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Micro-Start Program: Local Technical Services Provider - Impact Study of the Zakoura Microcredit Program
Zakoura Micro-Crédit (ZMC) is the microfinance arm of the Zakoura Foundation, a national NGO devoted to increasing the quality of life of the most underprivileged Moroccans. ZMC provides credit and training to a target market of economically disadvantaged women using a solidarity group methodology. Between its founding in 1995 and September 2000, ZMC had disbursed 82,814 loans totaling 121,489,000 Dirhams. Its current repayment rate is 99.69%
Points of Intervention
This section is a walk through the MicroStart process, with specific recommendations. It focuses on the key areas of intervention SUM has identified. SUM's goal is to develop simple, efficient, and meaningful procedures, and these suggestions are offered in that spirit.
Can MicroStart Have a Significant Impact on Policy and the Environment for Microfinance?
MicroStart programs establish an action-oriented framework for bringing key players together to learn about microfinance development. These players include government policy makers, private sector actors (potential social entrepreneurs or financiers), MFIs, and other donors.

Other TSP Issues
1. Local Technical Service Provider
Creating Effective Capacity Building Relationships
MicroStart's use of TSPs is an experiment in creating a new framework for capacity building. The original design sprang from the recognition that the standard CTA model in use throughout UNDP projects was not the best way to support the development of microfinance institutions.

Summary of TSP Performance in Countries Visited
The experiences of the TSPs in each country visited during the evaluation illustrate a range of different issues.

Can Technical Service Providers Add Significant Value?
The second major hypothesis behind MicroStart is that technical assistance from an experienced microfinance organization or consulting firm can help build the capacity of small, young MFIs.
Recommendations
This report recommends that SUM reorient MicroStart to focus more clearly on finding and supporting organizations that have good potential to become major providers, while reducing the proportion of its resources devoted to low potential organizations.
The Art of Selecting Promising MFIs
The key question for MicroStart is whether it can equip and motivate those in charge of MFI selection to choose "small and promising" rather than "small and weak."
What keeps MicroStart from selecting more high-performing organizations?
The desire to reach a target number of organizations in each country
MFI Performance in Countries Visited: A Few Numbers
Before reviewing the performance of MFIs in MicroStart, it is useful to consider what minimum level of performance would justify the expenditures MicroStart is making.

Does It Make Sense for UNDP to Help Launch Small and New Organizations?
The most fundamental question that this evaluation addresses is the validity of UNDP's decision to build a program focused on supporting small MFIs.

Overall Conclusions and Main Messages - MicroStart: Finding and Feeding Breakthroughs
Through MicroStart, UNDP is making an important contribution to the growth of microfinance around the world, both through its direct support of MFIs and through the processes and ideas it is introducing into countries where microfinance is just beginning.
Introduction - MicroStart: Finding and Feeding Breakthroughs
UNDP's Special Unit for Microfinance (SUM) commissioned a mid-term evaluation of its MicroStart program to take place in September-October 1999. SUM believed that an evaluation at this time would identify areas for improvement while there was still time to make changes. SUM directed us, as evaluators, to focus on the validity of the assumptions underlying MicroStart and on the processes used to implement it, rather than on the impact of the program.

Other microstart Related Articles

Introduction - MicroStart: Finding and Feeding Breakthroughs
UNDP's Special Unit for Microfinance (SUM) commissioned a mid-term evaluation of its MicroStart program to take place in September-October 1999. SUM believed that an evaluation at this time would identify areas for improvement while there was still time to make changes. SUM directed us, as evaluators, to focus on the validity of the assumptions underlying MicroStart and on the processes used to implement it, rather than on the impact of the program.
Overall Conclusions and Main Messages - MicroStart: Finding and Feeding Breakthroughs
Through MicroStart, UNDP is making an important contribution to the growth of microfinance around the world, both through its direct support of MFIs and through the processes and ideas it is introducing into countries where microfinance is just beginning.
MFI Performance in Countries Visited: A Few Numbers
Before reviewing the performance of MFIs in MicroStart, it is useful to consider what minimum level of performance would justify the expenditures MicroStart is making.

The Art of Selecting Promising MFIs
The key question for MicroStart is whether it can equip and motivate those in charge of MFI selection to choose "small and promising" rather than "small and weak."
Recommendations
This report recommends that SUM reorient MicroStart to focus more clearly on finding and supporting organizations that have good potential to become major providers, while reducing the proportion of its resources devoted to low potential organizations.
Can Technical Service Providers Add Significant Value?
The second major hypothesis behind MicroStart is that technical assistance from an experienced microfinance organization or consulting firm can help build the capacity of small, young MFIs.
Are Small Capital Grants Worthwhile?
The MicroStart approach is to make small grants available to participating MFIs. These grants can be used to cover operating losses or to capitalize loan funds. SUM staff wanted these grants to be a way to funnel small doses of funds in a way that would not overwhelm a small and young MFI’s capacity to absorb them. Each grant has a ceiling of $150,000 and is used for either covering operating losses and/or for loan capital.

Can MicroStart Have a Significant Impact on Policy and the Environment for Microfinance?
MicroStart programs establish an action-oriented framework for bringing key players together to learn about microfinance development. These players include government policy makers, private sector actors (potential social entrepreneurs or financiers), MFIs, and other donors.

Is MicroStart a Successful Microfinance Strategy for UNDP?
When MicroStart began, its designers were attempting to develop a program that would fit well with UNDP's strengths and weaknesses. They decided to focus on new institutions, recognizing UNDP's presence in many countries where microfinance was still new, as well as the limits on UNDP's ability to provide grants. In order to compensate for the lack of experience of country office staff, they developed a project blueprint that they hoped would prevent some of the most likely errors UNDP offices with little microfinance background might make.
Points of Intervention
This section is a walk through the MicroStart process, with specific recommendations. It focuses on the key areas of intervention SUM has identified. SUM's goal is to develop simple, efficient, and meaningful procedures, and these suggestions are offered in that spirit.
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