Be the Change Network

aka "Kari's Blog"

Archive for January, 2017

Impact Insights Into SSI’s Community Prosper Bank

January 25, 2017 By: karig2 Category: General No Comments →

Rural economic development is no easy task. A lack of training, infrastructure, access to capital and markets are all barriers to business growth for rural entrepreneurs. Out of this specific need to provide services for the small- but thriving- Aoral province where most households survive off micro-enterprise activity, the Community Prosper Bank (CPB) was spearheaded in collaboration with U.S. financial advisers and Kong Sem, Sustainable Schools International (SSI) first alumni. Through CPB, community members can receive micro loans to help grow their businesses.  In addition, a percentage of interest earned on loans is donated back to rural schools to facilitate community development through a social enterprise model. In 2016, 20% of interest generated was donated to local schools.

Jan 2017 Blog Picture- Jeanne Crump

In 2016, CPB provided loans to 171 customers. As CPB has grown over the years, SSI began taking a deeper look at how this program was making a difference in the Aoral community.  In June 2016, an impact study was conducted by CPB Adviser, Jeanne Crump. Through the study, a sample of CPB customers were interviewed to collect both demographic household information and to gauge the impact the loans were having on their businesses. We found some very positive insights. Most notably, 100% of respondents who used the loan for business purposes reported that they felt their businesses had grown since receiving a loan. Because it is often difficult to measure business growth through annual profits in the informal sector, we used several proxy indicators to gauge this impact. Business growth was reported through an increase in household income, the ability to purchase more inventory, or through an increase of direct sales. Some customers even reported growth in more than one area.

Additional notable insights include:

  • Customers were asked who the loan has affected/helped. Nearly 80% of respondents said it has helped both their children and family.
  • Customers who had school-aged children attending school were asked whether the loan had helped their children attend/stay in school. 90% of the sample said yes.
  • Nearly 75% of respondents reported that the female in the house managed household finances, and nearly every female that we surveyed who had taken out a loan said she was responsible for repaying the loan as well.
  • The most common occupations of those receiving loans are teachers and farmers. Teachers often use loans to create small enterprises teaching private lessons. Farmers reported using the loans most often for raising livestock and growing vegetables. There were also several loans supporting food vendors.

During this study, the globally-recognized Progress Out of Poverty Index (PPI) was also implemented. The PPI is a standardized country-specific tool that aims to measure changes in poverty levels over time. A sample of households were surveyed using the PPI, and this same group will be surveyed again in 2017, after which the first results will be available. Our goal for CPB is to alleviate poverty in Aoral and foster sustainable development through community-led programs.

As CPB grows, we have several initiatives in mind to make this program even more impactful, such as developing a community savings group, providing financial literacy education, and offering an agricultural loan product to encourage the diversification of crops among farmers. CPB is an excellent example of the types of socially minded projects we hope to see our Leadership Academy students develop as they contribute back to their communities. We look forward to sharing more insights and impacts with our supporters in the coming year.

– Jeanne Crump