Public Disclosure Authorized

Document of

The World Bank FOR OFFICIAL

USE ONLY

Public Disclosure Authorized

Report No.

15420

INPLEMENTATION COMPLETION REPORT

Public Disclosure Authorized

HONDURAS

THIRD INDUSTRIAL CREDIT PROJECT (LOAN 2703-HO)

Public Disclosure Authorized

FEBRUARY 16, 1996

Country Department II Public Sector Modernization/Private Sector Development Division Latin America and the Caribbean Regional Office

This document has a restricted distribution and may be used by recipients only in the performnance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

CURRENCY EOUIVALENTS Current Unit

Lempira (L)

In 1984: US$1.0 LO.0 In 1995: US$1.00

L2.0 US$0.5 Lps. 9.21

WEIGHTS AND MEASURES Metric System

FISCAL YEAR January 1 - December 31

FOR OFFICIALUSEONLY

PRINCIPALABBREVIATIONS ANDACRONYMS

BCH

Banco Central de Honduras (Central Bank of Honduras)

BCEE

Banco Centromencanode Integracion Econ6mica Central AmericanBank for EconornicIntegration

CDI

Centro de DesarrolloIndustrial (IndustrialDevelopmentCentre)

FONDEI

Fondo Nacional de DesarrolloIndustrial (IndustrialDevelopmentNationalFund)

FONDEPRO Fondo de Crdito para elDesarrollode la Prcoducci6n (Production DevelopmentCreditFund)

I

FOPEME

Fondo para la Pequeinay MedianaEmpresa (Small and MediumSizedEnterpriseFund - AID's Project No.522-0241, PequefiaEmpresa ID)

GOH

Gobiemo de Honduras Government of Honduras

ICR

Implementation CompletionReport

IDB

Inter-American DevelopmentBank

LPs

Lempiras

PFIs

Participating FinancialIntermediaries

PRI

Programa de Reactivaci6nIndustrial (Industrial RecoveryProgram)

TAR

Temporary AdminissionRegime

UPCA

Unidad del Proyecto de CreditoAgropecualo AgriculturalCreditProject Unit

USAID

United States Agency for IntemationalDevelopment

This documenthas a restricteddistributionand maybe usedby recipientsonly in the performanceof their

officialduties. Itscontentsmaynototherwise be disclosedwiihoutWorldBankauthorization.

l

IMPLEMENTATION COMPLETIONREPORT HONDURAS THJIRDINDUSTRIAL CREDIT (LOAN 2703-HO))

Preface ................................................... Evaluation Summary .................................................

i ii

PROJECT IMPLEMENTATION ASSESSMENT Background............................................ Achievement of Project Objectives .............................. ...... Project Implementation and Major Factors Affecting the Project. (a) Credit Component ........................................... (b) Technical Assistance Component ............. ............. (c) Modernization of Central Bank Computer System ...... ............... Project Sustainability ............................ Summary of Findings, Future Operations, and Key Lessons Learned ........................................... Bank Performance ........................................... Borrower Performance ............................................ Lessons Learned ................ ...........................

1

2 2 3 3 4

4 5 5 5 5

STATISTICAL ANNEX Table Table Table Table Table Table Table Table Table Table Table Table

1: 2: 3: 4:

Summary of Assessments.................................... Related Bank Loans Projects................................ Project Timetable ........................................... Loan/Credit Disbursements: Cumulative Estimated and Actual ........................................... 5/6:Key Indicators, Project Implementation and Operation ............................................. 7: Studies Included in Project ................................ 8a: Project Cost ........................................... 8b: Project Financing ........................................... 9: Economic Cost and Benefits .............................. 10: Status of Legal Covenants................................. 11: Compliance with Operational Manual Statements...... 12: Bank Resources: Staff Inputs............................

7 8 8 9

10 11 12 13

14 15 16 17

APPENDIX Program Review from Borrower's Perspective .....................

18

i

IMPLEMENTATION COMPLETIONREPORT HONDURAS THIRDINDUSTRIALCREDITPROJECTLOAN 2703-HO Preface 1. This is the ImplementationCompletionReport (ICR) for the Honduras Third IndustrialProject (Loan 2703-HO) in the amountof US$37.4million equivalent. It was approvedMay 29, 1986and becameeffectiveJuly 7, 1986. The Loan closed June 30, 1995, two and one-halfyears later than the expectedclosingdate of December 31, 1992. In total, US$33.4 million was disbursedagainstthe Loan. 2. The ImplementationCompletionReportwas preparedby Juan Luis Moreno V., consultant, and reviewedby Robert Lacey, DivisionChief, Public Sector Modernizationand Private Sector DevelopmentDivision, Country DepartmentII, Latin America and the CaribbeanRegion. 3. Preparationof this ICR was based on the findingsof field visits to Honduras, interviewswith governmentofficials and Bankstaff involvedin the project, and review of project files. The Borrowerreceivedthe draft for commentsand prepared its own evaluationof the project, which is attached,and it also acceptedthe ICR.

ii IMPLEMENTATION COMPLETION REPORT HONDURAS THIRD INDUSTRIAL PROJECT LOAN 2703-HO EVALUATION SUMMARY Introduction and Project Objectives i. During the early 1980s Honduras' manufacturing sector suffered a series of setbacks. The collapse of the Central American Common Market (CACM) and devaluation of other regional currencies led to a loss of competitiveness, with manufactured exports dropping by nearly one-third between 1980 and 1982. In view of the situation, the Government's plan for the industrial sector was to expand production, particularly to countries outside the region. A change in industrial incentives to reduce protection was a first step; however, investment for modernization and restructuring of industrial facilities was also needed to improve competitiveness. (para. 2) ii. In the past investment in the industrial sector was seriously constrained by inadequate term credit. Only 15% of private sector bank loans had maturities over 5 years--usually to preferred clients (large firms). Furthermore, assets were highly concentrated in four banks. This had the effect of restricting long-term credit for medium or small firms. The National Industrial Development Fund (FONDEI) remained the only source of long-term financing for medium-scale or small firms. Its line of credit was in part financed by two previous Bank Loans and helped fill the term credit gap. (para. 3) Project Objectives iii. The original project size was US$37.4 million.The project objectives were: (a) to support industrial private investment through the provision of term credit for medium-scale and small firms; (b) to improve performance of the financial sector through technical assistance to undertake appraisal and supervision of investment projects, and to strengthen the monitoring functions of the Superintendency of Banks; (c) to carry out industrial sector-specific studies, improving the database and analysis of key issues affecting sector development; and (d) to strengthen FONDEI's institutional capacity. Later, the loan was amended, with US$2 million directed to balance of payments support, and US$2 millionfor technical assistance to the Central Bank to establish a modem information system.

iii

Implementation Experience and Result iv. Loans were made in Lempiras at a fixed rate of interest while the BCH assumed the exchange risk. The Bank tried, unsuccessfully, to introduce flexible interest rates or dollar denominated loans. The project was a multi-currency loan; other repayment of interest and amortization to the World Bank were calculated using a basket of currencies. The devaluation of the dollar caused losses to the Central Bank and led to an implicit subsidy to borrowers. Under these conditions, the Government of Honduras decided to suspend the use of the industrial credit, negotiating a transfer of US$20 millionfor use as balance of payments support, as well as additional funds for technical assistance to modernize the Central Bank's information technology systems. Nevertheless, US$22.7 million eventually was lent under the program. Of this amount, US$10.4 millionwas financed by the Bank for 67 industrial investment projects in medium-scaleand small firms. This led to the creation of 532 jobs. (para. 8) v. The technical assistance to Central Bank (BCH) was delayed 5 months when one firm filed a legal objection to the award which the courts eventually rejected. (Subsequently, procurement followed the Bank's two-stage bidding process without difficulties.) In addition, project implementationalso was delayed by internal management problems related to jurisdiction over the project. The program required a complete change in administrative procedures, which took one year and strong support from management to complete. Actions taken to improve the administration included the appointment of a new division director and contracting an external consultant to develop an administrativestrategy to implement the restructuring. (para. 9, 16) vi. The project was successful in realizing its institutional development and technical assistance objectives. Operating capacity of private financial institutions was developed to evaluate, appraise, and supervise investment projects. In this regard, five banks created "project sections" to evaluate investment loans. (para. 12) In addition, the project improved the monitoring ability of the Superintendency of Banks and strengthened FONDEI institutionally. The project also updated the central bank system's environment by replacing obsolete computer technology and modernizing its information system. (para. 16) vii. No future operations are contemplated at this time. Long-term industrial investment lending by FONDEI has continued using funds from repayments of loans supported by the present and previous World Bank credit. Nevertheless, the effective sustainability of the credit line is below expectations because of the large devaluation of the Lempira in 1991, and high inflation has decreased the real value of the repayment funds, given that interest rates did not reflect the inflationary environment.

iv viii. In summarylessonsfromthe loan experienceare that for an industrial credit project, carefulattentionshouldbe paid to devaluationrisks and effective onlendingrates. The issueof flexibleinterestrates or dollar-denominatedloans should have been decidedprior to the loan agreement.

I

IMPLEMENTATION COMPLETION REPORT HONDURAS THIRD INDUSTRIAL CREDIT PROJECT LOAN 2703-HO PROJECT IMPLEMENTATION ASSESSMENT

Background 1. At the time of the loan, Honduras' manufacturing sector was relatively undeveloped, accounting for about 13 percent of GDP, less than 15 percent of total exports, and employing less than 8 percent of the economically active population. Importsubstitution policies were in place, though not as aggressively as in other countries in Central America. As a result, Honduran manufacturing was relatively efficient, with most industries producing at or near internationalprices. 2. The manufacturing sector grew at an average annual rate of nearly 9 percent in the second half of the 1970s, as a result of the rapid expansion of the Central American Common Market (CACM). This trend was brought to an abrupt halt in the early 1980s, when the world recession triggered a sharp contraction in the domestic and regional markets for manufactured goods. Devaluationof other regional currencies led to loss of competitiveness of exportable manufacturesin regional markets. Overall, manufactured exports dropped by nearly one-third in current terms between 1980 and 1982. In view of the new situation, the Government's objective for the industrial sector was to expand production, particularly to third countries, since prospects for growth within the CACM were limited at the time. A change in industrial incentive, reducing protection, was a first step in this direction. 3. The Government and the Bank's strategy was geared to support private investment in export industries and industriesproducing efficiently for local markets. Production for third markets required substantialinvestment in the retooling and upgrading of existing plants, construction of new plants, and considerable marketing efforts. One factor limiting investmentin the industrial sector was a dearth of term credit. Only 15% of private sector bank loans had maturities over 5 years -- usually to preferred clients (large firms). Furthermore, banks assets were highly concentrated within four banks; thus, long term credit for medium or small firms was not available. 4. The National Industrial Development Fund (FONDEI) represented 80 percent of term credit for industrial investment, It was the only source of long-term financing for medium-scale or small firms, and its line of credit was financed by previous Bank loans (Loan 1659-HO in 1979 and Loan 2075-HO in 1982). Its function was financed to fill the

