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Collaborating to provide microfinance to caregivers of orphans and vulnerable children in Ethiopia

ProQuest Dissertations and Theses,
2009

Dissertation


Author:
Grace Bae Bahng

Abstract:
This dissertation studies the collaborative efforts between World Vision Ethiopia (WVE) and Wisdom Micro financing Institution, S.C. (WISDOM) to provide caregivers of orphans and vulnerable children (OVCs) in Ethiopia with microfinance. Because of the millions of new OVCs being created every year, many have thought microfinance could be an effective tool to mitigate the negative effects of loss for OVCs. Nevertheless, because OVC households can often be targets of stigmatization and can have lower levels of social capital, the heavy dependence of microfinance on mechanisms that use social capital can consequently work to exclude many OVC households. Despite the assumptions of the staff working for WVE and WISDOM concerning the capacity of OVC caregivers to participate in microfinance, it was the collaborative efforts between WVE community workers with WISDOM staff that resulted in the inclusion of more OVC caregivers in WISDOM loans. Furthermore, it was the observations of the positive impact that WISDOM was having on the community that showed to be the biggest factor in motivating WVE community workers to collaborate with WISDOM in their lending processes. The result was in a comparison among newer and older borrowers of WISDOM, in addition to eating more and attending school more often, OVCs in households who had been participating in WISDOM for over a year fared better in psychosocial measures as well. Thus, the potential of microfinance to mitigate the negative effects of loss for OVCs is substantial. The irony of this particular case was that both the ability of WVE community workers to include more OVC caregivers in WISDOM and the success of OVC caregivers in microfinance occurred without either organization being aware of it. As a result, collaborative efforts between the two organizations weakened in recent years while false assumptions concerning the separate needs of different populations among the poor were never challenged. However, despite the two organizations' different missions, their work was not separate. WVE services may have actually been working to prepare many households to participate in higher forms of economic development, such as microfinance, demonstrating the importance of collaboration and integrated models for development work.

TABLE OF CONTENTS

DEDICATION

ACKNOWLEDGEMENTS

iii

LIST OF TABLES

viii

LIST OF FIGURES

ABBREVIATIONS

ABSTRACT

xii

CHAPTER ONE: OVERVIEW OF THE DISSERTATION

1.1

Research Objectives

1.1.1

Including the Most Vulnerable in the Community in Microfinance

1.1.2

Joining Microfi nance Institutions (MFIs) with Community

Development Organizations

1.1.3

Strengthening OVC Household Capacity

1.2

World Vision International (WVI)

1.2.1

Orga nizational Background

1.2.2

World Vision Ethiopia (WVE)

1.2.3

Wisdom Micro Financing Institution S.C. (WISDOM)

1.2.4

Individualized Approach to Development

1.3

Research Questions

1.3.1

Microfinance for Groups Vulnerable to Social Exclusion

1.3.2

Motivating Collaboration with the MFI

1.3.3

Mitigating the Negative Effects of Loss For OVC Households

with Microfinance

1.4

Research Design

1.4.1

The PRISMA Project: Integrating Support and Care with

Microfinance

1.3.3

WVE’s Guraghe Area Development Program (ADP)

1.3.4

WVE’s Wonchi Area Development Program (ADP)

1.5

Sources of Data

1.5.1

Stru ctured Interviews

1.5.2

OVC Household Surveys

1.5.3

Performance Data

1.6

Challenges with Cross - Cultural Research

CHAPTER TW O: INCREASING FLEXIBILITY TO MITIGATE SOCIAL EXCLUSION IN BORROWING

2.1

An Overview of Social Capital Theory in Development Practice

2.1.1

A Resurging Interest in Social Capital Theory

2.1.2

Effects of Social Capital in Economic Development

2.2

Social Capital in Microfinance Group Lending Practices

2.2.1

Conceptual Overview of Group Lending

2.2.2

Peer Selection and Screening

2.2.3

Peer Monitoring and Enforcement

2.2.4

Microfinance and Groups Vulnerable to Social Exclusion

2.3

Including and Screening Groups Vulnerable to Stigma for Microfinance: WISDOM Micro Financing Institution

