 Develop master plans and business plans; financing for hotels & restaurants Active June 2011 Tourism Cap Haitian 43 Due diligence, access to credit for Association of Taxi Drivers Active June 2011 Tourism Cap Haitian 189 BDS training in finance, accounting, and merchandising; access to credit for Federation of Artisans Active Mar. 2011 Poultry Gressier 1 Support for poultry value chain Active Aug. 2011 Tourism 1 Express bus and helicopter tour Active Aug. 2011 Tourism 1 Support for workshops Active Aug. 2011 Tourism 1 Pottery Active Nov. 2011 Salt Amurt 10 Support for salt value chain Active ANNEX IV: EVALUATION WORK CALENDAR 1 Evaluation Work Schedule – June 2012 SUNDAY MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY 1 Document review Home 2 Prepare draft work plan Home Submit draft work plan 3 TL travel to Haiti Port-au-Prince 4 Meet with USAID; revise work plan Port-au-Prince 5 Meet with USAID; HIFIVE staff; revise work plan Port-au-Prince 6 Revise work plan; meet HIFIVE staff Port-au-Prince Submit revised work plan 7 Holiday; plan field trip Port-au-Prince 8 Meet with TNS; Transversal Port-au-Prince Submit final evaluation work plan 9 Plan field trips Port-au-Prince 10 Port-au-Prince 11 Meet with Mercy Corps, Le Levier, Voilá (Tcash), Yellow Pepper Port-au-Prince 12 Meet with Unibank, ACME, Digicel (Tcho Tcho Mobile) Port-au-Prince 13 Team 1 CECACHE focus group; Team 2 MCN, CECACHE, Scociabank Port-au-Prince 14 Team 2 KNFP, KOFIP, MCC Port-au-Prince 15 Team 1 FESO focus group; Team 2 MAMEV; FESO Gressier; Petit Goave 16 Team 1 MCN focus group, Team 2 ASAVIS focus group Les Cayes Les Cayes 17 Port-au-Prince 18 Team 1 MAMEV focus group, Team 2 CODECREM; SCOCENTER Gressier Mirebelais 19 Team 1 travel, Team 2 SOKOLAVIM; KEKAM Gros mornes, Saint Marc, Marmelade 20 Team 1 KNFP focus group; Team 2 CPF; FECANO Association Gros Mornes, Cap Haitien 21 Team 1 KEKAM focus grouop; Team 2 Labadee Artisians focus group Marmelade; Labadee 22 Team 1 Artisans focus group; Cap Haitien Taxi focus group; Team 2 Fecano focus group; meet Artisans Associat. 23 Team 1 KOFIP focus group; Team 2 Marchand SOKOLAVIM focus group; return to PAP 24 Cap Haitien; Port-au-Prince 25 Team 1 SCOCENTER & CODECREM focus groups, ret to PAP; Team 2 - FONKOZE; WINNER Project Mirebelais; Port-au-Prince 26 Team 1 Analyze and prepare survey results Team 2 – clarification meetings with HIFIVE Mirebelais; Port-au-Prince 27 Team meeting; analyze and prepare survey results Port-au-Prince 28 Analyze and prepare survey results Port-au-Prince 29 Prepare USAID presentation Port-au-Prince 30 Prepare USAID presentation Port-au-Prince 2 Evaluation Work Schedule – July 2012 SUNDAY MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY SATURDAY 1 Port-au-Prince 2 USAID presentation Deliver presentation of findings Port-au-Prince 3 Write final report Port-au-Prince 4 Write final report Independence Day; Port-au￾Prince 5 Write final report Port-au-Prince 6 Write final report Port-au-Prince 7 Write final report