2

need for both term credit and foreignexchange. FONDEI,a second-tierinstitution,and a semiautonomousdepartmentof the Banco Centralde Honduras(BCH), had previously managedthe two World Bank industrialcredit projectsto Honduras,and had now developedinto a mature and relativelyefficientinstitution. The principallessonsderived from the first two projectswere: (a) financialintermediariesshouldassumegreater responsibilityfor appraisingand supervisingsubprojects;and (b) a programof technical assistancewould help to strengthenthe capabilitiesof privatecommercialbanks, as well as those of publicinstitutionsin the sector. Achievementof Objectives 5. The originallendingobjectiveswere onlypartiallyfulfilled,as the credit programwas eventuallycanceledafter US$10.4millionhad been disbursed,and over US$20.0milliontransferredto be used for balanceof paymentssupport(whichbecamea high priority), and also for technicalassistanceto the BCH. The industrialloans made under the programwere in line with the WorldBank's objectivesrelativeto firm size, participationof privatebanks,targetingof industrialsectors, and geographicdispersion. 6. Fulfillmentof project institutionaldevelopmentobjectivesand technical assistancewas highlysatisfactory,especiallyin the designand implementationaspects. The project developedthe operatingcapacityof private financialinstitutions:fivebanks establishedtheir own project operatingunits. In addition,the project strengthened FONDEI'sand the Superintendencyof Bank's institutionalcapacity, and modernized BCH's obsoletecomputerfacilityand systems. However,the studiescomponentobjective was not fulfilled,as severalstudieswere incomplete,were done with a reducedscope, or their recommendationscould not be implemented. ProjectImplementationand MajorFactorsAffectingthe Project 7. One problemwith the projectwas the fixedinterestrate in Lempiras,which meantthat the CentralBank assumedthe exchangerisk. Thiswas not considereda problemas long as the Lempiraremainedstable.The Bank tried, unsuccessfully,to introduceflexibleinterestrates or dollardenominatedloans duringpreparation. The projectwas a multi-currencyloan,and repaymentsof interest and amortizationto the World Bank were calculatedusing a basketof currencies. The depreciationof the dollar during 1986-87producedan exchangecost and, implicitly,a transferto borrowers(this later on becamelarger as the Lempirawas devalued). Under these conditionsthe Governmentof Hondurassuspendedthe use of the industrialcredit andnegotiateda transferof the remainingUS$20 millionto be used as balanceof paymentssupport. Additionally,US$2.3 millionwas canceled,and US$1.7millionremainedundisbursed. Nevertheless,US$22.7millionwas lent under the programfor 67 industrialinvestment projectsin medium-scaleand smallfirms,leadingto the creationof 532jobs. 8. The procurementof BCH's computerwas done using procurementprocedures followingHonduranlaws. This was acceptedby the Bank,as originallyBCH was not sure

I

3

ICB procedurescould be used. This provedto be unfounded.One of the firms involved objectedto the resultof the biddingand challengedit in court. Thisled to a 5-month delayin projectimplementation(the courtultimatelyrejectedthe complaint). Subsequently,procurementfollowedthe Bank's two-stagebiddingprocess. Credit Component 9. The Creditcomponentcontemplatedsubloansof US$52.7million,including US$16.9millionfrom FONDEIand ParticipatingFinancialIntermediaries(PFIs). During 1987/88and part of 1989, before loansfrom the industrialcredit componentwere suspended,lendingwas above the projectedtimetablefor use of resources. The program financed67 projectsfor US$22.7million,of whichUS$10.4millioncame from the Bank credit.The operationsfinancedwere mainlyfor medium-scalefirms,with US$1.6 million going to small-scaleand micro firms.Of the total, 71%was used for investmentin fixed assets and 29% for workingcapital. The principalbeneficiarieswere the food and beverageindustry,the chemicalindustry,and the machineryindustry.The projects financedshowedan internalfinancialandeconomicrate of return of between 20% and 25%. Technical Assistance Component 10. The TechnicalAssistancecomponentwas the mostsuccessfulpart of the program,with the numberof participantstrainedexceedingexpectations.The program was coordinatedby a consultant.FONDEIcreateda Unidadde AsistenciaTecnica (TechnicalAssistanceUnit) to coordinatethe variousprojects.The subcomponentsand implementationresults are describedbelow. 11. Trainingcourses and seminarswere givento employeesof financial intermediariesas well as FONDEI's employeesand consultantsin projectevaluation, appraisal,and supervision.Also, proceduresandnormswere developedwith which to analyzeand evaluateloans.As a result, fiveprivatebankswere ableto create a "developmentunit" or project section,withtheir personneltrainedto evaluateinvestment loans,whichboth acceleratedloan processingandmadeit moreefficient. 12. FONDEIbought modem computerequipment,informationprocessing technology,a computerpackage for projectevaluation,andreceivedthe requisitetraining. Additionally,support was givento FONDEIto strengthenits operationalcapacityand improveits physicalinstallations.The projectalso strengthenedthe capacityof the Superintendencyof Banks to supervisecommercialbanrs by providingcourses on project evaluationand training(both abroad andlocally)in credit controland bank supervision. 13. The studiescomponentwas not as successful(seetable 7). The study on imports' TemporaryAdmissionRegime(TAR)was not done, andthe study on constraints on investmentwas of very limitedscope. The proposalsto establishvariableinterest rates couldnot be implementedbecause of the CentralBank's domesticlegalconstraints. The

4

projectalso supportedan industrialsurvey.The studieson customsduties and allocation of foreignexchangewere done using governmentresources. Modernization of Central Bank Computer System

14. The informationsystemused by BCHwas obsolete. The objectiveof the modernizationprocesswas: (a) to buy new open-architecturehardwareand compatible software;(b) to developand implementnew softwareapplications(e.g., accountingand personnel)in an integratedsystemsenvironment;(c) to traincomputerand central bank personnelin the new technology;and (d) to promotethe widespreaduse of microcomputers. 15. Project implementationwas delayedfive monthsbecauseof procurement proceduralproblems.In addition,there were implementationproblemsrelatedto jurisdictionover the project. The programrequireda completechangein administrative procedures. With strong supportfrom management,the problemswere resolvedafter one year. The actionstaken includedthe appointmentof a new divisiondirectorand contractingan externalconsultantto developan administrativestrategyto implementthe restructuring. 16. Trainingfor the new systemwas carriedout successfully.Trainingwas given by equipmentand program suppliers,through externalacademiccourses,trainingabroad, and "leaming-by-doing."The programimplementedan open-architecture,integrated systemdesign;installedand beganto operate a UNIX softwarepackage; implementeda relationaldata base and an ExecutiveInformationSystem;and installed100 microcomputers.New applicationswere developedfor a numberof administrativeand operationalfunctions,includingaccounting,foreignexchangemanagement,personnel,and budget. The project, in spite of its delays,was in largepart completedin a satisfactory manner. The most importantoperationalresultwas the integrationof the different branchesand activitiesof the BCHby end 1985. Project Sustainability

17. Long term industrialinvestmentlendingby FONDEIhas continued,using fundsfrom repaymentsof loans. FONDEIwas later reorganizedas FONDEPROto be ableto absorbCentralBank's industrialcredit line. Nevertheless,the effective sustainabilityof the credit line is uncertainbecauseof the large devaluationof the Lempira in 1991; moreover,high inflationhas decreasedthe real valueof the repaymentfunds, sinceinterestrates were kept constant. In spite of this, the strengthenedinstitutional capacityof the PFIs and FONDEIdevelopedunder the projecthas been instrumentalto the maintenanceof the long-termlendingfacility.

5 Summary of Findings, Future Operations, and Key Lessons Learned 18. The lending program had limited success as less than one-third of the project funds were actually used for industrial credit and as the effective income transfer to industry reduced the social benefits of the project. However, the use of the remaining funds for balance-of-payments support was sociallybeneficial. At the same time, the project did succeed in developing institutional capacity in the private and public sector, including the modernization of the information system of BCH, despite the fact that the studies component objective was not fulfilled. Some studies were not completed or those that were had little impact on the project's results. Bank Performance 20. The Bank's performance in the identification and preparation of the loan was satisfactory. A new concept of project management, with the participation of PFIs, proved successful, as was the improved capacity and training in all institutions involved. The World Bank was correct in identifyingthe issue of exchange risk, and considered solutions in terms of flexible rates or dollar loans. The Bank's performance at appraisal was not satisfactory because the exchange risk, or flexible interest rate issue, should have been resolved before approval rather than considering it after effectiveness. The Bank's supervision was acceptable. It responded to shifts in government priorities by redirecting available funds, and demonstrated needed flexibilityin this regard. Borrower Performance 21. BCH was cooperative and proficient in project preparation, design, implementation, and evaluation. The competency and integrity of FONDEI and of BCH ensured public acceptance of the program and contributed to its effectiveness. The decision to suspend lending was necessaryto avoid taking additional 22. exchange risks and to reduce potential subsidies to borrowers. The development of technical assistance for the private sector to establish "development units" or project sections was well done. Additionally, in the process FONDEI became an experienced, well-trained, well-equipped, and well-managed institution. Lessons Learned 23. A broad lesson from the loan experience is that for this kind of project, careful attention should be paid to the devaluation risks and the effective onlending rates. The issue of flexible interest or dollar denominated loans should have been resolved prior to the loan agreement. An implementation lesson specific to the project is that the Bank should have insisted on using internationalprocurement procedures for the added BCH computer project.

IMPLEMENTATION COMPLETION REPORT

HONDURAS

THIRD INDUSTRIAL CREDIT (LOAN 2703-HO)

STATISTICAL ANNEXES

TABLE 1: SUIMMARY OF ASSESSMENTS THIRD INDUSTRIALCREDIT PROJECT A. Achievementof Objectives

Substantial

MacroeconomicPolicies SectorPolicies FinancialObjectives InstitutionalDevelopment PhysicalDevelopment

Partial

Negligible

Not Applicable

X X X X X

PovertyReduction GenderConcern Other SocialObjectives Enviromental Objective Public SectorManagement Private SectorManagement Othes (Specify)

X X X X X X Likely

Unlikely

Uncertain

x

B. ProjectSustainability HighlvSatis.

Satisfactory

Deficient

C. Bank Performance

Identification

X

PreprationAssistance

X

Appraial

X

Supevison

X

D. BorrowersPerformance Prepmtion Implemntations Covant Compliance Operation(if applicable)

X X x X Highly Satisfactory

E.

