Topic: Impact of Internal Savings and Lending Schemes on poverty reduction in Gokwe South , Zimbabwe.

RESEARCH TOPIC:

Topic: Impact of Internal Savings and Lending Schemes on poverty reduction in Gokwe South, Zimbabwe. [BY TAPIWA M. GUDZA IN PARTIAL FULFILMENT OF THE MASTERS DEGREE IN DEVELOPMENT STUDIES]

1.0 Introduction

This study examines the impact of Internal Savings and Lending Schemes in Gokwe South. The research is motivated by the need to understand whether ISALs provide avenues for the poor and the poorest to meet their basic needs. The study examines whether the schemes incorporate the very poor. Most studies have generalized ISALs as a programme that has positive impacts on the poor but there has been a gap in terms of distinguishing various categories of the poor. Some scholars have argued that female headed households are the poor of the poorest however ZIMSTAT statistics paints a different picture which shows that generally male headed households experienced extreme poverty than their counterparts (ZIMSTAT 2013). Gokwe South has been chosen as an area of study since few researches has covered ISALs in the area. The inquiry will use methodological and data triangulation to evaluate the extent ISALs can be used as tool of poverty reduction.

Poverty brings untold suffering to human kind, ridicules dignity and shortens life. Governments and Non Governmental organization have designed and redesigned programmes to put an end to poverty with varying degrees of success. Poverty still remains one of the greatest challenges to human kind. The challenge of studying poverty emanates from the nature and complexity and diversity of poverty. Poverty is multi faceted, according to Iiffe (1987) the challenge with studying poverty is that the poor themselves are not a homogeneous group, they are diverse. People living in poverty invariably lack adequate and secure livelihoods. They are vulnerable to HIV and AIDS, dangerous and illegal work such as prostitution, child labour and exploitative working conditions below the minimum wage. According to UNDP ( 2014) poverty is not mere absence of adequate income, but it is a cruel mix of human deprivation in knowledge, health, dignity and participation and lack of voice. The most notable thing is that the poor lack access to loans and savings which can give them an opportunity to engage in self employment and economic development through various income and generating activities. Poverty is a multidimensional with complex linkages and various strategies have been used to mitigate it. Internal Savings and Lending Schemes (ISALs) is one of the approaches that have been adopted to provide financial access to the poor. With most NGOs and Government moving away from giving grants and loans ISALS have become a source of funding for the poor. However in Zimbabwe, ISALS have also been used by those in the middle class like civil servants to fund various initiatives.

Background to the study

According to Allen (2002) ISALs methodology was introduced in Zimbabwe in 1999 by Care International under the name Kupfuma Ishungu. A non – political and non- sectarian humanitarian organization dedicated to fight against global poverty which was founded in 1945 to bring emergencies relief to those who had survived in World War 2 in Europe and East Asia (Brannen 2010). ISALs were a modification of Rotating Savings and Credit Associations (ROSCAS). In ROSCAS contributions are fixed and the cycle ends when each member gets a turn to get the contribution but in ISALS the members borrow the contributions and returns the amount with an agreed interest and at the end of the cycle the members share all the savings. ISALS are also characterized by a social fund which members can borrow without interest in emergencies such as health, death, and education of household members and productive loans repaid with interests (Development Officer Training Guide 2010: 42). ISALS have been incorporated in various programmes such as water and sanitation, HIV and AIDS and girl child empowerment. The funding methodology has been replicated by various organizations in Zimbabwe like Concern, Caritas, World Vision and Welt Hunger Hiife with varying approaches. Ministry of Women Affairs, Gender and Community Development has also taken the mandate to train ISALs. Though ISALs are popular in Zimbabwe there is a sizeable number of people who are still using ROSCAs as a funding methodology. While ISALs are more common in the rural areas there has been assimilation of the programme into urban areas.

Microfinance institutions provide an alternative source of credit to the ‘poor’ however the demand of collateral security, salaried employment, guarantors, and businesses is restrictive for the rural poor (Qureshi, Saleem and Ali 2012). ISALs seem to be better option to meet the funding needs of the communities. Despite the attractive nature of ISALs there is a need to examine to what extent they have been able to poverty reduction tool and the extent they meet the needs of the poorest people. While poverty can be explained in terms of basic needs theory it is important to evaluate ISALs contribution in such a manner.

Statement of the Problem

The Government, Non Government Organizations and donor agencies have tried to establish viable and accessible financial inclusive systems in rural areas to eradicate poverty. .According Peachey and Roe (2006) access to finance indeed empowers people, provides them the opportunity to have an account, to save and invest, to insure their homes or to take a loan and in many cases to liberate from the clutches of poverty. The assumption of such microfinance intervention and initiatives is that it will improve lives. It is in this context that ISALs have been a funding methodology which has been used to fight poverty, it is imperative to investigate the impact it has on mitigating poverty. The problem which this study tries to address is providing access to finance for the poor so that they can create self –employment and meet other business and financial needs. Henceforth there is a need to examine whether ISALS are accessible to the poorest. The problem can be summarized the statement by Koffi Annan former Secretary General of United Nations ‘The stark reality is that most poor people in the world still lack access to sustainable financial services, whether it is savings, credit or insurance. The great challenge before us is to address the constraints that exclude people from full participation in the financial sector.… Together, we can and must build inclusive financial sectors that help people improve their lives’ (Leticia 2012:12).

Justification

The research is important in that it will shade light on the impact of ISALs on poverty eradication. The study can be used by policy makers, evaluation departments and Non Government in designing and modifying ISALs to ensure that these reach the poorest. Important lessons can be drawn from the research to address the short falls of ISALs as microfinance strategy to ensure financial accessibility and as poverty reduction tool.

There is need to fill the dearth of research on whether the poorest participation in ISALs. Most studies have focused on the impact of ISALs on the livelihoods of the poor, however this will inquire whether the poorest participates in ISALs and what has been the impact of the methodology on poverty eradication. Academics and programme managers can make use of the information that will be cultivated in this study.

Few researches have covered ISALs in Gokwe South hence there is a genuine motivation to cover this gap. Most research has targeted ISALS in Zimbabwe as a whole there is a need to move from the general to the particular. Hopefully the research will provide enlightening revelations in issues of programming in the area under study as well as in other areas.

Hulme (2000) states that impact assessment studies keeps donors, it is in this regard that such a study can be used by donors who have invested training in ISALs hence this study can be a review of their money’s worth. The study can provide prospective donors in the programme a glance of the effectiveness of the funding methodology.

Aim

To assess the impact of ISALs on poverty reduction in Gokwe South.

 Objectives

v  To assess the operationalisation of the ISAL model in Gokwe South

v  To assess the benefits of ISALs.

v  To assess the challenges of ISALs

Research Questions

v  What category of people has joined ISALS and the reasons of joining?

v  How has ISALs improved the lives of people?

v  Does ISALs uplift the poorest?

v  What have been the challenges of ISALs?

De-limitation of the study

The research is confined to ISAL groups in Gokwe South District that are in the following wards Nemangwe, Chisina and Huchu. The main reason is that there is a concentration of ISAL groups in these areas as per the database of the Ministry of Women Affairs, Gender and Community Development. The majority of training of these ISAL groups has been done by Concern Worldwide a Non Governmental Organisation (NGO) which is no longer operating in Zimbabwe. Caritas a faith based organization has trained about 90 groups. World Vision has trained 233 groups.

This research is not periodised since it will use cross sectional design in its methodology. A single point in time will be used to evaluate the extent ISALs have fared in poverty eradication. Most studies have looked at ISALS as a strategy for empowering women however this research will not confine itself to a particular sex.

This study will not review books generally written on microfinance since the topic is broad it will limit its focus to literature written on Village Savings and Lending or ISALs. Attention will focus on recent studies that have been done on ISALs.

The term mukando will be used to mean Internal Saving and lending or Village Savings and lending Association. The term has been used to refer to ROSCAs by scholars like Mbizi and Gwangwava (2012).

Limitations of the Study

Gokwe South is farming area which will make interviews difficult since most of the time people will be busy in the field. The researcher will be limited to conducting the interviews on Thursday on which is the day set for field breaks known as Chisi.

The bureaucratic nature of most organizations of certain NGOs and Government poses another threat to the research. The researcher will ensure that all required permission is sought in time to avoid disappointment during interviews.  Permission of the local leadership will be sought before getting into the villages to make interviews.

Ethical consideration will be taken into account by seeking permissions of the interviewees. In addition guaranteeing confidentiality to participants will be used as way to ensure 100% responses from the interviews.

Assumptions

The researcher assumes that there will be positive responses to the interviewees especially from the groups of ISALs. The researcher is anticipating that the local leadership will not give resistance to the study and that they will influence the groups to participate. Since personal information will be given in the interview the researcher will guarantee confidentiality to the respondents.

The researcher assumes that he will be able to meet the deadlines of the study. The researcher believes that timely submissions will be made to the authorities.

Definition of terms

Poverty Reduction/ Alleviation – Is removing beggary and creating self sufficiency through transformative change by improving lives by reducing the negative impact of poverty and the levels of deprivation as far as possible to meet the basic needs.

ISALs - Internal Savings and Lending Schemes is broad it covers self –financing schemes both in urban and rural areas while village and Savings and lending are schemes which targeted rural areas.

Poor – People who have relative access to human basic needs

Poorest - People who experience extreme poverty or absolute poverty where access to basic needs is evident.

Literature Review

ISALs and Women Empowerment

Rambo (2012) article assessed the empowerment of women through the Village Savings and Loan Schemes in Rachuonyo District. Through using a cross- sectional survey design  and triangulation of research approaches he concluded that there was a significant difference in terms of the amount invested in business, net returns on capital, ownership of properties such as land, business premises as well as production equipment and machinery.  Women were able to use the returns obtained from VSL to acquire production factors such as equipment, skills and business premises. Financial discipline was another positive component that characterized women who were engaged in VSL than those who did not. His research slanted towards how VSL affected women, while this research will look at ISAL groups without any exclusion on the basis of gender. His research pointed out that one of the major challenges of VSL effectiveness was poverty a position that is ambiguous to this inquiry. The research needs ascertain the extent ISALs have managed to be a mitigating strategy against poverty.

Chuma (etal., 2013) examined ISALs as survival strategy for female –headed households in Mucheke in the city of Masvingo in Zimbabwe. Their research concluded that ISALs played a crucial role in meeting the basic needs. In addition owing to ISALS female headed household managed to buy household furniture, pay tuition fees for their children, and generate hospital fees as well make food provisions for the families. The study glosses over the participation of the poorest in ISALS. The study looked at the urban context of ISALS but this study will focus on the impact on the rural areas.

Participation in ISALs

Rasmussen (2013) in his PHD thesis investigated the impact of savings and loan associations in Malawi through using a randomized control trial a method borrowed from medicine. The scholar randomly chose 46 villages where the half acts as the control and the other as an experiment. The experiment villages has ISALs established will the control the status quo is left to prevail. The outcome of the research proved that savings and loans association were indeed important however the poorest of the poor did not participate. While his research was hands-on due to the availability of resources at his disposal this research will base its findings on from interventions that has been done by various organizations who has set ISALs like Ministry of Women Affairs, Gender and Community Development Ministry of Women Affairs, Gender and Community Development (MWAGCD), Concern , World Vision  and Caritas.

