Evaluation of credit aid to ailing SA municipalities

Project name:
Ex-post evaluation of the sixth credit line

Service:
Monitoring and evaluation

Sector:
Public and Social

Area of Expertise:
Evaluation & impact assessment

Client:
Large international donor organisation

Date:
2016

Country:
South Africa


A large international donor organisation has worked closely with a development finance institution since 1994, extending a number of credit lines aimed at uplifting historically disadvantaged people in South Africa. 

The objective of the most recent credit line was to provide finance to structurally weak municipalities in South Africa with the explicit aim of supporting the development of social infrastructure necessary for local economic development. 

Ultimately, the credit line did not achieve its stated objectives and experienced a number of challenges. Disbursement targets were not met, both in terms of the total credit line value and the amount that was required to go to the weakest municipalities.  

Genesis was contracted by the donor organisation to conduct an ex-post evaluation to understand what factors influenced the performance of the credit line, and ultimately to determine what could be improved in the design of future credit lines. 

Genesis used the OECD Development Assistance Committee’s (DAC) evaluation criteria as the guiding framework for the evaluation. In addition to the DAC criteria of relevance, effectiveness, efficiency, impact and sustainability, Genesis also considered the additionality of the donor organisation. 

Research methods included a thorough document and data review, key informant interviews with representatives of the development finance institution as well as other organisations in the municipal finance space, and site visits to selected municipalities that received finance through the credit line.  

Since the conclusion of the evaluation, the donor and development finance institution have been in discussions on the terms of the next line of credit, to improve on the previous credit line and spend donor money in a more effective and impactful way. 

Genesis has provided regular input into the negotiation phase for the next credit line, based on the findings and recommendations from the evaluation.

Top photo: Reservoir built in Makana Municipality using the municipal infrastructure loan facility

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