Assessmentof Outcome

Satisfactory X

Highly Unsatisfactory Unsatisfactory

8

TABLE 2: RELATED BANK LOAN PROJECTS

Loan/Credit Title 1. Industrial Credit Loan (1659-HO)

2. Tourism Credit Project (1673-HO) 3. Second Industrial Credit Loan (2075-HO)

Purpose To establish a system of medium and long-term financingto small or medium-sizeindustrial firms To establish long-term credit to hotels and tourism firms. To continue the medium and long-term financing for small or medium-size industrial firms

Year of Approval 1979

Status Closed

1979

Closed

1982

Closed

TABLE 3: PROJECT TIMETABLE

Steps in Project Cycle Identification Preparation Pre-appraisal Appraisal Negotiation Board Presentation Signing Effectiveness First Disbursement Second Disbursement Project Completion Loan Closing Last Disbursement

Date Planned May, 1985 April-August 1985 September, 1985 December, 1985 April, 1985 May 29, 1986 June 7, 1986 July, 1986 October 24, 1986 August 6, 1987 June 30, 1995 December 31, 1989 December 31, 1992

Date Actual May, 1985 May-August 1985 September, 1985 December, 1985 April, 1985 May 29, 1986 June 7, 1986 July 7, 1986 October 24, 1986 August 6, 1987 June 30, 1995 June 30, 1995 August 11, 1995

TABLE 4: LOAN/CREDIT DISBURSEMENTS: CUMULATIVE ESTIMATED AND ACTUAL (US$ Million)

Appraisal Estimate Actual* Actual as % of Estimate

FY

FY

FY

'FY

FY

FY

FY

FY

FY

1987 5.0 5.0 100

1988 10.0

1990 5.1 0

1992 3.0 0

1993 1.0 5.2

1995

TOTALS

--

--

2

2.3

261

3

0

1991 3.1 0 0

1994

26.1

1989 10.1 .3

0

520

37.4 33.4 89

Date of final DisbursementInvestment Program May 31, 1994; in BCH program August 11, 1995. *Includesthe $20.0 milliondisbursedin 1988 for Balance of Payments Support.

TABLE 5/6: KEY INDICATORS. PROJECT IMPLEMENTATION AND OPERAITON

Key Implementation Indicators

Estimated 1987 1988

1986

1989

1986

Actual 1987 1988

1. FinancialOerations A. LoanCommitments B. Numberof Subloans*

15% 27

35% 62

75% 134

100% 179

5% 40

31% 67

2. SubproiectPerformance A. JobsCreated

418

943

2,023

2,698

303

532

4

5

3. InstitutionalDevelopment A. Establishmentof Project EvaluationUnits of PFIs B. SystemsDevelopment

Design

Ist Phase ompleted

4. StaffTrainine* A. NumberTrained

50

June-86 Dec.-86

4

1

Full Implementation 110

ESTIMATED Plan ImplemenCompleted Prepared tation 5. Studies - GOH A. TemporaryAdmissionRegime B. Studyon Existingtariffs

2

1989

62

152

202

C

ACTUAL Plan PreparedImplementation Completed Comments

1987 1987

Not Done 1987

6. Studies - Central Bank

A. B. C. D.

IndustrialCensus 1986-TOR Constraintsto Investment AdjustableInterestrate 1986-TOR Evaluateallocationof foreign 1987-TOR exchange D. hIstruments E. Mechanismsto IncreaseCommercial BanksLendingto SSIs 1987-TOR Cumulative. * Does not includedtrainingfor BCH.

1987-TOR 1987 1987

1988

1987 1988 1987 1987

1987 1988 1987 1987

Oct-88Feb 89 1987

1989 1988 1987

IndustrialSurvey Liimitedscope

11

TABLE 7:

STUDIES INCLUDED i PROJICCT

1

Purposeas definedat Study

IndustrialCensus St:C:m;p;t:w:y constraintsto investment Evaluationof the system for allocatingforeign

exchange Legaland institutional conditionsfor introducing adjustable-ratelending Studyof the TARsystem of industral incentive Completereporton Tariffs and a proposalfor reform

appraioal

Gatheringdata to improve An Industial Surveymade in 1989 indutral formation To identifyconstraintsin Studyon plastics,cattle investment. rai,g, sausageindustry. To recommendmeasu DonebyBCH withits for alleviatingany resources constraintsin the system. To determinethe A proposalwas made. feasabilityof introducing adjustable-ratelending To developmechanismfor Not caried out expandingthe scopeand streamlining theTAR To analyzeTariffssystem, Done bythe Ministryof Treasury level and dispersionof I_

protection

Impact of Study

Status

Providedimportant infmpmation. Limetedimpact,few activitiesst*. Useful to change exchange rate. Not legallyfeasible.

Servedto formulatea tariff reform _

TAR:Temporaryadmissionregime,underwhich exportindustriesproducingfor third market countriesare allowed accessto importedinputs at internationalprices.

12

Table Sa: Prolect Cost (In Millionsof USS)

FixedAsset Subloans WorkingCapital Subloan Technological Inprovement TechnicalAssistance Balanceof PaymentSupport Cancelledor not used TOTAL *Modified

Appraisal Estimates Local Foreign Cost Cost 30.0 27.1 5.0 1.2 03

08

0.5

2.3

29.1

38.1

Total 57.1 6.2 181 2.8

67.2

38.5 2.1

Actual Loc2l Cost 7.9 4.4

5.8 20.0

6.6 20.0

0.3

38 1

67.2

12.6

Revised Local Cost 27.1 12

Estimates Foreign Cost 11.4 0.9

08

29.1

Total

Estimates* Foreign Cost 7.9 2.5 3.0 20.0 4.0 37.4

TOTAL 15S8 6.9 3.0 20.3 4.0 50.0

13

TABLE Sb: PROJECT FINANCING Source

AppraisalEstimate (USSM) Local Forelgn Total Cost Cost Cost IBRD 37.4 37.4 PNUD 0.7 0.7 FONDEI 10.8 10.8 PFIs 6.3 6.3 BENEFICIARIES 11.7 11.7 C.D.I. 0.3 0.3 TOTAL 29.1 38.1 68.2 CANCELEDAND UNDISTRIBUTED

Actual/LatestEstimate (USSM) Local Forelgp Total Cost Cost Cost 31.9 33.4 0.5 0.5 3.6 3.6 2.6 2.6 6.1 6.1 12.3

32.4 4.0

46.2 4.0

The part of FONDEI,IFP's and beneficiarieswas less than anticipatedbecausethere were less foreignresources.

14 TABLE,9 ECONOMIC COST ANDBENFITSs Internal Rate of Financial Returnon Loans Internal Rate of EconomicReturn on Loans

Economic Activity 1. Food, Beverage and Tobacco 2. Paper, Printing and Editorial 3. Chemical, petroleum products, plastics 4. Metal Products, Machinery & Equipment

Capital Cost 16.40% 16.74% 15.84% 15.88%

Financial Rate of Return 25.97% 24.43% 20.01% 25.87%

Economic Rate of Return 24.50% N.A. 20.74% 20.36%

*Note: These are average rate of return for projects of over US$800.0 according to the project evaluations. It was agreed that the minimumrate return that projects should be at least 12%.

TABLE 10 STATUSOF LEGAL COVENANTS

AGREEMENT SECTION

COVENANT PRESENT ORIGINAL REVISED TYPE STATUS FULFILLMENT FULFILLMENT DATE DATE

L 2703-HO

3.01

5

C

Continuous

April-94

L 2703-HO

3.01

5

C

Continuous

April-94

L 2703-11O

3.01

10

C

L 2703-HO

3.01

5

C

Continuous

April-94

L 2703-HO

4.01

1

C

1992

April-94

L 2703-HO

4.01

1

C

1992

April-94

L 2703-HO

4.01

1

C

1992

April-94

April-94

DESCRIPTION OF COVENANT Maintainat all times the Comite Eiecutivo. whichhas overall responsibilityfor revisingFONDEI's Statementof OperatingPolicy, approvingFONDEI'sbudget,Loans of $250,000or more,approving ParticipatingAgreementsand overseeingFONDEI'sactivities. Maintaina unit to administer FONDEIand the Project,includinga creditcommitteewhichshall approveloans of less than $250,000 The Banco Centralshall enter into the SubsidiaryLoanAgreementwith the Borrower. The BancoCentralshall carry out the operationsof FONDEIand conductsits affairs in accordance with soundadministrative,fimancial and managerialpractices. BancoCentral shall maintainand audit the separaterecords and accountsof financialconditionsof FONDEIand all Project expenditures Maintainsuch records,until at least one year after the audit report,and enable Bank's representativeto examninesuch records. Ensurethat such separateaccouits are includedin the annual auditand that the report thereofcontains,a separateopinionas to whetherthe proceedsof the Loan withdrawnin respectof such expendituresused were for the purposesfor which they were provided.

COMMENTS

Fulfilled

Fulfilled

Fulfilled Fulfilled

Fulfilled

Fulfilled

Fulfilled

16

TABLE 11 COMPLIANCE WITH OPERATIONALMANUALSTATEMENTS

Statement number and title N.A.

Describe and commentson lack of compliance

17

Table 12: Bank Resources: Staff Inputs (in Staff Weeks)

FY84 FY85 FY86 FY87 FY88 FY89 FY90 FY91 FY92 FY93 FY94 FY95

Preparation Appraisal Negotiation Supervision

.5

Sub-Total

.5

4.6

4.6

39.2 10.6 6.8 .4

16.5

20.2

9.7

8.2

2.2

10.8

10.8

7.6

9.8

57.0

16.5

20.2

9.7

8.2

2.2

10.8

10.8

7.6

9.8

Table 13: Bank Resources: Missions

Stage of Project Preparation Preappraisal Appraisal Supervision I Supervision II Supervision III Supervision IV Supervision V Supervision VI Supervision VII Supervision VIII Supervision

Month/Year 06/85 09/85 11/85 04/87 11/87 04/88 05/89 06/91 02/92 06/92 05/93 11/94

No. of Weeks 1.0 2.5 2.0 1.0 1.5 1.0 1.0 1.0 1.0 1.0 1.0 1.0

No. of Persons 3.0 3.0 2.0 1.0 2.0 1.0 2.0 1.0 1.0 2.0 2.0 1.0

Staff Weeks 3.0 7.5 3.0 1.0 3.0 1.0 2.0 1.0 1.0 2.0 2.0 1.0

18 Appendix A

Banco Central de Hondurs

FONDODE CREDITO PARA EL DESARROLLO DE IA PRODUCCION (FONDEPRO)

IMPLEMENTATIONCOMPLETION REPORT

HONDURAS

THIRD INDUSTRIALCREDIT PROJECT (LOAN 2703-HO)

Tegucigaps,bLD.C. Honduas

19

PROGRAMREVIEWFROMBORROWER'SPERSPECTIVE FOREWORD 1. This is the ImplementationComplianceReport(ICR)for the Third IndustrialCredit Loan Project,Loan NO2703-HO,in the amountof L. 74.8 million,equivalentto US$37.4 milion,which was approvedon May 29, 1986, and was effectiveon July 7, 1986. This reportis in compliancewith ArticleIX, Section9.07,literalc) of the LoanAgreement. 2. Loan2703-HOdisbursementsweresuspendeddueto the high exchangerisk in the World Bank'sbasketof currencies. The last disbursementfor investmentprojectsthrough the PFIs was made on May 24, 1988, when the loan balance was L. 66.2 million, equivalent to US$33.1 million. Some of the unused investment project resources (US$20.0 million) were reassignedto support the balance of payments,and some (US$2.0million)to the CentralBankRestructuringProgram.The last disbursementmade afterthese reassignmentswas on November14, 1994. Sixtyseven investmentprojectsof mo-, small and medium-sizedindustrialenterpriseswere funded with Loan 2703-HO resources,in the amountsof L. 21.7 millionWorld Bank resources,and L. 7.2 million BCH/FONDEPRO resources.Projectco-financingwas providedthroughcounterpartfunds from the Central Bank of Honduras,FinancialIntermediariesand subborrowersinternal resources. 3. The ICR was preparedby BCH/FONDEPRO personnelduringthe monthof March, prior to the arrival of the World Bank's Appraisal Mission. The Loan Agreement, amendmentsto the Loan, and to the SubsidiaryLoan Contract,the white paper for the negotiationof Loan NO2703-HO,the technicalassistanceprogram,FONDEPROprogress reportsand the files for subloansgrantedwere reviewedin order to preparethe ICR.This reportwas preparedfollowingthe guidelinesprovidedto the BCH/FONDEPROby World Bankrepresentativesin November1994.

