Access to Credit

Abstract

This article briefly describes an INSTRAW study of an income generation program in the Dominican Republic. The women in development program is operated by the Association for the Development of Micro-Enterprises in the Dominican Republic. The evaluation aims to quantify the results for men and women borrowers in terms of income, family health and nutrition, business reinvestment, job creation, and other measures. The aim is to compare findings between female household heads and non-heads. Findings support other empirical results showing increased sales and income after development. Women invested some of their additional income in their families' health, nutrition, and education. Women also hired other women and tended to employ more unpaid family members. 12% of employees were aged 7-14 years. The use of local community members, who were recent college graduates, as field officers was found to be an effective management tool. The young loan officers were successful in identifying potential clients and in creating accessible opportunities for advice and service. Loan officers increased the number of borrowers, and the program had low rates of nonpayment of loans. Comparisons between female heads and non-heads indicated different reasons for involvement in the program. Non-heads with other income providers reported personal reasons such as self realization and more money. Heads desired financial stability for the family and sometimes satisfaction of survival needs. Female heads tended to reinvest and expand their income-generating capacities. Women tended to increase their working space. This usually meant home space, since many women conducted their business at home. One obstacle was identified which limited income enhancement. For 30% of interviewed women a limit was set on available credit. Credit could only yield income equal to the minimum wage. This pilot study was limited to 400 persons from Santo Domingo. A further impact study is planned which would identify program strengths and weaknesses. Future plans for financial institutions and lending practices would be based on research findings.