Income-Generating Activities - Action Against Hunger

Field handbook • Scientific and Technical Department
Lack of guarantees, the high financial costs of managing credit and savings in
small quantities, together with the risk of non-payment, are some of the reasons
that vulnerable people are categorized as non-bankable by the commercial financial
sector.
In this context MFIs have grown up and been supported. They are mainly dedicated
to offering micro credit though some also offer savings systems and other services,
such as micro leasing. These types of credit services are not necessarily suitable for
the most vulnerable population, given that they have high interest rates, usually a
few points higher than those of the market, short grace periods, short repayment periods
and quotas to be paid weekly or every two weeks. This type of credit is usually
given in order to finance productive activities and not for consumption.
ACF believes that micro credit is not the most adequate financial response for the
most vulnerable people, or for the creation of new activities that need an initial period
before they start to generate incomes, or those that, due to their innovative nature,
can suppose a risk. For certain agricultural activities whose productive cycles are
long and whose dependence on climatic conditions also make them risky, micro credit
does not offer an adequate solution.
While ACF does not directly offer micro credit, we can work in coordination with
MFIs and strengthen their services, facilitating the access of the beneficiary population
to their services and putting them in contact. In addition to the reasons explained
above, ACF does not work directly in micro credit because we do not have the longterm
objective of remaining in the zone and our legal status does not correspond to
that of a banking entity.
IV. THE FOOD SECURITY TEAM FOR IMPLEMENTING IGA
Even though a team is needed from the beginning in order to define the objectives
of the programme and the activities that will be developed, once the funds are available
it will be necessary to define the structure of the team that will be in charge of
the intervention. This will depend on the type of intervention, the numbers of beneficiaries
expected and the geographic conditions of the zone. The recruiting process
must allow us to select the most suitable candidates and to be assured that they have
the capacity to carry out the tasks established in the job descriptions. (See Appendix
7 for some examples of job descriptions).
The role of social workers is fundamental to motivate the beneficiaries, promote
their participation and their ownership of the programme. It is necessary to reach a
balance between technical profiles, specializing in the sectors in which the IGA will be
working, and economic profiles. Experience and motivation, together with knowledge
of the context and the issues to be dealt with are essential characteristics of the team
members.
INCOME GENERATING ACTIVITIES: A KEY CONCEPT IN SUSTAINABLE FOOD SECURTIY
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