Final Report from the Evaluation of Sida’s work with Poverty

The Sida – MiBanco Guarantee (2018 – 2023) aimed to mobilize private capital and expand access to finance for micro-enterprises in Colombia that face barriers to credit, especially among women, in rural areas and prioritized territories.

Main method: Mixed methods; a difference-in-difference study of effectiveness at the municipal level and an analysis of stakeholder interviews using a grounded theory approach.

Positives: the guarantee expanded access to credit in higher-risk contexts. There were statistically significant increases in both the total amount disbursed and the number of loans granted in municipalities covered by the guarantee compared to non-covered municipalities. The instrument facilitated the approval of loans that were less likely to be approved without Sida’s guarantee.

Potential shortcomings: The evaluation did not detect effects of the guarantee among Sida’s prioritized target groups (rural municipalities, targeted territories or women-owned businesses). Women’s share in the guaranteed portfolio did not exceed the bank’s overall portfolio, and no attributable effects were identified on the proportion of loans granted to women.

The aim of this Development Economics Brief is to take a closer look at remittances, with a focus on inflow of remittances to Sida partner countries. It introduces key concepts, overall trends, explores links to poverty reduction, presents and analyses data from relevant geographical contexts, and finally concludes on some of the main challenges, possible ways forward and the potential role of development cooperation. This can inform Sida’s and other development organsiations work with remittances, as one of the most important, and perhaps less explored, financial flows for poverty reduction.