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Collector wells in basement aquifers
01.10.1985
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A mandate to manage — Hitosa's large-scale gravity-flow water-supply scheme
01.10.1996
Ethiopian villagers enthusiastically grasped the concept of community management; regional-government officials were less impressed. Representative decision-making structures must perform effectively if bureaucrats are to be persuaded to hand over the reins of power. -
The pleasures and perils of donor consortia
01.12.1996
With the growth of large, successful NGOs, specializing in financial services to microenterprise, funding requirements for programmes have often exceeded the capacity of single donors.Donor consortia have been formed to make it easier for NGOs to deal with several donors at once. They agree common procedures for reporting, monitoring and auditing the NGO's plan of work, and they pool the resources necessary for carrying out this plan in its entirety. In theory this means that the funding for a number of years is assured, and the administrative demands upon the NGO are reduced. This article suggests that this may not always be the case: donors can be late in disbursing funds, and monitoring and reports may become more and more elaborate and onerous for the NGO. This is especially true if the NGO does not feel on equal terms with the donor consortium and is reluctant to stand up to the donors' demands. -
Examining the impact of microfinance services - increasing income or reducing poverty?
01.03.1999
When examining the income impacts of microfinance programmes, it is important to recognize that there is a significant difference between increasing income and reducing poverty. Despite the prevailing emphasis on raising incomes as the central objective of development programmes, the two are not synonymous. Clearly, the use to which income is put is as important in determining poverty and welfare as the level of income itself - increased income can be (and often is) gambled away. It is also important to recognize that poverty is neither linear nor static, and that today's not-so-poor may well be tomorrow's poorest- and vice versa. It is for this reason that the poor place so much emphasis on diversifying their sources of income, since this reduces their exposure to catastrophic income loss. Finally, in the context of the drive to create businesses that provide jobs, the differences between the quality of formal and informal sector employment must be noted. These differences also explain why, for many, having diversified sources of home-based income is preferable to depending on exploitative informal sector employment. It is clear that, given the right economic conditions, (reasonable levels of inflation, access to markets etc.), well-designed microfinance services can reduce poverty. -
'Are you poor enough?' - client selection by microfinance institutions
01.03.2001
The debate between the proponents of maximizing sustainability, outreach and scale and thus serving many poor people (including poorer people) and the proponents of targeting 'the poorest of the poor' (discussed by Dunford in SED Vol. 11 No. 1) continues. The debate is essentially a healthy one, helping everyone involved in the industry focus on what matters: providing financial services to poor people. This article argues that MFI programmes should include the 'nonpoor' on the grounds that this more profitable business can crosssubsidize outreach to the poor, and because, without access to any financial services, vulnerable non-poor people are likely to be reduced to poverty when a crisis arises. Regarding 'the poor', MFIs wishing to service this group should offer savings and other innovative products, since poor people have few opportunities to utilize Grameen-type credit efficiently. Finally, the very poor or destitute may require relief services before they can use most financial products. The challenge overall is to design appropriate products, and efficient systems - and in this way both MFIs and their clients will benefit. -
Introducing savings services into ASA, a microcredit institution
01.09.2001
This article describes the experience of the successful Bangladeshi microcredit institution, ASA, in introducing savings accounts. Aiming to increase its access to capital, and to provide a greater range of financial products to its clients, from 1997 ASA launched open-access savings accounts, a contractual savings accounts and a term deposit account. ASA soon found that its overall savings balances increased, but no more than would have been expected if only its original compulsory savings account had remained. Although deposits increased rapidly, so did withdrawals, leaving ASA without the expected additional capital, and with the additional costs of extra transactions. Capital could be mobilized more cheaply elsewhere. In spite of the advantages to clients (particularly women) of being able to save small amounts secretly, ASA decided in the interests of institutional sustainability to drop the new accounts. This article goes on to compare a situation where savings products have taken off: BRI, Indonesia. It is suggested that most of ASA's clients have little to spare once they have re-paid their loans to make any additional savings. The near saturation of the market for microcredit in Bangladesh means that many poor people are becoming over-indebted, and this is likely to mean higher levels of defaults for all MFIs in future. -
The relative risks to the savings of poor people
01.09.2001
Central banks often cite the protection of poor people's savings as a reason for regulating MFIs, and prohibiting semi- and informal deposit-takers. Informal savings mechanisms often prove more risky than unregulated MFIs, however. This article describes research demonstrating that poor people lose as much, and usually more, of their savings in informal savings mechanisms, such as ROSCAs, ASCAs, savings in kind, and especially saving at home. Even formal savings institutions were found not to be completely safe. Prohibiting MFIs from accepting savings is likely to drive poor people to riskier informal alternatives, and is therefore undesirable. It is clear that when discussing the risks to poor people's savings, this has to be evaluated on a relative basis. Very often all the alternative savings systems available to poor people are risky... thus poor people are left facing decisions on the relative risk (or relative safety) of the various semi- and informal savings systems open to them. It would be better to provide higher quality, clearer information to poor people about the risks involved of the various alternatives open to them. -
Client-responsive product development
01.09.2003
When clients desert their MFI (microfinance institution) in large numbers, this should signal that the MFI'sproducts are not right. This article discusses the product development process for microfinance. It starts with defining a research issue and carrying out market research to find out what clients want, moves on to developing an initial product concept, refines the concept with input from customer focus group discussions and finally pilot-tests the new product. This process has been used to launch new products that have boosted the profitability of organizations such as Equity Building Society, Kenya, Tanzania Postal Bank and Buro Tangail, Bangladesh. -
Ukraine Horticulture Development Project: the use of incentives to motivate collective action
01.06.2013
The negative experience of large-scale collective farms during the Soviet period, whose primary function was to benefit the state as opposed to the individual small farmer, remains in the psyche of farmers throughout Central and Eastern Europe (CEE), serving as a disincentive to collaborate. This perspective clashes with a rapidly changing global marketplace, which demands large volumes of high-quality products to meet the needs of consumers. Using the Mennonite Economic Development Associates' (MEDA) Ukraine Horticulture Development Project (UHDP) as a case study, this article demonstrates that, introduced using a culturally sensitive approach and with the right market-based incentives, informal and formal methods of collective action can result in important benefits for small farmers in terms of increased incomes, stronger market position, and strengthened community alliances.