ISALs and Poverty Reduction

Katabarwa (2009) assessed the contribution of ISALs to household income poverty eradication in Mubende District in Uganda.140 respondents were used in his study from randomly selected villages who had practiced ISALs. The scholar used a triangulation of qualitative and quantitative research method. The former approach was used in form of focus group discussions while the latter was used to collect information from beneficiaries, their spouses and children in different households. Her findings showed that 71.7% of the respondents agreed that ISALs had eradicated poverty in their households while 28.3% disagreed. This research will use her approach to measure how ISALs in Gokwe South have managed to eradicate poverty. The findings of her study cannot be generalized to the rest of the world where ISALs has been used as an intervention for poverty eradication. This study will add to the existing body of knowledge that is already available.

Brannen (2010) in his study examined the impact of VSLA in Zanzibar in Tanzania. His hypotheses tested positive for the following assumptions that ISALs provided (1) improvements in economic and social welfare of the household: (2) growth and diversification in income-generating activities (IGAs) : and (3) increased empowerment (social , as well economic ) for members. Similary the study that was done by Anyango, Eipisu, Opoku , Johnson , Musoke and Malkamaki (Vol.18 ,No.1)observed that VSL had expanded to 4,500 members and groups were getting returns of savings as high as 53 percent.

Sustainability of ISALs

Hamadziripi (2008) article examined the importance of networking and linking and trade offs in Member Owned Institutions like VSLAs in Niger. In addition it looked at the trade –offs between accumulating and cashing out. His case study comprised of 25 VSLA groups in the Tahoua region networked and non-networked. He observed that networking threatened internal governance leading it to be more complex and sophisticated. Ownership and control of the VSLAs that have been networked was traded off to Care. His assessment proved that VSALs had more to lose from networking. The sustainability of networked VSLAs was fragile since they dependent much on subsidies. His research argued that networked VSLAs had little prospects of appealing and reaching the remote areas effectively because it was complex and sophisticated. Outreach to remote areas remained elusive to networked VSLAs. Hamadziripi noted that about 50% of women who participated in VSALs were in the vulnerable category thus “They had only one house with one or two rooms and one small granary but do not produce enough to feed for themselves half the time. They are estimated to be 60% of the commune households.” (Hamadziripi 2008:2) This research will investigate what sort of people are joined ISALs and to what extent has it transformed their lives. With the proliferation of ISALs into urban areas the research examines there is any noticeable difference between ISALs that are practiced in urban areas compared to those in the rural areas.

Allen’s (2003) article ‘CARE International’s Village Savings & Loan Programmes in Africa: Micro Finance for the Rural Poor that Works’ traced the origins, methodology and impact in Niger, Zimbabwe, Zanzibar and Uganda. His study revealed that more than 162,000 women receiving financial services in rural Niger. Women were able to articulate needs in other areas, such as literacy, health and legal aid training. There was major impact on self-confidence, self-esteem and social status. Capital mobilised nationwide was close to $3.0 million (Allen 2003). The challenges were investment were restricted only to short-term activities, such as trading and food processing. Agriculture, the main economic activity in Niger, could not be financed owing to the short-term nature of the loans and because agriculture was seen as inherently more risky. Some of the stronger graduated groups remain inhibited by the small size of the loans and were actively seeking linkages to credit unions. The legal and policy framework of the country was poorly understood with respect to women’s property rights (Allen 2003) In Zimbabwe there was an increase of women joining ISALs and groups formed and increase in savings. The research concluded that even in a high inflationary environment there was an increase in livelihood security and increasing purchasing power. In Zanzibar the Grameen Bank methodology (JOSACA) was used where external funds were provided to the groups after they had managed to raise the required 10% of the external loan. Josaca used shares instead of fixed contribution from members (Allen 2002:40). Overall the program was able to inculcate a culture of saving, high level of community awareness and positive programme reputation and reduced negative impact on forest reserves owing to diversification of income generating activities (Allen 2002). In Uganda, Jenga methodology was used which is similar to MMD used in Niger. The impact was felt in the growing number of VSL groups, household income and confidence of women. Mali used the JOSACA methodology with following characteristics: extending the training period from 8 months to 10 months, in order to accommodate the introduction of themes and messages unrelated to savings and credit, varying lengths of loan terms, shareholding in order to permit varying amounts of contribution and formalisation of social fund contributions. The impact has been the existence of autonomous management of savings and credit activities by groups, large number of women joining in a short time and generation of significant resources to meet household needs.

Explanations of poverty

Poverty has been explained and defined in various ways by different scholars. Handley (etal., 2009) cites that since Second World War the western definition of poverty explains it in terms monetary terms through measuring the levels of income and consumption. The poor are those who fall under a given line called a poverty datum line. World Summit on Millennium Development Goals (2005) asserted that poverty is not only a matter of income, but also, more fundamentally, a matter of being able to live a life in dignity and enjoy basic human rights and freedoms[1]. However Amartya Sen (1982) saw poverty as capacity deprivation which goes beyond material lack or want it included human capabilities for example skills , physical abilities and also self respect in society. Similarly Muzale as cited (Dhemba 1999) shares the same sentiments that poverty is more than a physiological phenomenon denoting a lack of basic necessities like food , health and clothing , but it is state of deprivation and powerlessness, were the poor are exploited and denied participation in decision  making in matters that intimately affect them.

The Human Rights perspective of poverty describes it as “denial of person’s rights to a range of basic capacities such as the capability to be adequately nourished, to live in good health, and to take part in decision making processes and in the social and cultural life of the community”(UNHCR 2012:2)[2] A rights approach is used to address poverty. In the language of rights, one may say that a person living in poverty is one for whom number of human rights remain unfulfilled—such as the rights to food, health, political participation and so on ”(UNHCR 2012)[3]. One reason why the human rights framework is compelling in the context of poverty reduction is that it has the potential to empower the poor (Human Rights and Poverty Reduction 2004). [4] Empowerment can be described as a process of increasing the capabilities of poor individuals or groups to make choices and to transform those choices into desired actions and outcomes, and to participate in, negotiate with, influence, control and hold accountable the institutions that affect their lives (UNHCR 2012). [5]

Poverty has been split into two broad categories which are absolute and relative poverty. Absolute poverty can be explained using the basic needs theory of poverty. According Bradshaw (2006) absolute poverty is lack of basic necessities such as food; shelter, medical care, and safety generally thought necessary, based on shared values of human dignity.

According Valentine (1968) argues that relative deprivation is embedded in inequality.[6] Inequality is characterized by unfair distribution of resources which results in the widening of the rich- poor gap. Unfair systems do not provide safety net for those are poor hence there is need for Governments to come up with mechanisms that address inequality as a step towards alleviating poverty. Most financial systems such as commercial banks are exclusionary than inclusionary for the poor. Access to credit for the poor can be a move towards addressing unequal practices.

Synopsis of microfinance and poverty

Microfinance has been defined by Schreiner and Colombet (2001:339) as “the attempt to improve access to small deposits and small loans for poor households neglected by banks.” Otero sees microfinance “the provision of financial services to low-income poor and very poor self-employed people” (www.dochas.ie/share/files/2/). Microfinance institutions play an important service of offering financial services to the poor.

A significant number of literatures prove that there is a positive correlation between access to finance, economic growth and poverty alleviation (Swamy and B.K Tulasimala 2013). Scholars like Littlefield, Zaman, Morduch Hashemi and Montgomery believe microcredit will reduce poverty. T. Pham and R Lensink asserts that access to credit will result in the rise of investments in income generating activities , diversification of sources of income, accumulation of assets, it can reduce the vulnerability due to illness, drought and crop failure, and it can contribute to a better education, health and housing of the borrower (www.pegnet.ifw-/kiel.de/event). Scully argues that microfinance does not reach the poorest, on the basis that the loans wanted by the poorest are too small to generate significant interest income for lenders, further microlenders are under pressure from donors to become financially self sustaining (www.gdrc.org/icm/wind/micro.html) hence there are forced to lend moderate poor.

Obed Gilbert Fredrick Mwalughali (2013) thesis looked at the impact of Community Savings and Investment Program on household income and credit market participation in Kasungu District in Central Malawi. His research did not focus ISALS however it gave insights on how the Community Savings and Investment Program (COMSIP) had fared for farmers in a rural setup. While ISALs looks at internal funding by members of the group the Community Savings and Investment Program is externally funded by the government to cooperatives. These cooperatives provide credibility to farmers and acts as collateral for farmers. This research will look at how the ISALs have managed to eradicate poverty in Gokwe South.

Theoretical/Conceptual Framework

This research uses the theory of change which states that if the intervention is able to bring positive changes and is able to meet unmet financial demands it would have positively transformed lives. Secondary theories like the Basic Needs theory as basis of measuring the impact of ISALs in mitigating poverty. The question which is asked by this research is that does ISALs provide the poor or poorest with a venue that will make them get the basics. The research uses Household economic portfolio (HEPM) model to assess the impact at individual, household and enterprise and community levels. Different economic and social variables will be looked at such as expenditure, consumption, assets and ability to send children to school, access to health and social position. Assets are important since there do not fluctuate like other economic indicators. The intermediary school of thought will be used to assess outreach and sustainability of ISALs. If outreach and sustainability have been enhanced then the intervention is judged to have a beneficial impact (Hulme 2000).

Research Methods

The Area of Study

Zimbabwe is situated in the sourthern part of Africa. It borders with Mozambique, South Africa, Botswana and Zambia to the east, south, west and north, respectively. The country is land locked with a total area of approximately 390.757 square kilometers, and, it has a population of 12.973.808 persons according to the preliminary results of the 2012 (Zimstat 2013:1). Zimbabwe has 10 provinces which are, Mashonaland Central , Mashonaland West, Mashonaland East , Manicaland, Masvingo, Matebeland South , Mateleland North, Midlands and metropolitan provinces of Harare and Bulawayo.

Gokwe South is situated in the Midlands Province with a geographical coordinates of 18⁰ 13′ 0′′ South , 28⁰ 56′0′′ East (www.maplandia.com/Zimbabwe/Midlands/gokwe/gokwe/ )[7]. It is a cotton growing town located 356 km from the capital of Zimbabwe, Harare and 140 km from the city of Kwekwe. It falls under Zimbabwe’s agro ecological zones of region III and IV the former is a semi intensive farming region which receives (650 - 800 mm) and the latter is under semi arid areas which receives poor rainfall between (450 - 650 mm ) (OCHA Map). 79.0% of the people are communal farmers and only 0.4 % is unemployed. Gokwe South has a total population of 331386 which consist of 159187 males and 172199 females, in 69619 Households (Census 2012). The district has 39 wards of which 33 are categorized as rural. The administration town is called Gokwe Centre which has a single vocational training centre which specializes in training the community in various crafts such as welding, carpentry and boiler making, various banking institutions such as Commercial Bank of Zimbabwe (CBZ), POSB, Agribank and CABS. Microfinance institutions include Women Development and Savings Credit Union, Zambuko Trust, Paramount Holdings and Microfin henceforth the rural people have to travel to get these services. Gokwe South has 75.3% of poverty compared to 44% of Gokwe Centre and 17.9% of the people living in extreme poverty compared to 4.8%. (See graph below). This information shows that the Gokwe town is far better than the rural areas.

