Microfinance in marginal dry areas: Impact of village credits and savings associations on poverty in the Jabal al Hoss region in Syria


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Date

2005-12-31

Date Issued

2005-12-31

Citation

Markus Buerli, Aden A. Aw-Hassan. (31/12/2005). Microfinance in marginal dry areas: Impact of village credits and savings associations on poverty in the Jabal al Hoss region in Syria. Beirut, Lebanon.
Worldwide, microfinance has been recognized as a powerful tool for alleviating poverty and raising living standards (Brandsma and Chaouali, 1998). In Syria microfinance is a new industry and started in 1997. The Rural Community Development Project (RCDP), of the UNDP and the Syrian Ministry of Agriculture and Agrarian Reform establishes Village Credit and Savings Associations (sanadiq, plural of sanduq) in the dry marginal region Jabal al Hoss southeast of the city of Aleppo. The sanadiq are considered promising institutions in providing microcredits to poor farmers, small holders and landless workers. The institutional framework enables the sanadiq to operate where other formal lending institutions do not lend. Formal lending institutions have limited activity in poor rural areas due to time consuming procedures, inappropriate land tenure systems, and due to the inherent risk from irregular land productivity resulting from low and variable rainfall. This study is based on a formal survey conducted in the area of the RCDP. The area includes 156 villages and about 27,000 households. Households that participate in a sanduq for at least 24 months are compared to: households from the same villages that were not members of the sanduq until January 2004 and to; randomly chosen households from the project area. Beside the demographic data collected, the formal survey was used to gather data on income, income generating activities, assets, education, food security, and livelihood strategies. The household characteristics were used to calculate composite poverty-indices. These poverty indices are used to determine the poverty outreach of the project. The impact of the project in terms of income, assets and other household characteristics such as education and food security on the different poverty categories of households are also analyzed. With this information the study investigates the conditions where and with which type of farmers the sanadiq operate most successfully and whether the sanduq system maybe be an option for further dissemination in Syria and probably other dry areas

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