Asian Development Bank (AsDB)
Asian Development Bank Letter to Management
July 2002
Executive Summary
A team comprising David Stanton, Chief Enterprise Development Advisor of the Department for International Development (DFID), Henri Dommel, Rural Finance Advisor of the International Fund for Agricultural Development (IFAD), Syed Hashemi, Senior Poverty Specialist of the Consultative Group to Assist the Poorest (CGAP), and Alexia Latortue, Microfinance Specialist of CGAP, conducted a Donor Peer Review of the Asian Development Bank (ADB) in Manila from 8 12 July, 2002. The review is part of a 21-agency initiative launched by UK Secretary of State Clare Short and CGAP to tackle aid effectiveness by using microfinance as a test case.
The Peer Review focused on the internal procedures, practices and processes of ADB to identify the success factors and constraints that influence the effectiveness of the agency’s microfinance operations. As the Focal Point for microfinance, the Finance and Infrastructure Division (RSFI) of the Regional and Sustainable Development Department (RSDD) briefed the team on ADB. The Focal Point also organized meetings with over 45 staff members from the regional departments, the sector divisions, RSDD, the Human Resources Division, the Operations Evaluation Department, the Economics and Research Department, and the Management Support Division. The team shared initial findings and recommendations with Vice President Eichenberger, senior management and staff on 12 July.
The Peer Review team considered this visit timely, given the recent re-organization of ADB and its implications for how support to microfinance is organized. The team hopes that this letter to management will enrich internal discussions and provide specific ideas on how ADB can improve the quality of its microfinance operations, and further strengthen links between regional departments and RSDD to better support financial services for the poor.
This letter outlines ADB’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 Peer Review team’s recommendations fall into four main categories:
- Develop an ADB-wide Vision of Microfinance. ADB should achieve a common vision of microfinance and how it contributes to poverty reduction.
- Improve Quality of Operations. ADB should obtain better knowledge of its portfolio, introduce performance-based monitoring, focus its resources where they have greatest impact, and improve the quality of credit components in multi-sector programs.
- Increase and Enhance Technical Capacity. ADB should increase the number of specialist staff in RSFI. RSFI should build strong partnerships with non microfinance specialists in the regions, provide more training to microfinance specialists and non-specialists, and prioritize technical resources for countries with a significant microfinance portfolio.
- Improve Learning. ADB should promote learning across regions, sectors and field operations, pro-actively mainstreaming sound practices in microfinance.
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