(Percent Poverty Prevalence Zimstat 2013, p i)

Gokwe South Map

Poverty Index

Research Methodology

This study will use a cross sectional design to ascertain the impact of ISALs on poverty reduction at a given time. The researcher will make use of methodological and data triangulation. The former refers to gathering data through several sampling strategies, so that slices of data at different times and social situations, as well as on variety of people, are gathered. The latter refers to the use of more than one method for gathering data (www.referenceworld.com/mmr.pdf).[8] Focus Group discussions and semi structured questionnaires will be used on groups who are participating or who have already participated on ISALs. The Ministry of Women Affairs, Gender and Community Development database will be used to draw a sample through stratified random sampling from the target population of 323 groups composed of 2315 members. The sample should cover the three wards which are covered by the database thus 33.3% should come from each ward. Using the online Survey System Package the sample size will be 148 with 90 % confidence level and using the confidence interval of 5% hence each ward will have a sample of 49 each (www.surveysystem.com/sscal.htm). 243 individual questionnaires to ISAL members were picked randomly from the total population of 2315 with 90 % confidence level and 5% confidence interval.

One on one, telephonic and electronic interview will be conducted to professional people who are involved in ISALS training such as Women Affairs Staff, VSL founder Allen Hugh, former programme manager and Country Director for Concern. Permission for the interviews of these people has already been sought. Individual interviews will also include non members of ISALs who will be drawn through purposive sampling. Snowballing will be used to select the individuals who are not members of any ISAL groups.

Primary sources from organization and groups in terms of monthly, quarterly and annually reports will be used in the research. Secondary sources will be instrumental in data analysis and literature reviews in the research.

Time & Budget

Activity	Time	Cost
Submission of Proposal	21 July	$ 20
Chapter 1	28 July	$ 10
Chapter 2	8 August	$10
Chapter 3	15 August	$10
Chapter 4	22 August	$ 100
Chapter 5	5 September	$ 10
Submission of 1st Draft	10 September	$ 20
Total		$180

Conclusion

The research will use a book format approach Chapter 1 will cover the Introduction of the study, Literature review and methodology. This chapter will explore various funding methodologies that have been used in Zimbabwe such as ROSCAs and SACCOs. Chapter 2 will look at various theories of poverty and strategies that has been used to mitigate poverty and the historical background of poverty in Zimbabwe. Chapter 3 will look at a historical background of microfinance in Zimbabwe. Chapter 4 will look at the socio-economic characteristics of the members of ISALs. Chapter 5 will present the findings of the research paying particular attention to the impact of ISALs on poverty reduction looking at various variables such as household income, education and assets acquisition.

CHAPTER 2 BACKGROUND OF POVERTY IN ZIMBABWE.

2.1 Introduction

In order to understand the mitigation method in question it is of paramount importance to trace poverty in Zimbabwe thus how it came to be and the key drivers to date. This chapter traces poverty in Zimbabwe and explores the key drivers.

2.2 Historical Background of Poverty in Zimbabwe

Poverty Reduction Forum Trust (2013) traces structural poverty to the colonial administration, the pre-independence Zimbabwe was characterized by imbalances and inequality skewed in favour of the white minority. The colonial government gave whites elevated privileges which included well resourced and well-equipped commercial farms acquired through massive land appropriation while black people were confined to poor unproductive overcrowded rural areas and densely populated urban townships run by poorly resourced African councils (Poverty Reduction Forum Trust 2013). In addition peasants were forced to work in white owned farms and mines. The post –independence resettlement scheme under willing buyer and willing seller programme including agricultural extension services program and social protection schemes which assisted the blacks with farming implements and inputs failed to redress land imbalances and to address structural poverty. The adoption of liberalization of the economy worsened poverty in Zimbabwe as indicated below.

UNHABITAT (2005) pointed out that three political factors economic crisis in the 1990s, that is, unbudgeted cash handouts to war veterans in 1997 and military intervention the DRC and the Fast Track Land Reform which triggered an inflationary spiral. Similarly Fowale (2010) also points to these three events as having caused economic crises that had resulted in poverty escalating.

1990-2000

3.1 Adoption of Economic Structural Adjustment Programme (ESAP) 1991-1995.

Zimbabwe adopted ESAP in October 1990 following the advice of the World Bank and IMF as preconditions of getting financial loans. The Framework of ESAP was spelt out in the document entitled Zimbabwe: A framework for Economic Reform (1991-95). The nation was then forced to abandon socialistic principles it had been following since independence since 1980. Neoliberal policies were adopted which entailed rolling back the state from active participation in the economy. Neoliberal principles were enshrined in ESAP which meant the government had to reduce expenditure through removal of subsidies, cost recovery, civil service rationalization and parastal reform, trade liberalization including deregulation of foreign trade, investment and production and devaluation of the local currency. ( Biljlmakers , Bassett & Sanders (1996), Dhliwayo 2001). ESAP had serious negative socio-economic impacts. The removal of subsidies and cost recovery in education and health sectors, resulted in swelling numbers of children out of school, people dying of curable diseases in their homes and women giving birth at home or in scotch carts on their way to health centers in rural areas. Participation in prenatal services declined; maternal death and mortality rates of babies. Wages of health personnel declined resulting in the mass exodus of qualified staff, low morale and general discontent. Hospitals faced critical drugs and equipment shortages; they faced congestion at casualty departments and mortuaries. The quality of health care deteriorated at most hospitals especially in rural areas. More deaths were reported in the rural areas compared to towns (Dhliwayo 2001). According Matunhu and Mago (2013) people who were retrenched headed back to their rural areas to join a stream of people suffering income poverty. It can postulated that most of the people who been the source of income for the rural folk hence their retrenchment worsened their poverty.

The Poverty Assessment Study of 1995 observed that 45 % of the population were found to be very poor since they could not meet basic nutritional requirements and 61% were found to be poor indicating there were able to buy enough food but not other goods and services that are considered a requirement. Poverty was more prevalent in rural areas by 75 % compared 39 % of the urban areas (Biljlmakers , Bassett & Sanders 1998: 104). Higher levels of poverty were recorded in rural areas (75% of households) compared to urban households (39% of households) (www.afraca.org/publications/508Zimbabwe ).

The effects of Structural Adjustment Programs (SAPS) were not unique to Zimbabwe alone but other Least Development Countries (LDCs) who had adopted them. SAPS compromised food security in many countries for example UNCTAD (2008) observed that in 2006, on average, 20 per cent of the LDCs food consumption was imported, and in some countries the share was higher for example Lesotho had 67%, Gambia 82%, Mauritania 32%, Malawi 31%. After adopting SAPS Haiti was forced to apply a series of trade liberalization policies which led to a reduction of tariffs protecting the production of crops, including rice. This opening allowed indiscriminate entry of subsidized US rice which was sold far below the price at which local farmers could produce it. This resulted in loss of work for the peasantry leading to importation of rice (www.internationalviewpoint.org). Many developing countries, especially LDCs, which are traditionally food-exporters, became net food-importers.

3.2 Unbudgeted compensation for the War Veterans (1997)

The disgruntlement of war veterans that had participated in the Second Chimurenga having been caused by deteriorating economic conditions forced the President Robert Mugabe to give grants. It should be note that the move was not a popular move among the parliamentarians and the decision had to be passed by a Presidential decree (Gudza 2007). Over Z$4.5 billion was paid as gratuities to 52 000 claimants (Mazarire and Rupiya).[9] As a result the Zimbabwe Dollar fell by 71.5 percent against the greenback while the stock market crashed by 46 percent as investors rushed for the US dollar (IOL 2007). This compensation was unbudgeted and had to be covered by massive printing of money resulting in the rise of inflation worsening the already ailing economy that had ransacked by the adoption of ESAP. With collapsing of the local currency poverty in Zimbabwe increased.

3.3 Zimbabwe military involvement in the DRC (1997-2002)

The economic reasons for Zimbabwe’s military involvement in the DRC conflict in 1997 are a matter of controversy among scholars. Some scholars argues that involvement in the DRC conflict was a matter of diverting the people’s attention from the economic doldrums , while others argue that the DRC was suppose to be the answer to mounting economic problems (Rupiya 2002 , Shivji 1999). Despite these views the involvement had a share in contributing to poverty in Zimbabwe. The DRC war fed from the budget of Zimbabwe the Ministry of Defence gobbled money that could have been invested in development. The budget estimate for Defence in 1998 was $5.540.187.000 however the actual amount, which was used, was in 1999 was Z$5,540,247,000.[10]In 2000 the expenditure was estimated to be Z$13,292,479,000 but the actual that used was $16,207,579,000.[11] The Financial Gazette reported that army used more than 12 percent of the total revenue for 2001, the paper quoted figures that had been presented to the IMF by the finance minister. The Government was reported to have spent Z$16.208 billion instead of 13.3 billion that was budgeted for by the finance minister. [12] It was estimated that US1.3 million per month or 0.4 per cent of the Gross National Product was spend on the war (Gudza 2007). The economic and social implications of the DRC conflict resulted in the increase of poverty levels.

3.4 Fast Track Land Reform Program (FTLRP)

The FTLRP which was launched in 2000 had two primary aims of compulsory land acquisition and redistribution (Zikhali 2008). Two models were adopted the A1 which was meant to decongest communal areas and was targeted land constrained farmers in the communal areas. The A2 model comprised of small medium and large commercial settlements (Zikhali 2008). Kinsey (2010) argues that, the forced seizure of thousands of commercial farms in the name of land reform in the beginning of 2000has been a major contributor to the dramatic worsening of poverty levels nationally. Richardson (2004) observed that agricultural production plummeted by 30% while the manufacturing sector dropped by 15 %. The absence of tenure for the beneficiaries made it difficult for them to acquire loans from the banks to invest in the newly acquired land. Despite the loans set aside by the Reserve Bank through Commercial Banks most farmers did not access the facility Chamunorwa (2010). The Poverty Reduction Forum Trust 2013 argues the FTLR worsened rural poverty as it affected those who were employed on commercial farms lost employment and reverted to rural areas that were .already congested. In addition the chaotic manner in which land reform was done attracted sanctions European Union, the US and several Commonwealth countries

Scholars like Zikhali (2008) argues that FTLRP mitigated poverty by pointing out that resettled farmers were more productive than communal farmers. However the scholar failed to compare the production of the ousted commercial farmers and the new settled farmers. 

 Chamunorwa (2010: 7) observed that 1.3 million people including farm owner and farm worker households, lived on and off 4,660 large-scale commercial farms covering over 10 million hectares (ha), while over 1 million households (5.6 million people) in the communal areas subsisted on 1.6 million ha. By June 2009, a total of 725,000 ha arable land was given for A1, small scale commercial and large scale commercial, 710,000 arable land for A2, 250,0000ha for communal and 800 ha for old resettlement (Chamunorwa 2010 citing FAO 2009).

