Freedom from Hunger's Credit with Education Model, Kathleen Stack, 2004

    Freedom from Hunger and its partner organizations in Africa, Asia and Latin America have developed an approach to combat chronic hunger and poverty with integrated financial and education services. Credit with Education provides participants with small working capital loans, a safe place to deposit savings, and education in better business management, health, and nutrition.

    Access to cash credit enables women to expand and diversify their income-generating enterprises and often replaces more costly sources of working capital or inputs. Borrowers usually invest in activities in which they are already skilled - food processing and selling, raising chickens, operating a small shop, and making or buying and selling clothing. Borrowers must earn enough to pay back the loan with interest, deposit some savings, have enough money to purchase food and other necessities, and additional amounts to grow the business. Credit with Education is a financially viable option for institutions that want to offer complementary business and health services to microfinance clients in an integrated fashion.

    Summary of results
    After 15 years of operating experience, the program is reaching over 330,000 women in 16 countries. A multi-year study in Ghana and Bolivia found that program clients enjoyed a significantly greater increase in monthly nonfarm earnings - almost double - as compared to nonparticipants. Clients attributed their increased incomes to business expansion, reduced input costs resulting from bulk buying or cash payment, and new activities or products. There was evidence that access to financial and education services had positively impacted women's self-confidence and status in the community - Ghanaian women took on more active roles in the community and in Bolivia they were running for and holding offices in local governing bodies. In both countries, participants also were more likely to give others advice about business, health, and nutrition.

    Associated Activities and Documents
    Synthesis Documents
    »Combining micro-finance and BDS, by Kathleen Stack, 2002