INTRA HOUSEHOLDS RELATIONS

Intra households Relations as a Result of Microfinace Interventions

Intra households Relations as a Result of Microfinance Interventions

Introduction

The impact of cash transfers can be improved by, among other strategies, linking with basic services; improving household mobility/employment opportunities, including adolescent and child-headed households; and understanding intra-household resource distribution.

As part of a Congressional mandate in the 2003 Amendment of the Micro enterprise for Self-Reliance Act of 2000, USAID is responsible for developing accurate, low-cost methods for poverty assessment to be used by micro enterprise programs. This mandate calls for methods that can be used by micro enterprise practitioners to assess to what extent they reach the very poor. 1 To this end, the Center for Institutional Reform and the Informal Sector (IRIS Center) at the University of Maryland was contracted by the United States Agency for International Development Micro enterprise Development office to develop and field test poverty assessment tools for use by institutions providing micro enterprise assistance.

Objectives of the Study

This report aims to complete the following:

review the literature on intra-household inequality;

provide a critical assessment of the existing literature's ability to measure intra household dynamics accurately and at low-cost; and,

applicable measures like micro finance interventions that could augment the existing Poverty Assessment Tools instruments to address intra-household inequality and poverty.

MicroFinance Interventions in South Africa

Over the past two decades, various development approaches have been devised by policymakers, international development agencies, nongovernmental organizations, and others aimed at poverty reduction in developing countries. One of these strategies, which has become increasingly popular since the early 1990s, involves microfinance schemes, which provide financial services in the form of savings and credit opportunities to the working poor (Johnson & Rogaly, 1997). Small and microenterprises (SMEs) are the backbone of many economies in Sub-Saharan Africa (SSA) and hold the key to possible revival of economic growth and the elimination of poverty on a sustainable basis. Despite the substantial role of the SMEs in SSA's economies, they are denied official support, particularly credit, from institutionalized financial service organizations that provide funds to businesses.

Microfinance Institutions (MFIs) have become increasingly involved in providing financial services to SMEs focused on poverty reduction and the economic survival of the poorest of the poor. There is continuing and quite rapid improvement in understanding how financial services for the poor can best be provided. As part of this learning process, microfinance practitioners, donors, and governments have been interested in knowing to what extent these credit interventions impact the beneficiaries. Consequently, a number of impact assessment studies on the performance of microfinance projects have been undertaken in recent years, with varying and revealing results.

Concept

Impact assessment is a management mechanism aimed at measuring the effects of projects on the intended beneficiaries. The rationale is to ascertain whether the resources invested produce the expected level of output and benefits as well as contribute to the mission of the organization that makes the investments. Indeed, for microfinance institutions (MFIs), impact assessment is important in enabling them to remain true to their mission of “working with poor people in ...