20

IMPLEMENTATION COMPLIANCE REPORT THIRDINDUSTRIAL CREDITPROJECT (LOANNO2703-HO) APPRAISALSUMMARY 1. The Third IndustrialCreditLoan Project,for whichthe disbursementperiodwas March 24, 1986 throughNovember14, 1994, was the last of four loans granted by the World Bank, for the Honduran Industrial and Tourism Sector. The Four Loans amount to US$101.9million,and are administratedby the CentralBank of Honduras,through the FondoNacionalde DesarrolloIndustrial(FONDEI),nowrenamedFondode Creditopara el Desarrollo de la Producci6n(FONDEPRO),establishedthrough the unification of the Unidadde Cr6ditoAgropecuarioand the FondoNacionalde DesarrolloIndustrial,by the CentralBank'sBoardof DirectorsDecisionNo.283-6/93,datedJune24, 1993. 2. The Third IndustrialCreditLoan Project,Loan NO2703-HO,in the amountof US$37.4 million, contemplatedthe following objectives:a) to promote industrial enterprises in Honduras,mostlysmall and medium-sizedindustries;b) to providean improvedcreditflow to industrialenterprises;c) to improvethe institutionalconditionsand capabilitiesof the financialsector;d) to strengthenthe institutionalcapabilitiesof FONDEIand the BCH;e) to promoteimprovedproceduresand overviewof the subloansby the FIs workingwith the FONDEI;f) to assess the industrialsector, includingthe generationof sectoral data to assistin the enforcementof SectoralPoliciesReforms. 3. The Projectdesign includedoffering creditto investmententerprises,in the areas of Fixed Assets combined with Working Capital, Working Capital by itself, and for the developmentof new techniquesand implementation of existingnew productiontechniques; as well as a technical assistance programfor the BCH, FONDEI, CDI and Financial Intermediaries. 4. In viewof the high cost of resourcesusedto finance,due to the use of the World Bank's basketof currenciesand the high exchangerisk,on December10, 1987, the Government and the BCH decided to postponetemporarilythe use of loan resources,until April 30, 1988. Duringthe analysisof alternativesand negotiationswith the IBRD,a decisionwas made to reassignthe unusedloan balance,introducingthe followingrevisionsto the Loan Agreement:a) US$20.0 million were transferredto the Governmentin April 1988, in supportof the balanceof payments,and b) US$2.0millionwere reassignedto the BCH's informaticsrestructuringprogram, in June 1992. In addition to the above mentioned changes,on June 26, 1992,the Governmenthad sent a cancellationnoticein the amount of US$2.3millionto the IBRD.A balanceof approximatelyUS$1.9millionis estimatedto

21

remainunusedupon completionof the BCH's informaticsprogram,and the use of same will haveto be cancelled. 5. When evaluating project results, on the basis of the implementationindicators establishedfor the period 1986-1989,the following commentsapply: a) To grant and disbursea 100 per cent of the financialresources:as of November1994, 85 per cent of same had been committedand disbursed;b) To grant 402 subloans:67 (17 %) were granted;c) To generate6,082 employments:an estimated532 (9 %) were generated;d) Establishing11 developmentunitsat the FinancialIntermediaries: 5 unitswere established; e) Training 110 personsat FONDEI,BCH, and FinancialIntermediaries:202 persons weretrained. 6. The technical assistance programwas executed with financial resources from the WorldBank,UNDP,and BCH/FONDECounterpartfunds. Partof this funds were used to acquire hardwareand softwarerequiredto computerizeFONDEI'saccounting. Similar supportwas providedto the Centrode DesarrolloIndustrial(CDI),the major non-banking financialintermediary,aimedat providingtechnicaland financialassistanceto micro- and small entrepreneurs,whichchannelledup to L. 100,000in projectfunds per subborrower. The institutionceasedto exist,by governmentaldecision,and in compliancewith National CongressDecreeN0 13-92,of April8, 1992. 7. Since the use of fundswas postponed,and in orderto continueprovidingfinancingto micro-, small and medium-sizedenterprises,through ResolutionN0 620-12/87,dated December17, 1987, the Boardof Directorsof the BCH establishedthe Local Currency FinancingLine, constitutedwith funds recoveredfrom credits grantedunder Agreements 1659-HO,2075-HO,and 2703-HO.

22

IMPLEMENTATION COMPLIANCEREPORT THIRDINDUSTRIAL CREDITPROJECT (LOANN° 2703-HO) ProlectObiectivesand Description: The Loan Agreementin the amount of US$37.4 million, entered upon by the Republicof Hondurasandthe InternationalBankfor Reconstruction and Development,was signed on July 7, 1986. Prior to this Projec(1659-HO,2075-HO),the World Bank had providedthreeloans:two industrialloans),andanotheronefor the developmentof Tourism in Honduras(1673-HO).The World Bankhas grantedthe Governmentof Hondurasa total of four loans amountingto US$101.9million, channelled by the Banco Central de Hondurasthroughthe Fondo Nacionalde DesarrolloIndustrial(FONDEI),now renamed Fondode Creditoparael Desarrollode la Producci6n(FONDEPRO). The mainobjectivesof Project2703-HOwere: a. To promoteindustrialenterprisesin Honduras,emphasizingon the developmentof smallandmedium-sizedindustries. b.

To provideindustrialenterpriseswith an improvedcreditflow.

c.

To improvethe conditionsand institutionalcapabilitiesof the financialsector.

d.

To strengthenFONDEI'sandBCH'sinstitutionalcapabilities.

e. To promoteimprovedproceduresandoverviewof subloansby the Financial Intermediariescooperatingwith FONDEI. f. To analyzethe industrialsector,includingthe generationof sectoraldata to assistin the enforcementof sectoralpoliciesreforms. The objectivesenvisagedin the Third IndustrialLoan Projectare similar to those establishedfor the Second IndustrialLoan Project,approved on December22, 1981, althoughsupportto the TechnicalAssistanceProgramis enhancedwithin the Third Project which emphasizes on InstitutionalDevelopmentof the Central Bank, FONDEI, and FinancialIntermediaries.The aboveoutlinedobjectivesare consideredto be precise,well groundedandfeasible.

23

Objectives Execution: According to the chronogram for execution of the Project, its closing date was foreseen for December 31, 1992. Due to several reasons the closing date has been extended to June 30, 1995 (Table No.3'). The disbursements program began on March 31, 1987 and was to conclude on December 31, 1993. In view of the loan postponementenacted by the Government and the Central Bank's Board of Directors, due to the financial cost increment upon application of the cost of the World Bank's basket of currencies, and the currency exchange risk, the use of resource was not implemented as programmed, causing two revisions to the Loan Agreement, and more particularly to "Annex I, Withdrawal of the Amount of the Loan"; one in April 1988, to reassign US$20.0 million, of funds designated for the subloans item, to assist the balance of payment, in support of the initial phases of the macroeconomic adjustment program the Government was beginning to implement that year. Another revision took effect in June 1992, which allowed for the reassignment of US$2.0 million, to support the Central Bank's restructuringprogram, mostly in the areas of: i) installation of an informatics administration system at the BCH; ii) assessment of the scope of the reorganization, and adequation of its functions; iii) institutional relationship of the BCH with the rest of the public sector, and strengthening its autonomous operation. In addition to the above changes, on June 26, 1992, the Government informed the cancellation of US$2.3 million. According to estimates, after implementation of the Central Bank's Informatics Restructuring Program is completed,there will be a balance of US$1.9 million,for which cancellation notice will have to be given to the World Bank. Several problems have arisen during the computer equipment purchasing process undergone by the BCH's Departmentof Informaticsand Technology. An analysis is being made of the offers presented during the Public Bid held in January 1995. According to project implementation indicators 100 per cent of the available resources should have been granted during the period 1986-1989; only 85 per cent had been granted and disbursed as of November 1994, including a disbursement in the amount of US$20.0 millionfor the balance of payments. Financing was to be provided for 402 subloans, out of which 67, representing 17 per cent, were actually financed; 6,082 new employment opportunities were to be generated, and according to estimates 532, representing9 per cent, were attained. If reassignment of the above mentioned Lps. 20.0 had nct been made, it would have been possible to attain those objectives. ' Tables 3 and 7 are included in the Bank's reports, thables 14 and 21 are in the original spanish version of the Implementation Report by the BCH.

24

Results may be consideredsatisfactoryin the area of institutionaldevelopment objectives. ElevenDevelopmentUnitswere to be establishedby the end of 1989,within the administrativestructureof the FinancialIntermediaries,in order for them to negotiate, evaluateand overviewinvestmentproje_S. Five of these units,for an equivalent45 per cent of the target,were establishedin the samenumberof FinancialIntermediaries.Also,a set of CreditAutonomyRegulationswas prepared,which was approvedby the Board of Directorsof the CentralBankof Honduras,by way of ResolutionNo. 299-6187,of June 25, 1987. This enabled PFIs with establishedDevelopmentUnits to independently approve loans for up to Lps. 100,000.00, thus expediting subloan approval and disbursementprocedures.Accordingly,and althoughthe DevelopmentUnitsare no longer working as expected, 11 PFIs are currently authorizedto provide loans for up to L. 200,000.00. The EnterprisesRehabilitationBy-lawwas preparedwith a Consultant'stechnical assistance,whichwas approvedby Resolution548-11187of the Boardof Directorsof the CentralBankof Honduras,on November5, 1987. This by-lawtakes into accountdifferent financingformsto thoseenterpriseswhich,due to specialcircumstances,fell in arrearsor lackof liquidity.This systemhas benefitedseveralenterprises. It was programmedto train 110 people. Over 200 employeesof the Central Reserve Bank, FONDEI,Financial Intermediariesand Consultantswere trained. The TechnicalAssistanceProgramwas executedwith financialsupportof World Bank, UNDP and FONDEI counterpartfunds. In addition, computer equipmentand the required softwarewas acquiredthrough this Program. Aiso, the Centro de Desarrollo Industrial (C.D.I.)benefited. The C.D.I. is the main financialintermediaryprovidingtechnical and financial assistance to the micro- and small entrepreneur, with a maximum of Lps.100,000.00Projectfinancingper borrower. MainProblemsAffectincthe Proiect The main problemaffectingProjectexecutionwas the cost of the currencybasket used by the World Bank for loan payment of principal and interest, which led the Government,as borrower,and the Central Bank of Honduras,as executingagency, to temporarilysuspendthe useof Projectfunds. After an evaluationandthe due negotiations,it was determinedto reassignUS$20.0 millionfor the Balanceof Payments,as stated in literalC), Annex I of the modifiedLoan Agreement. Also, US$2.0millionwere reassignedfor the Central Bankof Hondurasto execute of the InformationReformProgram,throughthe Departmentof Informationand Technology. This componenthas had implementationdelays due to several difficulties, speciallyin the computerequipmentbidding process. In addition to the financial cost