2.3.1

The Guraghe and Wonchi ADPs

2.3.2

WISDOM’s Lending Model: Screeni ng Over Monitoring

2.3.3

Assumptions Concerning OVC Caregivers and Microfinance

2.3.4

Overcoming Assumptions: OVC Caregivers as WISDOM Clients

2.4

Flexibilit y through Multiple Actors

2.4.1

The Role of WVE Community Workers

2.5

Monitoring through Collaborative Relationships

4.6

Summary and Conclusion

CHAPTER THREE: INCENTIVIZING COLLABORATORS FOR MICROFINANCE INSTITUTIONS (MFIs)

3.1

The “Microfinance Schism”

3.2

Wisdom Micro Financing Institution (WISDOM) and World V ision

Ethiopia (WVE)

3.2.1

Motivations to Collaborate Among WVE Community Workers

3.3

Factors in Motivating Collaboration Among WVE Community Workers

3.3.1

WISDOM’s Impact in the Community

3.3.2

The Role of the Collaborating Manager

3.3.3

The MFI as an Organization in Tension

101

3.4

Conclusion

106

CHAPTER FOUR: MITIGATING THE NEGATIVE EFFECTS OF LOSS FOR OVCs WITH MICROFINANCE

109

4.1

Identifying Areas of Vulnerability for the OVC

110

4.1.1

Negative Effects of Orphanhood on Children

114

4.2

The Hope of Microfinance: Mitigating the Negative Effects of Loss

for Orphans and Vulnerable Children

116

3.2.1

Measuring the Impact of Microfinance for OVC Households

119

3.2.2

Managing Endogeneity

123

4.3

Discussion and Conclusion

132

vii

4.3.1

Limitations and Other Approaches

133

4.3.2

Contributions of this Stud y

134

CHAPTER FIVE: CONCLUSION

136

5.1

Research Questions

140

5.1.1

Microfinance for Groups Vulnerable to Social Exclusion

140

5.1.2

In centives for Collaboration with the MFI

143

5.1.3

Mitigating the Negative Effects of Loss for OVC Households with Microfinance

145

5.2

Significance of These Findings

147

5.3

Recommendations for Development Work

149

5.3.1

Integrating Microfinance with Community Development

150

5.3.2

Understanding the Community as More Than a Label

154

5.3.3

Providing Incentives to Collaborate

156

5.4

Concluding Remarks

157

BIBLIOGRAPHY

159

APPENDICES

172

Appendix A: Interview Pro tocol for Staff Workers from WISDOM and WVE

172

Appendix B: Interview Protocol for OVC Caregiver

173

Appendix C: Household Surveys – OVC Caregiver

174

Appendix D: Hou sehold Surveys – OVC Child

176

Appendix E: Household Surveys – OVC Adolescent

177

Appendix F: Household Asset Survey

179

Appendix G: Calculation of Livestock Assets

180

Appendix H: Descriptive Statistics – Guraghe ADP

182

Appendix I: Descriptive Statistics – Wonchi ADP

184

Appendix J: Additional Regression Results

186

Appendix K: OVC Psychosocial Indicator Groupings

188

Appendix L: Village Level Regression Results

189

viii

LIST OF TABLES

Table 1: Disproportionate Impact of HIV /AIDS in sub - Saharan Africa (2006) .......... 5

Table 2: Financial Services Provided by WISDOM ................................ ................. 16

Table 3: Kebeles Included in the Sample ................................ ................................ . 31

Table 4: Summary of Major Social Capital Theories ................................ ............... 49

Table 5: Worker Responses on Microfinance for OVC Caregivers .......................... 63

Table 6: Percent of WISDOM Clients Caring for OVC in Guraghe ......................... 67

Table 7: OVC Ca regivers Participating in WISDOM by Village ............................. 71

Table 8: Comparison of Community Workers Relationship with WISDOM ............ 77

Table 9: Impact of Community Worker on Client Performance ............................... 80

Table 10: WVE Community Worker (CW) Motivation to Collaborate .................... 97

Table 11: Hansmann's Four - Way Categorization of Nonprofit Firms ..................... 102

Table 12: A Comparative Summary of Organization al Types ................................ 103

