European Initiative for Performance Evaluation of African MFIs: Conclusions of a Pilot Programme

This document presents the conclusions and recommendations, which were the result of a workshop that analyzed the lessons learned from a pilot program, called The European Initiative for Performance Evaluation of African Microfinance Institutions (MFIs).

The pilot program aimed to:

• Regularly evaluate the performance of nine African MFIs;
• Reinforce their performance;
• Increase the efficiency of their services;
• Strengthen their credit worthiness among donors and private investors;
• Test the willingness of MFIs to take part in such a process on a regular basis.

The pilot program had the following features:

• Operating principles:
• • MFI contribution at evaluating costs;
  • Payment of co-financing to the MFI.
• Selection of a set of criteria to test the MFIs.
• Participation of nine African MFIs and four professional evaluation agencies.

The paper lists the following lessons learned from the pilot program:

• Performance evaluation is a complex process;
• MFIs are confused about the concept and its definition;
• Regular performance evaluation is important for an MFI and the entire sector;
• There is a need for:
• • Precision on key elements like terms and ratios,
  • A professional, open, competitive and transparent market.

The paper concludes the following recommendations:

• Continue the evaluation process on a regular basis;
• Define the final objectives, terms and ratios;
• Continue the informal dialog between evaluation agencies and African MFIs;
• Maintain the principle of progressive participation.