“I will never think of going to Europe any more, I can take care of myself now.”
IMPACT ASSESSMENT – 2014 Burang Danjo
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Executive summary A post project impact assessment was conducted over the provision of loans provided to youth to establish enterprises. 4.5 million Dalasi was loaned to 301 people as part of 7 different projects from USAID funded project ESSU in 2003, Global Fund SEDE project 2005/6, LIFE project 2003, EC funded SMILE 2007 and URRLIFE 2007 – 2012. Repayment rates were low – on average 25% but ranging from 10 to 82% depending on the project with the most recent project still underway and expected to continue to recover loans. 71% of the sample visited were female and 29% male. 8 different enterprise types were implemented with horticulture gardens and animal rearing forming the majority. Despite low repayment rates – only 5% fully repaid their loans (but 86% paid ¼ or ½ of their loans before stopping), there was a high level of enterprise success. 86% of enterprises succeeded in earning income and achieving a range of important life improvements for the beneficiaries. Success rates were highest where business planning was provided, loans dispersed quickly following business plans and there was regular follow up visits by extension workers from partner NGOs or credit unions. The average annual income achieved was D7985 (US$200) per year but ranged from D40,000 for animal fattening to D3600 for firewood trade. Enterprise income was used to: feed the family (82%); meet important social needs like ceremonies (82%); pay for health care needs (55%); buy clothes for the family (45%); pay for childrens education (27%); construction of houses (17%); and purchase of land/compounds (4%). Higher repayment rates seems to be supported by: clear messages that it is a loan and not grant, better integration with local credit unions and their rules for lending; regular support by well trained field workers. Many of the projects targeted highly vulnerable people – those living with HIV, the poorest, etc. A mixture of grants and loan could make sense among the poorest as the livelihood impacts were still significant despite low repayment of loans. Family interviews confirmed the wide ranging and important benefits following the family member being supported to establish an enterprise.
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Background Concern Universal Gambia and Senegal (CU) in partnership with The National Association of Cooperative Credit Unions of the Gambia (NACCUG) - the Apex body and management support unit for Credit Unions in the Gambia - commissioned to carry out an impact assessment on some of the past projects to determine the impact of the credit programs on the life of the beneficiaries, their families and the communities. The impact assessment study was on a total of 4.5million dalasi (US$112,000) in revolving fund loans delivered in the following five completed projects of Concern Universal in The Gambia. Some of these are: 1. Enhancing Economic Stability and Social Unity (ESSU) Project Funded by USAID 2003 2. Strengthening Enterprise Development (SEDE) and the Support Societies Funded by Global Fund 2005/6 3. Fostering Agro-enterprises & Market development for Improved Livelihoods and Economic Security (FAMILIES Funded by EC 2007 - 2011) 4. Smallholder Irrigation for Livelihood Enhancement (SMILE) Project Funded by EC 2007 5. Livelihood Improvement through Institutional Strengthening, Food Security and Environmental Management (LIFE) Funded by EC 2003 6. Upper River Region Livelihood Improvement through Institutional Strengthening, Food Security and Environmental Management (URRLIFE). 2007 - 2012 The study looked at the impact of the revolving funds/loans components of the above projects in relation to transforming the livelihood and income levels. An earlier report by NACCUG (monitoring report July 2011) on the loan repayment rate found low recovery of loans but there was little evidence of what, if any, actual impact on the beneficiaries and to determine the extent to which loan repayment or non repayment had contributed in transforming their livelihood and income levels. Concern Universal and NACCUG have a long term interest in this because the lesson learnt from the study will no doubt be useful in developing future programmes of both organizations. SPECIFIC TASKS The specific tasks are: 1. Review of all relevant Revolving Fund reports and documents associated with the abovementioned five project; 2. Conduct in-depth interviews with a sample of beneficiaries of the revolving fund schemes 3. Carry out field visits to communities in the intervention areas of the various projects and interview some community members; 4. Conduct in-depth interview with the management of the project stakeholders: Concern Universal, St. Joseph Family Farm Centre, National Beekeepers Association of The Gambia and World View International, The Gambia; Njawara Agricultural Training Centre; 5. Conduct in-depth interview with the Board and Management of the Credit Unions which gave out the revolving fund loans; Methodology As series of planning meetings were conducted between CU staff and NACCUG to determine appropriate strategies to be used to carry out the impact assessment exercise to minimize the risk of results being distorted by loan recipients not prepared to disclose the true picture of what the 3
