1.1 Rationale and context
1.2 Assumptions
1.3 Objectives of the study
1.4 Research design
1.5 The case studies
1.6 The women
This report presents the main findings and recommendations of an investigation into the impact of training on women's micro-enterprise development conducted during 1997-8. The research was carried out into four programmes supported by two UK based NGOs, namely ACORD and Intermediate Technology.
It is important to present these findings within the context of the dominant thinking in the development community on women's income generating and micro-enterprise development at the time the research was conceived (1996). The early 1990s had witnessed an unprecedented level of interest in the provision of micro-finance as a mechanism of poverty alleviation (see Johnson and Rogaly 1997 for a comprehensive overview). This has been particularly true of efforts to support poor women. The most popular form of micro-finance support has been credit and savings schemes, especially those in which members of a group contribute regular savings and draw on the capital as short term loans 'in rotation'. This interest has led to significant levels of funding of such schemes by the major donor agencies and development banks, with the World Bank committing 200 million dollars to micro-finance programmes for the poorest, particularly women, in the mid-1990s (Wolfensohn 1995). A World Summit on Micro-Credit in Washington in February 1997 is also indicative of the commitment to poverty alleviation strategies through micro-finance.
The interest in micro-finance specifically for women superseded the prevailing wisdom which held until the mid 1980s that credit should be given to men as the main breadwinners of the family and as heads of household. Women's economic activities, where they existed, were seen as merely supplementing family income and consisting of casual and irregular income generating activities usually undertaken in conjunction with their child-rearing roles.
However, by the mid 1980s this view was changing, in particular influenced by the attention given to women's issues by the International Women's Conference in Nairobi in 1985. The development community began to realise that women's participation in economic production had been greatly underestimated and was largely ignored in national labour statistics and GDP. This was because women were mostly engaged in small scale activities in the informal sector which were difficult to capture statistically (and were not usually perceived as 'real' work). Moreover, the incidence of female-headed households (estimated at one-third world wide 1) was increasing, as men migrated to look for work in urban areas and as divorce rates grew. Many of these women would be the sole provider in the household. The break up of the traditional nuclear family, combined with economic recession and the changing nature of employment, suggests that women's participation in the economy is set to increase further. Even in male-headed households the woman may now be the main source of income (there are numerous cases in this study), for example where only unskilled jobs in the service sector are available or where activities generate so little profit that men will not consider doing them.
1 This figure is challenged by some, e.g. Varley (1996) claims that UN statistics suggest that one in five households globally and one in six in developing countries are headed by a woman.At the same time, evidence was emerging as to the creditworthiness of women. Research suggested that women's record of repayment on loans was often better than that of men; also that women were more likely to use whatever income they earned on their family, leading to improved health and nutrition, whereas men might spend additional income on luxury consumption for themselves, e.g. cigarettes, alcohol or gambling. This evidence of higher repayment rates and greater contribution to household well-being was used by gender lobbies to argue for targeting women in micro-finance programmes (Mayoux 1999). With female-headed households known to be more vulnerable in times of crisis because they have fewer resources to draw on, micro-finance for women came to be seen as an important form of poverty alleviation. The 1990s has consequently witnessed an unprecedented growth of such programmes of support, in particular by NGOs in the form of minimalist credit schemes.
This increasing recognition of women's role in the economy was paralleled in the global economic arena by a neo-liberal ideology which argued that governments should leave markets to regulate themselves and that non-profitable activities and enterprises should not be subsidised. This same ideology insisted that what the poor, including poor women, needed was credit so that they could compete in the marketplace with enterprises of their own. The distaste for subsidies and other forms of support to non-profitable organisations meant that the sustainability of programmes became an important issue for development agencies, especially when the economic recession of the late 1980s and subsequent budget reductions forced them to look for increased efficiency in the delivery of aid. Donors sought to cut all but the most effective types of intervention and programmes were expected to include cost-recovery mechanisms (such as realistic fees and interest rates). Minimalist credit schemes were attractive in this respect, not only because they encouraged private entrepreneurship and self-reliance, but also because their impact could be easily assessed in terms of income growth and business turnover. They also had, by donor project standards, relatively low funding requirements.
