Linking Poor Rural Households to Microfinance and Markets in Ethiopia
The USAID funded PSNP Plus project ‘Linking Poor Rural Households to Microfinance and Markets in Ethiopia’ ended in December 2011. The PSNP Plus was designed as a three-year project in support of the Government of Ethiopia’s Productive Safety Net Program (PSNP), which provides food and or cash to chronically food insecure households in exchange for labor on rural infrastructure projects, or direct transfers to households unable to participate in physical labor activities. The overall goal of the PSNP Plus was to build household resilience and household assets through market linkages and access to microfinance this goal being directly linked to the objective of facilitating the graduation of households from the PSNP and out of chronic food insecurity.
Since it was launched in 2008, the project has been linking PSNP households to both formal and informal microfinance. These interventions have included the establishment of Village Savings and Loan Associations, and the provision of credit for agricultural inputs. Complementary to these activities, the program has been linking participating households to market opportunities by supporting the development of livestock, cereal, haricot bean and honey value chains. Ultimately, the combination of the projects microfinance and value chain interventions are expected to contribute towards livelihoods diversification, household resilience, and an increase in household income and assets. These outcomes and impacts are reflected in the PSNP Plus causal model, which in summary proposes that increased access to markets and the enhanced use of microfinance leads to asset accumulation and improvements in PSNP graduation.
In order to test this causal logic, a longitudinal impact study (LIS) was included under one of the projects strategic objectives. The LIS included four in depth case studies, with assessments being carried out in Doba and Sire and Dodota woredas in Oromia, Raya Azebo woreda in Tigray, and Sekota woreda in Amhara region. The study included a baseline midterm and final impact assessment in each study area. The assessments used a variety of research methods and designs to assess the impact of the projects microfinance and value chain interventions.