Review of Microfinance and development Programs of COAST Trust

Background

Stromme Foundation (SF) has been supporting microfinance, development education and human rights program entitled 'South-East Coastal Development Initiative' (SECDI) of COAST Trust in Cox's Bazaar district over a three year period (2001-2003). Though eventually SF changed it policy of project financing, the review was intended to assess performance and progress to determine the level of continued support.

Purpose/objective

The Objective of the review was to assess performance and progress of the project supported to determine the level of continued support including funding.

Methodology

The review as planned was based on field visits, discussions, observations of the project activities and study of secondary data of the project of COAST in Cox's Bazaar area. i.e. discussions with group members, community leaders (People's organizations), staff members, visits to three Program units: Kutubdia, Maheshkhali and Cox's Bazaar Sadar and three non-formal primary schools

Key findings

It appears that COAST has developed a good combination of financial and non-financial services to address critical needs of the poor though it should be understood that not all programs have the same degree of coverage and success. COAST has exceeded achieving its targets in loan disbursement, savings balance, and average loan size and maintained 100% loan recovery rate, which is critical for a healthy microfinance program. However, it has not achieved the targets in the areas of group formation, membership and loan outstanding and has also recorded a high drop out rate (25%).
By way of impact of microfinance program the following have been observed, (a) reduction of dependence on moneylenders who charge 120-140% per year compared to COAST's 30%. Group members could start income generating activities as well as expand existing businesses by accessing loans from COAST and this has created employment opportunities thus increasing income as well as consumption and acquisition of household assets.

COAST has a development education module having 38 lessons on organization, family laws, environment and primary health care, education, dowry and medicinal herbs and discussions with the groups show that members can recall issues that have been discussed.
Development education has increased the level of awareness of the group members. Human rights and governance activities have created some sort implementation structure and initiatives taken by the Jan Sangathan ( JS) i.e., people organization though are still at the very rudimentary level.

Recommendations

Microfinance:
- Segregate interest income from the loan installment in the accounting system;
- Explore the possibility of simplifying MIS;
- Establish dialogue with PKSF to offer multiple savings products to the members only;
- Withdrawal of savings may be made easier;
- Develop parameters for a viable model branch and replicate it in all branches to make the microfinance program sustainable;
- Investigate the reasons behind high drop-out rate.
Development Education
- COAST should promote, in collaboration with JS specific follow-up action on social and economic issues. E.g. it can use its loan program to make 100% sanitation coverage.
- Explore possibility of upgrading and including news issues in the education lessons.
Non-formal primary education
- This activity should be expanded where schools are not available and/or where drop-out is not high.
Human rights and Governance
- This type of activities require a longer time and lot more efforts to make people's organizations strong and active, therefore additional training for both leaders and staff members will be needed.
Human Resources Development
- Additional training on microfinance development and other aspects of COAST's program may be given to staff members e.g. developing a training plan corresponding to career plan of the staff members at different levels.

Comments from the organisation

The evaluation has been very useful for both SF and the Partner. SF agreed to continue to support the project for another 5-years, to allow the partner to consider recommendations while expanding outreach with its improved professional capacity. SF guided the Partner on international standards and good practices in MF management e.g. preparation of BP and portfolio tracking. The partner has modified these according to needs of the participants. Efforts in the education sector have been consolidated significantly considering components appropriate to the local needs, e.g. elementary education through primary schools and Maktabs (religious education centres in mosque complex) and education of adolescent girls.