Impact of Accumulating Savings and Credit Associations on Child Well-Being

105 Pages·2013·2.78 MB·English

Theorie und Praxis
Wissenschaftliche Reihe zur Entwicklungszusammenarbeit,
Humanitären Hilfe und entwicklungspolitischen Anwaltschaftsarbeit
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Impact of Accumulating
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Savings and Credit Associations
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Evidence from World Vision Groups
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Nr. 11
Zukunft für Kinder!
Theorie und Praxis
Wissenschaftliche Reihe
zur Entwicklungszusammenarbeit, humanitären Hilfe
und entwicklungspolitischen Anwaltschaftsarbeit,

herausgegeben vom
World Vision Institut für Forschung und Innovation

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Impact of Accumulating Savings and Credit
Associations on Child Well-Being

Evidence from World Vision Groups in Mozambique

Master’s Thesis
in partial fulfilment of the requirements for the degree Master of Arts in
International Development Studies

by
Michaela Beck

presented to the Faculty of Social Sciences and Philosophy
and the Faculty of Business Administration and Economics
of the Philipps-Universität Marburg

III
Marburg, 2012

Michaela Beck

Impact of Accumulating Savings and Credit Associations on Child Well-Being

Evidence from World Vision Groups in Mozambique

Theorie und Praxis Nr.11

Impressum
© World Vision, 2013
Herausgeber:
World Vision Institut
für Forschung und Innovation
Friedrichsdorf, Deutschland
Gesamtleitung: Dr. Hartmut Kopf
Forschungsberater: Kurt Bangert
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Preface
As an organization that works in development and humanitarian aid, World Vision is very
interested in getting evidence on the effectiveness of certain programming approaches. This
master thesis focuses on the “Accumulating Savings and Credit Associations” (ASCA), a
programming model that supports economic development. The author Michaela Beck very well
points out the positive and negative effects of this approach. Besides having a look on the
economic outcomes of the ASCA the author also touches on the social impact of the individual
and in the community. Being a child focused organization it was particular interesting for us to see
what influence the ACSA model has on the wellbeing of children. The learning from this thesis will
help us to improve our programming and is therefore an important contribution in the fight
against poverty and improving the life of children

Stefan Sengstmann
Head of the technical advisory team (World Vision Germany)

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Acknowledgements
_______________________________________________________________________________________
Acknowledgements
First and foremost I would like to thank my supervisor Prof. Dr. Michael Kirk for his encouragement and
advice throughout the process of writing this thesis. I am also grateful to my second examiner, Prof. Dr.
Gunnar Otte, as well as to Simone Gobien and David Binder who provided me with methodological
support in terms of statistical analysis and SPSS.
I am indebted to the World Vision Institute for Research and Innovation who funded the field research this
thesis is based on, and especially to Dr. Hans-Peter Zerfas, Dr. Andreas Spaeth and Dr. Hartmut Kopf for
their trust in me as well as their constant support and advice.
This thesis would not have been possible without the technical and logistical assistance of the staff of World
Vision Mozambique, especially Arsénio Manjate and José Agostinho Pinto from the Saua Saua ADP;
Armando Muila and Azevedo Alves with their teams in the ADPs of Inteta and Nihessiue; Manuel Madeira
and Julio Martinho from the Muecate ADP; and Wilson Beca and Manuel Sumalgy in the Imala ADP. I would
also like to thank the provincial representative Sr. Jaime Bitone as well as Carlos Fontoura from the WV
office in Nampula, who were always available for organizational support.
I owe my deepest gratitude to Angela Getiniel Mucambe and her family for their exceptional hospitality and
for making me feel at home in Nampula.
I want to dedicate this thesis to the ASCA members of Nampula whose hospitality, generosity and patience
with me during the interview phase left me speechless, and whose courage to join their efforts in the ASCA
to provide a better future for their children is a great inspiration to me.
Last but not least I would like to thank my parents for their infinite love and support and for teaching me
more than university ever could.

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Abstract
_______________________________________________________________________________________
Abstract
Accumulating Savings and Credit Associations (ASCA) were developed in Niger within a program of the
NGO CARE as a savings-based micro finance instrument fit for the African context. They provide an
opportunity to join a group of people that trust each other, accumulate savings together, share experiences
and take small flexible loans from the group’s funds for investment, consumption, or emergencies. The
system proved to be very popular and was spread fast by a number of NGOs. Data and research on the
impact of these ASCA however are still very meagre and the majority of studies has no baseline data or
control group, but relies on recall data by members.
This thesis investigates the impact of ASCA on child well-being by analyzing existing studies, as well as
through specific research carried out within the World Vision ASCA program in rural Nampula,
Mozambique. 30 groups and 150 individuals were interviewed.
Results show a positive influence of ASCA participation on income and on the funds available to the
household. This seems to lead to greater spending on and ownership of household assets. However, in
order to achieve an impact on income diversification, extensive business and agricultural trainings seem to
be necessary. Most caregivers invest part of the funds that are made available to them through the ASCA in
their children’s well-being such as education and nutrition. Findings indicate though that caregivers’ ASCA
participation may increase children’s workload, which might have negative influences on their time and
energy available for studying. ASCA thus provide all the financial options they are expected to provide, but
the way participants use them – on mere consumption, productive purposes or their children’s well-being –
depends on a number of external factors as well as each member’s personal preferences.
Besides economic impact, ASCA shows strong potential for social impact, especially when combined with
the respective training by the implementing NGO. Findings show that ASCA help families to better deal
with hardships and to improve their economic resilience. Participants have a more positive view of the
future and are less worried about providing for their families. ASCA promote shared decision-making
between caretakers, which is assumed to lead to better decisions regarding their children’s well-being.
Participants gain confidence regarding their role and participation within civil society and various types of
associations.
As a conclusion of this thesis, the ASCA proves to be a powerful and flexible tool to serve the needs of the
rural and extreme poor, the great potential of which is by far not exhausted. Further systematic research is
needed to grasp its impact and further develop and enhance the concept.
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Table of Contents
_______________________________________________________________________________________
Table of Contents
Acknowledgements................................................................................................................................................ II
Abstract ...................................................................................................................................................................III
List of Abbreviations ........................................................................................................................................... VI
List of Figures and Tables ................................................................................................................................. VIII

