Final report: Mid-term Performance Evaluation of the USAID-funded Loan Portfolio Guarantees (LPG) through the Development Credit Authority (DCA) Activity. September, 2014 This publication was produced at the request of the United States Agency for International Development. It was prepared independently by ELIM Serviços Lda. MID-TERM PERFORMANCE EVALUATION OF THE USAID-FUNDED DEVELOPMENT CREDIT AUTHORITY (DCA) ACTIVITY: PERFORMANCE EVALUATION OF THE LOAN PORTFOLIO GUARANTEES (LPG) THROUGH THE DEVELOPMENT CREDIT AUTHORITY (DCA) ACTIVITY IMPLEMENTED IN MOZAMBIQUE THROUGH BANCO TERRA AND BANCO OPORTUNIDADE, MOÇAMBIQUE September, 2014 [AID-656-O-14-00003-DCA] DISCLAIMER The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government. CONTENTS Executive Summary .................................................................................................................................. 9 Introduction.................................................................................................................................................. 22 Government Agriculture Policy................................................................................................................ 22 Evolution of Policy 1975-2010............................................................................................................. 22 Post-2010 Government Agricultural Policy ......................................................................................... 23 Project Background ..................................................................................................................................... 24 Targeted Borrowers ............................................................................................................................ 25 Financial Intermediaries (Activity Implementers) ................................................................................ 25 Provision of Technical Assistance ...................................................................................................... 25 Evaluation Purpose & Evaluation Questions .............................................................................................. 26 Evaluation Purpose ................................................................................................................................. 26 Evaluation Questions .............................................................................................................................. 27 Evaluation Methods & Limitations ............................................................................................................... 30 Evaluation Technical approach ............................................................................................................... 30 The DCED Standard and the Evaluation Questions ........................................................................... 30 Evaluation Methodology .......................................................................................................................... 31 Data collection ..................................................................................................................................... 33 Geographical Coverage .......................................................................................................................... 34 Risks and limitations ............................................................................................................................... 34 LPG-dca Loan portfolio & terms and conditions of access ......................................................................... 36 Banco Oportunidate de Moçambique – LPG-DCA Agriculture Portfolio ................................................. 38 Banco Terra – LPG-DCA Agriculture Portfolio ........................................................................................ 42 Findings, conclusions & Recommendations ............................................................................................... 48 FINDINGS ............................................................................................................................................... 48 Risk Mitigation issues ................................................................................................................................ 59 Government Financial Policy: increased financial inclusion .......................................................................... 59 Government District Development Fund: a populist approach ....................................................................... 60 Donor Policy: a diversity of interventions .................................................................................................... 60 DFiD: AgDevCo ................................................................................................................................... 61 Danida: Growth & 7 Employment programUSD38million ................................................................... 62 World Bank USD100 Million Grant Project ......................................................................................... 63 USAID – FinAgro Program ...................................................................................................................... 64 Private Sector Interventions ........................................................................................................................ 65 CONCLUSIONS ...................................................................................................................................... 66 RECOMMENDATIONS ........................................................................................................................... 70 LOOKING FORWARD ............................................................................................................................ 73 Annex 1. Evaluation Statement of Work ................................................................................................. 76 Annex 3. Data collection & Evaluation logistics plan .............................................................................. 78 Annex 4. Evaluation Team Members ..................................................................................................... 82 Annex 5. Reference Material .................................................................................................................. 84 Development Credit Authority Mid-term Evaluation: Mozambique Annex 6. Evaluation Design Matrix ........................................................................................................ 85 Annex 7. Evaluation Data Collection Tools ............................................................................................ 88 KEY INFORMANT Interview Protocols ................................................................................................... 89 USAID ..................................................................................................................................................... 89 SIDA ........................................................................................................................................................ 91 TECHNICAL ASSISTANCE PROVIDERS (e.g. Agrifuturo, TechnoServe, ACDI/VOCA, World Vision, CLUSA, Save the Children, ADRA, etc) ................................................................................................. 93 Bank Semi-Structured Questionnaire ..................................................................................................... 95 supporting quantitative information required ............................................................................................... 96 Qualitative Interview Protocol for Participating Banks: ............................................................................... 97 Input Level (DCA Guarantee Design and Structure) .............................................................................. 97 Output Level ............................................................................................................................................ 99 Outcome Levels .................................................................................................................................... 100 Sustainability ......................................................................................................................................... 101 Lessons Learned ................................................................................................................................... 102 Closing Remarks And Appreciation ...................................................................................................... 102 Quantitative SURVEY: Non/Borrowers ................................................................................................. 103 Focus Group Discussion – Qualitative Interviews of borrowers/non-borrowers ................................... 107 Enterprises – Borrowers Semi-structured Questionnaire ..................................................................... 112 Annex 8. Disclosure of any Conflicts of Interest ................................................................................... 114 Annex 9. contact list ............................................................................................................................. 120 5 Development