Port-au-Prince 8 Port-au-Prince 9 Write final report Submit draft report Port-au-Prince 10 TL departs Haiti Travel 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Receive USAID comments 25 26 27 28 29 30 31 Submit final report ANNEX V: HIFIVE PROJECT ORGANIZATION ORGANIZATIONAL CHART FOR USAID/HAITI INTEGRATED FINANCING FOR VALUE CHAINS AND ENTERPRISES (HIFIVE) PROJECT WOCCU AND TECHNOSERVE STAFF IN HAITI Chief of Party Gretha Greathouse USAID/Haiti Economic Growth & Ag. Development Deputy Chief of Party Claude Clodomir Financial Products and Services Yvrose Joseph Technoserve Sr. Business Adv. Chantale P. Louis Info, Communicat., & Technology (ICT) Stephane Bruno Senior Internal Auditor Marjorie Milord Finance & Administration Gerald Deslouches Grants Manager Yvon Baptiste BDS Advisor Macimala Roy Value Chain Business Advisor Lourdes Lafleur Financial Prod. & Services Specialist Geraldine Lantimo HMMI Program Support Beatrice Ridore HMMI ICT Philippe Chancy Senior Internal Auditor Marjorie Milord Monitoring & Eval. Nathalie Lamonthe Grants Accountant Marie Florence Olisse Finance and Administration Gerald Deslouches Accountant Christ Marie Charles Admin Verification Specialist Charline Charles Administrative Assistant Marie Ange Taverne Drivers (5) Housekeephers (3) ANNEX VI: HIFIVE PROGRAM PERFORMANCE MONITORING PLAN HIFIVE Indicator Performance Tracking Table 1 Annex 5: Table 1: F Indicators IPIT :: I:': I f';;" I !"C!. f.;:" f':;" !':.o al JI (l0l') (l0l') (I o o .. 103 • '" "" m II. o o o o o o o Sialement "Equlal:le aa:ess 10 finane,,; services dwtse .... ders 10 low Income Haban lami.es and llIero and smal scc:ro (MI), Oulcome Of "II"" "'ipIei'.'1ii1g eV_ ...... T.og« "" .. "og« ACIu T,'9" -- T.og« "'"' "'9" _, or Ptogf'am A,ea lrJ1)ad ...... by, P.f1nef(sJ .- .. ., " (01) & OulpUllodicocor. • ,. 0.01'1 0.01'1 Proiect SOecific Indictors Progam Areas Indicalor: 4,51 A!1icullura) Seclor ProductiVily Resull Slalement '11rIl'""ed agnctJlttaI lraObcesIhalv41lead 10 in",eesedflVelihood opportunities and econorrlc WOCCO(Cole M., !III ''''' 0% 1>33 " .. ... "'" 447 61.2)% ."" IIIAI " .. 100 4.11.1 01' "4tntrlUI " hhienb 1llJSG.. " F.II p ........ 'OCO W W " .. W: U .l!f, III: " W"""" W:10% " W· .. .pt" ICfIVE Itl n 0% W, 10% W t.tlOO. l" 1.t3O'J4 10% W 111.,1..,) ... M 10% l5lO M' 10" "" M: 30" .. M: 30% II. 3&)(. 30% 130,45 30 .. 01 %oftJSG.anitttd MF"I. "" Non. WOCCU(CoIt MOj " "'M 0% " .. 81.2Sl< .... 18.0$% .'" IIlB3 ..... .,,' 4.712 hawe operatlONI .. p ........ 'f" sw:.nlblry (2,5.1) "'" " l.flVE,,) ""' ... , 01 PCrttItUg. of USG-..... Non. wotOJ\Co .. M., N'" 0% I."" '2% 1S% 83';1. Is.ooor. .... 63.83 IS''' 10 .. 4.11.3 rnaofInlr'lt. iubClAlons lfI-. hw. .. p ........ 'f" r,achld rNnCill tuUliNbily (2.5.2) IIFlVE ''''' " 'IWlt ... 