By Jeffrey Ashe and Lisa Parrott (October, 2001)
http://www.ffhtechnical.org/publications/pdfs/impactevalnepaloct01.pdf
Abstract
The PACT's Women's Empowerment Program (WEP) in Nepal differs from typical microfinance programs in that it serves as a time-limited catalyst of group development. Although recent trends in microfinance favor centralized control, WEP allows for total local control, and it removes itself completely once groups are trained in basic skills and can operate independently.
The key achievements of this program are:
- WEP achieved massive growth in record time, reaching 6,500 groups with 130,000 members.
- WEP was not designed to target poor women; however, 45% of group members are poor.
- WEP worked with 240 organizations, including local NGOs and community groups, providing them with literacy, empowerment, and savings and credit training.
- Average monthly savings more than doubled in two years; on average, 97% of group funds are current loans.
- Only 1% of the groups depend on WEP to keep their records. This independence increases the chances of the groups to continue operating even without WEP.
Summary
WEP was designed under a different approach to microfinance. It was built around literacy objectives; savings and credit were a secondary objective. It does not have a loan fund; resources come only from the groups' own resources.
Performance numbers for savings and loans are encouraging. 97% of group funds are currently on loan. While 14% of the groups report late payments, only 4% of the groups made loans that defaulted.
Savings doubled during the initial 2 years of the program, encouraged by the high interest rate, which can go up to 24% annually given that the interest rate on loans goes almost entirely to savers.
Group funds cannot yet meet the demand for loans of its members, but it is expected that those groups that have joined the program as village banks will meet the loan demand of their members in 2 years, but those that are considered economic groups could take up to 7 years.
In terms of bookkeeping, WEP has been successful in making the groups self-sustainable. Only 4% of them require the help of an NGO, and 1% depends directly on the program. One quarter of groups have adopted village bank techniques, but most use more simple techniques, relying on ledgers and not on calculators.
The impact of the program, according to the women, has been in terms of increased self-confidence and an enlarged women's sphere of influence in the households, especially for those who learned to read within the program. It is worth noting that savings, easy access to credit, and business development ranked far lower.
The individual surveys implemented by the authors show that even when the program was not targeted at poor women, 45% of WEP's women are poor.
An additional interesting feature of WEP is the active involvement of groups in the formation of more groups. It is expected that when WEP is over, not only are the groups likely to continue operating, but they will also help in forming new groups.