Development Credit Authority Utilization Diagnostic

Economic growth requires prudent access to financing for businesses, families and infrastructure service providers. Access to financing is a challenge, but in many USAID assisted countries financial markets overestimate the risk of providing credit. The Development Credit Authority (DCA) can be an efficient way to use scarce Mission resources to enhance access to credit that serves economic growth objectives, but only if lenders make use of the guarantee. Consultants might help design new DCA projects, but some designs do not utilize the full potential of DCA guarantees. If that is the situation in your Mission?s country the Sibley Consortium?s DCA Utilization Diagnostic can provide a solution that will revitalize your DCA program and mobilize additional local source financing without starting a new DCA project.

Product Approach and Outputs

Market conditions and the commitment of the banking sector to promoting small business growth largely determine DCA program utilization. Management and staff turnover at partner banks, competing bank priorities, changes in product offerings and local market conditions all affect DCA utilization. Often, relatively easy to implement adjustments in the DCA program can overcome the adverse effects of these conditions on program use. In implementing the DCA Utilization Diagnostic, the Sibley Consortium works closely with local lending institutions in conducting an independent assessment of the Mission?s actual DCA program utilization for comparison with the anticipated portfolio volume at inception. The result is a comprehensive analysis of DCA utilization and a suggested set of intervention strategies for getting the program back on track in line with Mission objectives. Specifically, the Sibley Consortium DCA Utilization Diagnostic provides USAID Missions with:

  • A comprehensive portfolio assessment of DCA program performance and an estimate of what can be achieved with the revisions suggested by the Diagnostic.
  • Assessments of individual partner lending institutions and realistic projected utilization levels.
  • Detailed assessment of the constraints to DCA utilization arising from market and institutional factors and, possibly, the structure of the DCA requirements.
  • Specific recommendations and an action plan to reinvigorate the program.

How to Access a DCA Utilization Diagnostic

The product is available from the Sibley Consortium through the General Business Trade and Investment II (GBTI II) indefinite quantity contract (IQC). A brief written request through the Mission or Regional Contracting Officer is all that is required by the fast-track procurement process set up by USAID to provide easy access to small businesses. Contact Theresa Stoll, GBTI II CTO, or Mark Karns, Deputy CTO, for more details on the fast-track process available to small businesses under USAID procurement regulations.

What Does It Cost?

A comprehensive DCA Utilization Diagnostic typically requires about one month to complete and one week in the field for a mid-level advisor. The Mission can decide the level of effort for local personnel. During the diagnostic, the Sibley Consortium can operate without USAID management support (though Mission involvement is welcome). A typical DCA Utilization Diagnostic will cost between $15,000 and $25,000 depending on location and final project characteristics.

USAID Contacts:

Theresa Stoll
CTO GBTI II EGAT/EG
Tel: (202) 712-0924
Fax: (202) 216-3025
stoll@usaid.gov

Mark H. Karns, CFA
658427
Structured Finance Advisor
EGAT/ED/EDFM
Tel: (202) 712-5516
Fax: (202) 216-3025
mkarns@usaid.gov


Sibley Consortium Contacts:

Robert Rourke
Project Manager GBTI II
Tel: (202) 833-9588
Fax: (202) 775-9416
gbti@sibleyinternational.com

Donna Sibley
President
Tel: (202) 833-9588
Fax: (202) 775-9416
dsibley@sileyinternational.com