Back to Office Field Monitoring Visit Report
Members of the Mission:
Tigist Lemma, Program Assistant
Yoshiaki Noguchi, Program Analyst
Project Title:
Local Economic Development (LED)
I. Places and Agencies Visited
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BoFED
BoUDC
MSE Agency
City Administration
Business Development Resource Center (BDRCs)
Chamber of Commerce
MSEs (beneficiaries of microfinance)
Microfinance Institutes (MFIs)
II. Main Activities Undertaken:
 Introduction of the newly assigned tentative Program
Coordinator,
Yoshiaki
Noguchi
to
related
stakeholders
 Check of the progress of the project over discussion
with LED Coordinator, LED Expert and officials in
related organizations
 Learning of status of beneficiary companies of the
microfinance service through visiting
 Check of the actual status of BDRCs in selected
cities through visiting
 Delivery of documents related to provision of
motorcycles to each city
Mission Date:
Tigray: 18-19 June 2013
Amhara: 20-21 June 2013
Dire Dawa and Harar: 25-27 June 2013
Project ID:
00082517
Counterparts discussed with:
1) Tigray
a) BoFED
i) Mr. Daniel Assefa, Bureau Head
ii) Ms. Zafu Gebre, Bureau Deputy Head
iii) Mr. Araya Tesfaye, LED Regional
Coordinator
b) Mekele City Administration
i) Mr. Nigusse Gebre Gebremedhin, Mayor
ii) Mr. Girmay Hailue Redae, Head of OoFED
iii) Ms, Nigisti Kidane Nigasssi, LED Expert
c) Adigrat City Administration
i) Mr. Haileselassie G/Meskel, LED Expert
2) Amhara
a) BoFED
i) Mr. Ayenew Belay, Bureau Head
ii) Mr. Tadie Kelemu, LED Coordinator
iii) Mr. Yonas Afwork, Expert
b) Bahir Dar City Administration
i) Mr. Dawud Mohammed, LED Expert
ii) Ms. Degie Zerihun, LED Expert
c) Amhara Chamber
i) Mr. Getachew Ayenew
3) Dire Dawa
a) BoFED
i) Mr. Asrat Chala, Bureau Head
ii) Mr. Nahoh Semeneh, LED Expert
b) Dire Microfinance Institution
i) Mr. Getachew Yimer, General Manager
4) Harar
a) BoFED
i) Mr. Nebil Alwan, LED Coordinator
b) BoUDC
i) Mr. Abdulhakim Mohamed, Bureau Head
ii) Mr. Abdunasir Abdurahman, LED Expert
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III. Objectives of Mission/Purpose of the Field Visit:
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Introduction of the new tentative Program Coordinator
Follow-up of the progress of the Program
IV. Outcomes of the Mission: Brief Summary
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Introduced the newly assigned tentative Program Coordinator, Yoshiaki Noguchi to 19 officials in related
organizations.
Progress of the project has been confirmed over discussion with LED Coordinator, LED Expert and
officials in related organizations.
Beneficiary companies of the microfinance service have been observed through visiting.
Actual status of BDRCs in selected cities has been observed through visiting.
The documents related to provision of motorcycles to each city have been delivered.
V. Highlighted Findings
Microfinance
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In the 3 cities visited that have implemented LED Microfinance since 2009, Repayment does not
progress as planned and the rate is low. In Mekele, the rate is only 25%, 70% in Adigrat and 52% in
Bahir Dar.
Microfinance Institutes (MFIs) do not take default risk of the loan in any cities visited. In Tigray, after
break-up of the initial negotiation, the loan is given without going through the MFI. In Amhara, the MFI
does not take any risk. In Dire Dawa, the MoU signed stipulated that MFIs share the risk with City
Administration, but it does not specify the exact share of the risk. The city Administration and LED Expert
will try to add the risk sharing agreement in the MoU. In Harar, the negotiation with MFIs about the
degree of risk to be shared is still ongoing.
All the beneficiaries are cooperative associations.
In Bahir Dar, the beneficiaries include a very large cooperative for sanitary services that employs as
many as 400 people aside from 10 cooperative members.
In Dire Dawa, it is already decided that the loan will be given in kind in the form of mini dump truck of
TATA Motors.
Through the visits, it has been confirmed that some cooperatives do have large potential to grow and the
loan is likely to boost their potential.
Some beneficiary companies also receive training of KAIZEN (quality and productivity improvement) and
implement it. The methods help the companies to improve its operation.
Most of the beneficiaries in operate in public shades that require very little rent, but some of them have
not got a place in them and operate in a private place, which makes their profit low.
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A textile cooperative in Bahir Dar
A brochure of trucks to be purchased in Dire Dawa
BDRC
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Out of the 5 cities visited, 3 cities as follows are supposed to have BDRC.
Mekele: BDRC is closed and a new one is planned to open within 3 months in a place currently used as
police office. Importance of the Center was explained to the mayor by the mission.
Adigrat: Not fully operational. ICT equipment has been purchased and will start the service soon.
Charged showing of DSTV is ongoing.
Bahir Dar: Fully operational with many kinds of services such as ICT (such as internet café), PC training,
Job consultation for unemployed, café, gymnasium, Showing of DSTV, and dance class.
Services such as Access to Internet, showing of DSTV or gymnasium are also provided by private
service providers. BDRC enjoys many users because it provides with lower charges than private ones.
Since the services do not need to bear the charge for land or spaces and the equipment is purchased
with LED budget, it yields much profit with little running cost.
The PC room in BDRC Bahir Dar
The gymnasium with machines in BDRC Bahir Dar
VI. Challenges
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Low repayment rate of microfinance scheme in all the cities
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Low understanding about importance of BDRC in related officials in some cities
Potential conflict of services provided by BDRC and the similar services by private providers
Not all microfinance beneficiaries cooperate in public shades.
VII. Recommendations
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For Dire Dawa and Harar, follow-up of the negotiation with MFIs to have them share some default risk is
in need.
For 4 regions with existing microfinance scheme and low repayment rate, efforts in each region to
improve the repayment rate should be followed.
For Mekele, the efforts to re-open BDRCs should be followed.
Common understanding about the type of services provided by BDRCs should be confirmed in National
Program Steering Committee.
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