situation is due to fear of being forced to pay. In this regard CU’s Project manager for capacity building, who was not connected to either of the loan programs was assigned to facilitate the study. NACCUG provided a summary list of loan recipients out of which sample loan recipients were identified from each project. In addition some reports available were reviewed to know some of the issues that were highlighted as either constraints or otherwise for action. The study generally looked at the impact of the loan received on the livelihood of the individual, the family and the contribution to the community. The method used include: one to one discussion with the sampled people that benefited from the scheme; focus group discussion (FGD) with some family and community members; review of project reports and discussions with some partner staff. Sample The assessment interviewed 21 people (15 female and 6 male) out of a total of 301 people that received loans representing 7% across four projects – giving a margin of error 14%. The assessment took 7% random sample from the list of the project beneficiaries that are in NACCUG’s report available – but as noted this did not reflect the total number of loanees as we cannot reach all the credit unions to get the list and NACCUG’s record shows only the summary. Each project beneficiary’s lists were put together and 7% randomly selected from each project as they were implemented in different regions Limitations One major limitation of the assessment was the fact that there is no comprehensive list or database of all loan recipients available at NACCUG (or elsewhere), but rather records are kept at the credit union level and the survey was unable to meet these unions to get the list. Secondly the management staff of two partners organizations (Njawara Agricultural Training Center NATC and Saint Joseph Family Farm SJFF) that provided both the training and extension services for LIFE and FAMILIES Projects in NBR and WCR have since left the organizations and the current management could not explain anything about the projects. The summary reports available did not look at individual performance but outcome of monitoring reports, consortium meetings, and quarterly and evaluation reports.
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RESULTS Document review and interviews A total of 7 projects were assessed that dispersed 4.5 million GMD to an estimated 300 recipients.
NAME OF PROJECT LIFE URRLIFE SEDE FAMILIES SMILE A ESSU SMILE B TOTAL
LOAN AMOUNT ISSUED 1,662,302 2,135,710 645,000 693,595 117,693 110,835 384,535 5,749,670
INTEREST
TOTAL LOAN
AMOUNT PAID
BALANCE
PERSENTAGE PAID
249,345 89,244 70,261 104,039 29,014 16,625 38,453 596,981
1,911,647 2,223,954 715,261 797,634 146,708 127,460 422,988 6,345,652
186,470 607,360 196,409 148,182 117,134 61,750 346,616 1,663,921
1,725,177 1616594 518,852 649,452 29,574 65,710 76,372 4,681,731
9.75% 28% * 27.46% 18.58% 79.84% 48.45% 81.94% 26.22%
The table shows details of loan amounts issued and the amounts repaid. Repayment rates ranged from 10% in the LIFE project to 82% in SMILE B with the overall average across all the projects being 25%. Some detail on each project is provided below. LIFE A total of 25 long term students trained by NATC and SJFF under the project received loans totaling D1,662,302 (one million six hundred and sixty two thousand three and two dalasi – USD$41,460) and the enterprises funded are mainly horticulture, animal husbandry and poultry keeping. Each individual student that benefited from the loan facility had developed a business plan as a precondition, which enable many to have good understanding about how to design and run a business and some of their family or peers were able to gain some ideas on business management from that. Reports indicated that some of these business plans were not properly followed during implementation of their loans programmes, especially students in WCR. Some diverted their funds to carry out other initiatives that they did not plan for and as such monitoring their implementation was difficult. Most of their new enterprises were not guided by any business plan nor did they learn (from the project) any skills to implement them. The arrangement between CU/ partners and NACCUG to implement the credit programs was the first of such arrangement between NACCUG and another development organization and as such was a learning process for NACCUG and CU. Provision of required technical support to individual loanees to implement their business plans was left to the partner extension workers and such a support was weak. The gap between the development of their business plans before their graduation from the training centre and the time for some of them to actually receive loans had a wide gap (in some cases more than three months) and as such neither NACCUG or extension did not verify whether
