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5.2Sanitation

The model requires a subsidy and, as yet, whilst there has been some replication by NGOs such as GOAL, there is no substantial take-up of the model by Government. One obvious issue is that there is no clear central or local government responsibility for the construction or promotion of latrines.

DW has conducted studies which indicate that open defecation is virtually eliminated once a community has 80% family latrine coverage. Unfortunately, LUPP has not monitored the health impact of its own latrine provision, nor the degree of inclusion of the programme. There must be some doubt concerning the degree of inclusion of the poorest within the programme. Evidence from elsewhere would suggest that a significant contribution (especially to the relatively more expensive pour-flush latrine) would exclude the poorest. Further, ability to construct a family latrine implies not only affordability but also rights to the land on which it is built and a plot which can accommodate the structure. Tenants and poorer plot-holders are likely to be excluded. An assessment of who is able to take up the programme offered by LUPP and an analysis of the poverty impact would provide better evidence of the effectiveness of the programme.

5.3Solid Waste Collection

5.4Electricity

5.5Early Childhood Development

The PICs have been built though an initial capital subsidy from SCUK for crèche construction. Development is in partnership with parents’ committees, the Municipal administration and landowner. A key partner has been the MINARS which has provided training and certification to the caregivers as well as ongoing monitoring.

The PICs are managed by parents’ committees and are operationally financially sustainable based on a $10 registration and fees of $15/month for each child.

The PICs are thus catering for the moderate poor families. SCUK acknowledges that there is a need to develop a subsidy mechanism to enable inclusion of children from poorer families.

The impact of the PICs on family and child development is being monitored (including child height and weight, illness) although it was not possible to view evidence of analysis of this. Case studies report on improved child literacy and numeracy, increased livelihood security for care-givers, and increased income-earning potential (time) for mothers.

MINARS is supportive of the initiative and has transferred $10,000 to each of 11 provinces for the construction of PICs. 10 have so far been built in 2 provinces (Benguela and Huila). An issue within this replication will be to maintain management and accountability to parent committees.

5.6Savings, Micro-finance and BDS

SLP has developed a model of ‘solidarity group lending’ which initially was modelled on the Grameen Bank methodology, and, based on DW research, has been further adapted to Angola’s particular post-war situation. The SLP model draws from this and has been demonstrated to be more effective in reaching the poor than the commercial banks’ attempts to reach poor clients²³.

KixiCredito is now a largely independent and sustainable micro-finance institution²⁴ – the first in Angola. It has developed from a loan fund of $1m from DFID in 1999 and has disbursed loans totalling $11m ($8.2m in Luanda and $2.6m in Huambo)²⁵. With a current loan portfolio of $3.5m, it has a loan repayment rate of 95% and an at-risk portfolio of 5.5%²⁶.

The fund has developed on a group guarantee basis with micro-entrepreneurs ‘graduating’ to larger loans based on repayment performance and accumulation of assets, income and savings. The average loan is between $500-$600. The number of ‘solidarity’ groups and clients has quadrupled from December 2003 to reach 560 groups and 10,676 clients in June 2006. Women remain the majority clients (64%) although this proportion has dropped from 75% in 2003. The expansion reflects an impressive transformation within the organisation based on a new understanding of the commercial imperatives as well as the social objectives of the programme.

Based on the success of the group guaranteed loans, KixiCredito is piloting new loans for individual businesses and for housing; and is investigating micro-insurance and a remittance service. It is likely to surpass its 2010 targets of 20,000 clients and $12m loan portfolio. It intends to open branches in five provinces.

The development of KixiCredito is impressive and a major achievement in a new lending environment in Angola. LUPP has undoubtedly made a major contribution to the sector. SLP/KixiCredito has been influential within the National Bank of Angola’s new Microfinance Unit²⁷ and, as well as attracting funding from an Angolan commercial bank, it has also influenced other banks to enter the microfinance market²⁸, provided training to other programmes and achieved widespread media coverage.

It seems likely that KixiCredito can remain financially independent and sustainable, the only limiting factor is to raise sufficient capital to support the demand for new loans. KixiCredito estimates that financial viability depends on a portfolio of 15,000 clients (currently almost 11,000). The organisation now employs 80 staff – all except are one non-graduates, 60% of them are women.

