Overcoming Poverty through Credit

The `Rural Credit to Reduce Hardcore Poverty Action Research’ also known as Ahon Sa Hirap(ASHP)was started as a research project in the Phlippines.Theproject followed the Grameen Bank Approach (GBA)and ASHP was jointly sponsored by the Asia and Pacific Development Centre and the University of Philippines at Los Banos(UPLB).

The objectives of ASHP were diverse but all focussing on alleviating the economic and social position of the poor. The objectives included assisting the poor to reduce their dependance on money-lenders, increasing income levels through the provision of credit, mobilising savings among the poor and thereby reducing rural to urban migration which takes place due to hardships in the rural areas caused by poverty.

The project involved a detailed pre-project plan to select the target areas and target groups.The project site required to be within 50 kilometers of the UPLB and selection required to be done based on the density of very poor people.

The target group was defined as the poorest of the poor living in the target area.

Initially project staff were recruited and given two week’s training on the various aspects of the project such as an understanding of projection work, motivation work, means testing and group formation.They were also given a rigorous training as in the GBA which was adapted to suit theculture and practices of the Philippines.

In order to select sites, project staff surveyed the potential areas to determine and document the number and location of poor households.They also recorded other relevant socio-economic,political,religious,cultural and related information about the community.

Based on the surveys and secondary information obtained from the Provincial and Municipal Development Offices in the Province, an area report was drafted.

The identified target area was where the poorest communities lived. The level of poverty was assesed based on the ranking by revenue earned or annual income. Selection of the area was done after further identifying, which was based on 3 criteria that required the area to be rural or semi-urban having a fair to high density of poor households and with no other credit programmes for the poor in the area.

Once the target towns were selected, specific villages in the towns were chosen according to the degree of poverty and the final decision on site selection was made by the project Management Staff.

The beneficiaries who lived within the target areas automatically became eligible to join the credit scheme.They were then given a seven day compulsory training in credit related issues and were motivated to form groups as in the GBA.

Initially the target group included men and women who were chosen at random but as the project progressed the target group turned to be women only.