Credit with education : a promising Title II microfinance strategy

With start-up training and ongoing TA from Freedom from Hunger, credit unions and NGOs in 12 countries (Bolivia, Burkina Faso, Ghana, Guinea, Haiti, Honduras, Madagascar, Malawi, Mali, the Philippines, Togo, and Uganda) are offering CWE services to more than 145,000 clients, the great majority of whom are women living in very poor, rural areas. At the end of June 2000, CWE loans outstanding totaled nearly US$8.2 million, with only 3.52% of the portfolio being "at risk." Average loan size was $70 per borrower. Personal savings totaled just over $1.5 million. On average, the 24 implementing institutions reporting adequate financial data had recovered 85% of their operating expenses (for financial and educational service delivery and for cost of capital and loan- loss provisioning) from interest and fee revenues. Considerable research verifies that CWE is having the intended impacts. Research focuses on program success in providing participants the anticipated intermediate benefits -- improved economic capacity, empowerment, and adoption of key child survival health/nutrition practices -- that lead to measurable change in food security and nutritional status. Results from a variety of evaluations are reviewed and summarized in the present report. The most conclusive results come from controlled, longitudinal studies designed in collaboration with the Program in International Nutrition (PIN) at the University of California, Davis, and conducted in Ghana and Bolivia. The research in Ghana clearly indicates that CWE not only increases income and savings, enhances self-confidence, and improves health/nutrition knowledge and practices of women, but can also ultimately improve household food security and children"s nutritional status. The positive changes measured in Bolivia were not nearly as dramatic as those in Ghana, but the problems with quality/quantity of education implementation in Bolivia provided a unique opportunity to verify one of the central assumptions underlying the design of CWE. Income increases, decreased vulnerability to hunger, and even empowerment are not enough to notably improve child nutrition, Programs must provide sufficient good quality education to change caregivers" behavior. As a stand-alone program, CWE seems capable of cost- effectively generating certain impacts that contribute to the food security goals of Title II. However, greater impact will be achieved when CWE is offered with more familiar maternal/child health/nutrition (MCHN) services to improve and support food security in a population. Includes recommendations and references. (Author abstract, modified)