ASSESSMENT OF FUNDED MICROPROJECTS IMPACT ON COMMUNITY DEVELOPMENT

Diana CHEIANU-ANDREI,Project Evaluator

PURPOSE OF ASSESSMENT

The impact of funded microprojects on the community through their effectiveness, efficiency, consequences on the environment, gender aspects, and last but not least, sustainability.

The assessment of results was conducted 6 months after the microgrant beneficiaries have received the equipment and machinery purchased within the project.

ASSESSMENT METHODOLOGY

1. Analysis of documents.2. Observation.3. Individual in-depth interview. Interviews were conducted with: (i) representatives of local public administration of levels I and II from

localities where projects are implemented; (ii) a representative of a national association the microproject

beneficiaries are members of; (iii)manager of the Orhei Resource Centre; (iv)microproject beneficiaries; (v) representatives of Hilfswerk Austria in Moldova, implementers of

the “Remittances Developing Moldovan Communities” Project and project partner the National Assistance and Information Centre for NGOs in Moldova CONTACT.

4. Analysis of financial results collected from beneficiaries of microgrants for the years 2012-2013.

GRANT COMPETITION

33 participants:- 12 persons from the district of Orhei, - 11 persons from the district of Telenesti, - 6 persons from the district of Rezina,- 4 persons from the district of Soldanesti.

- Gender: 8 women and 25 men;

- Age: 20-45 years;

Most of the business projects were related to the agricultural field: growing mushrooms, vegetables, walnuts, breeding sheep, cattle, rabbits, etc.

7 BENEFICIARIES OF MICROGRANTS

Grant size: Euro 9,900 - 15,0001. Acquisition of wrought iron processing equipment (LLC

“Zmuvinadorvic –Metal,” village of Negureni, district of Telenesti); 2. Acquisition of a honey extracting mobile laboratory (LLC

“Fagurasii de Aur”, village of Sipca, district of Soldanesti); 3. Construction, setup and outfit of an agricultural hardware repair

workshop (CS “MCN-Curchi” LLC, village of Mitoc, district of Orhei);

4. Setup of a rabbit farm (LLC “Casa Iepurilor,” village of Mandresti, district of Telenesti);

5. Development of a corn flour milling and packing business (CS “Venera” LLC, village of Tahnauti, district of Rezina);

6. Acquisition of a hail net for a curant and jostaberry plantation (PF “Gaina Petru Dinu,” village of Chitcanii Vechi, district of Telenesti);

7. Acquisition of a mobile electrotechnical laboratory on ETL-10 cables (LLC “Erstelab,” town of Orhei.

EFFECTIVENESS

• All enterprises recorded an increase in the amount of sales for 2013, generating gross profits. Only one business did not also register net profits.

• None of the microgrant beneficiaries did not reach the indicators set up in their submitted business plans, although most of them were very close. This situation is due, on one hand, to some delays in the project implementation, and on the other hand, to the underestimation of some risks.

FACTORS SUPPORTING THE SUCCESS OF THE INITIATED BUSINESSES

(i) existence of the business before the grant competition (5 out of the 7 businesses);

(ii) beneficiaries’ professional experience in the field they have launched their businesses;

(iii) modern machinery/equipment purchased within the “Remittances Developing Moldovan Communities” Project, helping beneficiaries to increase the amount and quality of work;

(iv) hard work by microproject beneficiaries, sometimes over the standard 8 hours per day;

(v) identification of potential clients among individuals and legal entities;

(vi) reasonable prices of the finished products, including prices for some additional services (transportation, installation, etc.);

(vii) trainings delivered within the project; (viii) implementation of new technologies, etc.

EFFICIENCY

• Performance obtained over the short period of activity and comparative assessment of financial results for 2012 and 2013, including data set up in the 2013 business plan and the achieved results, point out to an efficient management in 5 businesses, while in the case of the other 2 – there are possibilities to enhance the management efficiency.

• Starting up and development of these businesses created 20 new jobs (13 permanent and 7 seasonal jobs), giving the possibility to employees’ families to have a stable income while working in Moldova.

IMPORTANCE OF FUNDED MICROPROJECTS FOR THE

COMMUNITY(i) Creation of new jobs and stable incomes in employees’

families; (ii) Prevention of migration in some families, hence husbands

can be together with their wives, while parents can be together with their children, including elimination of some eventual negative consequences of migration (divorce, children without parental care due to migration);

(iii) Contributions to the local budget, through the paid taxes and fees;

(iv) Examples of successful business persons influencing other members of the community to invest their remittances and develop a business;

(v) Provision of consultation in the business field and to other interested persons.

EFFECTS ON THE ENVIRONMENT

In developing their businesses, entrepreneurs considered the particularities of the environment.

The started-up businesses do not cause any negative consequences on the environment.

Moreover, some of them have rather beneficial effects on the regional flora (e.g., SRL “Fagurasii de Aur” provide pollination services for annual and multiannual plantations, determining an increase in the productivity of farming land).

GENDER ASPECTS

All businesses funded within the “Remittances Developing Moldovan Communities” Project are managed by men. Moreover, even the majority of employees are men, and the number of women working in the 7 businesses is extremely low.

SUSTAINABILITY (I)

• The initiated/developed businesses are viable. The review of financial data of beneficiary enterprises shows that all of them recorded gross profits in 2013, which indicates to a stable financial situation in terms of profit level growing indices.

• To initiate and develop these businesses, beneficiaries used their own financial resources, benefited from resources provided by the project, or applied for grants from local institutions and contracted loans.

• Trainings provided within the project contributed to the development of knowledge and abilities of beneficiaries and enhanced the level of sustainability in short and medium term.

SUSTAINABILITY (II)

• The started-up businesses are welcome in Moldovan communities and serve as a positive example at the locality level for the initiation and development of new businesses.

• Results show that in terms of economic activity, part of enterprises have increased their amount of activity, also contributing to:

- creating the public resources fund at the local budget level,

- creating new jobs, - increasing local consumption level.

DIFFICULTIES IN THE SUSTAINABILITY OF BUSINESSES IN MEDIUM AND LONG

TERM

(i) reduced capacity to expand the activity; (ii) high costs of financial sources available on the loan market; (iii) reduced profits and high fixed costs due to the capacity of fixed assets engaged in the operational activity that is not fully used; (iv) insignificant production amounts, which is limiting the competitiveness of products on the market from the price perspective; (v) limited financial possibilities for making own investments.

CONCLUSIONS

The Project “Remittances Developing Moldovan Communities,” at the microgrant chapter, has succeded to:

• initiate 2 businesses and further develop 5 existing businesses;

• create 20 new jobs (13 permanent and 7 seasonal jobs at the community level);

• ensure stable incomes in 20 families and prevent migration in a significant part of these families;

• provide good practices on investing remittances to community members and Moldovan society;

• contributions through taxes and fees paid to the LPA budget;

• provide consultations on starting up and developing similar businesses.

RECOMENDATIONS

• To expand similar projects in all districts of Moldova, as this will contribute to enhancing competitiveness;

• To also provide support to businesses managed by women;

• To support beneficiaries to enhance the sustainability of their businesses in medium and long terms, by developing a detailed strategy ensuring their medium- and long-term profitability.