Twists and turns along Kiútprogram - Policy recommendations based on an evaluation exercise Balázs Váradi Budapest Institute for Policy Analysis Brussels, September 2012

About the evaluation exercise Challenges, lessons  Strategic / policy recommendations Content

Client: The Polgár Foundation itself Timing Summer+Fall 2011 Methods Desktop research + participation + 54 interviews + (non- representative) survey questionnaires Task No substitute for lege artis ex-post evaluation. Rather: Ex ante evaluation of the change in targeting in Spring 2011 Interim evaluation, aiming at suggestions for the programme management for the rest of the period Generating strategic and policy recommendations The evaluation

Relevance and consistency Getting the targeting right (more „upmarket” clients, locations with access to more market, enriching the set of services offered) Getting the incentives right (optimally leveraging group pressure, strengthening the functional equivalents of the missing collateral) External coherence With the business environment (information gaps, administrative burden, discrimination) With the public policy context – taxation and social transfer system (effective disincentives, high opportunity costs) Challenges, lessons

Programme sponsors, managers Launch long-run, patient programmes: it takes (more) time to get it all right Carefully assess target groups’ needs, diversifying the service package (incl. loan product and support services) Provide training and information sharing – even post disbursement Foster mutual learning within groups / among field staff Reinforce group cohesion and peer pressure – even post disbursement (community work!) Do not give up on lobbying for a freer and more stable business environment (at least organise special pilots), esp. for your target group – hardly anyone else will do that for them! Strategic / policy recommendations

Hungarian policy makers Evaluate ex post the Kiútprogramme in order to finetune microcredit schemes financed by EU structural funds Reduce administrative burden, especially on small entrepreneurs and on start-ups Stress geographically targeted capacity-building of government agencies and services Expand and retool the state capacities (e.g. PES) and programmes (‘VVT’) meant to help disadvantaged people become entrepreneurs in light of the the lessons learnt Relax the tight financial framework regulation that makes social microcredit a cumbersome affair in Hungary Strategic / policy recommendations

EU policy makers Build the opportunity for social microcredit programmes into the mainstream structural funds Connect EU priorities on reducing administrative burden and social targets (20/20) to make such microcredit programmes more viable. Strategic / policy recommendations

For more information, see uation_of_the_microcredit_programme_in_Hunga ry___Kiutprogramme Thank you for your attention!