Income-Generating Activities - Action Against Hunger

Field handbook • Scientific and Technical Department
The rehabilitation of productive capacities is done through donations to restart
usual activities already familiar for the beneficiaries. The families suffered significant
losses through being displaced or finding themselves confined, their economic
situation is precarious and does not allow for the consideration of the creation of
payment obligations during this process of reinitiating IGA.
ii. Revolving funds
Revolving funds, presented in Chapter 3 of this book, are a valid alternative for facilitating
access to cash for the vulnerable population, while avoiding dependence and
promoting the involvement in and the ownership of the programme by the beneficiaries.
The definition of the type of system most suited to the zone will depend on the
socio-cultural characteristics and the lending customs of the population.
In IGA support programmes, revolving systems to finance activities can be created
in which individuals or groups of beneficiaries repay the total or a part of the financial
support given by the programme to a revolving fund that permits the continuity
of financing and support to the activities, or the creation of new IGA.
Example 20: Revolving funds in Azerbaijan
The districts of Beylagan and Agjabedi, in the Republic of Azerbaijan, were especially
affected by the conflict with Armenia over the control of Nagorno Karabaj.
Due to their proximity, a large number of displaced people moved to the zone, which
was already affected by the closure of the border.
ACF, after supporting the recapitalization of groups of vulnerable farmers, created
a revolving fund to finance the improvement of the IGA being carried out. A
committee formed by members of the team and by some of the members of the
beneficiary groups makes the decisions about the distribution of funds and the repayment.
For now ACF is carrying out the management of the money.
In order to clearly organize the system, several elements must be defined: the objectives
of the fund, the criteria for selecting the activities to be financed, and the
loan and repayment conditions. It is also necessary to create a management and monitoring
system to guarantee good use of the fund. Appendix 15 gives an example of a
revolving fund system and Appendix 16 shows a repayment agreement for beneficiaries
using the service.
To assure the sustainability of these systems it is necessary to have a group that
can take charge of the management of the fund once the intervention is over; it is easier
to support already existing groups than to create a new one with this goal. Training,
technical support and monitoring during a minimum period of two years is
essential to guarantee correct functioning.
INCOME GENERATING ACTIVITIES: A KEY CONCEPT IN SUSTAINABLE FOOD SECURTIY
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