As a consequence, other inputs traditionally provided on development projects, such as training, equipment and information and extension services, became subordinate to the provision of credit, which was seen as the main need of the poor. Moreover, they are costly to provide. In the case of training, its role in enhancing incomes is not well understood, in comparison to credit, partly because the benefits of training are usually long term and difficult to measure.
The macro-context of this study was therefore one of growing activity in micro-finance for women and declining interest in training. 2 This trend is exemplified by the Port Sudan Small Scale Enterprise Programme which features in this study. This moved in 1993-4 from being a multi-faceted community programme, with a strong emphasis on training alongside micro-credit to a single-input credit organisation. This trend away from the provision of training as part of a portfolio of support for poor women is disturbing because so little is known about its impact on women's income generation and micro-enterprise development. The purpose of this study was therefore to examine the effectiveness of training in a number of contexts where it was still provided. This would increase our understanding not only of the role it plays in enhancing women's incomes and well-being but also of the ways in which it might also maximise the impact of micro-credit. Moreover, training provision is often poorly recorded in project documentation and it is even possible that benefits accruing to individuals have been attributed to credit alone, when a training input, albeit of an informal and irregular nature such as occasional business advice, has also been provided. This study would provide an opportunity to identify and isolate training inputs and effects.
2 There has been something of a resurgence of interest in training among donors involved in support for small and medium enterprises (SMEs). For example, the Donor Committee on Small Enterprise Development set up a working group in 1995 to look at non-financial services, including training, for SMEs (see chapter 2). However, like much of the work in SME development, it does not address the training needs of the poorest and seeks primarily to support training interventions within the marketplace itself, e.g. through vouchers, consultancy services and trade associations rather than through NGOs.This notwithstanding, the study also sought to question the common belief that training, like education, is 'a good thing' and that in some direct and predictable way it contributes to individual and collective socio-economic development. Others have questioned the assumed link between formal education and national development, and have pointed to the poor quality of schooling, the excessively academic curricula relevant only to better off urban populations, the high levels of wastage through dropout and repetition, and the increasing numbers of 'educated unemployed' in the poorest countries as evidence that the relationship is not straightforward. We in turn would wish to question the assumption that all forms of training are beneficial. We would in particular seek to find out what kind of training was appropriate for poor, often illiterate, women.
It is not surprising that the role of training in enhancing women's incomes is not well articulated in comparison to credit, for the latter has attracted more research, albeit small-scale and often based on project evaluations. The difficulty of measuring training impact, mentioned above, makes it an unattractive area of research. As a result, there is little empirical work of a scale and depth significant enough to inform policy and/or practice in this field with regard to women's micro-enterprise development (see chapter 2). At the same time, much of the research that does exist has focused on vocational training and on training for self-employment. These are traditionally seen as male preserves and hence target an anticipated level of economic activity and formal business structure which is considerably larger and more stable than the kinds of informal sector/self-employment activities engaged in by women. The Peru study featured here, which included a sample of men, showed this clearly.
However, the rapid growth in micro-finance activity did lead by the mid 1990s to the emergence of a growing disquiet over the excessive faith placed in it as a mechanism of poverty alleviation (Hulme and Moseley 1996, Buckley 1997), and for women, as a means of empowerment (Mayoux 1999). Linda Mayoux in particular provides a strong critique of the naive belief that micro-finance creates of itself a 'virtuous spiral' of economic, social and political empowerment for women without it being considered necessary to develop explicit strategies to address other dimensions of poverty or gender subordination. The view that mere participation in such a scheme is considered sufficient for women's empowerment is highly simplistic. 3 She cites extensive evidence from a range of studies which shows that for some women micro-finance may be empowering but for many others it is marginal both in economic and socio-political terms (Mayoux 1999). She draws attention to work by Kabeer (1998) and Goetz and Gupta (1996) in Bangladesh which provides evidence that micro-credit can be disempowering and increase tensions within the family. This is supported by other research in rural areas of Bangladesh where BRAC and the Grameen Bank operate credit schemes (Schuler et al 1999). This found that women's access to credit can increase domestic violence, although in some cases it reduces it.