1 0' Nlrobtr of c\itru at USG-astithd • F.II WOCCU(CoII M., 'fXl91> 0 443,07 !OO, 514,59'2 'lS, 610.6'10 870.000 l23,2JI lOS, 879, 4.7.t " rriMlfinllntlllSIilbon$ (tl.l) p."""" ''''' 9 000 W, l48,900 000 W:4SG,641 9 000 000 'f" HFIVE JW¥..,)I W, M:-15U70 "':204,1504 W: gr.,t ... ) .. :11M2 482,Si 1lI;JC.'1 • 1 ,.,: M: 122.31 22S99 , 6 0: Totll ahI"9,depow held., USO Non. WOCCU(eor. M., nA5Il(Q 0 41,321 39,1 517.641.819 ... sn,oss,01O 65,000.00 lal9S 10.0 1S,O 4.71.5 lJSG..u.srsted ma olinlnw p.m... 1"" ,305 " .0 W;31.72S,03l 00,0 0 A$3 00.0 'f" irUtclioM (2.4) ICfIVE O. 101:18,071,178 00 • W, 00 00 grantet) . 3,0(6 0 ,999 It 28.012 ,785 0: fVntw of mluolininc:. Nttltiom • Non. WOCOJ(tolli M" J' 0 lS 30 ,. .. .. " '" .. .. " 7.1 6 -.,polied by usa finlnWI Of 'f" t.dlnIC4ll'$siQne. HfIVE ''''' "",_, Progam flemenllndlcator: 4.7.3 Strengll1en Microenlerp.300 >,300 I 'F" SlIM1idpI&lg U$G .... d v.w. wi! actol1, FIs) 200' ...... andrew ., HIFIVE Indicator Performance Tracking Table 3 ANlIf Pertonnance Indicators Unit oo..w o"Cl Sou!w, ..- 2C03 2C03 1010 1010 1011 1011 2012 1012 1013 1013 10" 201' __ Macro ImpIct (MI), Oultome .. ega ... I"...,.eitihv eY,. .V .... T_ ...... T ... """ T ... AcIu T ... ..... , To" ."" TW91) Program Ateas lndicalor: 4.51 A!ricu,tur., Sector Productivity Result Statement ","clkes lhalwll lead 10 in"easedtl .. hhood OIlOOIIuniies and econonic securllV' USAID ""'. Table 2: Project Level Indicators IPTT Pedonlliloce Unil m..ggo """"'" .-. ..- 2C03 zooo 1010 1010 1011 1011 1012 1012 1013 2013 101< 10" Mac-o Irrc>aCI (MIl Ota, 111 or PoInI. of s.rv.e. fOS) II""", .-" ""''''J SMIcB$ "" ro.- y,,"*, I.tx!ttj • I ::t:;: 7<1'> • 11 .. lIS 100 106 \0, 111 "' "' NII'I'teI of IotaIMMee PfOY\dtf. 11.2 (lSp) f.giltnd to MI'Vt!be muslJy I .... ... (fNSn I '" lSP. 12 ......... • N, "" C.m .... '" .... , 0 0 " 15 '9 " " .. 23 " HIFIVE Indicator Performance Tracking Table 5 Performance In(icators, una o. .. s...co -. 80_ 2009 2009 20'0 2010 2011 201' 2012 20'2 2Ol3 20'1 20" 20" "'''''11"4>''' Outcome 0( "JM'd l , ... , • v ..... T, '9" "'" .. Target A_ T. _""" T. .- T, '9" "' .... T. _ct...o 111"4>'" orProgramAt •• 1mpaCl .... by: ..... -.mg - (2OO9l (01) & Output Indi< ..... (0) . .... P ...... Is) 0-01') PrOie<1 Soocific Indic1O.3.1 Nunbtf of fa'" denl$ HFIVE 200. 0 ,00 0 0 g1Int ... 0 .,. ... Core p.tne .... &b, "" a .... ... 13.61'1' . .,. '''''' 1% 11.10% '" 1.,. 25.' POttfoiNt·mIP30 ISm HFIVE 200. ........ Result Statement Obie<1JVe 3 (Result 3 : Increase Effective Use 01 Remlual1Ges 11 Nunbef of m..ca.1 protltc:ts '"kid 10 • ... Co .. p.tnetl Mo, "'. 0 0 , 1 , , 1 1 8 10 flIINtInO": HfIVE 200. gltllHs. DCA "",tntl. 3.2 NU'nbtf or tWo flat bentfl from 1M • .. , Co,. partntfll, lAo, /VA 0 0 1.500 14 20,000 '" 31,500 111 ><150 15,000 linInaal procb:b IInktd to remttac\tu HfIVE 200. Qf'M'U _ ' , .. Oc.l 33 USO ... eo .. pWltrl. "" "" 0 0 n.ooo ' 83,200 S8,000, 1238.08 $10.000 2Il&MS S'I5,00 $20,00 chMlMltd ttnIu;f'I MSloEt oM the HFIVE ".. .000 000 0 000 0.000 0000 finnial p.o6Jtt:J IIMtd to rtmMnc:.s grant .... DCA NEED to modly AR S .. "",,, Result SI.,emont ObieU JIlO.OO 325.00 dI. I'Ul'tMr of cNnll MMld .to. to If) HFIVE 200. lZ 0 ICT ftlMrDon grant .. s. DCA rm.16 -" .. NU'I"Ibtf of ba