International Labor Organization Peer Review: Note to Management

Publication Date: 2003
Published by: Consultative Group to Assist the Poor (CGAP)
Document Type: Paper

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Recommendations to improve the effectiveness of the International Labor Organization

This letter from the CGAP Peer Review Team examines the strengths and challenges of the International Labor Organization (ILO), and presents recommendations to the management to improve its microfinance operations.

The review was part of an initiative to tackle aid effectiveness by using microfinance as a test case. It focused on the internal procedures, practices and processes of the ILO to identify the success factors, and constraints that influence the effectiveness of the agency’s microfinance operations.

The recommendations are as follows:

• Establish a shared vision and objectives for pro-poor financial services: The ILO should develop a consensus on its vision and objectives in financial services, and articulate an operational strategy to attain these objectives.
• Develop a framework approach: The ILO should approach resource mobilization proactively and invite donors to buy into its operational strategy for microfinance.
• Clarify the function of the microfinance focal point: The ILO should allocate resources for spreading good practices through a recognized focal point.
• Increase accountability and improve quality: The ILO should pursue the following inter-related activities:
  • Integrate financial services in the program and;
  • Link with specialized institutions;
  • Establish a system to “flag” projects with microfinance;
  • Avoid revolving funds;
  • Track key performance indicators.

[Based on the author’s abstract]