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their business ideas are still refreshed in their minds at the time of disbursing the loans. This led to some diverting their funds to do something else not guided with any business plan. The report indicated that greater part of the loans were not paid and this is largely due to weak extension monitoring and miss information passed by some of their colleagues that ‘the money is grant and it is the implementing organizations that are issuing them as loans’ and this made many to refuse re-paying their loan. See below for data collected. SEDE PROJECT This project provided loans to 91 people, of which 72 of the 91 (80%) applications approved went to female applicants. A number of loans were disbursed to restart or rebuild business that had provided income before the client became ill.(People Living HIV/ AIDS) FAMILIES This project provided Agro Enterprise loans to 63 people (majority female but no percentage indicated in the report) through the “Fansoto” marketing Federation being established in WCR. This umbrella body has a membership of 52 groups (kafos) across the region Below is a summary table of total amount of loan disbursed, interest, amount paid, balance and percentages recovered. It is important to know that total beneficiaries are difficult to obtain as some of the loans are issued to credit unions and partners to then be further disbursed to beneficiaries and there isn’t enough detail data at NACUUG to know exactly how many individuals or to break it all down by gender. However from project reports, a total of 301 beneficiaries received the loans
and this means an average loan size is D14,973 (US$373). Using the population data on average family size (8 per family), one will conclude that total number of people that somehow benefited from these loans is 2,408 if it is assumed that their households also benefited.
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The tables above indicates a summary of loans disbursed by project and percentage recovered however this could change as WASDA is the only partner still recovering loans. (Graph or Chart two one on projects and loans disbursed and the other one on % paid)WASDA is still collecting loans from people that benefited from URRLIFE project Gender of loan recipients A total 301 people according to records received loans from four projects. The gender breakdown LIFE Male 2
Female 7
URRLIFE Male Female 1 2
SEDE Male 1
Female 3
FAMILIES Male Female 2 3
TOTAL 21 = 7% of 301 15 = 6 = 29% 71%
could not be verified through credit unions to know how much are female and how much male. The Out of the 21 interviewed (7% sample of the total) 15 (71%) are female and 6 (29%) are male. There was no gender perspective investigated in the study Table: Types of enterprises implemented by beneficiaries within the sample and by project Enterprise Horticultural gardens Animal raring Fire wood selling Vegetable marketing Animal fattening Poultry management Sewing Bakery Other specify
URRLIFE 1 1
SEDE
1 2
LIFE
FAMILIES
TOTAL
Percentage
6 2
1
7 5
33.3% 23.8%
2
9.5%
2
9.5%
1
4.8%
1 1 1
4.8% 4.8% 4.8%
1
4.8%
2 1 1 1 1 1 (did not receive loan)
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The types of enterprises undertaken by the loanees vary but horticultural gardening and animal rearing top the list (33.3% & 23.8% respectively). Vegetable marketing and firewood selling was largely done by women in WCR and ranked third (9.5% each) while the rest: animal fattening, sewing, bakery and poultry keeping attract the least (4.8% each). One of the interviewees – a long term student from Dobo in NBR reported that she did actually receive any loan although her name is in the NACCUG’s list (all others interviewed had received loans). Estimated yearly income generated by project and by activity We asked loan recipients interviewed to estimate the yearly income obtained from the business being started with the loan. None of the loanees was able to produce records of their business tractions for verification rather they all recalled the amount of money they earned from transactions either daily or monthly – or in some cases seasonally e.g. for vegetable producers. The average annual income was D7985 (US$200) per year. Table: activities and estimated income generated Enterprise
URRLIFE
SEDE
LIFE FAMILIES 6 people
Horticultural gardens Animal fattening
1 = 24,000
28,600
1 = 40,000
2 = None of the two projects
TOTAL enterpris es functionin g 7/7 100% 1/3 33%
Estimated total income generated 192,000 40,000
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are working and family cannot explain if any income is generate d Animal 1 = (did 1 = 11,000 1 = No raring not start income selling) now but but generated estimated about to get 18,000 5000 this before the year animal died Poultry 1 = management estimated income 4,500 Fire wood 2 one selling generates about 7200 yearly and the other not working Vegetable 2 = marketing estimated income 2250 monthly, yearly 27,000 Sewing 1 No income as the machine is not working Bakery 1 estimated income 3000 monthly Other 1 (did