Table 13: Organizational Summary ................................ ................................ ....... 104

Table 14: Impact of Microfinance on OVC Household Consumption .................... 121

Table 15: Impact of Microfinance on OVC Househo ld Consumption .................... 126

Table 16: Impact of Microfinance on OVC Psychosocial Well - being .................... 130

LIST OF FIGURES

Figure 1: Strains on the OVC Household and Community Safety Nets

Figure 2: Individualized Approach to Development

Figure 3: PRISMA Implementation Model

Figure 4: Edja District Map

Figure 5 : Wonchi District Map

Figure 6: Factors in OVC Well - Being

112

Figure 7 : Individualized Approach to Development

150

Figure 8: Integrated Approach to Development

152

Figure 9: Relationship Between Assistance and Development

153

ABBREVIATIONS

ADP

Area Development Program

AIDS

Acquired Immune Deficiency Syndrome

CBO

Community - Based Organization

CCC

Community Care Co alitions

CIP

Children in Program

CLP

Collaborative Learning Project

Community Workers

FBO

Faith - Based Organization

IGA

Income Generating Activities

HIV

Human Immunodeficiency Virus

Kebele (Village)

MSC

Microcredit Summit Campa ign

MDG

Millennium Development Goals

MED

Microenterprise Development

MFI

Microfinance Institution

MSC

Microcredit Summit Campaign

NFPO

Not - for - profit Organization

NPO

Non - profit Organization

NGO

Non - governmental Organization

OVC

Or phans and Vulnerable Children

PLWH

People Living with HIV

PLWHA

People Living with HIV/AIDS

PRISMA

Promoting Rural Integration and Security through Microfinance in

Africa

WHO

World Health Organization

WISDOM

Wisdom Micro Financing Instituti on S. C.

World Vision

WVE

World Vision Ethiopia

WVI

World Vision International

UNAIDS

Joint United Nations Programme on HIV/AIDS

UNICEF

The United Nations Children’s Fund

xii

ABSTRACT

This dissertation studies the collaborative efforts betwee n World Vision Ethiopia (WVE) and Wisdom Micro financing Institution, S.C. (WISDOM) to provide caregivers of orphans and vulnerable children (OVCs) in Ethiopia with microfinance. Because of the millions of new OVCs being created every year, many have thou ght microfinance could be an effective tool to mitigate the negative effects of loss for OVCs. Nevertheless, because OVC households can often be targets of stigmatization and can have lower levels of social capital, the heavy dependence of microfinance on

mechanisms that use social capital can consequently work to exclude many OVC households.

Despite the assumptions of the staff working for WVE and WISDOM concerning the capacity of OVC caregivers to participate in microfinance, it was the collaborative efforts between WVE community workers with WISDOM staff that resulted in the inclusion of more OVC caregivers in WISDOM loans. Furthermore, it was the observations of the positive impact that WISDOM was having on the community that showed to be the bigges t factor in motivating WVE community workers to collaborate with WISDOM in their lending processes. The result was in a comparison among newer and older borrowers of WISDOM, in addition to eating more and attending school more often, OVCs in households wh o had been participating in WISDOM for over a year fared better in psychosocial measures as

xiii

well. Thus, the potential of microfinance to mitigate the negative effects of loss for OVCs is substantial.

The irony of this particular case was that both the ability of WVE community workers to include more OVC caregivers in WISDOM and the success of OVC caregivers in microfinance occurred without either organization being aware of it. As a result, collaborative efforts between the two organizations weakened i n recent years while false assumptions concerning the separate needs of different populations among the poor were never challenged.

However, despite the two organizations’ different missions, their work was not separate. WVE services may have actually be en working to prepare many households to participate in higher forms of economic development, such as microfinance, demonstrating the importance of collaboration and integrated models for development work.

