Funding for self-employment of people with disabilities. Grants, loans, revolving funds or linkage with microfinance programmes.
In 2005, Handicap International commissioned a study on the practices of funding for self-employment activities of people with disabilities (PWD), with a special focus on access to microfinance. The overall goal of the study was to produce a framework document highlighting good practices, strategies, tools and operational methods that guarantee the efficiency and sustainability of self-employment projects for PWDs. The first phase of the study consisted of a literature review and a worldwide survey. Through this first phase the research team identified the most innovative programmes for further analysis through field visits. In the second phase field visits were conducted in Afghanistan, Bangladesh, Ethiopia, India, Kenya, Nicaragua and Uganda, while regional workshops were organised in Dhaka and Nairobi. Phase three involved consolidation and analysis of the information and finally drafting of the framework document. This paper summarises the findings and good practices as presented in the framework document, based on the results of the literature review, the survey and the field research. It is not a scientific paper, i.e. it doesn't contain a discussion of the literature reviewed or systematic reference to sources, the same as the document on which it is based, as it is primarily meant for 'practitioners'. A main finding of the study was that there is no single 'best solution' to funding of self employment activities. While inclusion of PWDs in existing microfinance institutions (MFIs) is the preferred strategy, guaranteeing efficiency, sustainability and future access to funding for the target group, it was found that in reality many PWDs do not have access to microfinance programmes. This can be explained by stigmatisation of PWDs by staff of MFIs, who do not believe in their income earning and repayment capacity, and self-exclusion by PWDs. To fight against it projects have been set-up linking MFIs with programmes for PWDs, focusing on better information exchange between both parties respectively on disability for MFIs and the characteristics of microfinance for programmes for PWDs. Other programmes experiment with special credit lines or guarantee funds, placed at the disposal of MFls and earmarked for loan disbursement for PWDs, to facilitate their inclusion. Another reason for non-inclusion is the vulnerability of many PWDs. Many of them have no prior business experience, while many MFIs only provide loans to clients with an existing business. Vocational and/or business training and raising of their self-confidence, to be assured by a programme for PWDs, is often required prior to setting-up of a self-employment activity and taking a loan. If not prepared to run a 'business' successfully, taking a loan will present a too great a risk for themselves, getting indebted, and for the MFI. 'Start-up' grants for business-starters and revolving funds managed by PWD programmes, are other approaches practised by PWD programmes, of which the pros and cons are discussed in the study. A major weakness of many MFIs is that they do not reach the most vulnerable clients, including many of the PWDs, and their weak presence in rural areas especially in Africa. MFls have to look for innovative approaches to deepen their outreach. The self-help group approach in India, starting with the clients' own savings from which loans can be disbursed to the group members while linking the well-performing groups to banks for access to bank loans, is such a new approach. It is practised by The Leprosy Mission Trust in India. In Africa, some international NGOs started with similar 'community based saving and lending groups'.
klerkton@xs4all.nl
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D003906:Developing Countries; D006233:Persons with Disabilities; D004651:Employment / Q000145:classification / Q000191:economics; D005378:Financial Support; D005381:Financing, Organized / Q000379:methods; D006801:Humans; D007182:Income; D011287:Prejudice; D012657:Self-Help Groups / Q000191:economics