2000 – 2008

3.5 Operation Restore Order /Murambatsvina /Tsunami 2005

The demolition of illegal demolition of urban settlement was coded operation Murambatsvina which literally meant ‘driving and cleaning out dirt or refusal’ (Dzimiri and Runhare 2012). It aimed at putting a stop to illegal activities in contravention of municipal by-laws, such as the erection of illegal structures, illegal vending, touting by commuter omnibus rank marshals, illegal street garaging, illegal cultivation, dealing illegally in foreign currency and prostitution. The affected people were told to go back to their rural areas (Dzimiri and Runhare 2012).

The UN envoy report (2005:20) outlined the following reasons for the Operation Murambatsvina:

A. was a result of general concern over increasing chaos and congestion in the central business district of Harare and other major cities over which the Government was being blamed by the middle class; nostalgia over the role of Harare as the “Sunshine City” was on the rise;

B. was an act of retribution against areas known by the Government to have voted for the opposition during the last few presidential and parliamentary elections;

C. could have been conceived by a number of individuals as part of the politics of succession to President Mugabe;

D. was a means of checking the power and influence of the war veterans, or ex-combatants;

E. was a means to increase the flow of foreign currency through the "Homelink" scheme;36

F. was a pre-emptive strategy designed to prevent popular uprising, in light of deepening

food insecurity and other economic hardships;

G. was a mechanism designed to re-possess control of the conduct of business by some political leaders in the ruling party, thus establishing a system of political patronage over urban areas

H. was a scheme to divert the attention of the President away from his increasing concerns over the underutilization of newly acquired commercial farms in rural areas; and

I. represented a desire on the part of some political leaders to engineer a reverse urban-to rural migration process, on the wrong belief that this was good for Zimbabwe’s national development.

The operation had serious social, institutional, political and economic consequences. It was estimated that 700 000 lost their homes and business because of the operation while 2.4 million were affected (Tibaijuka 2005: UNHABITAT 2005). Chibisa and Sigauke (2008:40) ‘an estimated 90 000 vendors had their bays demolished. A total of 92 460 housing structures were demolished, directly affecting 133,534 households. At the same time 32 538 premises/structures of small, micro and medium size enterprises were demolished as per government figures released on 7 July 2005.’ 97 614 people lost their primary source of livelihood (Tibaijuka 2005). Dzimiri and Runhare (2012) argue that 40% of the jobs in the informal sector were lost during the operations. The evictions destroyed livelihoods and forced and urban to rural migration (Chibisa and Sigauke 2008: Dzimiri and Runhare 2012). The plummeting economic conditions were worsened by Operation Murambatsvina. The displacement of people from urban areas to rural areas affected families who had been supported by their kinsmen in the urban areas. The burden fell on rural people to support the displaced who had chosen to return back.

3.6 Sanctions

The sanctions against Zimbabwe are enshrouded in controversy with the West arguing that there are not sanctions but restrictive measures ring fenced against targeted individuals. The Zimbabwe Democracy and Economic Act of (2001) cited that sanctions were because ‘economic mismanagement, undemocratic practices and the costly deployment of troops in the DRC’. On the other hand ZANU PF views sanctions as comprehensive having being driven by the land reform.

Hove (2012) argues that the sanctions caused serious shortages of cash in banks, collapse of health, education and water services. The sanctions were argued to have caused a hyper –inflation which hampered the country’s ability to obtain foreign currency.  Developmental Aid was halted after the imposition of sanctions. The Danish International Development Agency stopped the US29.7 million programme which was aimed supporting the Ministry of Health and Child Welfare (MOHCW) while the Swedish government stopped aUS6.4 million programmed aimed at improving water and sanitation, health and conditions for the disabled and the prevention of HIV and related behaviours. (Hove 2012). DANIDA is said to have stopped another 15.4 million Agricultural programme  which was meant at developing agriculture , supporting irrigation schemes for small farmers and supporting them to start income generating activities. In addition it also halted 48 million dollar project which was meant at rural rehabilitation and maintenance of roads (www.rbz.co.zw/farm_mech?sanctions.pdf). Stopping of these programmmes also meant retrenching employees and stagnation of rural development. The poverty Reduction Trust (2013) argues that despite the controversy of sanctions Manicaland poverty is partly because of sanctions.

Sanctions has led to Non Governmental Organisations (NGOs) changing their area of focus and their modus operandi from developmental aid to humanitarian assistance which has short term impact and rarely contribute to economic development and poverty reduction (www.rbz.co.zw/farm_mech?sanctions.pdf). Donor flight has been another repercussion of sanctions due to bad public by the West. According to RBZ “the imposition of targeted sanctions has precipitated negative perceptions about Zimbabwe…The negative perceptions make it difficult for private and public enterprises to secure funding, as donor funding agencies are no longer willing to support projects in Zimbabwe” (www.rbz.co.zw/farm_mech?sanctions.pdf).

Following sanctions multi –financial institutions like International Monetary Fund (IMF), The African Development Bank (AfDB) and World Bank (WB) withdraw developmental aid to Zimbabwe. From 2002 to 2007, Zimbabwe failed to acquire a single loan from these banks (www.rbz.co.zw/farm_mech?sanctions.pdf). This shows that despite the claim that these sanctions were targeted they affected the economy. Zimbabwe could not borrow money to develop itself hence worsening poverty especially in rural areas where development of infrastructure hit a brick wall.

Poverty Drivers in Rural Zimbabwe

HIV and AIDS

Human Immno Virus (HIV) and Acquired Immuno Deficiency Syndrome (AIDS) remains a challenge that has caused untold suffering taking a toll on morbidity and mortality consequently leading to acceleration of poverty both in rural areas and urban areas. Agriculture has been greatly affected since Zimbabwe can be said to be a rural country with 68% of the population residing in rural areas and 43.6% of the economic active people surviving on farming (CSO 2013). HIV and AIDS affect farming in various ways such as loss of labour, low production in yield and agricultural output and lose of agricultural assets henceforth compromising food and nutritional security. According to FAO in 1997 maize production had dropped by 61 % because of HIV and AIDS while the overall output declined by 50% (www.fao.org/.../463605.htm , Reneth Mano & Innocent Matshe 2006 ).

Women are more vulnerable to HIV than man. According Zimstat (2013) 61 % of farming is done by women making the impact more vicious on agriculture. According to GOZ and UN ( 2010)

The impact of HIV and AIDS has been felt particularly in smallholder agriculture, because women, who comprise the bulk of the farmers, are more vulnerable to HIV, both in terms of infection and being infected, since they frequently assume the role of caregivers, thus reducing their time in the field.

Long distances and poor roads to health centers make it difficult for rural people to access health services. According to ZIMVAC (2013) the most common and the biggest challenge of rural people are poor roads, transport, infrastructure and communication while the lack of health facilities is number the forth challenge.

Climate Change

Poverty in Zimbabwe can be attributed to climate change which has caused devastating droughts, erratic rainfall and cyclones. Manyeruke (etal., 2013: 271) noted that the effects of climate change has been grossly felt by African countries grappling with scarce food reserves and poverty. The effects drought can be seriously felt because the farming is the main economic activity for most Zimbabweans and the source of basic household food supply. Nyati (2012) noted the 1992 drought was the worst which left most people in a poverty trap without livestock and draught power.  In the 2011/12 season, Zimbabwe was forced to import over 50% of its maize requirements (Manyeruke., etal 2013) this has been caused by successive droughts from 2002-2003, 2004-2005 and 2007-2008. Majengwa (etal 2012) observed that drought had social , political  and economy implications on the country. They argue:

(Sic Three years after independence) were drought years which led Zimbabwe to borrow causing debt problems later (Hanlon et al., forthcoming). In 1991/92, Zimbabwe witnessed the worst drought ...This pushed the country into accepting the ESAP. The drought years of 1993/94 and 1994/95 worsened the economic problems caused by adjustment and fed into the strikes and disruptions. Then 2001/02 drought occurred in the first year that farmers had land under the Fast Track Land Reform, making it harder for new farmers to become established.

Floods associated with cyclones as well as the droughts experienced in 2002 to 2008 negatively impacted food security and the household incomes for the rural people. 265 000 people were affected by droughts between the years 2000-2009 (Manyeruke. etal 2013). In 1999 Cyclone Eline caused flooding in Zambezi valley in Muzarabani and Dande. According Musarurwa and Lunga (2012) the Zambezi basin has experienced flooding in 1955, 1967, 1972, 1975, 1977, 1981 and 2000. In 2000 being the worst case ever experienced.

Climate change has been associated with other hazards such siltation, veld fires and land degradation. These hazards’ are known to destroy livelihoods henceforth entrenching and causing a spiral of poverty.

Conclusion

This chapter defined poverty and gave various strategies that have been adopted to combat poverty in the world. The Chapter also gave a historical background of poverty in Zimbabwe arguing that the adoption of ESAP, unbudgeted pay out for war veterans, the military involvement of Zimbabwe in the DRC, FTLR and sanctions worsened poverty especially in rural Zimbabwe. The chapter also gave other poverty drivers in rural areas which are climate change and HIV and AIDS and their continued impact on livelihoods in Zimbabwe.

Chapter 3 Microfinance in Zimbabwe

Introduction

The chapter looks at origins and the development of microfinance in Zimbabwe. It goes to explain other models of lending in Zimbabwe such as ROSCAS, SACCOS, and Microfinance Institutions. It goes further to explain working modalities of ISALs in Gokwe South. It also looks at organizations which are implementing the programme and how the implementation is designed.

Origins of Microfinance

Microfinance is worldwide phenomenon which started in developed countries and it trickled down to Third World countries like Zimbabwe as a way to better the lives of the poor. Mago (2013) cites that microfinance evolved from microcredit which was limited to giving small loans. The term microfinance became prominent in the 1990s replacing microcredit. Microfinance started in the 15^th century when pawn shops were established in Europe as alternatives to usury. In 1700s, the Irish Loan System was established in Ireland then it was followed by the formation of financial cooperatives aimed at improving the rural and urban people in Germany in the 19^th century. By 1895 microfinance spread to Indonesia leading to the creation of Indonesia People’s Credit Bank. Early in 1900s savings and credit activities emerged in Latin America and other parts of the world. Between 1950s and 1970s governments and donors adopted agricultural credit to increase yields for the marginalized small farmers however low repayments bogged the initiative Mago (2013).

In 1976 Muhammad Yunus a Bangladeshi social entrepreneur transformed the face of microfinance by establishing the Grameen Bank. The Grameen model addressed structural barriers facing the poor such as lack of collateral, high transaction costs, high risks and systematic market bias. The bank gave small loans to poor villagers as poverty alleviation strategy. The model used the group lending methodology which entailed delivering financial services to the poor people. Yunus’ approach received worldwide recognition, instead of asking collateral the bank asked for ‘social collateral’ which involved peer pressure strategy among group members. It recorded an overwhelming success of more than 95% repayment (Mago 2013). The model was replicated by various organizations and banks ACCION International , the Self- Employed Women’s Association (SEWA) bank in India, Bansol in Brazil, K –Rep Bank, Rakyat bank ; Prathama bank and Equity Banks in Kenya ( Mago 2013). The Grameen Bank has emerged as a best practice. By 1984 John Hatch came up with village bank concept which is unique way of delivering non-collateral loans and services to the organized poor.

