KfW

March 1, 2008    

Score: 85/100

Key Findings
KfW received 85 out of 100 points—a very strong performance and the highest rated DFI participating in this round.  Senior management has provided considerable managerial and intellectual support to KfW’s work in financial systems development.  KfW also has a range of appropriate instruments and has substantially increased its flexibility in working with the private sector by using its own funds.  Finally, KfW has superior systems for tracking its portfolio compared to its peers.

Suggestions to Increase Agency’s Effectiveness and Scores

• Address challenges of disbursement pressure and disincentive to do smaller volume projects, and identify creative countervailing options, especially for newer markets with less absorptive capacity.
• As KfW expands into new markets—where it has less knowledge and direct experience—recruiting staff with prior familiarity with these markets will become increasingly important.  One suggestion: KfW could more broadly replicate examples cited of sending junior staff to do stints with financial institutions in the field.
• Undertake regular portfolio reviews (agency-wide, regional, or even focusing on a particular type of projects, e.g., the investment fund portfolio) to obtain detailed information on performance and to uncover patterns of what works and what does not work well.  This is especially important given KfW’s rapidly growing portfolio.
• Ensure that portfolio performance tracking systems extend to indirectly funded retail providers.  Retail providers funded by KfW through apexes, investment vehicles, regional funds, etc., account for nearly half of the bank’s retail microfinance portfolio.
<