3 This reductionist tendency is the same as the one referred to above with regard to education and training, as having automatic benefits.The growing awareness that the relationship between micro-credit and increased income, women's empowerment and household well-being is highly complex may turn the development community's attention back to programmes of multiple inputs, of which training is of course one (other inputs may be the provision of equipment, commercial premises or workshops, and marketing assistance). This is therefore a timely moment for this study, as it seeks to examine training as one input in interaction with micro-finance.
This study was based on three assumptions which we expected the research to confirm. These were that:
1. Training can be an important component of poverty alleviation for women. Women find themselves competing in a heavily gendered labour market which disadvantages them vis-a-vis men, who usually have more education, skills, work experience and capital to draw on. Women are perceived largely as unskilled and semi-skilled casual labour. Given that their socio-economic circumstances force most poor women to seek an income in the informal sector, we sought to measure the impact that training might have on their activities in this sector.We have chosen to use the term 'micro-enterprise' or 'small business', 4 in preference to 'income generation' in this study. We wish to distinguish between income generation as a casual activity which women move in and out of as time and needs dictate, and probably supplementing male household income, and micro-enterprise/small business as a more permanent form of economic activity, often the sole source of income in the household. One benefit of the training cited here was that many women shifted from viewing their activities as 'income generation' to viewing them as a 'business'.2. The potential impact of training on poor women goes beyond increased income. We anticipated that it has the power to change gender relations within the household and the community, either directly as a consequence of the training itself, or indirectly through the increased income brought about by the training. We therefore sought to monitor and record these changes on a number of levels.
3. Training is only effective if it is responsive to the complexities of the socio-economic environment in which women live and work, combining productive work with domestic and community duties in settings often constrained by household demands. Its potential effectiveness may be impeded by poor design and delivery (itself a consequence of the lack of research and evaluation). We would seek to find out what kind of training for micro-enterprise development was appropriate for poor, often illiterate, women.
4 The terms 'enterprise' and 'business' are also used. However, it must be understood that they are used throughout this report to refer to very small scale initiatives, i.e. 'small businesses' or 'micro-enterprises' (usually defined as those having fewer than five workers). References to 'business skills', 'business training' etc also need to be understood in this sense.
The broad goal of the research was to contribute to the improvement of the income earning potential of poor women in the South by studying the impact of training on their economic and social status, and to inform policy and practice in this field. Given that development agencies were supporting initiatives to promote women's micro-enterprises as part of an agenda which combined strategies of poverty alleviation with women's empowerment, it was important to assess the impact of training in this field within the context of these twin goals. Hence, training which only led to an increase in a woman's income, without increasing her control over both economic and social aspects of her life, would not be considered as having met its objectives. We therefore identified four indicators by which to measure the effectiveness of the training provided, which were:
· incomeThe indicator 'status' was broken down into three components:
· access and control of resources
· status
· quality of life (e.g. sufficient leisure time, time with children, harmonious household relations).
· self-esteemFor the training to be judged as having effectively assisted the women, we would expect improvements on all four indicators.
· status in the household
· status in the community.
The research addressed three broad questions, as follows:
· What is the impact of the training on women's economic and social status (in terms of the identified indicators)?The most important question is the first and most of the data gathered addressed this. There are two parts to this question, the first concerning the specific outcomes of the training as measured by each of the four indicators, and the second concerning the relationship between the four indicators. We included the latter because we wanted to separate out the impact of training from the impact of increased income on the other indicators. In the case of the third question, the only significant 'other input' provided by the projects selected for study was credit.· What constitutes effective training for women's micro-enterprise development?
· How does the training interact with other inputs, in particular credit?