Microfinance in Zimbabwe

According to Mago (2013) microfinance in Zimbabwe dates back to the 1960s when people where organized into savings clubs. During the colonial era the formation of Friendly Societies like Bantu Trading Cooperative Society (1938), the First African Friendly Society (1960), Central African Mutual Association of 1960 and the United Consumer Cooperative Society (1964) were aimed at providing household and projects loans but these failed to meet the needs of the poor (Raftopoulos and Lacoste 2001). The societies failed because of a compound of constraints which were political and legal which were machinated by the colonial state in addition to poor management of the organisations themselves. Such constraints included various local government bylaws and controls, and national legislation such as the Land Apportionment Act (1930) and the Native Urban Areas Registration and Accommodation Act (1946), that placed severe limitations on the possibility of Africans both, owning and utilising, land in rural and urban areas (Raftopoulos and Lacoste 2001:6).

Noticeably the Catholic Missionaries played an important role through the initiation of the Savings Development Movement which focused on micro saving for rural women. These clubs are reported to have attracted large numbers of members thus growing from a mere 30 in 1970 to 60 000 in 1975 (Raftopoulos and Lacoste 2001). After Independence in 1980, SDM was registered as a cooperative (Bond 1998). Mago (2013) observed that in the 1980s Agricultural Finance Cooperation (AFC) was giving loans to small farmers. The government then formed the National Association of Cooperative Savings and Credit Unions of Zimbabwe (NACSCUZ) under the Ministry of Community and Women’s Affairs in 1986 to mobilize savings for the poor.

ESAP did not produce an enabling environment for the poor since it triggered a spiral of high interest rates and inflationary milieu. In 1996 Self Development Foundation replaced SDM. The foundation was given support by various NGOs through the development of sound funding methodologies, governance and establishment of revolving funds. However the loan funds of the foundation were misused and people were reluctant to pay (Mago 2013).

Types of Microfinance

Microfinance Institutions .

Hiatt and Woodworth (2006:471) define MFI as organizations that ‘provide small loans as start-up capital for the unemployed poor…’ Mpofu (etal 2013) cites that MFIs provide financial services to lower income earners and the informal sector their service target are Micro, Small and Medium Enterprises (MSMEs). This paper defines microfinance institutions as organizations that give microloans and financial services which include savings, insurance, and money transfers to the poor who usually face access barriers from conventional banks. High operational costs and collateral issues make the conversional banking restrictive to the poor. According to Microfinance Information exchange (MIX) an online information platform there are currently 2100 MFIs in 150 countries in the world an indication of the growing number and recognition of MFIs (www.mixmarket.org ). In Zimbabwe, MFIs are registered under Money-lending and Rates of Interest Act [Chapter 14.14].

Material poverty, deprivation of goods and services can be addressed by microfinance initiatives. MFIs can help people to become more economically secure. This, in turn, has a multiplier effect on people's standard of living, enhancing basic household welfare, such as food security, nutrition, shelter, sanitation, health and education services. MFIs can help prevent and extricate people from debt. Oftentimes, they liberate low-income households from moneylenders with outrageous interest rates that often reach 100% annually. Savings and credit services help people start or improve their own small businesses, providing income generation and employment for themselves and their families (www.un.org/.../microfinanceinafrica.pdf ).

MFIs give services that include financial management, legal rights business management, as well as other support services. MFI participants, especially women, are often empowered to speak out, assume leadership roles, and address issues beyond their workplace, such as domestic violence. (www.un.org/.../microfinanceinafrica.pdf).

According to Victoria (etal. 2012) formalised Microfinance Institutions (MFIs) became a significant feature of Zimbabwe’s financial services sector in the early 1990 and they grew rapidly in the period 1990 to 2000 in response to the exponential increase in the number of micro-enterprises requiring micro-finance services and the lack of provision of services to this market by the large scale financial sector. 9. 90% of MFIs were established between 1995 -1999 because of ESAP which had caused loss of employment and the increase of cost of living this forced the affected people resorted to MFIs as a livelihood strategy. The increase in the number of MFIs led to the establishment of the Zimbabwe Association of Microfinance Institutions (ZAMFI), in 1997, to provide a forum for MFIs to discuss and address common issues facing the micro-finance sector (Victoria etal 2012).

In 2012 there were 157 registered MFIs compared to 1700 in 2003 (Victoria etal 2012). The economic crisis of 2000-2008 was detrimental to microfinance due to foreign currency shortages, and hyper – inflation environment. The graph below shows the decrease of microfinance institutions in Zimbabwe from 2003 to 2009.

(Klinkhamer 2009)

Despite the remarkable contribution of MFIs in poverty alleviation in other countries research has shown that this has not been the case in Zimbabwe. MFIs still face a significant number of challenges which makes them fail to meet the financial needs of the poor or the poorest. According Mpofu (etal. 2013) few entrepreneurs receive loans from MFIs, due to a number of reasons such as high interest rates (Qureshi etal. 2012) ignorance of their existence and a general lack of trust and confidence of their operations. His study concluded that MFIs in Bulawayo are less effective in promoting entrepreneurs’ According to Mutambanadzo (etal. 2013) MFIs are failing to grow in Zimbabwe because of lack of funding and competition from commercial banks and other MFIs and poor management. In addition the MFIs are still using redundant financial systems instead of adopting the Management Information System. A study of MFI in Pakistan showed that the majority of the poor were failing to access microfinance because of high interest rates, lack of group guarantors, collateral, assets, businesses and salaried employment (Qureshi etal. 2012). Chowdhury (2009:6) asserts microfinance is not a panacea for poverty reduction; it needs both complementary supply-side and demand-side factors. Supply-side factors—such as good infrastructure, entrepreneurial skills, etc.—are needed to make micro-enterprises more productive. The UN makes a remarkable observation on MFIs which is conclusive to the role they play in poverty eradication, it asserts that;

Microfinance is not a panacea for poverty and related development challenges, but rather an important tool in the mission of poverty eradication. Poverty is a multidimensional problem, embedded in a complex and interconnected political, economic, cultural, and ecological system. Owing to poverty's large scope and multiplicity of actors, there is no single guaranteed approach to its eradication. … While microfinance alone does not improve roads, housing, water supply, education and health services, it can play an important role in making these and other sustainable contributions to the community. (www.un.org/.../microfinanceinafrica.pdf)

Gokwe South has about 10 MFIs which are currently targeting civil servants. The average interest rate of these MFIs is 20% per month which is usually repaid at the end of the month in full.  This focus on civil servants has created a backlash at small scale farmers whose type of business does not allow them to get money monthly but seasonally. MFIs in Gokwe South are largely restrictive to informal businessmen despite the fact that they should provide financial access and services to the poor entrepreneurs. The required documentation needed to obtain a loan is limiting for the informally employed for example pay slips, bank statements and confirmation of employment are needed. The interests rates creates financial slaves which can be exploited monthly hence worsen their poverty. One civil servant remarked that ‘once you get entangled in borrowing from MFIs you will do so monthly’ (Interview, MFI client).

Savings and Credit Cooperatives Societies (SACCOs)

Chigara and Matesasira (2001: 15) cited that the cooperative movement in Zimbabwe was a political as well as a social movement born out of the post-colonial socialist ideology. Over the years the movement has changed and has become less political. There are two types of SACCOs which are worker based and community based. The former include Post and Telecommunications Corporation and Zimbabwe Teachers' Association. The latter are usually based in high density suburbs, growth points and rural areas and are known as village banks. In December 2000 there were 43 SACCOs affiliated to the apex body National Association of Cooperative Savings and Credit Unions of Zimbabwe (NACSCUZ). Ernest and Young (2006) noted that in 2005 there were about 200 SACCOs and only 150 were active while 55 of these were members of the NACSCUZ. Unlike banks SACCOs collect deposits and lends to their members. In Zimbabwe, SACCOs are regulated and supervised by the Ministry of Small and Medium Enterprises (MSMES) and they are registered under the Cooperative Act.

SACCOs offers services which include savings, and loan facilities and share option. The loans are diversified to include agricultural, consumption/non-productive and for enterprises. Very few SACCOs offer other services such as insurance and even those that do so restrict it to cover the loan amount borrowed (Chigara and Matesasira 2001).Some of the characteristics of SACCOs are listed below

Characteristics

v  Well established institutions that are relatively stable

v  Have significant outreach in the country : urban , peri-urban and rural

v  Offer relatively lower and consistent interests rates their members

v  Well networked with high degree collaboration

v  Focus on members welfare and livelihoods enhanced as their beneficiaries

v  Increasing growth in rural SACCOS (agri-based and enterprise based

v  Lend both for consumption and business

v  Low interest rates charged

v  Low loan loss rate

According to Ernst and Young (2006) the shortcomings of most SACCOs are caused by inadequate supervision, poor remuneration of SACCOs, political interference, lack of operational and financial sustainability, restrictive constitution and choice of audit. Chigara and Matesasira (2001) cites that SACCOs suffer from governance and ownership problems, nonpayment on savings and no dividends payouts which results in disillusioning the members. Furthermore most SACCOs do not comply with by-laws and the Cooperative Act. Chigara and Matesasira (2001:16) noted that the legislation that governs SACCOs is laced with flaws listed below:

v  The co-operative structure is open to abuse by individuals within the membership, putting member’s savings at risk.

v  The legislation provides inadequate measures for control and regulation of SACCOs.

v  SACCOs are not compelled to belong to NACSCUZ as the apex organisation and therefore they are not compelled to submit reports or accept monitoring and inspection or audit services from NACSCUZ.

v  Ministry officials tasked with administration and regulation of co-operatives do not have the specialist knowledge needed to deal with SACCOs

v  NACSCUZ as an apex organisation has no powers of enforcement of regulations.

v  More stringent measures for reporting and accountability are needed for SACCOs than for other types of co-operative due to the nature of their business (i.e. people's savings are at risk).

Gokwe South has only five SACCOs which are registered under the SMES namely Mapfungautsi, Tatenda Progressive, Chitekete, Gokwe Founders and Gokwe South Youth Savings and Credit Cooperative (GSY). GSY is under the Ministry of Youth however the SACCO is no longer functional. The total membership of these SACCOs is 267. Out of these SACCOs two have received a total of US20 000 from UNDP and GSY received around US14 000 from YES JUMP project under ILO which it dismally failed to repay (Youth Officer, Interview). The numbers of the members are indicative that SACCOs in Gokwe South does not meet the financial needs of the poor. The membership of these SACCOs is insignificant when the population of the poor is taken into account.

Grassroots microfinance

Grassroots microfinance institutions are informal and unregistered. This category is comprises of ROSCAS and ISALS. Joining of members does not require administrative costs or intensive paper work or documentation. Administration is basically done by members.