25

increasedueto the CurrencyBasket,there is an exchangerisk. Bothproblemsprevented the continuedgrantingof subloansto the private enterprise.The Loan Agreementstated that financingcould be grantedin US dollarswith loan repaymentsin the same currency. Legalrestrictionsdid not permitsucha practice. ProiectSustainability Althoughonly part of Loan 2703-HOwas used for industrialcredit and technical assistance,it is consideredthat it hascontributedto the sustainabilityof the main objectives of the Project. Since the use of financialresourcesfor the Third IndustrialCredit Project was suspended,and in order to keep providingmediumand long term loans to micro-, small and mediumsized enterprises,the Boardof Directorsof the Central Bank of Honduras, by Resolution620-12187,created the NATIONAL CURRENCYINDUSTRIAL FINANCINGLINE,establishedwith funds recoveredfrom creditsgrantedthroughAgreements1659-HO,2075-HOand2703-HO. Before the creation of this line, the Board of Directorsof the Central Bank of Honduras,by Resolution1956-12/84,createdthe FINANCINGLINE FOR HOTELSAND RELATEDACTIVITIES,establishedwith funds recoveredfrom credits granted through Agreement1673-HO.Bothfinancinglinesare currentlyavailable. As can be seen,the Projectsustainabilityduring the last 7 years has been made possiblethroughfinancinggrantedwithresourcesrecoveredfrompreviouslygrantedloans. FONDEI's(FONDEPRO)activitieswere enhancedin December1988, with AID's Project No.522-0241Small EnterpriseII (FOPEME),in the amountof Lps.30.0 million,of which Lps. 28.0 millionwere assignedto the Loan Fund, and Lps.2.0 millionto the Guarantee Fund, which was highly successful(Non-refundableresources). Also, the Industrial FinancingLinesmanagedby the Programade Reactivaci6nIndustrial(PRI),an agencyof the Banco Central de Honduras,includingthe FinancingLines provided by the Central American Bank for Economic Integration (CABEI), IDB, Venezuela Export Fund (FINEXPO),C.C.C. and Spanish-HonduranEquipmentSupport Fund, the latter nonrefundableresources,weretransferredto FONDEI(FONDEPRO)in October1991. Accordingto the above, and as a part of the Central Bank of Honduras restructuringprocess,in June 1993,the FondoNacionalde DesarrolloIndustrial(FONDEI) was mergedwith the AgriculturalCreditProject Unit (UPCA),with personnelreductionso sharpthat the unit currentlyhas only37 employees,includingthat of two regionaloffices in San PedroSulaand La Ceiba. This has allowedfor significantoperatingcosts reductions.

26

Performanceof the Bank The World Bank'sperformanceduringthe preparation,assessmentand overview stagesof the projectwassatisfactory. During the preparation and implementationstages of the Project, a Consultantprovidedassistancewith contributedto carryout the correspondingactivities. Nevertheless,no analysisin depth was made of the possiblechanges in the currency basket. Also, the World Bank'sofficials have alwaysbeen willing to help in the analysis and searchfor altemativesto solve anyproblemsfoundduringthe executionof the different stagesof the Project. These solutionshave beencarriedout within regulationsand in the shortest possible period, such as revisionsto the Loan Agreement,which allowed to reassign financialresourcesto coverareasthat couldbe servedwithinthe termsof the Agreement. Performance of the Borrower

Duringthe stagesof Loan negotiationanddesign,the Governmentandthe BCH,as ExecutingUnit, cooperatedwith the World Bank in the preparationof the financial and statisticaldata requiredto executethe LoanAgreement. Existinglegal restrictionson dollar loan grantingwere not taken into accountwhen drafting the Project. Therefore,the financingmodeby which loans in dollars would have beengranted,to be repaidin the samecurrency,thus reducingthe currencyexchangerisk, was not promoted. The decisionto suspendthe use of loan fundsto providefinancingto the Private Sector through the FinancialIntermediarieswas a fit one, as it preventedto continue subsidizingit, due to the effectsof the currencybasketandthe currencyexchangerisk on the financialcost. Negotiationswere carriedout and amendmentswere made to the Loan Agreementto reassignfundsat the shortestpossibletime,thus allowingthe Govemmentto continue using loan funds for the balance of paymentsand to strengthen the BCH Informaticsprogram. On the other part, there was a better coordinationamong the institutionsinvolvedwas duringthe executionof the TechnicalAssistanceProgram,thus helpingattainsatisfactoryresults. The modalityof performingdiagnosticsof the FinancialIntermediariesset up by the technicalassistancecomponentof the Third IndustrialLoan Project,in order for the formerto establishDevelopmentUnitswithintheirorganizationalstructure,as a requisiteto set their autonomousapprovallimitationswas satisfactory,as some of the Banks were willing to establishthem. In additionto financinggrantedthroughfinancinglines provided by FONDEPRO,these Units or Credit Sectionscarried out operationswith their own

27

resources, helping to expedite credit granting procedures,and providing for better coordinationwith FONDEPRO'sSupervisionSectionin loansfollow up. ResultsAssessment The first disbursementof the loanwas madeon March21, 1987, continuingto serve the industrial sector with financing channelledthrough the Central Bank, FONDEI (FONDEPRO)and the participatingFinancialIntermediaries for Micro-,Small and Medium Sized Industries,with the followingresults: Sixty seven investmentprojects of the Micro-, Small and Medium Sized a. IndustrialEnterprisewere financed,for a total amountof Lps. 28.9 million, out of which Lps. 21.7 million were World Bank resources,and Lps. 7.2 million were CentralBank/FONDEIresources,(Table No. H-2). These investmentprojectsare estimatedto have generated532newemployments. b. Out of this financing,89 percent,equivalentto Lps.25.7million,was oriented to medium sized enterprises,and the remainderLps.3.2million were oriented to micro- and small enterprises(Table No. H-2). Enterpriseswith net fixed assets aboveLps. 400,000.00,excludingland andbuildings,are consideredto be medium sized.

c. Resourcesassignedby line itemwereLps.20.5 millionfor FixedAssets,and Lps. 8.4 million for WorkingCapital,equivalentto 71 per cent and 29 per cent of total financing,respectively(TableNo.H-3). d. The participatingFinancialIntermediaries channellingmost of the financial resourceswere BancoContinental(22%),BANCAHSA(18 per cent), and Bancode losTrabajadores(16%),(TableNo. H-5). e. The industrial activitieswhich took greateradvantageof financing were: Metal works, machinery and equipmentmanufacturing(24 per cent); Food, beveragesand tobacco(16 per cent);and Chemicalproducts,petroleumderivates, latex, and plastics (13 per cent), (Table No. H-6). Due to their geographical characteristics,financingwas centeredin the departmentsof FranciscoMorazan and Cortes,mainlyin the citiesof TegucigalpaandSan PedroSula,with 60 per cent and36 per cent, respectively(TableNo.21). SinceFebruary,1983,the executionof the TechnicalAssistanceComponentof the SecondIndustrialCredit Loanwas coordinatedwith the assistanceof a Consultant. The Consultantcontinuedto provideassistancewith the Third IndustrialCredit Loan, until the TechnicalAssistanceUnitwas established,in accordancewith the terms of the Agreement.

28

This unit, establishedby ResolutionNo. 348-7/86of the Boardof Directorsof the Central Bank of Honduras,datedJuly 7, 1986, was set up within the organizationalstructureand under the Boardof Directorsof FONDEI. The main purposeof this unit was to coordinate the executionof the TechnicalAssistanceprogram,including: a. Technicalassistanceto FONDEIandthe FinancialIntermediaries,to improve the systemadministration,and information,procedures,assessmentand overview of the investmentprojects. b.

Technicalassistanceto the C.D.l.to improvesupportto micro-enterprises.

c. Technicalassistance to the Banks SuperintendenceDepartment of the Central Bank, to strengthenthe transactionoverviewcapabilitiesas well as the performanceof CommercialBanks. d. In order for the Central Bank to carry out the following studies: a) On proceduresto set in motionmediumandlong termcreditwith variableinterestrates; b) An industrialsector census; c) An analysis of the restrictions existing on incrementof investments;and d) An assessmentof the exchangeallocationsystem. (Table No.7). e. Fromthe Govemment:a) To evaluethe temporaladminissionregime (TAR) for importsstablisedby Decree No. 37 of December27, 1984: y b) A complete reporton existenttariffsand a proposalfor tariffsreform(Table No.14) Table No. 14 shows a summary of the activities executed by the Technical AssistanceProgram. FutureOperations No shortterm activitieshave been programmedfor industrialfinancingthrough the BCH-FONDEPRO. Key knowledgeacquired a. While there were no major exchangerisks, there was demand for these resourceson the part of the IndustrialSector,thereforewe consider thatthe executionof the Projectwas positiveduringthe periodof stability. b. Technicalassistancefor the PFIs to establish Development Units within their organizationalstructure. Thoughthey were not establishedas profitand cost centers,they allowedto maintaincreditofficials in charge of

29

FONDEIrelatedmattersat the Bankswith largerloan portfolios,with FONDEI funds. These officialsdid not work exclusivelyon it, as there has always been personnelrotationfor their positions,as it generallyhappensover the wholebankingsystem. c. With the executionof this Project,some long term export activities such as prawnexportswere financed,which the bankingsystem does not financewith its ownresources,thus leamingthat the bankingsystemhas no longtermresourcesavailablefor the IndustrialSector. d. The executionof this loan agreementhas shown that an in depth analysisof the financialcost of these resources,due to the currencybasket and exchange risk, must be carried out during the stages of project negotiationand design, establishingproceduresto allow this cost to be coveredby the participantsin financingchannellingto the final borrower. e. That, unless their value is maintained,providingfinancing to the IndustrialSectorthroughloans in dollars,to be legalizedin Lempiras,means significantlossesto both the Govemmentand the CentralBank,as well as a subsidyto the final user of financing. A timelydecisionwas reachedin this case,not to continueprovidingloansunderthis scheme.

TABLE Il-1: SUMMARY OF ASSESSMENTS TlIRI) INDUSTRIALCREDIT PROJECT A. Achievementof Objectives

Substantial

X X X X X X X X X Likely

Unlikely

IJncertain

Satisfactory

Deficicnt

X lliglity Satis.

C. Bank Performance Identification PreparationAssistance Appraisal Supervision

Not Applicable

X X

MacoeconomicPolicies Sector Policies FinancialObjectives Istitutional Development PhysicalDevelopment PovertyReduction Gender Concern Other SocialObjectives EnvironmentalObjective Public SectorManagement Private SectorManagement Others (Specify)

B. Project Sustainability

Negligible

Partial

x X X X

D. BorrowersPerformance Preparation Implementation CovenantCompliance Operation(if applicable)

X x x Ilighly Satisfactory

E.

