Interim evaluation¹

Introduction

The rural micro-enterprises project (PROMER) began activities in June 1997 in two regions of Senegal (Tambacounda and Kolda) and by mid-term it had expanded to two additional regions (Kaolack and Fatick). Its total cost is 10.94 million USD, with 67% covered by IFAD loans (numbers 402-SN and SRS-47-SN).

PROMER is aimed at development of off-farm micro-enterprises in a rural environment. Its objectives were defined as:

1. To create new paid seasonal or permanent jobs, thus improving income of poor rural families;

2. To increase production of quality goods and services by enabling local farm production;

3. To extend the annual productive work period beyond the farm work period;

4. To reduce the rural exodus using work opportunities for young people.

The closing date of the IFAD loans is 31 March 2005. A possible second phase is being considered by the government and IFAD following evaluation of the IFAD programme in Senegal done in 2003 and the focal points of the intervention as set forth in the Country Strategic Opportunities Paper (COSOP). Given this outlook, the IFAD Office of Evaluation (OE), in accordance with standard procedures, conducted an interim evaluation of PROMER.

Evaluation partnership members and monitoring process

The joint evaluation partnership was made up of: i) a representative from the Ministry of Agriculture, ii) a representative from the Ministry of Economy and Finance, iii) the PROMER director, iv) the IFAD portfolio manager for Senegal, v) the West African Development Bank (BOAD) portfolio manager, and vi) the IFAD evaluation manager.

According to a joint partnership evaluation, the objectives of the interim evaluation mission were: i) to assess the suitability, effectiveness and sustainability of the actions undertaken by PROMER, ii) to understand, estimate and, if possible, measure the impacts of the project achievements and changes made, and iii) to assess the current dynamic of changes made and their projected sustainability, and iv) draw useful information and recommendations for the future.

It stayed in Senegal from 25 January to 18 February 2004. It facilitated a self-evaluation of the PROMER team, and it conducted field visits, held meetings with partners that may or may not have been involved in project implementation, held a workshop on restitution and exchanges in Kaolack based on the preliminary results and on restitution of the preliminary results for the authorities and members of the steering committee in Dakar.

Major observations from the evaluation

Main results and impacts

The mission showed that the quantitative objectives related to the number of rural micro-enterprises in the portfolio were reached: 1 359 rural micro-enterprises received PROMER support, 76% of which are operational. The objectives related to training, which should benefit rural micro-enterprises, are partially so, but literacy training, not scheduled, was appropriately introduced by the project. However, considering the available financial tools, the objectives related to job creation, particularly for disadvantaged women and young people, seem not to have been achieved, and the same is true for access to financing for rural micro-enterprises. Introduction of new, innovative equipment and processes should be emphasized in a positive manner and is one of the significant things learned under PROMER, even if some innovations are still under experimentation. There were interesting results in defining the intervention strategy and in testing various tools for promoting and sustaining rural micro-enterprises.

In terms of financial lessons, the project faced the absence of products suitable for medium-term equipment financing. This lack made it impossible to achieve some of the objectives. Furthermore, the conditions for entry and access to credit, including the distance from the main partner microfinance institution, Crédit mutuel du Sénégal (CMS), barred access to financing for part of the target public, especially unemployed young people and disadvantage women.

Generally speaking, the mission showed diversified impacts at several levels and involving different domains. There were positive, even quite impressive, impacts, in terms of volume of activities and evolution of sales volumes, for some micro-enterprises that received consistent support. The impacts are strongly tied to the intensity and duration of the coaching of the rural micro-enterprises. Nonetheless, the impacts remain modest at the local economy scale. The supplementary income, especially from female entrepreneurs, is allocated on a priority basis to improving family food, and approximately 1 350 households were affected by this impact. When the surplus is significant, it is invested in growth of productive capital from the family farm, especially for agricultural production and diversification of off-farm activities. This thus allows for better security of households involved, better access to primary health care, and, to a lesser extent, higher school enrollment for children and improved living conditions. Potentially, 860 households were able to make changes at this level. There is a reduction in the level of difficulty of women's work thanks to the introduction of processing equipment, and it can be estimated that some 2 000 people benefited from this impact in the project zone. Skills acquired at the professional level also had an impact on human resources. The economic success of some sponsors led them to play a greater role in the village, even, in some cases, in local development of the rural community, putting their reinforced abilities and their resources to use for the community to fund collective projects.

It cannot be said at the current time that all of the operational rural micro-enterprises are on the path to sustainability, due mainly to insufficient coaching in terms of duration and coaching that is insufficiently empowering and participatory. Although the impacts seen are quite significant for some rural micro-enterprises but relatively limited, within the framework of a pilot phase, they make it possible to assess the impact of the methodology and the interest in possibly linking training/advisory support and access to credit.

Main lessons from the experience

The main lessons that can be learned from the PROMER experience are:

1. A concentration of support on production activities and the exclusion of trade and pasture feeding activities, which the mid-term review drove, do not reach a disadvantaged public for which these activities generate income and could be a spark to activate more structuring activities. Trade activities could also accompany development of production activities, furthering marketing. Thus, the types of activities targeted, access to credit and the insufficient proximity of financial services are discriminant factors for women and young people who are not involved in off-farm activities and who are the most disadvantaged in the community.