Rotating Savings and Credit Associations (ROSCAs)

ROSCAs are colloquially known as merry – go – round. M. Khan and G. Lightfoot defines ROSCAs as groups of people who come together to make cyclic contribution of a predetermined amount to a common fund (pot), which is given repeatedly in turns to each member until everyone gets the fund (http://www.uclan.ac.uk/lbs/research/research_institutes/files/ROSCAs_Alternative_Funding_for_Sustainable_Enterprise.pdf).[13] A ROSCA have a fixed life cycle it pools the small savings of its members and transforms them into series of useful lump sums each member gets in turn (Allen 2006). ROSCAs can be divided into bidding ROSCAs, marketplace and investment ROSCAs. In investment ROSCAs members get the exactly the amount they have contributed. In bidding ROSCA a single person receives the contribution after pledging higher contribution and lastly marketplace ROSCAs are organized by the professionals ROSCA runners who collects contributions from the market and then kitty is auctioned off. The organizer usually reserves their commission for their services and remaining proceeds are distributed among members (Mbizi and Gwangwava 2013).[14]

ROSCAs do not need complex documentation like in formal banks they serve two functions which are saving and lending. The flexibility of ROSCAs allows members to peg money they are comfortable with to pay as subscriptions. Different purposes are met using ROSCAs such as smoothing cash flow, urgent needs and start-up capital. Start- up capital is important in creating employment. Urgent needs cover community emergences such as death and sickness. The funding methodology is a simple way of raising funds and these funds do not earn interest in addition no administration costs are charged. ROSCAs go further than fulfilling economic function – they are important in structuring community and relationships (Mbizi and Gwangwava 2013). Parties in a committee share more than interest in the pot: they become engaged with one another, with each other’s businesses thereby creating a union that cannot be dismantled which brings about development ROSCAs are by no means the whole solution to finance gaps in small firms, but they do pay an important part in helping resolve some of the problems (Mbizi and Gwangwava 2013). They also seem to offer the potential for growth within a wider social context, policy-makers would be wise to consider how they might be further encouraged or developed for business.

According to Katabarwa (2009) ROSCAs helped women by availing credit facilities and women were able to invest, send children to school and repair or construct new homesteads in Mathare Valley, in Kenya.[15] Mbizi and Gwangwava (2013) research concluded that 80% of the ROSCAs were a good source of finance for micro enterprises.[16] Allen (2006) asserts that there are far more ROSCAS in the world than Microfinance Institutions.

Advantages

Allen (2002) observed that ROSCAs have low to zero financial costs. They came be termed poor man's bank, where money is not idle for long but changes hands rapidly, satisfying both consumption and production needs. Besley and Levenson (1996) found that 68% to 85% of the Taiwanese population participate in ROSCAs which means a large number of people is surviving on these ROSCAs thus showing their importance in the development of the economies and also a typical example is noticed in Zimbabwe that is another study carried in Harare- by Chamlee-Wright (2002) found 76% urban market traders participate in ROSCAs and about 77% of these traders also have bank account which means these ROSCAs are a driving force to development

The benefit of the basic ROSCAS is that all the members receive finance earlier than if they had saved it themselves, except the last person that makes them to be able to buy large amount of goods that last long. UNCDF (2004) states that studies have shown that microfinance plays three key roles in development. ROSCAS help very poor households meet basic needs and protects against risks like food, clothes hence they are associated with improvements in household economic welfare. In addition ROSCAs help to empower women by supporting women’s economic participation. ROSCAs promote gender equity it provides start- up capital and women are able to own projects. Their decision making can be increase and they may even assume new roles in the community (Littlefield et al 2003, p.4).

Disadvantages

If the ROSCA distributes money by prior agreement or by lottery it is unlikely to be available at the time in a business cycle when it is most useful (Mbizi and Gwangwava 2013). ROSCAs are often then used in order to save up for household durables such as utensils or roofing sheets but relatively ineffective as a means of capitalising productive investment. The amount of savings is fixed and maybe inadequately matched to a person’s investment plans. There is no rate of return on people’s investment in ROSCAs, except a marginal time-value of- money benefit of receiving a lump sum at no interest cost before reimbursement. According to Brannen (2010) although ROSCAs may provide a variety of social benefits and impose savings discipline, they do not accrue interest and therefore may be relatively ineffective for productive investment

The fact that there are no written or legal contracts among the group members means any member can leave the group at any time before the end of the cycle disadvantaging the other members of the group.

ISALs

According Allen (2006) ISALS started in Zimbabwe in 1999 under the name Kupfuma Ishungu (KI) under a program which was implemented by Care International. The initial plan had been to supply groups with external funds following the recommendations of the project advisor. This precipitated an influx of chancers into the program distorting the saving behavior. Out of the 270 groups that were eligible for external funds only 8 received the funds. However after a review the external funds component was removed. The methodology that was adopted was a refined version of the MMD to suit the Zimbabwean environment. Groups began accommodating smaller numbers starting from 5. Training became shorter lasting only a week instead of eight. KI meetings were shorter than the MMD which lasted for an hour or more. Savings meeting comprised of disbursement excluding the need of security box.

ISAL Concept

Brannen (2010) defines ISAL or VSL is an Accumulating Savings and Credit Association (ASCA), which requires no external borrowing by, or donations to, the loan portfolio – it is entirely self-sufficient. It differs from a Savings and Credit Cooperative Organization (SACCO) in that it is does not receive external funding except training. ISALs are not formally registered with the government, which allows them to operate with less formal bookkeeping and thus they accommodate illiterate members. However this research agrees with Vanmeenen (2010) who argues that ISALs are more than ASCAS but they improve on ROSCAS/ASCA methodology by creating accessible, transparent and accumulating savings, and credit groups which are user- owned and self-managed in the communities where members reside. MWAGCD (2008) asserts that ISALs are a micro-finance programme aims at improving the living standards of the rural poor. ISALs target, the poorest that are economically active. The program focuses on supporting and improving their income generating activities and micro-business activities. ISALs are community based, poverty alleviation programme aimed at providing sustainable access to micro- credit and insurance. This lending model is composed of two funds thus the loan fund and the social fund.  The former is borrowed by members for start-ups or for growth of Income Generating Activities (IGAs) and is subsequently repaid with interest. The latter is only used in emergencies like death, cost for health or education and it does not accrue interests. The end of the cycle is marked by groups sharing the interests that have accrued and the savings they have earned during the ISAL life span. Vanmeenen (2010) observed that through SILC/ISALs farmers are able to meet their seasonal needs for loans for their families such as paying fees and educational expenses at any given time throughout the year.  Below is a diagram which shows some of the uses of ISAL funds.

Adopted from MWACD ISAL MANUAL 2008

Target Population

The Internal Savings and lending programme is for micro entrepreneurs who have problem of accessing capital. The programme also focuses on those with the interest of using their initiatives and resources. The beneficiaries should be committed to joining groups to build their capital. The participants in ISALS need to be semi literate.

Training

The training of ISALS is done by trained personnel from organizations or community based trainers using the facilitation method of learning. The training is done at the convenience of the participants. The training is usually last for five and half days. The training session should have between 15 – 25 people. The training covers group formation, financial resource mobilisation and management. The training is geared at capacity building in terms of simple financial literacy and basic business management. The MWAGCD manual (2008) cites that the training should enable entrepreneurs to form cohesive groups, mobilize their own savings which can used to mobilize IGAS, consumption and other basic needs.

The Facilitator

The training methodology is participatory in orientation. The trainer should be a skilled facilitator who is flexible, creative and be adaptive to various training environments. The MWAGCD (2010) warns against the facilitator taking an ‘active role’ during training. Various learning media are used during the training such as group discussions, focus group discussions, role plays and singing. Constant feedback to ensure the participants understand the concepts is encouraged.

Modules covered

Self - Selection

This module is designed to train participations to know their weakness  and strengths before committing themselves to be members of an ISAL group through self selection  and screening an individual would be able to evaluate themselves whether they can be part of ISALS or not. Prospective ISAL members should exhibit characteristics of punctuality, integrity, honesty and reliability (Vanmeenen 2010).

Group formation and leaderships

After the self-selection session the participants are trained to select others. Various group dynamics are taught at this stage. According Ndhlovu (2014) trainers may use animal allusions to symbolize various character traits of people. Lions can be used to symbolize authoritarian leaders, giraffes may be indicative of visionary traits while snakes can be associated as deceitful members. Sitscha (2014) adds that this stage is fundamental to the survival of the group. Failure to harness the different people into a single unified unity results in the collapse of the group.  Members selected should be hard working with good community relations and willing to save. Participants are usually encouraged to select members who they have the same social status with. Members of the group should have intimate knowledge of the others’ good and bad attributes, they should be aware of what motivates them and what their household social and economic characteristics are like.

Having selected the members the next step is forming the governance structure. The section trains participants on leadership and leadership selection. The structure which is recommended by the training is simple. It comprises of Chairperson, Secretary and Treasurer. The qualities and functions of group need to be known so that members select those that are capable and the selected know what they are expected to do (MWAGCD 2008). The duties and the qualities of the committee are tabulated below:

a)      Chairperson

Qualities	Tasks/Responsibilities
Strong and recognized personality	Calls in meetings with the help of the secretary
Good hearted and humble	Announces topics of day
Listens to others, attentive	Leads and guides the group
Patient	Leads discussions and maintains control
Approachable	Sees that there is discipline and order according to the constitution
Capable to lead and guide people – observant*	Distributes tasks according to the group's goals
Honest	Sees that problems are discussed within the group
Intelligent and interested	Advises the members
Dynamic and visionary	Makes sure savings and loan procedures are followed
Committed	Finds solutions in case of conflict
Tactful	Represents group to outside
Willing to take responsibility	Ensures achievement of desired results for the benefit of the entire members
Flexible, but consistent	Shares information from outside with group
Organized and structured	Ensures group strategy and procedures
Can speak in front of others	Is one of the bank account signatories

b)     Secretary

Qualities	Tasks/Responsibilities
Capable of giving small speeches and reports to group and outsiders	Calls meetings at the advice of chairperson
Capable of reading, writing and calculating	Takes minutes and keeps financial records
Trainable for Book-keeping	Compares records with Treasurer
Honest	Writes and dispatches letters
Intelligent	Reports to the group and outsiders at the advice of chairperson
Speaks languages	Records important events
	Is one of the signatories to the bank account

c)       Treasurer

Qualities	Functions
Trustworthy and honest	Collects saving contributions, fines and repayments
Knows how to count and calculate	Keeps money safe (at bank or at home)
Has a safe house	Ensure finance records are open to members to see and be checked by appointed bodies
Can resist, strong personality	Advises group using the resources of its future needs
	Keeps finance records, expenses and bank statements
	Makes sure the money is kept in a safe place at all times
	Is one of the signatories to the bank account

(MWAGCD 2008)

Constitution

The training provides a simple framework for constitution writing. The constitutions are drafted by the groups following provided ‘guidelines’. Participants should know that the constitution has to cover aspects that have to do with operation of their ISAL group such membership criteria, savings amounts and frequency, what happens in the event of loan default, death of a member, when to share amounts, interests to charge and meetings. Group objectives should also be covered in the constitution.

Group Fund Development

Groups are trained to build their funds through efficient savings and internal lending amongst members. The participants are trained on charging interests and the benefits of doing so. Simple financial calculation is introduced at this stage. Commitment to repaying is emphasized.

Record keeping

According to Hugh (2002) record keeping was included in the training especially in Zimbabwe because of the high literacy rate this differed from the implementation in other parts of Africa. Simple record keeping is trained to ensure transparency and accountability. session objectives of the training during the session is to make the participants appreciate the benefits of record keeping, know the different types of records that are needed for a savings and credit group and be able to write records for themselves. Lastly the groups should be able to interpret the group records. Participants to keep the following books thus the register, savings book, fines book, cash book and loans book as well as the constitution.