CHAPTER ONE: OVERVIEW OF THE DISSERTATION

Microfinance refers to the delivery of financial services, typically micro or small loans, to people living in poverty - stricken areas for the purposes of increasing financial accessibility. It has become an increasingly popular intervention in reducing p overty, especially for rural women in the Two - Thirds World. Over the past thirty years, the microfinance industry has grown to over 10,000 microfinance institutions (MFIs). In 1999, there were approximately 8 to 10 million households participating in mic rofinance programs worldwide (Morduch, 1999, p. 1569). By 2004, there were approximately 90 million participating, according to the Microcredit Summit Campaign (MSC) (Daley - Harris, 2005; Carr & Tong, 2002, p. 7). Today, microfinance continues to increase in recognition with awards, such as the Nobel Peace Prize to Muhammad Yunus in 2006 1 , and with initiatives, such as the UN Millennium Development Goals (MDGs).

Still, despite the high hopes people have for microfinance, challenges continue to exist. A mong them lies the question of how to more effectively reach the most vulnerable groups of the community. Because of its use of social capital mechanisms, microfinance can unnecessarily shut out groups who are most vulnerable to social stigma or exclusion . Nevertheless, the argument can be made

1 Yunus is the founder of the Grameen Bank in Bangladesh.

that it is the most vulnerable who not only need microfinance the most but who also can benefit from microfinance the most.

Because pressure continues to mount for MFIs to cut costs and maintain financial self - su fficiency, collaboration can be a viable option for many MFIs. Not only can collaboration with other community organizations increase the scope of services offered by MFIs, it can also increase its ability to reach more, including those who are vulnerable to social exclusion. Collaboration with other community organizations can also improve information and monitoring efforts. However, although there are many potential benefits, collaborating can also add additional complexities and challenges to an organ ization’s operations.

This dissertation examines how MFIs can improve their outreach efforts to include more community members who are vulnerable to social exclusion. It explores how collaborating with another community organization can help improve bot h outreach and monitoring efforts while also posing new challenges in motivating workers at the individual - level. Finally, it also considers how community members who are vulnerable to social exclusion actually fare when participating in microfinance.

Using data collected from several sources over a six - week period of field research, this dissertation studies an initiative implemented by World Vision International

(WVI) targetting microfinance services provided by Wisdom Micro Financing Institution (WIS DOM) for households caring for orphans and vulnerable children (OVCs) in Ethiopia. The spread of AIDS, particularly in sub - Saharan Africa, has resulted in millions of children who have been left orphaned or vulnerable. Once a family member becomes chroni cally ill, the children in the household are also impacted in several ways, both economically and psychosocially, that threaten their overall well - being. In addition, OVCs and their familiy members are often targets of social stigmaization from other comm unity members.

The sheer number of OVCs in a region has spread family networks thin and weakened household capacities and community safety nets. The success and popularity of microfinance to alleviate poverty and empower individuals has led to hopes th at it can be used as a tool to mitigate the negative effects of the HIV/AIDS epidemic and other chronic diseases. In particular, many hope that microfinance can be used to strengthen household capacities and thereby improve OVC well - being. Nevertheless, because OVCs are also vulnerable to social stigmatization, reaching OVC caregivers for microfinance programs can be difficult. This study explores some of the successes and challenges that WISDOM faced in providing microfinance to OVC caregivers and consi ders the validity of the hopes in microfinance to mitigate the negative effects of death and illness for OVCs in Ethiopia.

1.1

Research Objectives

Although different forms of microlending have existed for quite some time, one of the earliest best - known ac counts is how Muhammad Yunus founded the Grameen Bank in Bangladesh in the 1970s. It was on a visitation to a small village in Bangladesh that Professor Muhammad Yunus would meet a woman who made her wages making bamboo stools. She told Yunus of how high interest rates on the money she borrowed to make her stools would leave her with only a penny profit margin at the end of each day. The woman’s story would be the catalyst behind a pilot research project Yunus would conduct in 1976 to give “micro - loans” or small loans to 42 basket - weavers based on a policy of “joint liability” in the hopes of greater financial empowerment ( Yunus, 2003 ). In 1983, Yunus founded the Grameen Bank on the same concepts of his research project. The success of the Grameen Bank in Bangladesh has been noted worldwide with approximately 1,000 branches and 14,000 staff servicing approximately 2 million borrowers with a portfolio of $260 million by 1997 (Schreiner, 2003).

