EGY 2002/003: Impact Assessment Evaluation: Family Development Fund Program
Author: Sultana, M.; Nigam, A.; UNICEF NYHQ
The Family Development Fund (FDF), initiated by UNICEF in 1993, is underway in three Governorates in Upper Egypt (Asyut, Suhag, Qena) and in one in Lower Egypt (Alexandria). UNICEF has invested US$ 455,000 for the loan capital and operating costs of the FDF. In Upper Egypt, the FDF is operating in 21 villages or district centers covering over 3100 borrowers. The objective of the FDF is to improve the socio-economic conditions of low income, asset-less women and their families through (a) provision of credit for small/micro enterprises to create opportunities for self-employment and income generation; and (b) the promotion of an integrated package of social services that aims at improving the beneficiaries overall quality of life.
Purpose / Objective
Prior to further expansion of the FDF, UNICEF Egypt decided to do an assessment of the achievements to date and the improvements needed in order to enhance its impact and ground FDF on solid foundations. This study aims at:
- ascertaining the effectiveness of the targeting mechanism
- measure the changes in the economic condition - health, nutrition and education status - of the FDF program beneficiaries.
The study gathered primary data to analyze the impact of the FDF program on the socio-economic situation and well being of the FDF borrowers. A combination of quantitative and qualitative data gathering methods were used:
- individual interviews with structured questionnaire for FDF borrowers and others who have not received FDF loans
- focus group interviews with the center members
- case studies on individual borrowers
While the impact assessment has adopted the approach of comparing both before and after situations and those with a control group, any changes that are observed, positive and negative, can not be attributed to the FDF program interventions alone. The impact assessment simply tells us what are the differences or changes in the lives of the borrowers in comparison to the before and after situation and in comparison to non-borrowers with a similar socio-economic profile to the borrowers before they received a first loan. The changes can be due to a number of dynamic factors operating at the community and household level. Causality for these changes is difficult to establish. At the same time, the viability of a credit operation should not be judged on the basis of financial measures alone. In the context of development many additional measures are relevant.
Key Findings and Conclusions
FDF has been able to develop a successful model in micro-credit using grassroots level community based organizations - called Community Development Associations (CDA). FDF is managed by the CDA at relatively low cost and with minimum bureaucracy.
UNICEF has invested US$ 355,000 in the FDF in Upper Egypt where the per capita income in both rural and urban areas is $500, although in the villages where FDF is operating it is considerably lower. This amounts to about $115 per household or $19 per capita, with the initial loan capital still intact. The loan sizes vary from $50 to $400. It is estimated that this has resulted in marginal net increase in the per capita income of the borrowers' families of about 20%, but the return on the capital invested by UNICEF, measured in terms of the net additional income of all the borrowers, i.e. after repayment of their loan and related expenses for generating the income, is significant at about 200%. Impact
FDF has managed to reach mostly the very poor, although there are other poorer families in the community who do not borrow for various reasons. However, a majority of the borrowers of the FDF come from the older age groups. The granting of flexible size loans has helped the FDF to reach the very poor and has been responsive to their changing situations.
The process of group formation has brought women together from similar socioeconomic backgrounds and helped to build solidarity among them. But the groups are not sufficiently well developed and independent to take initiatives in terms of tapping other facilities and resources available outside the FDF program. This is in part a reflection of the fact that the FDF has been operating for only four years and the groups have not yet received any formal training on group management, record keeping, structured social awareness messages and information on other services with the exception of health and nutrition. Capacity building of the group's internal management is critical for long term sustainability and enhanced impact of the FDF.
FDF has successfully instituted the group savings program for the borrowers. However, the amount of savings per borrower at present is low.
Productive activities undertaken by the program include cattle rearing, small trading, handicrafts etc. Most of the loans disbursed are for cattle rearing except in the Farshoot district where there is scope for small trading and other informal sector activities.
Focus group interviews with the individual borrowers suggest that credit has been helpful in creating income earning sources for women. Income from the credit activities is mostly spent on children's education and family subsistence. While the credit activities have created an income earning source for women, it has not provided most women with a steady source of income. Women involved in the informal sector activities have expanded their business whereas those involved in cattle rearing have secured additional income only when they sell their cattle. However, a small number of women are able to own cattle, which they do not have to sell to repay the loan, after more than three loans. In comparison, the situation of the non-borrowers in the control group remains unchanged.
