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THEME: Credit experience argues for paying more attention to the profitability of the enterprise and ensuring access by poorer women.
Two IFAD-supported projects in Syria have provided a
large number of rural women with loans for on and off-farm activities.
This experience has resulted in some useful lessons on how to improve
similar future activities.
A 1999 IFAD mid-term evaluation found that fully 42% of recipients of livestock loans given under one project (SARDP I) were women. Women also received loans for off-farm income-generating activities. Profitability of the loan activities showed large differences. In general:
- loans taken for calf-fattening and dairying and milking machines were found to be profitable;
- loans for goat and sheep-raising were marginal; and
- profitability of women’s off-farm enterprises was lower, except in rare cases.
Most of the loans for off-farm activities were for the setting up or expansion of embroidery, sewing, flower-arranging, and similar handicraft types of activities. Skills training was a first step. Women themselves chose the type of training they wanted to pursue. The business training (offered by the United Nations Fund for Women, UNIFEM) was apparently very useful, but available to only a few women. At the time of the mid-term evaluation, some 17 000 women had been trained, but only 1 776 had received credit for income-generating activities. The demand for loans exceeded the number of actual recipients, but many poorer women who had skills and interest were not able to qualify for loans.
The IFAD evaluation found that the credit programmes have tended to serve ‘productive’ farmers and women who were good credit risks, rather than those without assets or in the greatest need. In the case of off-farm income-generating activities, at least a proportion of the loans went to women who were interested only in pursuing a hobby, rather than in generating an income to help feed their families. Clearly these were the rural privileged rather than women from needy households. But, because of the lending requirements and the nature of the loan products, they had a much better chance of getting loans than the poorer women.
Several lessons have emerged:
- Self-targeting through certain credit terms does not always work. Exclusionary criteria are needed.
- Credit conditions, such as the requirement for suitable guarantors of loans, tend to exclude poorer women, who usually do not have the right kind of social contacts.
- Loans should not be provided for activities that have become obsolete or can no longer generate an income, particularly in the handicrafts area.
- Loans for the same activity should not be provided for several women in the same village, unless more distant marketing outlets are available. Otherwise, local markets will be flooded and women will not be able to sell their products at a favourable price.
- Lending for livestock requires suitable credit conditions that do not penalize the poor.
- Loan repayment terms should match the cash flow of the project.
- Savings mobilization needs to be included along with credit, particularly where loan size may be inadequate to cover all start-up costs. If this is not done, poorer women may end up taking additional loans from moneylenders, with negative consequences both for the women and for the loan repayment.
Adapted from:
IFAD - Office of Evaluation and Studies. 1999. Syrian Arab Republic – Southern Agricultural Development Project (Phase II), Mid-Term Evaluation, Vols. I & II. Rome. May.
IFAD - Office of Evaluation and Studies. 1999. Thematic Study on Rainfed Agriculture, Main Report, Appendixes and Annex. Rome. October.