KixiCredito claims that the microfinance operation has a significant positive impact on the livelihoods of the poor and that it also provides a social safety net. A number of case studies have been completed to illustrate positive impact on nutrition, child education, better health care, safer living conditions and diversified livelihood options.

Unfortunately, it seems that there has been no systematic monitoring of client impact although this may be possible to retrieve from client records. Such an analysis would be an extremely important contribution to understanding the poverty impact of the programme, its inclusiveness and its contribution to LUPP as a whole.

Under the LURE project, CARE has developed a savings programme, savings cooperative, business development services and access to microfinance.

The savings programme is based on group savings and internal loans to enable collective investment and leveraging external loans or investment. Different types of savings groups are supported. These comprise groups saving for improved services such as water standposts and electricity; and groups saving to develop micro-enterprise. Interviews for the evaluation showed that groups are generally small with around 5 members and save between Kz100 and Kz400 per person per week ($1.50 - $5).

In addition, CARE is piloting the development of savings for especially vulnerable groups. CARE has approached communities such as the physically disabled and supported the formation of small groups both with the intention of providing mutual support and also to develop income generation activities and small funds for emergencies. The groups interviewed save Kz50 per week per person (less than $1), some of them from begging. With small advances from CARE, a number of groups have been able to develop small businesses (e.g selling soft drinks) and are now saving Kz100 per week. Group cohesion is clearly difficult with such low and vulnerable incomes, but where successful they are having visible impact on communities with little other support. Whilst there is support from church organisations, this programme is unlikely to develop without LUPP/CARE support.

Through LURE, LUPP has also developed an NGO Consortium, MIFIBAC, to develop a network of organisations supporting savings groups. Whilst MIFIBAC has completed a strategic plan to achieve financial and technical assistance, this has not yet been achieved. Discussion with the BNA and KixiCredito indicated that cost recovery from savings operations are not (yet) legal and so financial sustainability is unlikely to be possible.

Whilst not achieving the accelerated growth of KixiCredito, the LURE model of savings and credit seems more likely to reach the poor and poorest.

Linked to savings and loans, LURE has also developed ATREINE²⁹, a group of 15 micro-entrepreneurs who have been trained by CARE to give business development advice. The group is financially sustainable (although they suggested they needed continued technical assistance), charging Kz250 per session to group businesses (minimum 5 people per business) for a 13-session training course. 40% of the income goes to the facilitators, 60% is for operational costs. Since staring in 2003 they have trained 950 individuals.

Unfortunately, the impact of the training is not monitored, although ATREINE reports that about 70% of the businesses they have helped have been successful. Whilst demand is increasing, ATREINE do not offer the training to individual entrepreneurs – their experience has been that individuals do not finish the course. Unfortunately, this would appear to rule out the smaller businesses.

LURE, through ATREINE and other programme activities, links micro-entrepreneurs to commercial banks. Perceiving the gap between the needs of small businesses and the commercial banks, LUPP has supported ASGFG, a group of economics students who are managing a Credit Guarantee Fund and advice service. The Fund guarantees individuals’ loans (unlike KixiCredito’s solidarity group guarantees), and, through the development of charges, is aiming for financial sustainability by the end of 2006.

Overall, LUPP has been instrumental to develop the microfinance and business development sector in Luanda (with influence on its expansion to other Provinces). Since 2003, the programme, through the Coordination Unit, has also supported the development of RASME (the Angolan Network for Micro-Entrepreneurs). Formally registered in 2004, this is now a network of 30 organisations supporting micro-enterprise and micro-finance, representing 35,000 clients in 12 provinces. It also includes one commercial bank, Banco Sol. Apart from developing a databank and information service for members, a key role is to represent the sector in the development of policy and regulation. This was acknowledged and given importance by the BNA MFU.

LUPP has supported the establishment of a secretariat for RASME with 5 staff. It is not yet financially sustainable, and financing needs to be developed perhaps through membership subscriptions. It is possible the network could continue without a secretariat albeit with reduced effectiveness. External support may be possible from AEP. The BNA Microfinance Unit considered that RASME should in fact be doing much of the work the Unit is now doing – representing the micro-enterprise sector within the Bank, building the capacity of the sector, developing a Code of Conduct – and suggested that continued support was needed to ensure its development.