Assessmentof Outcome

Safisfactory X

I lighly Unsalisfactory Unsatisfactory

31

BANCO CENTRALDE HONDURAS(BCH) THIRD INDUSTRIALCREDIT,LOAN2703-HO FONDEPRO TABLE H-2: LOANS ACCORDING TO FIRM SIZE (Thousands of Lempiras)

Firm Size Micro Small Medium TOTAL

FONDEI CREDIT No.of BCH/ Projects FONDIE BIRF TOTAL 21 291.1 811.1 1102.2 14 392.3 1758.1 2150.4 32 6558.3 19104.9 25663.2 67J 7241.71 21674.1T 28915.8

Micro: Net Assets, excluding land and buildings, of less than L.100,000 Small: Net Assets, between L.100,000 and L. 400,000 Medium: Net Assets of more than L. 400,000

TABLE H-3: LOANS ACCORDING TO TERM (Thousands of Lempiras)

TERM From I to 3 Years From 3 to 5 Years From 5 to 7 Years From 7 to 10 Years More than 10 Years TOTAL

FIXED ASSETS WORKING CAPITAL No. Amount No. Amount 1 257.6 33 3033.0 7 354.8 2 323.3 26 5960.6 15 142.2 25 12097.5 15 4734.2 3 1858.6 2 154.0 62 20529.1 67 8386.7

TABLE H4: LOANS ACCORDING TO ASSETS OF IFPs (Thousands of Lempiras)

ASSETS From 0 to 100,000 From 100,001 to 400,000 From 400,001 to 500,000 From 500,001 to 1,500,000 More than 1,500,000 TOTAL

NO. OF PROJECTS AMOUNT 24 14 3 12 14 67

1282.7 2985.9 879.0 6895.6 16872.6 28915.8

3-2

TABLE H-5: LOANS ACCORDING TO FINANCIAL INTERMEDIARY (Thousands of Lempiras) FONDEI'S LENDING TOTAL BIRF FONDEI

NO. OF PROJECTS

FINANCIAL INTERMEDIARY BANCAHORRO BANCO ATLANTIDA BAMER BANCAHSA BANHCAFE C.D.I. BANCO COMERCIO BANCO CONTINENTAL BANCO FICENSA BANCO OCCIDENTE BANCO SOGERIN BANCO TRABAJADORES

2 2 6 6 5 15 1 13 2 8 3 4

TOTAL

67

|

417.2 3.6 49.8 1899.7 32.6 179.1 10.0 956.0 1858.1 257.7 155.9 1422.1

774.3 1026.4 1255.7 3190.2 2392.5 475.1 126.0 5806.9 482.9 1893.8 1112.1 3138.1

7241.81

21674.0

TABLE H-6: LOANS BY INDUSTRIAL ACTIVITIES (Thousands of Lempiras)

INDUSTRIAL ACTIVITY Food, beverage and tobacco Textiles, cloathing Wood, wood products and fumiture Paper, paper products, editorials Chemicals, petroleum products, plastic, caucho Non metalic mineral products Basic Metals Machinera and Equipment Others TOTAL

No.

AMOUNT LENDED BY FONDEI TOTAL FONDEI BIRF

13.0 9.0 6.0 10.0 10.0

669.7 271.6 350.6 166.6 161.1

3898.6 2254.2 3003.8 2267.1 3692.0

4568.3 2525.8 3354.4 2433.7 3853.1

3.0 2.0 13.0 1.0 67.0

1010.5 3458.6 1153.0 .0 7241.7

554.2 25.9 5913.3 65.0 21674.1

1564.7 3484.5 7066.3 65.0 28915.8

1191.5 1030.0 1305.5 5089.9 2425.1 654.2 136.0 6762.9 2341.0 2151.5 1268.0 4560.2 28915.8

DEHQNDURAS BANCO CENTRAL FMNDO DECREDITD PARA ELDESARROLLO DELAPRODUCCION (FONDEPRO)

INFORME DE CUMPLIMIENTO DE IMPLEMENTACION

TERCER PROYECTO DECREDITO INDUSTRIAL (PRESTAMO No.2703-H+)

TEGUCIGALPA, M.D.C.

HONDURAS, C.A.

I ND

ICE

FROLOGO RESUHEN DE LA EVALUACION

Parte

I-

Evaluacion

de la

Implementaci6n

1.

Objetivos

y 3escripci6n

2.

Ejecuci6n

de

3.

Principales

4.

Sostenibilidad

5.

Desevpeffo del Banco

6.

Deserpeffo del

7.

Evaluaci6n del Resultado

8q.

CQeracionesFUturas

9.

Lecciones

Parte

II

del Proyecto

Objetivos Factores

que

afectaron

el Proyecto

del Proyecto

Pr'est

atario

Claves Aprendidas

Irnformaci6n

Estadistica

(No se presenta)

Los cuadros 1 - 11 estan en la version en ingles. El resto de los cuadros se encuentranen el documentooriginal en los archivos del departamento.

INFORME DE CUMPLIHIENTO DE IMPLEMENTACION

TERCER PROYECTO DE CREDITO INDUSTRIAL (PRESTAMONo. 2703-HO) PROLOGO

(ICI) pars el Este es el Informe de Cumplimlento de Implementaci6n Tercer Proye+tO de Crr4dito Industrial, Pr6stamo 2703-HO por la cantidad de L. 74.8 Millones, equivalente a US$37.4 Millones, el de el 7 de julio cual fu4 aprobado el 29 de mayo de 1986 y efectivo 1986. Este informe es en cumplimiento al Artfculo IX, Secci6n c) del Convenio de Prestamo. 9. 07, inciso Los desembolsos del Prestamo 2703-HO, para financiar proyectos de inversi6n fue suspendido, por el alto riesgo cambiario en la canasta de moneda del Banco Mundial. El ultimo desembolso para se llevo a cabo el 24 proyectos de inversi6n a traves de los IFP'S, 66.2 un saldo de Lps. de Mayo 1988, momento en el cual arrojaba equivalente a U.S.$. 33.1 Millones. Millones Los recursos no utilizados en proyectos de inversi6n, parte fueron reasignados (U.S.$ 20.0 Millones), para apoyo de la balansa de pagos y otra parte (Us$2.0 Millones) para el programa de El ultimo desembolso del Reestructuraci6n del Banco Central. el 14 de prestamo despues de estas reasignaciones se realiz6 Noviembre de 1994. Con recursoS financieros del Pr4stamo 2703-HO, se financiaron 67 Pequenfa y Medina Empresa proyectos de inversi6n de la Micro, Industrial, por un monto de Lps.21.7 Millones con recursos del Banco Mundial y Lps.7.2 Millones recursos del BCH/FONDEPRO.

El cofinanciamiento del proyecto fue provisto por contraparte tanto del Banco Central de Honduras, Intermediarios Financieros y Recursos Propios de los Subprestatarios. El ICI fue preparado por el personal de BCH/FONDEPRO en el mes de marz2, previo a la llegada de la Misi6n de Evaluaci6n del Banco Mundial. Para la elaboraci6n ICI se revisaron el Convenio de prestamo, modificaciones del Convenio y del Contrato de Prestamo Subsidiario, el Documento base para la negociaci6n del 2703-HO, programa de asistencia tecnica, informes de labores del FONDEPRO y archivos de los subpr6stamos otorgados. Este informe se prepar6 siguiendo los lineamientos entregados en noviembre de 1994 por personal del Banco Mundial al BCH/FONDEPRO.

INFORtl'E DE CUMP'LITIENTO DE I.MPLF)ENTACION TERCER PROYECTO DE CRFDITO IDNUSTRIAL (PRESTAfO 2703-HO)

R,&SMFKN Dn EVALUACION

El Tercer Proyecto de Credito Industrial, cuyo periodo de de desembolsos comprende del 24 de Marzo 1986 al 14 de Noviembre 1994, fue el ultimo de cuatro prestamos recibidos del Banco Mundial, para el Sector Industrial y Turfstico de Honduras. Los a USS 101.9 Mfllones y son administrados Cuatro Frestamos ascienden de del Fondo Nacional a trav4s por el Banco Central de Honduras, Desarrollo Industrial (FONDEI), hoy Fondo de Crgdito para el (FONDEPRO), constituido mediante la Desarrollo de la Producci6n y Fondo Nacional Agropecuario unificaci6n de la Unidad de Credito Resoluci6n del Directorio del de Desarrollo Industrial, mediante Banco Central No.283-6/93, de fecha 24 de Junio de 1993. El Tercer Proyecto de Credito Industrial (Pr6stamo 2703-HO) por US$ 37.4 Millones, contemplaba los objetivos siguientes: a) Fomentar las empresas industriales en Honduras principalmente la empresa peguei3a y mediana; b) Proporcionar un mejor flujo de credito a las empresas industriales; c) Mejorar la situaci6n y capacidad institucional del sector financiero; d) Fortalecer la capacidad institucional del FONDEI y el BCH; e) Promover mejor tramitacion y supervision de los subprestamos por los IF'S que trabajan con el FONDEI; f) Analizar el sector industrial, incluida la generaci6n de datos sectoriales para ayudar a instituir las Reformas de las Politicas Sectoriales. En el disen5o del proyecto inclula credito para empresas de inversi6n, en los rubros de Activo Fijo combinado con Capital de Trabajo, solamente Capital de Trabajo y para desarrollo de nuevas tecnicas y la aplicaci6n de nuevas tecnicas existentes de producci6n; asimismo un programa de asistencia t6cnica para el BCH, Financieros. FONDEI, CDI, e Intermediarios de de 1987 tomaron la decision El Gobierno y BCH el 10 de Diciembre suspender temporalmente hasta el 30 de Abril de 1988, la de destinados para el financiamiento utilizaci6n de los recursos de los mismos, por el alto costo financiero empresas de inversi6n, del Banco de la canasta de divisas originado por la aplicaci6n Mundial y por el riesgo cambiario.

En el anllisis de alternativas y negociaciones con el BIFE, se determin6 reasigna.r el saldo del pr6stamo no utilizado,

que implic6

introducir las modificaclenes al Convenlo de Prestamo asf: a) En Abril 1988, se traslad6 US$ 20.0 billones al Gobierno pa.raapoYO de la balanza de pages y b) en Junio de 1992 se reasign6 USS 2.0 Millones para el programa de reestructuraci6n inform.1ticadel BCE. el Gobierno a los cambios anteriores. Adicionalmente norificado al BIRE el 26 de Junio de 1992, la canccelacldn

habia de US$

2.3 Nillones. Despues de ejecutar el programa de Informatica del BCE, se estima quedar,dun saldo sin utilizar de aproximadamente US$ 1.9 glllones, que debera ser cancelada su utilizaci6n. Evaluando los resultados del proyecto en base a los indicadores de implementaci6n programadas para el periodo 1986-1989, se observa lo siguiente: a) Comprometer el 100Z de los recursos financieros; a noviembre de 1994 se habia comprometido y desembolsado el 85.7; b) Otorgar 402 subpr6stamos, se otorg6 67 (17*); c) Generar 6, 082 empleos, se estima que gener6 el 532 (9 X); d) Establecimiento de 11 unidades de desarrollo en los Intermediarios Financieros y se estabZecieron 5; e) Capacitaci6n (entrenamiento) de 110 personas del FONDEI, BCE, e Intermediarios Financieros, se capacit6 a 202 personas. El programs de asistencia t4cnica, fue ejecutado con recursos del BCH/FONDEI. financieros del Banco Mzndial, PNHD y Contraparte Con parze de estos fondos se adquiri6 parte del equipo de cc5mpuzo y los programas necesarios, para automatizar principalmente las operaciones contables del FONDEI. Igual apoyo se otorg6 al Centro de Desarrollo Industrial (CDI), principal intermediario financiero no bancario, orientado a proporcionar asistencia tecnica y financiera al micro y pequeno empresario, cuyo monto maximo de financiamiento que canalizaba con recursos del proyecto fue de L.100,000 por prestatario. Por decisi6n del Gobierno esta Congreso Nacional No. 13fue cerrada segun Decreto del instituci6n de 1992. 92 del 8 de Abril A partir de la suspensi6n de la utilizaci6n de los fondos del pr,s tamo y con el prop6sito de continuar otorgando financiamolento a la micro, pequeina y mediana empresa, el Directorio del BCH mediante Resoluci6n No.620-12/87 de fecha 17 de Diciembre de 1987, estableci6 la Linea de Financiamiento en Moneda Nacional, constituida con recuperaciones de creditos otorgados a trav4s de los Convenios 1659-HO, 2075-HO y 2703-HO.