MFIs are driven by the notion of granting small loans to po or people who lack traditional forms of collateral or access to formal financial institutions. They are aimed at helping people to improve their lives through financial empowerment resulting in the alleviation of poverty. Microfinance seeks to do this us ually by either: 1) reducing the vulnerabilities resulting from poverty with services, such as

savings or insurance or 2) increasing opportunities for enterprise development through services such as credit or training (Fikkert, 2003, p. 5). Often services are dispersed through group lending models. However, individual lending models are not uncommon either.

Table 1 : Disproportionate Impact of HIV/AIDS in sub - Saharan Africa (2006)

PLWHA (prevalence)

24.7 million [21.8 - 27.7 milli on]

Newly infected in 2006 (incidence)

2.8 million [2.4 - 3.2 million]

AIDS deaths

2.1 million

Children orphaned due to AIDS

11 million

Source: UNAIDS, 2006, p. 10.

Recent interest in microfinance and its successes has led many to ask the que stion of whether it can play a structural role in mitigating the negative effects of HIV/AIDS on a household (Wright, 2000; Pronyk et al., 2005, p. 28). By 2006, while making up just over 10% of the world’s total population, sub - Saharan Africa accounted f or 63% (24.7 million) of the world’s total HIV/AIDS population. Similarly, 72% of all AIDS deaths worldwide occurred in this region at 2.1 million (UNAIDS, 2006, p. 10 ). See Table 1 for summary of HIV/AIDS statistics in sub - Saharan Africa. Prevalence ra tes do appear to be stabilizing within the region with some countries even experiencing

decreasing rates of HIV/AIDS. Nevertheless, large numbers of deaths have resulted in millions of orphaned children throughout the region.

OVCs are formally defined as: 1) children who have either lost one or both parents for some reason, 2) children who are living with a PLWHA, 3) children who have parents that are chronically ill, or 4) children who are identified as vulnerable by some community standard. Accurate numbers of OVCs are difficult to come by due to inadequacies in survey language in including children who are living with relatives, variations in prevalence levels, stigma attached to orphan status, girls who themselves become parents, and migration activ ity. In addition, children whose parents are positively infected or children who are living with foster families often go unaccounted for in such numbers (Foster & Williamson, 2000, p. S276).

However , despite such difficulties, estimates have been made . In 2001, the USAID in conjunction with UNICEF and UNAIDS conducted a study estimating numbers of OVCs. The study estimated that 80% (11 million) of the 14 million children worldwide who have lost one or both parents to AIDS lived in sub - Saharan Africa ( USAID et al., 2002, 2004 ; Shetty & Powell, 2003: 25; Levine, Foster, & Williamson, 2005, p. 5). Estimates also expected that the number of children orphaned due to AIDS in this region would reach 20 million by 2010 and remain exceptionally high

until 203 0 (USAID, UNICEF, & UNAIDS, 2002, 2004; Foster & Williamson, 2000: p. S275).

Many fear that the impact of chronic diseases, such as HIV/AIDS, and the high numbers of OVCs in sub - Saharan Africa threaten to reverse much of the development gains over the pas t decades (USAID, 2001, p. 2). Thus, in the face of these great challenges, the hope of what microfinance can achieve has captured the minds and imaginations of many development workers working to mitigate the negative effects death for households in the Two - Thirds World. Microfinance has been shown to produce economic benefits that can lead to a greater sense of autonomy and resilience for clients (Cheston & Kuhn, 2002; Pronyk et al., 2005, p. 29). It has a lso been linked to greater health benefits (Kha ndker, 1998; Pronyk et al., 2005, p. 29). Many have even suggested that its outcomes can address the structural factors, such as poverty and gender inequalities, that often contribute to the spread and impact of HIV/ AIDS (Parker, Easton, & Klein, 2000; Pr onyk et al., 2005, p. 28). Yet, if microfinance is truly to be used to bring widespread change for vulnerable groups, such as OVCs, several challenges remain.

1.1.1

Including the Most Vulnerable in the Community in Microfinance

Many scholars have criticized m icrofinance for unnecessarily excluding community members from borrowing. Common barriers can be excessive pressure from loan

officers or discrimination from other community members. The use of social capital mechanisms, such as group lending, in microfi nance can have unintended effects of preventing groups vulnerable to social stigma and exclusion. Because stigmatization can be one of the negative effects for OVCs when they lose a parent or family member, targetting OVC caregivers for microfinance can b e difficult. Nevertheless, scholars have suggested that increasing flexibility in the processes and products of MFIs, can work to include more of the vulnerable population in microloans.

