2.4.4. A cross-cutting issue: Outreach vs. Effectiveness vs.
Sustainability
We have pointed out how Padakhep started officially its
microfinance activity by making a business (credit) plan. This plan was aimed
at setting objectives in terms of outreach: each year, more street children had
to be reached. However, this credit plan, because of the absence of a good
framework surrounding it, had e negative impact on «sustainability»
and «effectiveness»: Indeed, in order to reach the targets, credits
were delivered: in terms of effectiveness, some street children who did not
really need it were provided with credit; and the street children who needed it
were not accompanied in the process of disbursing credit; in terms of
sustainability, the recovery rate was low, and because of the lack of a clear
management, it impacted the ability of the organisation to deliver such
credits, reducing their outreach. We see how trying to reach the maximum of
street children without setting up a good microfinance framework can lead to
serious impacts in terms of effectiveness and sustainability.
2.4.5. Some recommendations
If we come back to our case study framework, those two
previous points helped us to test the validity of our model, and helps us to
make recommendations to Padakhep:
Poorly effective and sustainable
DOES NOT FOLLOW OUR MODEL
PADAKHEP
Readaptation to our model
Model valid
First, we learned that our model is valid. However, among all
the elements proposed in our framework, one proposed activity seems
problematic: linking guardians. Indeed, this appeared as a problematic issue in
our paper; and a program that seeks such involvement must carefully analyse all
the risk parameters before doing so.
Following this figure, Padakhep must try to readapt its
framework of intervention to our comprehensive microfinance for street children
program proposed before. This means concretely:
1. Uniformize the Informal and Formal Programs, and
create one single program
We have seen how keeping two different programs is inadequate.
Those two programs must therefore be merged in an effective and sustainable
way, creating a single and uniform program, settled on clear rules and
regulations.
2. Savings:
Those services are reliable, convenient and flexible; however,
convenience can be enhanced by a computerized registering system and costs can
be reduced by not providing interests on savings (as highlighted previously)
3. Credit:
a. Loan access criteria must be settled clearly according to
our proposed model, in order to avoid providing credit to children who do not
need it and who are not able to manage it effectively, enhancing therefore
their vulnerability.
b. Linking the guardians is a difficult task, and must be
considered with precaution.
c. Small loans for seasonal businesses can be useful in the
very short term, as a first aid, but do not provide viable long term
perspectives to street children. Although stopping providing directly those
seasonal credits may not be appropriate in the short term, the program needs
progressively to integrate a global perspective on start-up businesses, with
the help of the microfinance section.
d. The «Revolving loan fund» must
not be taken from other budget; a separate budget for that must be provided for
each DIC.
e. Focusing on group-lending may be a viable solution in order
to enhance effectiveness; although this demands a high investment of the staff
to coordinate such activity.
f. One of the key issues of Padakhep seems to be vocational
training. Indeed, credit MUST be directly linked to the vocational training,
following our process. Providing small credits for seasonal businesses might be
useful in the short-term, but can harm the child's well-being and does not
provide a better future. Following all the steps of our comprehensive
microfinance for street children framework is essential to guarantee an
effective and sustainable intervention.
4. Management:
a. Management structure: Our
question of provider did point out two possibilities of delivering «a
microfinance for street children program»: YSO focus; or YSO/MFI
Partnership.
Here, very interestingly, the second provision model might be
the most adequate one: the Child section of Padakhep must be the main manager
of the program, from savings to credit, but needs to be helped by the
Microfinance section. This is, indeed, a way to limit the costs (training, etc)
and hence to increase the sustainability. Finally, the difficult coordination
between the child development section and the microfinance section is an
illustration of the difficulties that a non-well designed partnership can face.
b. The staff: An important issue is
the staff. The high staff turnover created negative impacts to the program and
will still create if no solutions are found in terms of incentives.
c. Data: Keeping data is
essential for evaluating the program. In order to do so, a uniformized system
among the three DIC must be settled.
d. Outreach: trying to reach
a maximum of street children must not be the objective. Although in terms of
savings, his may not be a problem, in terms of credit this can be problematic.
The key objective is the long term well-being of the child.
5. Marketing :
Give a name to the program (in consultation with street
children), in order to ensure an appropriation of the program and the knowledge
diffusion of Padakhep's microfinance program for street children across the
country.
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