2/3 66%
Estimated income generated by the projects is 34,000
1/1 100%
4,500
2/2 100%
7,200
2/2 100%
27,000
0/1 0%
Nill
1/1 100%
3000
1/1
Business
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specify
Total by project
69,000
18,200
not receive loan) No income 28,000
100%
52,500
did not take off
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307,700 The enterprise success rate (as opposed to repayment rate) was variable between projects. At the time the study, all those that received loans through URRLIFE project are still in business, those that received loans from HIV AIDS supported project (SEDE) only one is performing. For the SMILE project (horticultural gardens) and that of FAMILIES - all are performing. The summary indicated that URRLIFE project loanees are realizing the highest income from their loans of up to D40,000 (US$997) per year. This better result may be because of the support given to the loanees during purchase of their materials and as the implementing partner WASDA has a credit union; it became quicker to provide loans to the beneficiaries within a short time. Secondly intense monitoring support provided by WASDA extension workers enabled the loan recipients to receive valuable information on the performance of similar projects being implemented by other people. WASDA performing these double functions (facilitating issuing loans and monitoring implementation) enabled many to perform better. The staff routinely visit the loan recipients, support them with technical advice to review their business plans against the enterprise and provide necessary advise to them for improvement of their enterprises. In some cases the extension worker establishes targets with the loanees to guide their future actions and these were very helpful according some of the beneficiaries interviewed. Secondly the strategy adopted in URR with the partner WASDA that is channeling the loans through the district tribunals to enable the district authorities being aware of the loan program and support the recovery process as may be found necessary did not happen in some other cases. According to staff at WASDA, the involvement of district authorities made many people to know about the project and made huge impact on the loan repayment as many people don’t want their case to be taken to the district tribunal court for hearing as this was outlined in their contract. The second project that is doing well in terms of income generated following receipt of loans is FAMILIES and this may be as a result of the establishment of marketing kafos and federation that built the capacity of many people, including the loan recipients, as highlighted during the discussions. The problem encountered that led to low loan repayment under LIFE in WCR and impacted on FAMILIES project was the mix messages being provided by extension workers that the loan should not be paid.It is important to note that SJFF (the implementing partner in WCR had two different types of extension support, one by another partner FFHC and by their staff. It is difficult to work with another partner providing extension services on your behalf while you want strengthen your organization’s relation with beneficiaries. Projects like SEDE which largely supported HIV/AIDS victims had good capacity building (training on business skills) that the loanees highly appreciated but weak extension services after disbursing loans which led to low loan repayment. Table: success rate by enterprise type
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Enterprise Type
Success rate
income per enterprise (GMD per year)
Animal fattening
33%
40000
Horticultural gardens
100%
27429
Vegetable marketing
100%
13500
Animal raring
100%
11333
Poultry management Fire wood selling Sewing Bakery
100%
4500
100%
3600
0% 100%
0 3000
Of the 8 types of enterprises supported through loans the highest income was generated by animal fattening, followed by horticulture gardens, vegetable marketing (ie trading) and animal rearing. Poulty, firewood had significantly lower incomes. While Animal fattening had the highest income it suffered from a lower success rate (33%), while all the other enterprise had a 100% success rate with the exception of sewing enterprise which failed. Repayment rate ‘When we saw the concern universal we were ready to run away….we thought you were coming to follow up on our loan’ (SEDE LOAN GROUP)
Name of project
No. of people interviewed
No. who did not pay anything
No. who made full payment
No. that made partial repayment
1/4
1/2
3/4
LIFE PROJECT
9
0
1
6
2
0
FAMILIES
5
0
0
3
2
0
URRLIFE
3
0
0
1
2
0
SEDE
4
2
0
2
0
11
Total
21
2 (9%)
1 (5%)
12 (57%)
6 (29%)
0