1.1.2

Joining Microfinance Institutions (MFIs) with Community Developme nt Organizations

Increasing pressures to be financially self - sufficient have pushed many MFIs to scale back the products and services they can offer community members. Social services, such as health and education programs, have become less common for MF Is because of the extra costs to the organization. Yet the organized structure of group lending can also be beneficial in providing other social services to community members.

Therefore, collaborating with other social service and development organizati ons has become one way for both organizations to benefit from the other to help community members. Furthermore, collaborating with community organizations may provide MFIs with the flexibility they need in their processes to include more community members in their services, especially those that are hard for MFIs to reach themselves. Thus, collaboration can provide positive outcomes for both the

community members and the organizations themselves. However, working together can often add a layer of complex ity that can become burdensome as well.

1.1.3

Strengthening OVC Household Capacity

Studies in several countries have shown that income levels were approximately 20 to 30% lower in orphan households compared to non - orphan. A lack of pre - planning and a lack of widows rights can also lead to land - grabbing and increase a household’s poverty after a family member’s death (Foster & Williamson, 2000, p. S282).

In the midst of all of this, the importance of the extended family network as a safety net for OVC has b ecome apparent. Aunts, uncles, and grandparents often act as caregivers for an orphan after a parent has passed away. As a result, interventions focused on working through households rather than resorting to institutionalization are often recommended (Fo ster & Williamson, 2000). A USAID report notes that the "institutionalization of children often separates them from families and communities and often delays healthy childhood development" (USAID, 2001, p. 9). Thus, the importance of "strengthening the s afety nets of families to protect and care for OVC[s]" has been emphasized by policy advisors from the UNAIDS, UNICEF, and USAID (2004, p. 5).

Nevertheless, the sheer number of OVCs has saturated many family safety nets and more and more children have be gun to fall through the cracks. Figure 1 shows the

various strains on an OVC households that can result in children being exposed to more risks in the community. Indicators of the saturation of family safety nets can include: high numbers of elderly careg ivers, child - headed households, frequent sibling dispersal, and migration (Foster & Williamson, 2000, p. 7 - 42). Therefore, finding mechanisms and interventions that will strengthen household capacities is vital for the well - being of millions of OVCs.

Figure 1 : Strains on the OVC Household and Community Safety Nets

1.2

World Vision International (WVI)

This dissertation focuses on an initiative implemented by WVI to provide microfinance services to OVC caregivers in Ethiopia. T he following section provides a general overview of the global operations of WVI as well as its national operations

in Ethiopia managed by World Vision Ethiopia (WVE) and its microfinance subsidiary, WISDOM.

1.2.1

Organizational Background

World Vision is a Christian relief and development organization that was started in 1950 by Reverend Bob Pierce. Its first child sponsorship program began in 1953 in response to the hundreds of thousands of orphans created by the Korean War. Since that time, WVI has exte nded its operations to include regions throughout Asia, Latin America, Africa, the Middle East, and Eastern Europe.

WVI’s primary source of funding is its child sponsorship program where donors are linked to specific children living in poverty throughou t the world and sponsor them through a monthly donation. Children who are sponsored are called Children in Program (CIPs) and receive health, education, and food assistance through the sponsorship program. During the 1970s, WVI incorporated a community d evelopment model into their program activities in the form of Area Deveopment Programs (ADPs). World Vision ADPs refer to both the community development programs and the boundaries within which they operate. World Vision ADP staff work with community mem bers to oversee and implement these development activities in the community. Typically, in addition to managing the child sponsorship program, ADPs address community needs caused by poverty and work to improve “access to clean water, primary health care, nutritious food, basic education, and

economic development” over a period of time in areas often covering entire districts ( Tegarden, 2006 ).

World Vision ADP staff work with community members to oversee and implement these development activities in the co mmunity. The ADP staff is organized according to a generic structure with the ADP context given consideration. The generic structure is as follows: 1) ADP Manager, 2) Program Office, 3) Program Facilitators, and 4) Program Support Staff.

