ISAL Dissertaion Worked
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MIDLANDS STATE UNIVERSITY Faculty of Arts Impact of Internal Savings and Lending Schemes on poverty reduction in Gokwe South. By Tapiwa Muzadzi Gudza R136086W Dissertation submitted in partial fulfillment of the requirement of the Master Degree in Development Studies. 2014 DECLARATION I Tapiwa Muzadzi Gudza declare that this thesis is a result of my original effort and work, and that the best of my knowledge, the findings have never been presented to the Midlands State University or elsewhere for the award of any academic qualification. Where assistance has been sought it has been acknowledged accordingly. Tapiwa Muzadzi Gudza Signature Date Supervisior : Mr Munhande Signature Date ii DEDICATION This thesis is dedicated to my wife Chipo, son Eugiene and my late Grandmother Mbuya Kuutsi iii ACKNOWLEDGEMENTS I would like to thank God for his guidance and protection throughout the course of this study. My wife Chipo and son Eugiene it has been our journey together. Amanda my sister your support throughout this study should not go unnoticed. McDonald for helping me sort my numerous questionnaires.My profound gratitude goes to my supervisors Mr. Munhande and Mr. Hahlani, your wisdom directed my path throughout this research. May God greatly bless you. I am greatly indebted to my four research assistance namely Shauline Chuma , Edwin Hondo , Lovegirl Vera and George Gogwe for community mobilization and linking me to various groups. Lastly I would like to thank all that participated in this research namely Mark Harper, Hungwe, Mahohoma , Shona , Jekwa. My workmates have been supportive in this research and deserves recognisation especially Mr. Makota and work partner Sitsha Brian and Mayibongwe Mabanda. My academic best friend and study partner Luke Njenda I thank you for your support throughout my studies and this research. Tariro and Rudo and the MADS whatsapp Group of my classmates you guys are great your suggestions were helpful. iv ABSTRACT This research assesses the impact of ISALS in poverty reduction in Gokwe South by analyzing the operations, benefits and challenges of the funding methodology. The research uses methodological and data triangulation in an attempt to make an informed conclusion about ISALS as a mitigating strategy against poverty. The research goes a step further to evaluate the extent ISALs have reached the poorest. The research analyses Household Economic portfolios and loan portfolios of groups in Nemangwe 5 ward 9; Ngomeni ward 5 and Ndhlalmbi 3 ward 32, using a cross section design. Participatory Observation played an important part in this research. The research concluded that ISALS were playing an important role reducing poverty, how there was need for external linkage to support the ISAL groups. However there was a gap in terms of reaching the poorest. v Contents DECLARATION................................................................................................................................... ii DEDICATION...................................................................................................................................... iii ACKNOWLEDGEMENTS ................................................................................................................ iv ABSTRACT ........................................................................................................................................... v LIST OF ACRONYMS ....................................................................................................................... xi INTRODUCTION ................................................................................................................................. 1 Background to the study ..................................................................................................................... 2 Statement of the Problem .................................................................................................................... 3 Justification ......................................................................................................................................... 4 Aim ..................................................................................................................................................... 5 Objectives ........................................................................................................................................... 5 Research Questions ............................................................................................................................. 5 De-limitation of the study ................................................................................................................... 6 The Area of Study ........................................................................................................................... 6 Limitations of the Study .................................................................................................................... 11 Assumptions ...................................................................................................................................... 12 Definition of terms ............................................................................................................................ 12 Literature Review .............................................................................................................................. 13 Benefits of ISALS ......................................................................................................................... 13 Participation in ISALS .................................................................................................................. 14 ISALS and Poverty Reduction ...................................................................................................... 15 Sustainability of ISALS ................................................................................................................ 16 Explanations of poverty ................................................................................................................ 18 Synopsis of microfinance and poverty .......................................................................................... 20 Theoretical Framework ..................................................................................................................... 21 Research Methodology ..................................................................................................................... 22 Conclusion ........................................................................................................................................ 23 CHAPTER 1 BACKGROUND OF POVERTY IN ZIMBABWE. ................................................ 24 1.0 Introduction ................................................................................................................................. 24 1.1 Historical Background of Poverty in Zimbabwe ........................................................................ 24 1.2 1990-2000 ................................................................................................................................... 25 1.2.0 Adoption of Economic Structural Adjustment Programme (ESAP) 1991-1995. ................ 25 1.2.1 Unbudgeted compensation for the War Veterans (1997) ..................................................... 27 1.2.3 Zimbabwe military involvement in the DRC (1997-2002)’................................................. 27 vi 1.2.4 Fast Track Land Reform Program (FTLRP) ........................................................................ 28 1.3 2000 – 2008................................................................................................................................. 29 1.3.0 Operation Restore Order / Murambatsvina /Tsunami 2005 .................................................. 29 1.3.1 Sanctions .............................................................................................................................. 31 1.4 Poverty Drivers in Rural Zimbabwe ........................................................................................... 33 1.4.0 HIV and AIDS ..................................................................................................................... 33 1.4.1 Climate Change .................................................................................................................... 34 1.5 Conclusion .................................................................................................................................. 36 Chapter 2 Microfinance in Zimbabwe .............................................................................................. 37 2.0 Introduction ................................................................................................................................. 37 2.1 Origins of Microfinance .............................................................................................................. 37 2.3 Microfinance in Zimbabwe ......................................................................................................... 38 2.4 Typologies of Microfinance ........................................................................................................ 40 2.4.0 Microfinance Institutions (MFIs). ........................................................................................ 40 2.4.1 Savings and Credit Cooperatives Societies (SACCOs) ......................................................