Only one loan recipient fully repaid their loan (5%). 9% did not make any repayments at all. 57% repaid an estimated one quarter of their loans (ie they started to make repayments), while 29% paid half of their loans. None of the loanees visited was able to accurately explain how much they re-paid out of their loan nor did they produce receipts to verify. Instead they only estimated how much they have paid as they can recall. However URRLIFE loans are still being recovered so results may improve. In the FAMILIES project beneficiaries made greater effort than the other project beneficiaries – for example all loan recipients paid something but none fully repaid their loans. Both those projects have a higher level of extension support provided. Fundamental reason for not continuing to pay: • Mixed extension messages from extension workers – were given e.g. they were told it was a grant and they did not have to pay (LIFE) – which was before families. What the proceeds of the loan (income generated from the enterprise) are used for Feeding the family 82% confirmed spending part of their income on supporting family feeding
Payment of school expenses for children 27% said they sponsor their children at school
Buying clothing for children
Health care
Others
45% highlighted buying clothes for family
55% indicated spending some money on health care
82% indicated spending some money on social services like ceremonies and 18% sponsored construction of their houses, 4% paid for land as compound
Loan Management Agreement 12
Concern Universal made an agreement with NACCUG to administer the credit component of the projects, while NGO partners would provide the training and extension work. NACCUG on the other hand used their credit unions to disburse most of the loans except for URRLIFE and some of NBR recipients. In URRLIFE, WASDA established their own credit union and responsibility to disburse loans to their beneficiaries and collect repayments. In this regard there is better monitoring and follow up to ensure loans are paid. This arrangement viewed as the best had some difficulties that affected loan administration e:g WASDA felt that their credit union did not receive any capacity building support during the project implementation period to enable them to effectively administer the loan program and this resulted in some lapses in loan management as highlighted in the 2013 audit report. As for NATC and SJFF the implementing partners in NBR and WCR, the management of both organizations left and the new management were not able to explain anything about the loan program and their organization’s partnership with NACCUG or experience with managing loans. Individual Benefit 90% of the respondents benefited greatly from the loans, each highlighted the materials or articles they bought or constructed from the proceeds of their loans: example Mustapha Drammeh from Bassending built a house for his family from the business loan, Mrs. Aminata Jallow at Kanlaji doing vegetable marketing bought a compound and built a house for the family. All the 98% of the people interviewed spoke very highly of capacity building training provided to them before they received the loans (both the business plan development and loan management training for long term students’ skills training). They consider this as the main reason for any success they register or support they were able to provide to other people 30% did not follow their business plans when implementing their loans and they attributed this to the fact that it took them long time before they received their loans after their training and within the period they saw what some of their neighbors get from some other enterprises, that is why they change their plans. 80% of those interviewed said they all have at least 5 fowls that they bought from their profits and they all emphasized the importance of this as fowls produce very quickly. As for Mustapha Drammeh in Bassending, he bought ducks and currently has 17 and sold at least 10 to his neighbors as they expressed interest to breed and the family ate 6. 20% used some of their monies from their business funds to support building houses for their families which is significant for them as an achievement Family level benefits Loan recipients were asked what type of on going benefits there have been as a result of receiving the loan. Type of support provided to family
Percentage
Remark
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Hire labor during farming period
30%
We highly appreciate the fact that we do get some support on hire labor during farming period to facilitate early farm work and this increases the yields and income
Provide space to family members in their gardens
35%
We do appreciate that through the gardens , some family members now have space in the gardens to grow vegetables and earn income to support ourselves
Sponsoring children in Senior secondary schools
15%
Without the support of my brother my senior secondary school carrier will have stopped as highlighted by Lamin Touray of Kuwonku - URR
Engaging family members in business
20%
Some family members confirmed that they are supporting their brothers and sisters to run the business which is enabling them to learn business ideas.