In addition, ADP managers also work with World Vision community workers (CWs) who work to identify the neediest children in a community and monitor their progress through the child sponsorship program. Typically, a World Vision community worker monitors the CIPs in th e sub - village or village in which he or she lives. Often a World Vision community worker generally oversees an area of approximately 500 households and may be assigned a sub - village or an entire village or two depending on the population density of the ar ea.

WVI also has several other established divisions allocated to different activities, including emergency relief, HIV/AIDS care and prevention, and microfinance provision. WVI‘s emergency relief division was created in the 1970s to respond to various humanitarian crises throughout the globe. Its operations, however, are

outside the scope of this dissertation. In the 1990s, WVI began responding to the HIV/AIDS crisis through various programs designed to aid orphans and their caregivers. In 2000, WVI formally established the Hope Initiative designed to work towards prevention, care, and advocacy for HIV/AIDS related issues. Finally, also during the 1990s, WVI began implementing microfinance programming in its ADPs and subsequently established a micro finance subsidiary, called VisionFund International, in 2003 to manage all of its microfinance operations globally.

1.2.2

World Vision Ethiopia (WVE)

World Vision Ethiopia (WVE) has operated as WVI’s national program office for Ethiopia since 1971. Its nati onal program office is located in Addis Ababa in addition to several program offices and ADPs throughout the country. WVE’s mission is stated as, “working with the world’s most vulnerable people…to overcome poverty and injustice” (World Vision Internation al, n.d).

The organizational structure of WVE is a three - tiered structure with the following tiers: 1) National Office, 2) Program Offices, and 3) ADPs. The Program Offices and ADPs implement more of the frontline, on the ground, sort of work while the N ational Office works to give strong technical backing to the other two. Currently, WVE works throughout the country in seven regional states and has over 46 ADPs.

WVE’s HIV/AIDS care and prevention program, established by WVI’s Hope Initiative, has fiv e areas of intervention: 1) prevention, 2) care and support for those affected by HIV/AIDS, including OVCs, 3) partnership with faith - based organizations (FBOs), 4) staff capacity building, and 5) advocacy for those affected and marginalized by HIV/AIDS. A lthough different strategies are employed, the program’s main approach involves mobilizing and training Community Care Coalitions (CCCs).

Full document contains 204 pages

Abstract: This dissertation studies the collaborative efforts between World Vision Ethiopia (WVE) and Wisdom Micro financing Institution, S.C. (WISDOM) to provide caregivers of orphans and vulnerable children (OVCs) in Ethiopia with microfinance. Because of the millions of new OVCs being created every year, many have thought microfinance could be an effective tool to mitigate the negative effects of loss for OVCs. Nevertheless, because OVC households can often be targets of stigmatization and can have lower levels of social capital, the heavy dependence of microfinance on mechanisms that use social capital can consequently work to exclude many OVC households. Despite the assumptions of the staff working for WVE and WISDOM concerning the capacity of OVC caregivers to participate in microfinance, it was the collaborative efforts between WVE community workers with WISDOM staff that resulted in the inclusion of more OVC caregivers in WISDOM loans. Furthermore, it was the observations of the positive impact that WISDOM was having on the community that showed to be the biggest factor in motivating WVE community workers to collaborate with WISDOM in their lending processes. The result was in a comparison among newer and older borrowers of WISDOM, in addition to eating more and attending school more often, OVCs in households who had been participating in WISDOM for over a year fared better in psychosocial measures as well. Thus, the potential of microfinance to mitigate the negative effects of loss for OVCs is substantial. The irony of this particular case was that both the ability of WVE community workers to include more OVC caregivers in WISDOM and the success of OVC caregivers in microfinance occurred without either organization being aware of it. As a result, collaborative efforts between the two organizations weakened in recent years while false assumptions concerning the separate needs of different populations among the poor were never challenged. However, despite the two organizations' different missions, their work was not separate. WVE services may have actually been working to prepare many households to participate in higher forms of economic development, such as microfinance, demonstrating the importance of collaboration and integrated models for development work.