Swedish International Development Corporation (Sida)
Swedish International Development Cooperation (Sida)
May 2002
Executive Summary
A team comprising David Stanton of DFID, Richard Roberts of FAO, and Brigit Helms and Alexia Latortue of CGAP conducted a Donor Peer Review of Sida in Stockholm from 20-24 May, 2002. The review is part of a 21-agency initiative launched by UK Secretary of State Clare Short and CGAP to concretely tackle aid effectiveness by using microfinance as a test case.
The Peer Review team focused on the internal procedures, practices and processes of Sida to identify the success factors and constraints that influence the effectiveness of the agency’s microfinance operations. The microfinance specialists within INEC provided the team with an orientation to Sida and organized meetings with over 35 staff members, including regional and sector departments and embassies. The team briefed the Director General and other members of the management team on its initial findings on May 24.
The Peer Review team found its visit to be timely given the current process underway at Sida to develop a new policy, operational guidelines, and tools in microfinance. The team hopes that this letter to management will enrich the internal discussions and provide specific ideas of how Sida can improve the effectiveness of its microfinance operations.
This letter outlines Sida’s strengths and challenges, and presents a number of specific recommendations for change. A matrix at the end of the letter provides a summary of the key findings and recommendations organized around six strategic areas.
The recommendations address the need to clarify Sida’s role and comparative advantage in microfinance. The team’s suggested actions for change fall into four main categories:
- Achieve Strategic Clarity. Sida should clarify internally the cross-cutting contribution of microfinance to its development agenda and install incentives to follow sound practices.
- Improve Accountability for Results. Sida should more systematically employ performance-based contracts, monitor performance against targets, and define exit strategies at the outset of program design in microfinance.
- Enhance Technical Capacity in Microfinance. Sida should increase the number of staff specialists in Stockholm (decentralization needs a strong center), while recruiting local staff in selected countries with some microfinance expertise.
- Clarify Role of the Stockholm-based Microfinance Unit. Assuming a commitment to improving its overall technical capacity in microfinance, Sida should define four roles for the central unit: non-specialist training, helpdesk function, knowledge management, and resource leverage.
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