Internal Savings and lending Group development Cycle.

            Adopted from MWACD ISAL MANUAL 2008

The diagram above shows the life cycle of the training and support services given to ISALs groups. The base of the diagram shows the basic training required to start ISALs. Five topics which are membership selection, leadership, constitution making, fund development and record keeping which have been mentioned in detail above are covered. Following group formations pre-trained cluster facilitators makes intensive follow –up monitoring and giving technical support to groups an exercise which takes between 4 to 6 months. The next 4 months is referred to the pre-graduation follow-up stage and which the cluster facilitator makes recommendation on the progress of the group to the organization implementing the process. The last stage is the graduation stage where celebrations are held for the group. The leading organization may issue certificates. The group may use the occasion to show what they manage to get throughout the cycle. The cycle lasts for 16 months.

Implementers of ISALs in Gokwe South

Ministry of Women Affairs, Gender and Community Development (MWAGCD)

MWAGCD is responsible at training ISALS as well as monitoring activities of partner organizations especially NGOs, Faith Based Organization and Community Based Organization that compliment government efforts in this regard. The Ministry of Women Affairs Gender and Community Development is a government ministry which was established in 2005 although the portfolios under it have existed in different Ministries since 1981. The Ministry was given broad based mandate, on economic empowerment and mobilization of women and communities and elimination of gender disparities. The Ministry is comprised of five departments, two which are service departments that are, Finance and Administration and Human Resource .The remaining three make up the Technical Departments which are Women Affairs, Gender and Community Development. The latter Departments are also referred to as the line departments, because they directly execute, the mandate, goals and objectives of the Ministry.

ISALs are trained by two main departments which are Women Affairs and Community Development. The former department specializes in exclusively women run projects in all sectors of the economy including ISALS. The Community Development Department oversees ISALs operated by both sexes. At District level the personnel who do the training of ISALs in both departments are the same while at provincial and National level it is done by different officers. The District office is headed by the District Development Officer followed by two Community Development officers whose responsibilities are supervising and training of Ward Development coordinators (WARDCOs). The WARDCOs are located in various wards and their major responsibility is supervising ISAL groups, collecting regular data, capacity building and training of new groups. The Ministry is also responsible of keeping a database of all ISAL groups in the district including those trained by other partners. Below is a diagram which shows how the training of ISALs is conducted by MWAGCD  

TRAINING OF ISALS AND COMPILING OF THE DATABASE Training of CDOs   Compiling of Provincial ISAL database for Women/ Communities   Admin Officers for Gender / Community Development (Province)                    Ward Database   Training of ISAL Groups   Communities   Training of WDCOs   District Database   Community Development Officers (Districts)   Ward Development Coordinators

According an interview with Sitscha (2014) MWAGCD is implementing the ISAL in 39 wards in Gokwe South District where villagers conduct their own savings which they borrow and attach a certain percentage interest when they repay. Objectives of the ISALs groups vary some target increasing their household income others prioritize buying household kitchenware (women ISAL groups) and others livestock.

Caritas Zimbabwe

Caritas Zimbabwe was founded in 1972 by the then Rhodesia Catholic Bishops Conference (RCBC) to carry out social work of the church. The organization was renamed Catholic Development Commission (CADEC) in 1984 as way to shift its emphasis from social welfare to development. However in Zimbabwe it still is called Caritas Zimbabwe , its ‘mandate includes human development, emergency relief, advocacy , peace building , respect of human rights , and proper stewardship of the planet’s environment and resources’ ( www.caritas.org ).

Caritas trains ISAL groups and provides monitoring up to graduation level. According to the programme officer the training takes 5 days while monitoring takes 3-6 months (Mr. Ndhlovu 2014, interview, 1/9/2014). The training content is similar to what is trained by the MWAGCD. The aim of ISALs is to help communities budget their money especially after harvesting so that they do not run out of cash. This stemmed from the realization or acquisition of seasonal income which characterized most communities. Caritas Zimbabwe realized that farmers would have money briefly after harvesting that rarely lasted to the next harvest. The ISAL programme was then designed to promote a culture of saving and investing. The organization argues that if communities are able to save and invest the chances of them following under the reigns of poverty is minimized. Dependency on external loans or contract farming which is usually exploitative is minimized (Mr. Ndhlovu 2014, interview, 1/9/2014).

The programme was also designed to help communities mobilize and manage their resources without external help. This was a shift from the provision of hardware components such as fertilizers, grants, external loans and other building material. The methodology adopted by Caritas aimed at removing dependence syndrome of communities on donors to spearhead and dictate the pace of development. Emphasis is given on the utilization of local available resources rather external donations.

To ensure sustainability and continuity of the ISALs Caritas Zimbabwe trains Community Based Facilitators who will carry the monitoring of groups after graduation as well train more groups. The training of the Community Based Facilitators is done in 7 days. While the MWAGCD records that 90 groups have been trained by Caritas, it claims that it has managed to train around 150 groups. This might be indicative that there is need network regularly to update information between the partner organization and the Ministry. It emerged from the interview that the organization does not give regular reports to the Ministry of Women Affairs, Gender and Community Development (Mr. Ndhlovu 2014, interview, 1/9/2014).

World Vision

World Vision began operating in Zimbabwe in 1973, providing assistance to children’s homes and offering relief to Zimbabweans in campus and institutions. After independence in 1980, focus changed to rehabilitation and small-scale development programmes as the country absorbed exiles and displaced groups. Currently World Vision is addressing community development focusing on children (www.wvi.org/Zimbabwe ).

World Vision incorporated ISALs into a programme aimed at tackling barriers to girl child access to education called Improving Girls Access Through Transforming Education (IGATE). The programme is implemented in partnership with Care International which has been selected for its expertise in ISALs and SNV Netherlands Development on the other hand, is responsible for training School Development Committees (SDCs). The VSL program or ISAL model is incorporated to address financial barriers to girl’s education. The model educates self selected households to save towards food, health and education. Mother Support groups are formed within the VSL model to use the proceeds to meet the school needs of the children such uniforms and school fees.(www.educationinnovations.org).

According to the World Vision database there are 1628 ISAL members spread out in 233 supervised by 3 officers. None of their trained groups have graduated. Trainings were conducted late in 2013.

Concern Worldwide

Concern Worldwide started working in Zimbabwe from 2002-2013 with the aim of increasing productivity by using conservation farming techniques. Training of ISALs were done under Food Income and Markets programme which was aimed at fighting famine at household level and producing a surplus for sell. The organization was operating in Gokwe South, Gokwe North and Nyanga. Concern Worldwide had targeted the training of 6211 ISALs but it managed to surpass the figures and it trained 6462 thus 1674 males and 4788 females spread in 901 groups (Concern Worldwide Stakeholders Report July 2012). A total of 40 Community Based Trainers were trained to train new groups and monitor the activities of groups. MWAGCD does not have the database Concern had (Community Development Officer, Interview 2/2/14).

Conclusion

This chapter looked at a brief background of microfinance in Zimbabwe. It examined interventions of SACCOS, ROSCAs and MFIs looking at their characteristics, successes and limitations especially in the Zimbabwean context. The chapter went on to look at ISALs training methodology and current and former implementers of the programme in Gokwe South.

Chapter 4 : The Socio- Economic Characteristics of ISAL members

Membership of ISALs

Most ISALs in Gokwe South are run by females. Out of a total of 8778 member including the membership that were trained by Concern which is not covered in MWAGCD database only 2624 are males and the remaining 6154 are females. The reasons for the overwhelming numbers of women participation lie in the fact that the programme was designed to empower women so that they could increase their household income (Interview Ndlovu, 2014).

Membership according to Wards

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QUESTIONAIRE 1 ISAL MEMBERS

SECTION A:             QUESTIONAIRE IDENTIFICATION

1.

Date of Interview
District
Ward
Village

2. PERSONAL DETAILS

Name of Respondent

b)

	Male	Female
SEX

c)

Age	(Tick were appropriate)
15-24
24-29
30-49
50 and up

d)

Level of Education	(Tick were appropriate
Primary
Secondary
Tertiary
Never Attended School

3. Household Information

	Yes	No
Are you the Head of the Household ?

(If NO answer next question /if YES skip next question)

b) Relationship with head of Household?

c) Household size (Number of family members)

1 – 3
4-6
6-9
More than 10

d)

Children Currently in School	1	2	3	4	5	6	7	8	9	10
Primary
Secondary
Tertiary

4. Income and Expenditure

a)       What is your occupation?         

b) Main source of Income ?

c) Other Sources of Income:

1)
2)
3)
4)
5)

d) Amount earned per Year

Below $100
$300-$500
$500-$1000
$1000-1500
$1500-2000
$2000-more

e)

Expenditure	Amount
Household consumption (groceries)
Education
Clothing
Assets
Investments
Savings
Health
Agric inputs

f)

How often to you get money?
Daily		Weekly		Monthly		Yearly		Seasonally

5 Assets

a)

Type of Unit	(Tick where appropriate)
Detached  house
Semi -detached house
Flat

b)

Number of Dwelling Units /                            

c)

Roof		Wall		Floor
Type of material used for construction of the roof. (Tick were appropriate)		Type of material used for construction of the wall (Tick were appropriate)		Type of material used construction of the floor (Tick were appropriate)
Iron sheets		Burnt bricks with cement		Concrete
Tiles		Cement blocks		Bricks
Asbestors		Stone with cement		Cement screed
Concrete		Un-burnt bricks with cement		Rammed earth
Tins		Un-burnt Bricks with mud		Wood
Thatching		Wood
		Mud and Pole
		Other (Specify ) ……………………………		Others (Specify) …………………………

d) Fuel

Fuel/Power				Drinking Water		Distance from water source (Kms)			Time Taken To The Water Source
What fuel does this household mainly use for Lighting		What fuel does this household mainly use for cooking		What is the households main source of water for Drinking			Drinking water	Nearest water
Electricity		Electricity		Tap/Piped water
Paraffin		Firewood		Borehole
Candles		Paraffin		Protected well
Firewood		Charcoal		Open water source(unprotected well)
Solar				River
Batteries
Generator
Other specify         …………………………		Other Specify ……………………….		Other Specify ……………………….

e)

Does the Household Own		(Tick were appropriate)
Transport		Communication		Other Assets
Bicycle		Mobile phone		Generator
Car		Radio		Scotch Cart
Donkey		Television		Solar Panels
Cows

f)

Draught power used for farming?		Own	Rented	Leased	Other
Cows
Donkeys
Man power

(Tick were appropriate)

Number of Cattle and Donkeys owned by the household ………………………..

g)

Livestocks owned by the household?	(Tick were appropriate)
Poultry (chickens , Ducks, Turkeys, Guinea Fowl) etc
Goats
Pigs
Sheep
Rabbits
Fish
Other Specify :

6) Diet

a)       Meals per day

	1	2	3	More
Number of Meals Per day ?

b)

Regular Dish

Sadza		Chicken
Rice		Beef
Rapoko		Goat Meat
Millet		Green vegetables
Potatoes		Other Specify
Sorghum
Pasta
Other Specify

7) Financial Deatils

a)

Do you have a Bank Account ?	Yes	No

b)

Type of Bank Account
Savings
Current
Fixed
Cooperate

c)

Where do you get your Loans ?