INFORtE DE COMPLIMIENTO DE IMPLElfENTACION TERCER PROYECTO DE CREDITO INDUSTRIAL PRESTAMO 2703-HO 1.-

Obietivos

v

Descripci6n del Provecto:

El Convenio de Prestamo entre la Rep6blica de Honduras y el Banco Internacional de Reconstrucci6n y Fomento por un monto de US$ 37.4 millones, fue firmado el 7 de julio de 1986. de este Proyecto el Banco Mundial habfa otorgado tres prestamos; dos industriales (1659-HO, 2075-HO) y otro para el desarrollo del Turismo en Honduras (1673-HO). El Banco Mundial ha otorgado al Gobierno de Honduras en total cuatro prestamos que ascienden a US$ 101.9 millones, siendo canalizados por el Banco Central de Honduras a traves del Fondo Nacional de Desarrollo Industrial (FONDEI) hoy Fondo de Credito para el Desarrollo de la Producci6n (FONDEPRO). Antes

Los objetivos principales del Proyecto 2703-HO fueron: a.-

Fcmentar las empresas industriales en Honduras, dando importancia al desarrollo de las empresas pequenas y medianas.

.b.- Proporcionar un mejor flujo de credito a las empresas industriales.

c.-

Mejorar la situaci6n y capacidad institucional del sector financiero.

d.-

Fortalecer la capacidad institucional del FONDEI y el Banco Central.

e. -

Promover

una

mejor

tramitaci6n

y

supervisi6n

subpr6stamos por los Intermediarios Farticipantes que trabajan con FONDEI. f.-

de

los

Financieros

Analizar el sector industrial, incluida la generaci6n de datos sectoriales para ayudar a instituir las reformas de las politicas sectoriales.

Los objetivos contemplados en el Tercer Frayecto de Cr6dito Industrial son similares a los establecidos en el Segundo Proyecto de Credito Industrial, aprobado el 22 de diciembre de 1981, con la modalidad que en el Tercer Proyecto, se amplia el apoyo al Programa de Asistencia T6cnica con enfasis en el Desarrollo Institucional del Banco Central, FONDEI e Intermediarios Financieros. Se considera que los objetivos delineados fueron claros, realistas y factibles de alcanZar.

2 2.

E-iecuci6n

de

Obietivos

a.-

De conformidad al calendarlo de ejecuci6n del proyecto estaba previsto su cierre para el 31 de diciembre de 1992, por diferentes razones se ha tenido que ampliar esta fecha hasta el 30 de junio de 1995 (Tabla No.3).

b.-

El programa de desembolsos del prestamo iniciaba el 31 de marzo de 1987 y conc7uia el 31 de diciembre de 1993, en vista de la suspensi6n del prestamo efectuada por el Gobierno y Directorio del Banco Central en diciembre de 1987, motivada por el incremento en el costo financiero del Banco al aplicar el costo de la canasta de di visas Mundial y el riesgo cambiario, la utilizaci6n de los recursos no se efectuo tal como estaba programada, lo cual origin6 efectuar dos modificaciones al Convenio del prestamo,

especificamente

al

"Anexo

I,

Retiros

del

de 1988 para una en abril Pr6stamo"; Importe del los fondos no US$ 20.0 millones de reasignar comprometidos en las categorias para subpr6stamos, para para apoyo de balanza de pagos en apoyo a las primeras fases del programa de ajuste econ6mico que el Gobierno iniciaba en dicho afno. La otra modificaci6n se efectuo en junio de 1992, la cual permiti6 reasignar US$ 2.0 millones, en apoyo del programa de reestruccturacion del Banco Central, principalmente en las siguientes areas: i) La instalaci6n de un sistema de administracion informatica en el BCH; ii) Una evaluaci6n de los alcances de la reorganizaci6n y la racionalizaci6n de las funciones que desempenfa;iii) Relaci6n institucional del BCH con el resto del sector publico y el fortalecimiento de su autonomia. Adicional a los cambios anteriores, el Gobierno notific6 el 26 de junio de 1992, la cancelaci6n de US$ 2.3 millones. Tambi6n se estima que despues de ejecutar el de Reestructuraci6n Informatica del Banco Programa Central, quedara un saldo de prestamo sin utilizar de aproximadamente US$ 1.9 millones, que se tendra que notificar al Banco Mundial la no utilizaci6n. El proceso de la compra del equipo de computo por el Departamento de Informatica y Tecnologfa del BCH, ha tenido que enfrentar varios contratiempos, encontrandose ofertas actualmente en la fase de analisis de las en Publica que se efectuara en la Licitaci6n presentadas el mes Enero de 1995. c.-

del proyecto de implementaci6n Los indicadores contemplaban para el periodo 1986 - 1989, que ei 100.'de los recursos estarian comprometidos; a Noviembre de 1994 estaba compz'ometidoy desembolsado el 85% incluido el

3 desemabolsode US$ 20.0 millones para balanza de pagos. Se programaba financiar 402 subprestamos; logrando 67 subprestamos que representa el 17Z; en generaci6n de empleo, se programaba 6, 082 nuevos empleos, se estima que se alcanz6 532 que representa el 9 Z. Netas que se pudieron log.rarde no haber reasignado los Lps.20. 0 antes referidos. d.-

En los objetivos de desarrollo institucional se puede calificar como resultados satisfactorios, en vista que para finales de 1989, se programaba establecer dentro de la estructura administrativa de los Intermediarios Financieros, 11 Unidades de Desarrollo, para desempenfar las funciones de tramitaci6n, evaluaci6n y supervisi6n de los proyectos de inversi6n. Se establecieron 5 en igual numero de Intermediarios financieros, equivalente al 45% Asimismo se elabor6 el reglamento de Autonomia Crediticia, el cual fue aprobado por el Directorio del Banco Central de Honduras mediante Resoluci6n No. 2996/87, de fecha 25 de junio de 1987, esto permiti6 que los IFP's que tenian establecidas sus Unidades de Desarrollo, pudieran aprobar prestamos en forma aut6noma hasta Lps. 100,000.00, mecanismo que agiliz6 el tramite de aprobaci6n y desembolso de los subpr6stamos. El limite actual es de hasta Lps. 200,000.00, y estan 11 IFP's autorizados para operar bajo el mismo, aun cuando no se mantiene las Unidades de Desarrollo como originalmente se programaron. Con la asistencia tecnica de un Consultor se prepar6 el Reglamento de Rehabilitaci6n de Empresas, el cual fue aprobado por el Directorio del Banco Central de Honduras, mediante Resoluci6n 548-11/87, de fecha 5 de noviembre de 1987. Este contempla diferentes modalidades de financiamiento a las empresas que por problemas especiales han caido en situaci6n de mora o iliquide2, algunas empresas se han beneficiado de este sistema. En entrenamiento del personal se programaba capacitar a 110 personas y se capacitaron a mxs de 200 personas del Banco Central, FONDEI, Intermediarios Financieros y Consultores. El Programa de Asistencia Te'cnica, fue ejecutado con recursos financieros del Banco Pfndial, PNUD 7 conttrapartedel FONDEI. Tambien a traves del mismo se logr6 adquirir parte del equipo de computo y los programas necesarios, para automatizar principalmente las operaciones contables del FONDEI. Igual apoyo se otorg6 al Centro de Desarrollo Industrial (C.D.I.), principal Intermediario Financiero, orientado a proporcionar asistencia tecnica y financiera al micro y pequenfo

empresario, cuyo monto maximo

recursos

del

Froyecto

de financiamiento

4 con

era de Lps. 100,000.00 por

pres ta t2ri . 3.-

PrinceDales Factores aue afectaron el Provecto El principal factor que afect6 la ejecuci6n del proyecto, fue el costo de la canasta de divisas que aplic6 el Banco Mundial a la amortizaci6n de capital e intereses del prestamo, lo que motiv6 que el Gobierno como prestatario y el Banco Central de Honduras como administrador, tomaran la decisi6n de suspender temporalmente la utilizaci6n del mismo. Despues de los analisis y negociaciones correspondientes se determin6 reasignar VSS 20.0 millones para balanza de pagos contempladas en el Inciso C) del Anexo I del Convenio de Prestamo modificado.

2

Tambien se reasign6 US$ 2. 0 millones para que el Banco Central de Honduras, ejecutara el Frograma de Reestructuraci6n Informa'tica atraves del Departamento de Informitica y Tecnologia. Este componente por diferentes razones ha tenido retrasos en su implementaci6n, especialmente en el proceso de Licitaci6n del equipo de computo a comprar. Ademas del incremento del costo financiero por la Canasta de Divisas, esta el riesgo cambiario.Ambos factores influyeron para no continuar otorgando subpr6stamos a la empresa privada. El Convenio de Prestamo contemplaba la opci6n de otorgar los financiamientos en d6lares y su repago en esta misma moneda, pero existieron limitaciones de tipe legal que no permitieron legalizar prestamos en d6lares.

4.-

Sostenih

ilidad de7 Provecto

Ser considera que la ejecuci6n del Prestamo 2703-HO, aunque se utfliz6 s6lo una parte para credito industrial y asistencia tecnica, ha contribuido a la sostenibilidad de los principales objetivos del Proyecto. A partir de la suspensi6n de la utilizaci6n de los recursos financieros del Tercer Proyecto de Credito Industrial, con el prop6sito de continuar otorgando prestamos de mediano y largo plazo a la micro, pequenia y mediana empresa, el Directorio del Lanco Central de Honduras, mediante Resoluci6n 620-12/87 de fecha 17 de Diciembre de 1987, estableci6 la LINEA DE FINANCIAfIENTO INDUSTRIAL EN MONEDANACIONAL, consti tuida con recuperaciones de los creditos otorgados a traves de los Convenios 1659-HO, 2075-HO y 2703-HO.