The main findings are presented within the framework of these three questions in chapter 8.
The research was designed as a series of case studies of projects and programmes providing training in technical and/or business skills. Technical skills covered what is usually understood by vocational or employment-related skills. Business skills usually consisted of basic bookkeeping (profit and loss accounts), carrying out market surveys, drawing up business plans, sales forecasting, pricing etc.
ACORD and Intermediate Technology, both experienced NGOs in the field of micro-enterprise development, selected the projects. Out of the six originally planned for the study, only four yielded full sets of data, while one (a Food Processing Training Programme supported by Intermediate Technology in Sri Lanka) yielded some data. This report covers the four full studies, these being Ethiopia, India, Peru and Sudan. Conclusions and recommendations from the research have therefore to be seen within the context of a more limited data source than originally envisaged. 5
5 A small additional case study, which was to be provided by an independent researcher in Sierra Leone, was also prevented from starting by the civil unrest that engulfed that country in 1997-8.It was obvious from the outset that whatever impact training might have on women's economic and social status, it would manifest itself in complex and subtle ways. It was therefore necessary to research the process as well as the outcomes of the training. To this end, the research was designed to include an assessment of the training given to the women, both where it was delivered as a one-off short course and where it was delivered over time and informally 'on the job'. It was also apparent that the impact of the training on the women's micro-enterprises might not be immediate or it might vary over time. It was therefore necessary to engage in a longitudinal study, where the women's use of the skills acquired was monitored at regular intervals. Although the samples were too small and the field work period too short to allow for a full assessment of the impact to be made, this study provides an indication of the useful direction of future research.
To allow us to examine both the process and the outcomes of the training, we selected for each case study a sample of 18-20 women. These consisted both of women who were about to undergo training, whether in technical or business skills (or both) at the time the field work started and of women who had been trained at some earlier time. Those about to be trained formed the focus of the study (Group 1), with the researcher visiting them at regular intervals after the training to assess the impact it had had on the development of their micro-enterprises. Those women who had been trained earlier (Group 2) were included because this allowed us a longer perspective from which to judge the impact of the training. They were interviewed only at the start and the end of the research period. Full details of the research design, the methods used and the instruments developed are provided in Chapter 3.
The NGO projects/programmes which provided case studies can be divided according to the type of training offered (formal, informal or both) and the content of the training (business skills, technical skills or both). Formal training was defined in this study as being an organised activity, of fixed length, provided to a group of trainees on designated training premises and delivered by a trainer or facilitator. Informal training was defined as of no fixed length or regularity, given to individuals as and when required or requested, usually in their work premises, by a trainer or adviser. Formal training was provided by ACORD's Dire Dawa Urban Development Programme in Ethiopia and the Small Scale Food Processing Training Programme supported by Intermediate Technology Peru. In both, training was attached to the provision of micro-credit for women.
In the Ethiopian programme, training consisted of three full days of intensive basic training in business skills. In the Peru programme, it consisted of three or four days of five hour sessions of technical training (in either fruit processing or bread making in the case of the sample women) with one session devoted to marketing and bookkeeping.
The Port Sudan Small Scale Enterprise Programme, run by ACORD, also provided a sample of women following a sewing and handicrafts course. This programme had ceased providing formal training courses in 1995; however, the training function was taken over by a number of ex-clients of ACORD, who ran courses as a business with some assistance from ACORD. Three women in the Group 1 sample, and all the women in Group 2, who had received training some years previously when the course was run by ACORD, were included in the study as having received formal (technical) training. In 1997 ACORD also started formal training for members of Loan Advisory Committees which included some basic business skills (see chapter 7).
Informal training was provided by the Port Sudan programme in the form of initial business advice to all loan applicants, whether individuals or groups, and some on-going advice to those currently in receipt of loans (other types of informal training provided by ACORD are not covered by the study). On the Peru programme, a limited amount of what was called 'technical assistance' or 'follow-up' was provided on request. However, this was not an integral part of the training course as in the Indian programme (see below) and was not made available to all participants.
