Credit with Education: A Self-financing Way to Fight Chronic Hunger and Poverty

This paper is a short write-up on Freedom from Hunger's program called Credit with Education, including:

• Evidence of success;
• The components of the program in some detail;
• The role of the field agents;
• The possibility of financial sustainability for the program.

Two multi-year evaluations were undertaken in Ghana and Bolivia to determine the impact of the Credit with Education program. The results showed that many of the desired impacts are being achieved, such as:

• Greater increase in monthly earnings;
• Longer periods of breast-feeding;
• Increase in self-confidence and social status;
• Decrease in malnutrition.

Credit with Education programs form and train credit associations:

• Training involves keeping financial registers and understanding payment and deposit procedures;
• Once training has finished, the credit association receives a group loan, which it on lends to members;
• The members guarantee each other's loans, which have a duration of four to six months;
• The product is designed to become self-financing within 18 months to three years after start-up.

The education component of Credit with Education comes in the form of the promotion of a mix of topics at meetings:

• The topics depend on local needs and demand, organizational objectives, and the availability of services (such as immunization and primary health clinics);
• Typically, during a four to six month loan cycle, one or two topics are explored in depth.

The extra education the members receive accounts for 10 percent of the total program costs. However, the extra satisfaction seems to justify the extra cost and charging extra has not been a concern because it has not been necessary for financial sustainability.