Family members appreciation of the level of support being provided by the loan recipient
98%
There is over whelm agreement from the families of those interviewed on the type and level of support being provided by these people and this includes; contributing to family feeding by buying rice mostly during the rainy season, paying school fees etc.
Challenges Bringing together up to three different organizations (CU, NACUUG, and the implementing partner) to implement a credit scheme was not easy and more over channeling the funds to local credit unions where the beneficiaries were often not traditional members made it even more complex as they did not adhere to the By – laws of these credit unions. The partner institutions except WASDA in URR did not see the funds as their money and their partnership with NACUUG became a marriage of convenience just to implement the project. Neither CU nor regional partners has mandate to implement credit program and this limited the role of partner extension workers to effectively monitor the credit scheme NACCUG’s capacity on the ground is limited and the credit unions did not fully integrate this loan program into their union because as one of them said these people have support from somewhere while we don’t 14
In some cases (only the long term student and those supported by FAMILIES project) completed their training and developed their business plans and before they receive their loans, although some of them changed their minds and invested their money on projects without business plan, the other group funded by SEDE received some training but did not development any business plan. Poor extension supervision led to uncertainty in the minds of some loanees and even their families on what the money is for and this has reduced commitment towards ensuring that the loans are paid. Access to market was a big problem for many as most of these loans are village based and poor communication to nearest markets is difficult. As some did not follow their business plan, they did not have clear documentation of their business transactions to enable one monitor how the business is performing Implementing partners like WASDA did not receive any formal training from NACCUG during project implementation on effective management of the loan program and this limited their ability to manage the credit scheme Way Forward CU, NACCUG and partners learnt a lot in their partnership to implement such a credit program and as such both made some suggestions for implementing such initiatives: Each partner organization need to establish their own credit union to be trained by NACCUG and they be fully responsible for their credit program Should be administered by MFI Shorter period between training and receipt of loans… Why loans were not paid; Respondents from SEDE, SMILE and FAMILIES said that they understand that the projects were grants and later they were told to pay as loan, so that was mixed message and secondly they don’t see the extension worker regularly and money is difficult to keep. Some highlighted family problems especially during the rain season resulting to use of their money including part of their capital. Targetting; The projects overall targeted the very needy people as outlined in respective project documents, (youths – URRLIFE, HIV/AIDS – SEDE and small entrepreneurs under the FAMILIES project). Other than those that received loans from the FAMILIES project, all the rest are poor and vulnerable people with no business background. Their profits were not substantial due to the support they provide to families. Comments from families The families of loan recipients overall highlighted the significant support being provided by their people that received loans without which many will suffer. One lady Sira from Kuwonku in URR said ‘without the support of my son, we will suffer from hunger especially during the rains and last son will not be able to go school. Now we have farm implements with drought animals that enable them to produce enough cereal that takes the family for almost the whole year.
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One HIV/AIDS positive person in Basse said he did not pay the loan but was able to build a house for the family and currently has ducks, chickens and sheep that the family is benefiting and the neighbors. A mix of grant and loan could make sense. Resettlement package – (loan) is what can make a difference‌particularly for poor youth and very poor households. For more information contact Burang Danjo Burang.Danjo@concern-universal.org
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