The Impact of Microfinance

Micro-enterprises are an important source of employment in Zimbabwe. According to the data in 1998, an estimated 860,000 micro and small enterprises were engaged in manufacturing, commerce and service activities, and approximately 25 percent of Zimbabwe’s working population got jobs or self-employment from these enterprises.

The U.S. Agency for International Development’s Assessing the Impacts of Microenterprise Services (AIMS) Project has three longitudinal studies, and one of them is the assessment of Zambuko Trust, Zimbabwe. The main objective of the assessment is to determine the nature, extent and distribution of impacts from participation in Zambuko’s program. (Carolyn Barnes, p1).

Zambuko began in 1992 and is a partner in the Opportunity International Network. “It offers group co-guaranteed loans and individual loans backed by guarantors to individuals who have a microenterprise that is at least six months old, are not employed fulltime elsewhere, and have an enterprise that is deemed to be financially viable. The loans are normally nine to twelve months in duration and repaid on a monthly basis. They also provide business management training to help borrowers. “Since 1996 it has extended more than 10,000 loans each year. It issues more loans to microentrepreneurs than any other organization in Zimbabwe.” (p3)

“The results from the impact analysis of the survey data, which controlled for specific, initial differences, make a strong case that Zambuko’s program has a positive impact on its clients. In some areas, microfinance appears to have an impact only on repeat continuing clients. Zambuko’s program has a positive impact on clients from extremely poor households, especially among those who remain in the program.” (p4)

Household Level

▪ client households acquiring assets: spending on household durable assets, which improve the quality of life for women who are responsible for women who are responsible for preparation of meals.

▪ positive impact on the value of funeral-related assistance: continuing client households provided to other households

▪ education of children

▪ the frequency nutritious foods were consumed and the diversification of income sources among departing clients

Enterprise Level

▪ Net revenue

▪ employment

▪ value of assets

Individual Level

▪ individual savings

▪ greater self-esteem

▪ greater self-confidence

▪ clients’ ability to plan for the future