Bank
MFI
ROSCAS
ISALS
NONE

8) ISAL DETAILS

a) What are the reasons you have for joining ISALs

………………………………………………………………………………………………………………………………………………………………….

……………………………………………………………………………………………………………………………………………………………..…..

b)       How long have you been an ISAL Member                                    

c)       How many cycles have you completed                                                           

d)       What are the changes you observed since you joined ISALS

………………………………………………………………………………………………………………………………………………………………..

……………………………………………………………………………………………………………………………………………………………..…..

…………………………………………………………………………………………………………………………………………………………………

e) Are there any assets you have bought using money from the ISALS (and Give Asset Value)

1)                                                                            $                             

2)                                                                            $                             

3)                                                                            $                             

4)                                                                            $                             

5)                                                                            $                             

f) How do you spend the loans you get from ISALs

………………………………………………………………………………………………………………………………………………………………..

……………………………………………………………………………………………………………………………………………………………..…..

…………………………………………………………………………………………………………………………………………………………………

g) How did you spend the money you get at the end of the cycle?

………………………………………………………………………………………………………………………………………………………………..

……………………………………………………………………………………………………………………………………………………………..…..

…………………………………………………………………………………………………………………………………………………………………

h) Where do you get funds to deal with Emergencies?

………………………………………………………………………………………………………………………………………………………………..

……………………………………………………………………………………………………………………………………………………………..…..

…………………………………………………………………………………………………………………………………………………………………

i)                    How does the community view members of ISALS?

………………………………………………………………………………………………………………………………………………………………..

……………………………………………………………………………………………………………………………………………………………..…..

…………………………………………………………………………………………………………………………………………………………………

j) Has your status in the Community Changed since you joined ISALS?

………………………………………………………………………………………………………………………………………………………………..

……………………………………………………………………………………………………………………………………………………………..…..

…………………………………………………………………………………………………………………………………………………………………

k) What are the challenges you have encountered because of ISALS?

………………………………………………………………………………………………………………………………………………………………..

……………………………………………………………………………………………………………………………………………………………..…..

…………………………………………………………………………………………………………………………………………………………………

Cross Sectional Questionnaire of Impact Assessment (Group Questionnaire)

Date of data collection                                                                       ………………………………………………………

1. Name of group
2. Date of first training meeting
3. Which organization trained you?
4.Date Group started saving
5.Members at start of cycle
6.Active members at time of interview
7. Active men at time of interview
8.Active women at time of interview
9.No of members attending meeting
10. Dropouts since start of cycle
11.Value of savings this cycle
12.No.of loans outstanding
13.Value of loans outstanding
14.Write-off since start of cycle
15. Total loan fund
16.Cash in other funds
17.Property at start of cycle
18.Property now
19.Debts of the Group
20.Value of loans
21.Value of ISAL savings used to purchase Agri-inputs at time of visit e .g
22.Linkage to external savings e.g banks
23.Linkage to external credit e.g banks
24 Challenges faced by the Group

Key Informant Interviews (MWAGCD/CARITAS ZIMBABWE/WORLD VISION)

My name is Tapiwa M Gudza ,I am a student at the Midlands State University (MSU) doing Masters in Development Studies and I am carrying out of study on the impact of ISALs on poverty reduction in Gokwe South. The research is motivated by the need to understand whether ISALs provide avenues for the poor and the poorest to meet their basic needs. Your organization has been chosen for the interview since you are implementing an ISAL programme. It is important to note that your participation in the interview is voluntary and that ethical considerations will be observed. I thank you in advance for your participation.

Date of Interview                  …………………………..

Name of Informant:                                                                                                             

Position :                                                                                                                               

Organisation:                                                                                                                        

Sex:                                                    

Questions

1)      What are ISALs

2)      Why did you chose ISALs

3)      May you give an overview of the operation of ISAL as you implement them.

4)      What is the eligibility criteria of people who want to join ISAls

5)      What do you think are the reasons for people to join ISAL

6)      How many groups have you helped establish in the last 5 years?

7)      What do you want to achieve with programme?

8)      What has been the response of communities to ISALs

9)      What were the states of affairs before the programme intervention?

10)  Through the course of the programme what have you observed

11)  What services do you offer to ISALs members?

12)  What are the benefits of ISALs per se on the poor you have noticed during your programming.

13)  What have been the challenges of implementing ISALs?

14)  How do you ensure sustainability of ISALs

NB: Follow up questions maybe asked for clarification purposes.

Key Informant Interview:  (DR/ MR /PROF HUGH ALLEN)

I am a student at the MSU and I am carrying out a study on the impact of ISALs on poverty reduction in Gokwe South. The research is motivated by the need to understand whether ISALs provide avenues for the poor and the poorest to meet their basic needs. You have been chosen for the interview since you are an expert in ISALs. It is important to note that your participation in the interview is voluntary and that ethical considerations will be observed. I thank you in advance for your participation.

Date of Interview                  …………………………..

Name of Informant:                                                                                                             

Position:                                                                                                                                

Organisation:                                                                                                                        

Sex:                                                                

Questions

1)      What are ISALs /VSL and how do they operate?

2)      Why has your organisation chosen ISALs /VSL?

3)      What is the eligibility criteria of people who want to join ISALs?

4)      What do you think are the reasons for people to join ISAL?

5)      What do you want to achieve with the programme?

6)      What has been the response of communities to ISALs?

7)      What were the states of affairs before the programme intervention?

8)       What do you think are some of the services which need to be made for ISALs members?

9)      What are the benefits of ISALs per se on the poor

10)  What do you think is the impact of ISALs on poverty reduction?

11)  What are some of the challenges you observed in implementation of ISALs in Zimbabwe?

12)  How sustainable are ISALs and what mechanisms do you recommend in ensuring their sustainability?

NB: Follow up questions maybe asked for clarification purposes. THANK YOU

Electronic Key Informant Interviews (Erstwhile Programme Manager Concern Gokwe South)

I am a student at the MSU and I am carrying out a study on the impact of ISALs on poverty reduction in Gokwe South. The research is motivated by the need to understand whether ISALs provide avenues for the poor and the poorest to meet their basic needs. You have been chosen for the interview since you are an expert in ISALs as well as the former Programme Manager Concern Gokwe South. It is important to note that your participation in the interview is voluntary and that ethical considerations will be observed. I thank you in advance for your participation.

Date of Interview                  …………………………..

Name of Informant:                                                                                                             

Position :                                                                                                                               

Organisation:                                                                                                                        

Sex:                                                                

Place of Interview:                                       

1)      May you give a background of the ISAL programme during the operation of Concern in Zimbabwe (Gokwe South).

2)      How did you implement the ISALs

3)      What was the status quo prior the implementation of the programme?

4)      How many groups did you help establish?

5)      What do you think you achieved with the ISAL programme?

6)      What was the response of the communities to ISALs

7)      What are the benefits of ISALs per se on the poor you have noticed during your programming.

8)      What were some of the lessons learned from the ISAL programme?

9)      What have been the challenges of implementing ISALs?

10)  How did you ensure the continuity of ISALs?

THANK YOU

Electronic Key Informant Interviews (Erstwhile Concern Country Director)

I am a student at the MSU and I am carrying out a study on the impact of ISALs on poverty reduction in Gokwe South. The research is motivated by the need to understand whether ISALs provide avenues for the poor and the poorest to meet their basic needs. You have been chosen for the interview since you are an expert in ISALs as well as the former Country Director of Concern worldwide. It is important to note that your participation in the interview is voluntary and that ethical considerations will be observed. I thank you in advance for your participation.

Date of Interview                  …………………………..

Name of Informant:                                                                                                             

Position :                                                                                                                               

Organisation:                                                                                                                        

Sex:                                                                

Place of Interview:                                       

Questions

1)      May you give a background of the ISAL programme during the operation of Concern in Zimbabwe (Gokwe South).

2)      How did you implement the ISALs

3)      What was the status quo prior the implementation of the programme?

4)      How many groups have you helped establish?

5)      What do you think you achieved with the ISAL programme?

6)      What has been the response of communities to ISALs

7)      What were some of the lessons learned from the ISAL programme?

8)      What are the benefits of ISALs per se on the poor you have noticed during your programming.

9)      What have been the challenges of implementing ISALs?

10)  How did you ensure the continuity of ISALs?

11)  NB: Follow up questions maybe asked for clarification purposes.

THANK YOU

---

[1] 2005 World Summit Millennium Development Goals

[2] Office of the United Nations High Commissioner for Human Rights, Principles and guidelines for a human rights approach to poverty reduction strategies, Geneva, 2012, p. 2.

[3] Ibid, p . 2.

[4] Human Rights and Poverty Reduction. A Conceptual Framework(New York And Geneva ,United Nations ,2004)

[5] Office of the United Nations High Commissioner for Human Rights, Principles and guidelines for a human rights approach to poverty reduction strategies , Geneva , 2012, p. 4.

[6] A. Sen, Development As Freedom, Anchor , New York, 1999, p

Valentine , C.A Culture and Poverty Chicago University of Chicago Press, 1968, p.

[7] www.maplandia.com/Zimbabwe/Midlands/gokwe/gokwe/ )assessed 2/08/14

[8] A, Bryman, ‘Triangulation’ www.referenceworld.com/mmr.pdf . Accessed 16/7/2014

[9] G. Mazarire and M. Rupiya, “Two wrongs not a right: A Critical Assessment of Zimbabwe’s Demobilisation and Reintegration Programmes 1980-2000” (unpublished manuscript), p.9.

[10] Ministry of finance, Budget Millennium: Budget estimates: for the year ending December 2000, Harare, Government Printer, 1999,p.10.

[11]N.B The first endnote represent the first figure and the second the next figure.

 Ministry of finance, Budget Millennium: Budget estimates: for the year ending December 2001, Government Printer, Harare, 1999, p.10.

Ministry of finance, Budget Millennium: Budget estimates: for the year ending December 2001, Government Printer, Harare, 1999,p.10.

[12] Staff reporter, “Harare's War Chest Gobbles Up $16.2 Billion”, in The Financial Gazette, February 14, 2002,p. 1.

[13] M. Khan and G. Lightfoot , ‘ROSCAs: Alternative Funding for Sustainable Enterprise’ http://www.uclan.ac.uk/lbs/research/research_institutes/files/ROSCAs_Alternative_Funding_for_Sustainable_Enterprise.pdf ,accessed 6/7/14.

[14] R. Mbizi and E. Gwangwava, ‘Rotating savings and credit associations: an alternative funding for sustainable micro enterprise- case of Chinhoyi, Zimbabwe’ in Journal of Sustainable Development in Africa ,Volume 15, No.7, 2013 , p. 186.

[15] C. F Kabatarwa, ‘Community based savings micro finance and household income poverty eradication in Uganda: a case study of Busimbi Sub County, Mubende District’, MA thesis, Makerere University,2009,p.14.

[16] R. Mbizi and E. Gwangwava, ‘Rotating savings and credit associations: an alternative funding for sustainable micro enterprise- case of Chinhoyi, Zimbabwe’ in Journal of Sustainable Development in Africa ,Volume 15, No.7, 2013 , p. 187.