1. Introduction ...................................................................................................................... 1
1.1 Background................................................................................................................................................... 1
1.2 Research Question and Hypotheses ...................................................................................................... 3
1.3 Thesis Outline ............................................................................................................................................. 5
2. Savings and Credit Options for the Poor ....................................................................... 7
2.1 Savings and the Poor .................................................................................................................................. 7
2.2 Financial Services for the Poor ............................................................................................................. 11
2.3 Accumulating Savings and Credit Associations (ASCA) ................................................................. 16
2.3.1 The ASCA as enhancement of the ROSCA .............................................................................. 16
2.3.2 The ASCA as MFI substitute for the rural and extremely poor........................................... 17
2.3.3 The ASCA as ‘African version’ of Self Help Groups ............................................................... 18
2.3.4 The ASCA for independence from financial institutions ........................................................ 20
2.3.5 The ASCA as an NGO tool for social change .......................................................................... 20
3. Research Outline ............................................................................................................ 22
3.1 Review of Relevant Field Studies ......................................................................................................... 22
3.2 Research Setting: WV ASCA in Nampula .......................................................................................... 24
3.2.1 Geographical Setting ....................................................................................................................... 24
3.2.2 Access to financial services............................................................................................................ 26
3.3 Methodological procedure .................................................................................................................... 28
3.3.1 Data collection and analysis .......................................................................................................... 28
3.3.2 Characteristics of Respondents.................................................................................................... 29
3.4 Critical Assessment of the Research Design .................................................................................... 32
3.4.1 Methods ............................................................................................................................................. 32
3.4.2 Timing ................................................................................................................................................. 33
3.4.3 Comprehension ................................................................................................................................ 33
4. Findings ........................................................................................................................... 35
4.1 Effects on Overall Economic Well-Being ........................................................................................... 35
a. Increase in income ................................................................................................................................. 35
b. Household assets and housing situation .......................................................................................... 38
c. Productive Assets and Income Generating Activities (IGA) ....................................................... 41
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Table of Contents
_______________________________________________________________________________________
4.2 Effects on Education and Nutrition ..................................................................................................... 45
a. Education expenditures ........................................................................................................................ 45
b. Children’s Workload ............................................................................................................................ 47
c. Nutrition .................................................................................................................................................. 50
4.3 Effects on Vulnerability and Confidence ............................................................................................ 54
a. Economic Resilience and Optimism about Future ......................................................................... 54
b. Decision Making ..................................................................................................................................... 55
c. Participation in Civil Society ............................................................................................................... 57
4.4 Other Findings on Child Well-Being ................................................................................................... 59
5. Specific Implications for World Vision ASCA in Mozambique .................................. 62
6. Summary and Concluding Remarks ............................................................................. 66

Appendix 1: Interview Guides ....................................................................................................................... lxviii
Appendix 2: Regression Tables ..................................................................................................................... lxxv
References ...................................................................................................................................................... lxxxix
Ehrenwörtliche Erklärung ................................................................................................................................ xcii

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List of Abbreviations
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List of Abbreviations
ADP Area Development Programme(s)
ASCA Accumulating Savings and Credit Association(s)
CARE Cooperative for Assistance and Relief Everywhere, Inc.
CWBO Child Well-Being Outcome(s)
DFID British Department for International Development
GDP Gross Domestic Product
IGA Income Generating Activity/Activities
IMF International Monetary Fund
INE Instituto Nacional de Estatística (Mozambican National Institute of Statistics)
IRAM Institut de recherches et d’applications des méthodes de développement,
(Institute for research and application of development methods)
KAP Knowledge, attitudes and practices
LDC Least Developed Country
MFI Micro finance institution(s)
MFRC South African Micro Finance Regulatory Council
MPD Ministério da Planificação e Desenvolvimento
(Mozambican Ministry of Planning and Development)
Mt. Metical/Meticais (Exchange rate during research period: 35.87 Mt./EUR)
n.d. No date
NGO Non-Governmental Organization(s)
ODES Organização para o Desenvolvimento Sustentável
(Organization for Sustainable Development)
PCR Poupança e Crédito Rotativo (Rotating Savings and Credit)
PPI Progress out of Poverty IndexTM
PPP Purchasing Power Parity
PRA Participatory Rapid Appraisal
RCRN Rede de Caixas Rurais Nampula (Network of Rural Banks Nampula)
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