The program does not keep track of the number of beneficiaries who are women. One program impact survey found that approximately 50 percent of surveyed borrowers were women. The program attracts many women because loans with relatively short terms, frequent repayments, and high interest rates are most appropriate for petty traders. In Indonesia. women make up a large share of the people engaged in this occupation.

For banks participating in this program, geographic outreach varies significantly. Some banks engage only in lending to channeling groups (Model 3), and service clients who are no more than 6 kilometers from one of their branches. Other banks serve groups much further away by relying on the more indirect lending to credit groups (Model l), or to NGOs that onlend to credit groups (Model 2). As indicated above, one BPR was using Model 2 to serve clients located one hour or more away from the bank by car.

_Productivity._ The PHBK program has very high overhead costs, as reflected in its high unit costs and subsidy dependency index. PHBK's national-level staff is large and spends a very significant amount of time and money supporting regional initiatives. Similarly, regional staff spend a large amount of time working with NGOs and banks. However, the program is rapidly becoming more cost effective as it is increasingly able to benefit from econornies of scale. and as the shift to the relatively simple model of banks' lending to channeling groups (Model 3) reduces ongoing support requirements.

_Reasons for Evoluition int Program Performance._ Program rnanagers attribute PHBK's troubled start and improved performance to financial sector and program-specific circumstances. The program experienced particular difficulties in 1991/92 and 1992/93. This was a troubled period for the entire Indonesian financial sector, which experienced significant liquidity problems and escalating arrears rates. Program volume was also adversely affected and took some time to recover after the program stopped providing subsidized liquidity credits to participating banks in 1992.

Program managers attribute initial, high program costs and arrears rates to inadequate screening of participating NGOs and groups, and to high reliance on the program's Model 2. Model 2 provides financing to credit users through banks making loans to NGOs that lend to credit groups that lend to members. Alternative program models are simpler and more direct with banks lending directly to credit groups which lend to members (Model 1), or banks lending directly to end-users loosely organized as a channeling group (Model 3). Model 2 was found to require the most intense program support and to have the highest program costs. It also suffers from the highest arrears problems because many NGOs are poorly moltivated and trained to make marketbased loans. For the last several years, the program has been phasing out this model wherever possible, and its share of total program volume has declined from 60 percent in 1993/94 to 17 percent in 1995/96. However, as indicated above, this Model is sometimes the only way that the program can function in remote areas. The program must screen NGOs carefully to ascertain that they have the commitment to follow sound banking practices. Further, it must provide them with training that will enable them to perform these functions effectively.

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