Canadian International Development Agency (CIDA)
CIDA Letter to Management
June 2003
Executive Summary
A team comprising Katharine McKee of USAID, C. Ross Croulet of AfDB, and Jennifer Isern and Eric Duflos of CGAP conducted a Donor Peer Review of CIDA in Gatineau from 8 to 13 June 2003. The review is part of a 17-agency initiative launched by Development Ministers, heads of agencies, 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 CIDA to identify the success factors and constraints that influence the effectiveness of the agency’s microfinance operations. The Policy branch provided the team with an orientation to CIDA and organized interviews with 58 people throughout the agency, including consultation with field level staff and partners. The peer review team also read a comprehensive set of documents prepared by the Policy branch. The team briefed the Minister of International Cooperation Susan Whelan, the President of CIDA Paul Thibault, and several department heads and staff on its initial findings on June 12th and June 13th.
The peer review team found its visit to be timely given the growing demand by CIDA stakeholders to increase development aid effectiveness. The team hopes that this management letter will enrich the internal discussions and provide specific ideas of how CIDA can increase its effectiveness in microfinance. This letter outlines CIDA’s strengths and challenges, and presents specific recommendations. A matrix at the end of the letter provides a summary.
The peer review team makes five concrete recommendations to management to enable CIDA to improve its microfinance operations. The team hopes these recommendations will also prove helpful for enhancing CIDA’s overall aid effectiveness.
- Focus its involvement. CIDA should focus on fewer countries and fewer types of higher quality operations, employing equal or fewer resources.
- Build a strategy for microfinance. CIDA should develop and implement a microfinance strategy, based on its existing documents, and on other donors’ work. This strategy should increase competitive selection of its partners and be as practical and operational as possible. It should be promoted actively by top leadership.
- Review and clean up the portfolio. CIDA needs to develop an inventory of its current portfolio, review the work done by Canadian Executing Agencies (CEAs), and phase out problem projects and credit components.
- Strengthen technical skills and analysis. To ensure quality and effectiveness in microfinance CIDA should create a full time microfinance focal person in the policy branch, place specialists strategically, provide orientation to non specialists, and enhance knowledge management.
- Improve performance management. CIDA should require technical specialist analysis of all new projects and extensions, utilize common performance indicators, develop minimum standards checklists, and design and enforce performance contracts for CEAs and consultants.
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