After taking the loan the number of borrowers whose children did not go to school dropped from 23% to 16% and the number who were sending their children for wage labor outside the home dropped from 28% to 17%. The increased income of the women contributes to withdrawal of children from wage labor and their enrolment in school. Most borrowers, however, prefer to educate their sons rather than their daughters.
After participating in the FDF and utilizing the loan, more borrowers contributed to the family income than non-borrowers. The increase in income of the women has positive implications on child nutrition and education of children. Focus group interviews suggested that women spent the additional income primarily on family food needs and Impact Assessment Study of the Family Development Fund, Egypt iii children's education.
The greatest impact of the FDF was observed on improvement of the knowledge of the families about health and nutrition. It appears that even the marginal additional income and training on health and nutrition program has a positive impact on family food consumption pattern - 21% of the borrowers' families eat fish/chicken/meat twice a week in comparison to 15% of the non-borrowers' families. The training has also helped borrowers to gain knowledge on nutrition, first aid, diseases and treatment of diarrhea - 87% of the borrowers use ORT compared to 63% of the control group; 68% are aware of Aids compared to only 48% of the control group. Television has been a major source of information on AIDS followed by the awareness program in FDF.
After being involved in the FDF program, 37% of the borrowers have installed latrines in their homes. Positive results of the FDF's personal hygiene message are also observed, with almost 93% keeping soap next to their domestic water source. Most of the borrowers still lack the additional money needed to pay the capital cost of a household water connection.
Participation of the women in the literacy training program is low because of: (a) household work load; (b) literacy class is far away from home; (c) nine months course is too long.
Women's mobility has increased, since they have participated in the FDF's program. Access to credit has provided women with greater say in the family decision-making on matters such as buying food and other items for the family. Almost half of the borrowers (46%) said that their relationship with their husbands has improved and 76% said that their husbands listen to them more than before. However, almost all the women said that their income is kept by their husbands.
The FDF has offered the poor the opportunity to earn a living, not charity. The socioeconomic situation of the poor women borrowers in the FDF has improved in comparison to what it was prior to taking loans and is better than that of the non-borrowers in many respects. Continued credit is needed to sustain the increases in the income of the borrowers' families. In the short-period of time, the FDF has essentially provided a safety net, preventing the poor from falling further behind and reduced their poverty in different ways - with the potential for reducing income poverty over a period of time. The most important contribution to the reduction of poverty is seen in terms of the access of the poor to basic needs - additional food and better health and nutrition.
For enhancing impact, credit needs to be complemented with access to and utilization of other basic social services such as primary schools. This will allow achievement of Impact Assessment Study of the Family Development Fund, Egypt iv impacts on a broad set of social indicators sooner rather than later. Credit alone is also insufficient to empower women within a short period, but it has laid the foundations for it and for improved access to basic social services. Continued support for the expansion of the FDF program is warranted.
In order to meet UNICEF's objectives of improving the condition of the children, more emphasis should be given to target women from the younger age group. This is not to suggest that poor women borrowers without children under 14 years of age should not receive credit since the formation of groups has to be seen in the context of the community relations.
In order to make the groups economically viable and socially self-reliant, there is a need to further develop their internal management capacity for long term sustainability and greater impact.
To ensure qualitative long term empowerment of the group members, social awareness and gender training should be incorporated in all aspects of the FDF program. There should be a compulsory adult literacy training program for the group members during the center meeting.
Income generating activities should be diversified. The income generating schemes should be developed on women's traditional skills and occupations which have greater chance of providing viable income than those which require training in new skills. Those schemes that build on women's traditional skills and are geared to local markets generally prove less complicated to manage.
An analysis of the basic social services available in the different FDF locations may be carried out with a view to developing a plan for better integration with credit.
Additional credit for meeting the capital costs of water and sanitation facilities should be considered.
For expansion and long term sustainability, the capacity of the CDA should be further strengthened in areas such as identifying and bringing more of the poorest within the ambit of the FDF, and the management and monitoring of a set of financial and social indicators such as primary school attendance of both boys and girls.
The FDF should be expanded first in the existing villages to meet the demand for credit by the poor before moving into the new areas.
The project staff and the extension officers are the front line of the delivery mechanism. Their role and capacities will determine the cost effectiveness and the coverage of FDF. The capacity of the project staff and the extension officer should be further strengthened through training of trainers in areas such as social awareness, child rights, gender and adult literacy, and motivating the group members. Their capacity should also be strengthened to monitor a limited set of impact indicators such as primary school attendance, particularly of girls.
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