5 Anteriormente a esta Linea, el Directorio del Banco Central de Honduras mediante Resoluci6n 1956/12/84 de fecha 20 de Di ci embre de 1984, habia establecido la LINEA DE FINANCIAfIENTO PARA HOTELES Y ACTIVIDADES CONEXAS, con recuperaciones de los prestamos otorgados bajo el Convenio 2673-HO. Ambas Lfneas se mantienen vigentes actualmente. Como se puede observar, la Sostenibilidad del Proyecto durante los ultimos 7 afnos,ha sido posible mediante el otorgamiento de financiamientos con recursos provenientes de recuperaciones de los prestamos otorgados. Posteriormente la actividad financiera del FONDEI (FONDEPRO), fue incrementada en diciembre de 1988, con el proyecto AID No. 522-0241 Pequenia Empresa II (FOPME), por Lps. 30.0 millones, correspondiendo Lps. 28.0 Millones Fondo de Prestamo y Lps. 2.0 millones Fondo de Garantia, el cual tuvo muy buenos resultados, (Recursos no reembolsables). En octubre de 1991, tambien fueron transferidos al FONDEI (FONDEPRO) las Lineas de Financiamiento Industrial, que administraba el Departamento del Banco Central de Honduras, denominado Programa de Reactivaci6n Industrial (PRI), que comprende Lineas de Financiamiento del Banco Centroamericano de Integraci6n Economica (BCIE), BID, Fondo de Exportaciones de Venezuela (FINEXPO), C.C.C. y Fondo de Ayuda al Equipamiento Espafna-Honduras estos ultimos recursos no reembolsables. Congruente con lo anterior y como parte del proceso de reestructuraci6n del Banco Central de Honduras, se fusion6 el Fondo Nacional de Desarrollo Industrial (FONDEI) y la Unidad del Proyecto de Cr6dito de Agropecuario (UPCA) en Junio de 1993, con una drastica reducci6n del personal al grado que actualmente solamente cuenta con 37 empleados, incluido las dos oficinas regionales, San Pedro Sula y La Ceiba, esto ha permitido reducciones significativas en costos operativos. 5. -

DPesempepnOde7 Banca El desempeno del Banco Mundial durante las etapas de preparaci6n, evaluaci6n y supervisi6n del Proyecto fue satisfactorio. En la parte de preparaci6n y implementaci6n del Proyecto se tuvo la asistencia de un Consultor que contribuy6 mucho a concretar las actividades de estas fases, sin embargo no se analiz6 con profundidad, los posibles cambios en la canasta de moneda. Asimismo, siempre se ha observado en los funcionarios del Banco Mundial, receptividad y anuencia para ana2izar y

6 acordar alternativas de soluci6n, a los problemas que en determinado momeentose han presentado en la ejecucion de las del Proyecto. diferentes etapas Estas soluciones y en permi tidas al modificaciones de reasignaciones dentro de atender 6.-

DesemDeiio

del

se han dado dentro de las reguZaciones como las tales posible, el menor tiempo que permitieron las de Prestamo, Convenio de factibles a destinos financieros recursos del Convenio. los terminos

Prestatarlo

En las fases de negociacion y diseffodel Prestsmo, en lo que corresponde al Gobierno y al BCH como Unidad Ejecutora, se toda la informaci6n preparando con el Banco Aundial, colabor6 financiera y estadistica, necesaria para concretar el Convenio de Prestamo. en denominados subpr6stamos de otorgar En la alternativa dolares, cuyo repago se esperaba fuera en esta misma moneda, para existentes, legales no se tom6 en cuenta las limitaciones otorgar prestamos en d6lares, raz6n por la que no se promovi6 esta forma de financiamiento que hubiera con tribuido ha daisminuirel riesgo cambiario. del de los recursos la utilizaci6n de suspender La decisi6n Intermediarios de los a traves financiar para prestamo, fue acertada porque evit6 Privado al Sector Financieros, costo en el los efectos por subsidiandolo, con tinuar cambiario. y el riesgo de divisas de la canasta financiero, para la al Convenio de Prestamo y enmiendas Las negociaciones en el menor tiempo se efectuaron de los recursos reasignaci6n los recursos utilizando continuar permiti6 lo que posible, del pr6stamo por parte del Gobierno para balanza de pagos y al For otra parte su programa de Informa'tica. BCH para reforzar en la ejecuci6n del Programa de Asistencia Tecnica, se logr6 una mayor coordinaci6n entre las instituciones involucradas, que permiti6 alcanzar logros satisfcatorios. La modalidad introducida en el Tercer ?ro*vecto de Credito asistencia t6cnica, de Industrial. en el componente de efectuar diagn6sticos en los Intermediarios Financieros, para que estos procedieran ha establecer Unidades de Desarrollo dentro de su estructura organizativa, como requisito prerio fue otorgarles limites de aprobaci6n aut6noma, para satisfactoria, porque existi6 receptividad en algunos Bancos en establecerlas. del Credito, ademas Unidades a Secciones de Estas financiamiento a traves de las 7ineas de financiamiento del con sus propios las operaciones atendlan FONDEPRO, tambien recursos, pero contribuy6 a agilizar el tramite del credito y

7 existi6 mayor coordinaci6n con la Secci6n de supervisi6n del FONDEPRO para el seguimiento de los prestamos. 7.

Rvaiuanf6n del R&Aesultae El primer desembolso del pr6stamo se efectu6 el 21 de marzo de 1987, continuando atendiendo al sector industrial con el canalizado a traves de Banco Central, financiamiento (FONDEPRO) e Intermediarios Financieros FONDEI Participantes para la Micro, Pequenia y Nediana Empresa obteniendo los resultados siguientes:

a.-

Financiamiento de 67 proyectos de inversi6n de la Micro, Pequena y Mediana Empresa Industrial, por un monto de prestamo de Lps. 28.9 millones, correspondiendo Lps. 21.7 millones con recursos del Banco Nundial y Lps. 7.2 millones con recursos del Banco Central/FONDEI, fTabla Estos proyectos de inversi6n se estima No. 16). generaron 532 nuevos empleos.

b.-

El financiamiento fue orientado en un 89.%' para la mediana empresa equivalente a Lps. 25. 7 millones la diferencia de Lps. 3.2 Nillones a la Micro y pequenfaempresa (Tabla No. 16). Nediana Empresa es la que tiene activos flios netos excluyendo terrenos y edificios mayores a Lps. 400,000.00.

c.-

Por rubros de inversi6n, los recursos fueron destinados Lps. 20.5 millones para Activo Fijo y Lps. 8.4 millones para Capital de TrabaJo, equivalente al 71X y 29% del financiamiento total respectivamente (Tabla No. 17).

d.-

Los Intermediarios Financieros Participantes que canalizaron la mayor parte de los recursos financieros fueron Banco Continental (22%), BANCAHSA (1f8) y Banco de los Trabajadores C16%), (Tabla No. 19).

e.-

La actividad industrial que hizo mayor uso del financiamiento fueron: Fabricaci6n de productos metalicos, maquinaria y equipo (24X); Productos alimenticios, bebidas 7 tabaco (16*) yproductos qulmicos derivados de petr6leo, caucho y pllstico (13X), (Tabla No. 20). Asimismo, en la distribuci6n geogra'fica el financiamiento se concentr6 en los Departamentos de Francisco Morazan y Cortes, principalmente en las ciudades de Tegucigalpa y San Pedro Sula en 60X y 36X respectivamente, por las condiciones que reunen estas zonas geograficas (Tabla No. 21).

8 La ejecuci6n del componente de Asistencia T6cnica en el Segundo Proyecto de Credito Industrial, desde febrero de 1983, fue coordinada con la asesoria de un Consultor. En el Tercer Proyecto de Credito Industrial parte se continuo con la asesoria del Consultor hasta liegar a de T6cnics, Unidad de Aslstencia establecer La conformidad a los t6rminos del Convenio. Esta Unidad qued6 dentro de la estructura organizativa del FONDEI, como dependencia directa de la Direcci6n; establecida mediante Resoluci6n No. 348-7/86 del Directorio del Banco Central de Honduras, de fecha 7 de Julio de 1986. El prop6sito principal de 6sta, fue coordinar la ejecuci6n del programa de Asistencia Tecnica, que comprende lo siguiente: a.-

Asistencia Tecnica al FONDEI e Intermediarios Financieros Participantes, para mejorar el sistema de administraci6n e informaci6n, tramitaci6n, evaluaci6n y supervisi6n de los proyectos de inversion.

b.-

Asistencia

tecnica

a la micro

empresa.

al

C.D.I.

para

mejorar

el apoyo

a.-

al Departamento de la Asistencia tecnica para de Bancos del Banco Central, Superintendencia supervisar las la capacidad de fortalecer transacciones y desempeno de la Banca Comercial.

d.-

Para que Banco Central elaborara los estudios siguientes: a) Sobre mecanismos para movilizar el Credito a mediano y largo plazo con tasas variables de interes; b) Un censo del sector industrial; c) Analizar las limitaciones que pueden existir al aumento de las inversiones; y d) Evaluar el sistema de asignaci6n de divisas. (Tabla No. 7).

e.-

For parte del Gobierno: a) Evaluar el regimen de importaci6n temporal y establecido por el Decreto No.

37

el

27

de

diciembre

de

1984;

y

b)

Informe

completo sobre los aranceles existentes y las propuestas para la reforma arancelaria. (Tabla No. 7). El resumen de lo ejecutado Tecnica esta en la Tabla 8.

ne-r-cilonea

por el Programa de Asistencia No. 14

Futuras l

No se programa ninguna a corto plazo, para el industrial a traves del BCH-FONDEPRO.

financiamiento

9 9.

Lecciones Claves ArDrendidas a)

Mientras no hubo mayores riesgos cambiarios existi6 demanda de parte del Sector Industrial para estos recursos, con lo cual consideramos que durante ese periodo de estabilidad fue muy positiva su ejecuci6n.

b)

La asistencia tecnica para que los IFFS establecieran estructura Unidades de Desarrollo dentro de su organizativa, aun cuando en la practica las mismas, no se establecier6n como un centro de utilidades y costos, permiti6 al menos en los Bancos con mayor cartera de prestamos con recursos del FONDEI, mantener en forma permanente oficiales de credito encargados para atender los asuntos relacionados con el FONDEI. Esto no fue en y siempre se ha registrado rotaci6n en forma exclusiva estos cargos, situacion que por lo general se da en todo el sistema bancario.

c)

Con la ejecucion de este Proyecto, se financiaron algunas a largo plazo como el actividades de exportaci6n bancario con sus el sistema camar6n, que no proporciona propios recursos, derivandose como una lecci6n que el sistema bancario no dispone de recursos de largo plazo para el Sector Industrial.

d)

La lecci6n que se puede tomar de la ejecuci6n de este convenio de prestamo, el que en la fase de negociacicn y disenTo del proyecto, debe hacerse un analisis profundo originado por la del costo financiero de estos recursos, Canasta de Divisas y el riesgo cambiario, determinando un por los que el mismo, sea cubierto mecanismo que permita del canalizaci6n diferentes participantes en la hasta el prestatario final. financiamiento

e)

Que el sistema de otorgar financiamiento al sector industrial, en dolares y legalizar el prestamo en p6rdidas representa de valor, sin mantenimiento Lempira, significativas para el Gobierno y Banco Central y un en del financiamiento, para el usuario final subsidio oportunamente se tom6 la decisi6n de no este caso continuar utilizando el pr6stamo bajo este esquema.

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Report Type:

No: ICR

15420