Study of Impact and Client satisfaction with the loan services of Diaconia-FRIF

Background:
Diaconia-FRIF (D-FRIF) began to operate in Bolivia in 1991 as a project of Norwegian Mission Alliance, a not-for-profit Evangelical Christian organization that promotes the integral development of impoverished social groups with services, and production and institutional strengthening projects. The origin of D-FRIF follows the intention of countering lack of work and housing in families of meagre resources through credit programmes. Under this focus, work began that in a few years allowed recognizing D-FRIF as one of the most notable pioneer microfinance institutions (MFIs) in the development of microcredit technologies for housing. In 1997, D-FRIF acquired legal status as a foundation under Bolivian law. Notwithstanding, D-FRIF still has close links with Norwegian Mission Alliance through permanent representatives in the Board of Directors of the foundation.     

Purpose/objective:
•The objective of the evaluation is to know the impact of the services provided by Diaconia-FRIF to its clients
•In addition, an evaluation of strategic positioning and comparative advantage of Diaconia - FRIF in its areas of intervention in the broader microfinance context in the country and in relation to other actors of microfinance

Methodology:
   
Key findings:
Conclusions Regarding Individual Loans for Economic Activities

The comparison of the situation of borrowers of individual loans for economic activities between the periods ex ante and ex post access to the D-FRIF loans shows an increase in working capital, investment, income, and the number of workers of the economic activities financed, as well as improvements in the place of commerce. At the level of client homes, we also identify improvement in nutrition and education. The increases observed in capital, investment, and incomes are frequent in most clients. On the other hand, increases in employment, and improvements in the type of place of commerce, nutrition, and education are minority trends.

According to the criteria applied, individual loans for economic activities have, at the level of the economic activities financed:

•a high impact on working capital and income,
•a medium impact on investment in fixed assets, 
•a low impact on levels of employment, and 
•a moderate impact on the type of place of commerce.
In the sphere of client households, D-FRIF loans have a moderate impact on improvements in nutrition and education.

Conclusions degree of impact, housing loans:

•a high impact on the reduction of overcrowding in the home (increases in the number of bedrooms per member of the household);

•a medium impact on improvements in the condition of floors, roofs, and walls of the house, and on the separation of the kitchen from the bedrooms;
•a low impact on the installation of potable water and sewage in the house;
•a moderate impact on improvements in the type of house and on the installation of electricity and residential natural gas in the house.

Conclusions Regarding Loans for Microcredit Associations

A comparison of the situation of the borrowers of loans for microcredit associations ex ante and ex post access to the loan reflects increases in capital, investment, income, and employment in the economic activities financed, as well as improvements in the type of place of commerce. Also noticeable are improvements in nutrition and education of the household and greater participation of women in the decisions of the home. The improvements in capital, investment, and income are evident in most women clients, while the remaining improvements are minority trends.

Recommendations:
Challenges:
Outreach of the poor and excluded
•Expansion of outreach in rural areas and in neglected areas.
•Institutionalization of instruments for determining outreach in poor areas and of poor persons.
•Deepening of outreach of financial services (not only loans) for poor persons.
•Deepening of outreach in the rural productive sector and development of alternative guarantees (forestry guarantees, moveable goods guarantees, productive micro-warrants, productive micro-leasing, and agriculture by contracts).

•Institutionalization of the administration of social performance, involving three basic components: 1) the “operationalization” of the mission under specific social objectives and goals; 2) the development of information systems for monitoring and evaluating social performance; 3) the use of social performance information for decision-making and alignment of the internal systems with the social objectives.

Comments from the organisation, if any:
The evaluation work realized by Consultora PROFIN has been responsible and professional.  The results of the study shows that the work realized by Diaconia FRIF produce positive impacts, in what levels and in what areas with more impact. The study gives us facts and information that we have to follow up considering future plans and strategies.  We have the challenge to implement the indicators for social performance monitoring (Ricardo Suxo, director).