2. An active, dense and diversified private and associative partnership facilitates execution within a relatively short time of an ambitious programme of work, with a wide geographic and sectoral expanse. However, the contents of the cooperation protocols must be targeted and consider the specific situation of each partner to maximize cost effectiveness of each intervention.

3. Choosing an intervention out of all four regions was of some interest for the pilot nature of the operation and the diverse potentialities and types of activities. However, the scatter effect of the missions and operating costs could have been reduced by limiting the scope of intervention to certain economic activities without this affecting the choice of the priority target of the project.

4. Experience since 2002 in the structuring products has shown to bring interesting lessons that can be capitalized for the future. However, in its apprehension of the rural micro-enterprises, PROMER seems to be adopting a sectoral rather than product approach. Support is focused on rural micro-enterprises fulfilling, alone or nearly so, almost all of the functions (procurement - production - sales). They have little or nothing to do with the micro-enterprises upstream or downstream of the rural micro-enterprises supported. This strategy, which seems to fall within a vision of evolution of the affected rural micro-enterprises towards formal small and consequential enterprises seeking to cover the high value added markets and modern distribution, contributes to limiting the impact of the project and the driving role of some rural micro-enterprises. In addition, in this approach, the proximal procurement and sales markets were not well exploited although they involved almost all of the portfolio rural micro-enterprises and had constraints to be lifted.

5. The mission shows that if the sustainability tools selected by the project (commercial support agreement- CAC, technological support funds (FAT), rural micro-enterprise boutique) seem relevant, their experience over the allotted time (from now until the end of the current phase of PROMER) and at the introduction rate noted could not allow assessment of their suitability for the sustainability objective. It would thus be desirable in the future to be able to test and build on the bases for sustainability of these tools in a real situation with a fully participatory and empowering approach. Sustainability of the advisory support functions for rural micro-enterprises did not receive in-depth consideration during the project that would have allowed for a test operation that could be capitalized to define a second phase.

6. The mistakes and shortages in design of the monitoring and evaluation system throughout the project period, added to the staffing instability, made it impossible to optimize guidance of project interventions. These shortages mean that at present it is not possible to capitalize best on the experiences gained and take a good measurement of the impacts.

Main recommendations from the evaluation by consensus from the partnership

The main recommendations receiving a consensus from the evaluation partnership are:

1. Pursuing the experience within the framework of a second phase of PROMER, including in the current project zone, the relevance of which is justified with regard to: i) the relevance of the overall objective of the intervention, ii) the first positive impacts noted, iii) the overly limited duration of the current experience, the achievements of which still need to be consolidated; most of the current PROMER activities are still in the field, iv) the need to define and put in place a sustainable system for coaching the rural micro-enterprises, and v) the unsuitability of the financial tools, which excluded many potentially viable players.

2. Pursuing the experience using the overall strategy developed based on the training/coaching (advisory support)/credit model at the rural micro-enterprises' location and with externalization of the financing function. The approach to be used should not be exclusive concerning the various kinds of enterprises to be supported, whether in terms of sectors of activity or size, but should be differentiated according to the type of enterprise: single-person micro-enterprise, artisanal enterprise or enterprise with a vocation and a potential to evolve towards the small and medium-sized enterprise. From this perspective, the interventions in the second phase should not be directed exclusively towards the small and medium enterprises at the risk of directly or indirectly excluding the poor categories in the communities involved. The actions to be put in place should further growth of the products involved by the actions supported.

3. Choice of the location of the interventions will give priority to a pragmatic approach that should not oppose village or département seat location. The geographic positioning of the intervention in a region should be considered on the basis of the combination of certain minimum criteria: availability of raw materials, accessibility, actual or potential presence of financial services and outlook for a cost-effective advisory support service due to the existence of a potential for developing economic activities.

4. The extension zones for PROMER activities should correspond to the intervention zones of the other projects funded by IFAD to maximize the complementarities and synergies that will require effective coordination of the interventions. However, it should be emphasized that this extension should be done cautiously to take into account the newness of the PROMER experience and because the various methodological tools still need to be validated.

5. The funding question is central in the problem of emergence and consolidation of the rural micro-enterprises; and the vocation of PROMER to intervene in zones covered by the other projects funded by IFAD recommends that PROMER can integrate a technical assistance service into the projects on the question of funding. This service could be delivered by an internal cell with the required skills but the option of contracting with an outside specialist should be given priority. The intervention of international technical assistance could complete the scheme.

6. Creation of a sustainable advisory service for the rural micro-enterprise should be one of the objectives of the second phase. The process of withdrawal and empowerment of this service should be provided for from the beginning of project design and planned for in the time allotted. Right from the start, the principle of progress billing for services, particularly for the commercial, and training functions, which the entrepreneurs seem to be ready to take over when the services are quality and the positive impacts are clear, should be adopted in a modular manner. Then the question of takeover of all costs for these coaching services cannot be exclusively borne by the beneficiaries but must also be considered from the perspective of subsidy and duration, especially considering the contributions from the State and the local collectives.

7. Lastly, from the start it would be appropriate to build a relevant monitoring and evaluation and indicators system taking into consideration all of the characteristics of the rural micro-enterprise. The annual audits on accounting, financial and procedural should also be able to intervene in the internal information system.

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1/ This agreement reflects an understanding among partners to adopt and implement recommendations stemming from the evaluation. The agreement was formulated in consultation with the members of the Core Learning Partnership (CLP).