Mixed formal and informal training was provided by the Women's Micro-Enterprise Promotion in Silk Reeling project in India, supported by Intermediate Technology UK through a local NGO. It targeted schedule caste women (the lowest and poorest caste in Indian society) in an ambitious initiative to turn them from poor labourers into independent reeling entrepreneurs. The training consisted of a 28 day programme of both formal and informal components, the latter comprising visits to different sites relating to the silk industry, support and advice from a male NGO worker who accompanied the women on their business, and follow-up meetings and visits from NGO staff. However, in the case of the Group 1 women, who were the focus of the study, the formal training component was reduced in length due to funding and other constraints, as is explained in chapter 5.
The table in Appendix 1 provides an overview of the types of training provided on each project. All of the training courses with the exception of that on the Indian project and the formal training on the Sudanese project were open to men as well as women. The Peru data included a sample of five men in addition to the ten Group 1 women who were the focus of the study. The chart also shows whether the women had access to credit and/or savings schemes.
A total of 78 women were covered by the study (excluding the nine women interviewed once on the Sri Lanka project). Of these 78 women, 40 were in Group 1 and 38 in Group 2. The data provided by all these women were relevant and contributed to the findings. However, for the purpose of assessing the impact of the training on the women's micro-enterprises alongside that of credit, it was only possible to use a smaller sample of 57 women (see Appendix 5). This was because not all 78 women met the full criteria, namely that they were engaged in micro-enterprise activity throughout the research period, had received relevant training and were in receipt of credit at the time. The details are provided in the relevant case study chapters. We recognise that it is dangerous to make generalisations out of such a small sample and suggest that the indicative findings presented here should be tested in further larger studies.
As to the nature of the women's economic activities, most of the women in the Ethiopia and Peru samples were working in small-scale retailing, e.g. selling small household items, snacks and processed food from their house, from the street or from a market stall. Some in the Ethiopia sample were running small bars or canteens. Many of these were illegal activities, undertaken without formal licences. In Sudan a number were doing tailoring, and in Peru a small sample were part of a family bakery business. Many of the women were either illiterate or had minimal literacy skills (although many could do complex oral calculations). Few had had more than primary schooling, with the exception of Peru, where eight of the Group 1 women and seven of the Group 2 women had had some secondary schooling. In the Indian sample, only one woman in each group was literate (she was given the task of keeping the group's accounts). For the majority of those who were illiterate, this was their first experience of organised education or training of any kind.
A number of women in the sample were heads of household, either divorced, widowed or separated: there were seven in the Ethiopian sample of 20 women, and one each in India, Sudan and Peru. All the women were extremely poor, with daily net incomes among the Group 1 women at the start of the study ranging from the equivalent of 20-40 pence per day in India, £1-£4 in Sudan and Ethiopia, to £2.50-£12 in Peru. Even where income increases were recorded as a result of the training, these were also modest and did not usually increase by more than 25-50% over the research period. The only notable exceptions were one woman in the Ethiopian Group 1 sample and two in the Peru sample (one in Group 1 and one in Group 2, both working in fruit processing), with two of the three trebling their incomes over a sustained period. However, the low increases for the majority are deceptive in that some of the women's initiatives showed considerable promise in the longer term and the field work coincided in the latter stages with depressed markets in Ethiopia (economic recession and inflation), Sudan (low seasonal demand) and Peru (the impact of el Niño).
The poorest women are not seen as a 'natural' target for interventions in micro-enterprise development, their potential to become successful businesswomen being severely constrained by a wide range of economic and social factors. However, within a donor agenda of poverty alleviation, small gains among the very poorest must be considered as achievements.
The main findings of the four completed case studies are discussed in chapters 4-7. Each chapter will follow the same format: background information on the project/programme, an evaluative account of the training provided to the women in the Group 1 sample, profile of the women included in the study, detailed findings from the Group 1 sample and brief details of the Group 2 findings.
