Working Paper

.Assessing the Impact of Microenterprise Services (AIMS) Management Systems International 600 Water Street, S.W. Washington, D.C. 20024-2488 Tel: (202) 484-7170 • Fax: (202) 488-0754 E-mail: [email protected] AN ASSESSMENT OF THE IMPACT OF ZAMBUKO’S MICROENTERPRISE PROGRAM IN ZIMBABWE: BASELINE FINDINGS Working Paper March 1999 Submitted to: Dr. Monique Cohen Office of Microenterprise Development Global Bureau, USAID Submitted by: Carolyn Barnes and Erica Keogh Management Systems International (MSI) This work was funded by the Microenterprise Impact Project (PCE-0406-C-00-5036-00) of USAID’s Office of Microenterprise Development. The Project is conducted through a contract with Management Systems International, in cooperation with the Harvard Institute for International Development, the University of Missouri, and the Small Enterprise Education and Promotion Network. TABLE OF CONTENTS ACKNOWLEDGMENTS ....................................................vii EXECUTIVE SUMMARY .................................................. viii I. INTRODUCTION .....................................................1 A. Significance of Microenterprises and Zambuko Trust in Zimbabwe ...........1 B. Objective and Scope of the Assessment ...............................1 C. Assessment Framework ...........................................2 D. Hypotheses .....................................................3 E. Organization of the Report .........................................4 II. ASSESSMENT CONTEXT .............................................5 A. Zimbabwe ......................................................5 1. Pre-1990s ................................................5 2. Economic situation since 1990 ................................8 3. Microenterprise sector .....................................11 4. Study sites ..............................................14 B. Zambuko Trust .................................................15 1. Goals and objectives .......................................15 2. Organization and geographic coverage .........................15 3. Lending products, methods and terms ..........................17 4. Financial data and growth of the program .......................19 5. Basic profile of loans and clients ..............................21 III. METHODOLOGY AND CHARACTERISTICS OF FINAL SAMPLE ............23 A. Sampling Framework ............................................23 1. Sample design ............................................23 2. Client sample selection procedure .............................24 3. Non-client selection procedures ..............................26 4. Characteristics of final sample ................................27 B. Data Collection and Analysis Stages .................................27 1. Questionnaire design .......................................27 2. Preparations for field work ..................................28 3. Data collection ...........................................29 4. Data entry, cleaning and analysis ..............................29 IV. FINDINGS AND ANALYSIS ...........................................31 A. Introduction ...................................................31 B. Household Resources ............................................31 1. Human resources .........................................32 2. Physical resources .........................................33 3. Discussion ..............................................36 C. Household Income-Generating Activities and Level of Income .............37 i 1. Income generating activities .................................37 2. Income levels ............................................38 3. Discussion ..............................................38 D. Uses of Loan Funds and Income ....................................39 1. Use of loan funds .........................................39 2. Main uses of enterprise revenue ..............................40 3. Food consumption ........................................40 4. Household investments and assistance to others ..................41 5. Coping with financial shocks .................................42 6. Savings .................................................43 7. Discussion ..............................................43 E. Respondents’ Microenterprise Activities ..............................44 1. Basic characteristics .......................................44 2. Transactional relationships ..................................46 3. Business training and management ............................47 4. Employment, fixed assets and sales ............................48 5. Discussion ..............................................50 F. Empowerment of Women ........................................50 1. Pattern of savings .........................................51 2. Control over decision-making ................................51 3. Self-esteem and self-confidence ...............................52 4. Discussion ..............................................52 V. SUMMARY AND CONCLUSIONS ......................................54 A. Summary of Findings ............................................54 1. Household resources .......................................54 2. Household income-generating activities and level of income .........55 3. Uses of loan funds and income ...............................55 4. Respondents’ microenterprise activities .........................56 5. Empowerment of women ...................................58 B. Conclusions and Implications ......................................59 C. Emerging Issues ................................................60 BIBLIOGRAPHY OF KEY SOURCES .........................................62 ii MAP 1. Zimbabwe and Study Sites .........................................5 BOX 1: Zambuko Products and Methods ...................................17 FIGURES: Figure 1. Average Estimated Value of Select Household Assets ...................35 Figure 2. Distribution of Estimated Monthly Household Income ...................38 Figure 3. Estimated Current Value of Enterprise Fixed Assets .....................49 TABLES: Table 1. Employment in Key Industrial Sectors, 1990-1997 .......................9 Table 2. Employment in Harare, Bulawayo and Mutare, 1990-1997 .................9 Table 3. Macroeconomic Statistics, 1994 - 1997 ..............................10 Table 4. Growth of Zambuko Trust Branches and Offices (1992-96) ...............16 Table 5. Zambuko Trust Regional Offices and Branches, August 1997 ..............16 Table 6. Financial Record of Zambuko Trust, January 1994 - August 1997 ..........20 Table 7. Distribution of Zambuko Loans by Geographic Location and Gender, Fiscal Years 1995/96 and 1996/97 ..................................21 Table 8. Sector Distribution of Zambuko Loans by Geographic Location for Fiscal Years 1995/96 and 1996/97 ..................................22 Table 9. Sample Format ................................................23 Table 10. Sample Framework ..............................................25 Table 11. Distribution of Sample of Completed Baseline Interviews .................27 Table 12. Average Value of Recent Loan By Client Loan Status ........................................27 Table 13. Key Characteristics of Respondents and Their Households ...............32 Table 14. Children Attending School ........................................33 Table 15. Housing Tenure ................................................34 Table 16. Comparison of Trust Bank Clients and Other Respondents: Average Value of Assets ................................................36 Table 17. Sources of Household Income .....................................37 Table 18. Number of Rooms Household Rents Out .............................37 Table 19. Respondent Households Providing Cash and In-Kind Assistance to Others Last Month ....................................................41 Table 20. Sector Distribution of Respondents’ Main Enterprises ...................44 Table 21. Employment Last Month in Respondents’ Enterprises ...................48 Table 22. Percentage of Female Respondents with Specific Types of Savings Accounts ..51 iii ANNEX: TABLE OF CONTENTS I. RESPONDENTS AND THEIR HOUSEHOLDS ..............................1 Table 1: Locational Distribution of Respondents ..........................1 Table 2: Distribution of Interviews by Gender of Respondent ................1 Table 3: Marital Status of Respondents .................................2 Table 4: Marital Status and Household Economic Dependency Rate ...........2 Table 5: Trust Bank and Other Clients: Key Client and Household Characteristics ............................................3 Table 6: Housing Tenure By Comparison Group .........................3 Table 7: Housing Tenure by Geographic Area (percentage) .................4 Table 8: Have Lived at Current Residence for More Than Two Years .........4 Table 9: Households Owning Select Consumer Durables ...................5 Table 10: Household Ownership of Select Consumer Durables Trust Bank Households Compared with Other Clients ...............5 Table 11: Estimated Value of Assets ....................................5 Table 12: Ownership of Household Enterprises ............................6 Table 13: Geographic Distribution of Households Owning or Buying Their Residence That Have One or More Renters ..................6 Table 14: Distribution of Number of Rooms Rented Out by Households Owning or Buying Their Residence .............................7 Table 15: Per Capita Household Total Monthly Income Last Month ............7 Table

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