The primary purpose of Lendwithcare is to help poor people to improve their lives through supporting them to access loans for their businesses. Do we actually have any evidence that this is happening? Certainly, we have a great deal of anecdotal evidence – in addition to the periodic updates that we receive from some of the microentrepreneurs that we have funded, each year my colleagues and I also visit and speak with hundreds of individuals and groups who Lendwithcare supports in 11 countries in Africa, Asia and Latin America. Although we do come across some persons for whom nothing much seems to have changed, more often than not they explain to us how access to loans over an extended period of time has enabled them to develop their businesses, stabilise or increase their incomes, increased their self-confidence, self-esteem and economic independence, make improvements to their homes, and sometimes as a result even spend more money in areas such as their children’s education and the health of their families.
However, this approach is not particularly scientific – there are often other important reasons aside from improved access to loans why their lives have improved, it might be that we are simply meeting the more ‘successful’ microentrepreneurs, people are simply being polite, or they are telling us what they think we want to hear.
|Ghulam Raza interviewing an entrepreneur at Akhuvat|
Therefore, in order to make our approach to assessing change more rigorous and impartial, more than a year ago Lendwithcare enlisted the support of the Business School from the University of Portsmouth to design and implement a long-term research project that aims to monitor the changes taking place in borrowers’ lives over a prolonged period of time. Although we intend to eventually conduct the research in several countries, we decided to begin our analysis in Pakistan mainly because our local partner there was also very keen to find out whether what they were doing was having a positive impact on poor people’s lives and also how they might improve their services.
Therefore, after selecting and training a team of five local independent researchers in the city of Lahore we interviewed a random sample of 500 microentrepreneurs. We spoke with them in that short period of time between applying for their first ever loans from Lendwithcare’s partner Akhuwat and actually receiving the money. The interviews were conducted during April and May 2015 and we collected data on a range of financial and social indicators relating to the borrowers businesses, their households and living conditions. In order to have a comparison group, we also collected data on 100 microentrepreneurs who lived and worked in the same neighbourhoods as the borrowers, but who had not applied nor were they in receipt of a loan from Akhuwat or indeed from any other microfinance institution.
|Racheel Zahid and an Akhuvat borrower|
We are currently processing the information we gathered from the 600 interviews and hope to re-interview the same persons again in late 2016 and once again in 2018, that is approximately 18 months and 36 months respectively after the first interviews to assess what changes, if any, have happened in their lives. It is likely that the same persons will receive subsequent loans in the future.
Although it is very time-consuming, this research is important because it addresses in a systematic manner the fundamental question of whether what we are doing is actually successful or not in alleviating poverty. We aim to disseminate the findings of our research on a regular basis over the next few years. On a broader note, all types of humanitarian assistance should be based on empirical evidence so that we can make better judgements on what works and what does not so that money is directed towards interventions which can demonstrate the greatest impact on improving poor people’s lives – ultimately better evidence means less poverty.
Dr Ajaz Ahmed Khan