Microfinance for Poultry Farming
ADP is working with NEEDS (Network for Education & Economic Development Services) to provide an income generation opportunity for women who are living below the poverty line in the Charsadda District. Currently there are no microfinance/consumer loan options available to women in the area; this project will provide the opportunity to establish small businesses (poultry and livestock) for 100 women.
The project consists of loans to women headed households (up to Rs. 5,000). These loans will be made in-kind (chickens and roosters) to enable the women to run a home-based poultry business, breeding chickens for sale. After the first year, NEED will continue to disburse the principal loan sum that is recovered from the first set of recipients and also any profits from the project.
This project aims to raise monthly income by Rs. 2,000-3,000. The loan will be recovered from beneficiaries through small installments, and this funding will be revolved back into the project, thus providing the same opportunity to many other women. Each beneficiary will be liable to pay NEEDS 8% of their total annual profit (estimated to be approximately Rs. 1,000). Similar loan programs have shown that default rates among women are very low (2%-5%). The total funding for this project is PKR 710,000.
The project partner, NEEDS, will also provide training to loan recipients. Attendance at training sessions is mandatory and must be completed before loan disbursement. The training will include several components:
A: Raising poultry, sickness in chickens, hygiene etc. B: Business aspects of running the business, keeping records, ensuring profits C: Assistance with managing the loan, profits, and expansion. Additional training should be provided as needed.
Charsadda was severely impacted by the floods, and people are struggling to make their ends meet all the while rebuilding their homes and community. This opportunity will provide women to support their families by becoming financially independent. Women in this area have been deprived of access to credit until now.
Presently eggs, hen and meat are imported from Peshawar and sold at marked up prices to meet the demands of the local market. Thus this project will also make it more affordable for the community to purchase poultry.
ADP will track the following information to monitor the project:
- Loan Report Form
- Up to date information on loan disbursement and repayment
- Household Survey Form
- Information on income and expenses for every loan recipient that must be filled on each visit to the loan recipients. For the first 8 months, visits should be at least every two weeks to all households.
- Monthly Household Master Form
- Aggregate of income and expenses for all loan recipients for each month
NEEDS is a nonprofit organization based in the Charsadda District. It works to eradicate poverty by creating policies that transform societies, focusing on key issues such as education, health and women empowerment. Their main objectives are increasing literacy rates, improving community health, increasing income levels and providing legal support and awareness. NEEDS is committed to making this project sustainable within a year, and tracking ROI through close supervision.
1. What type of livestock options are being offered to the beneficiaries? What will be the ratio of roosters to hens provided to each beneficiary?
The project will support backyard poultry farming only. Ratio of Rooster : Hens = 1 : 10, In case a beneficiary is getting 15 hens then there will be 2 roosters.
2. Please provide more details on the enterprise model (what will be sold in markets, how NEEDs can ensure the sales, how are these markets accessible to beneficiaries, etc.).
The main products are egg and meat. These items are in great demand in the local village since people use eggs and eat chicken on a regular basis. As mentioned above, they have been forced to pay higher prices to products brought in from Peshawar, so there is a great market opportunity.
3. Please explain why it will take the project one year to become sustainable? What is the average amount of time it takes per beneficiary to generate turnover?
The sustainability of the project is based on the return on investment, and we have planned that at least 20% profit will come to the organization, to be reinvested in the pool of investment capital. If the total revolving fund (worth Rs. 500,000) is disbursed then the estimated annual profit will be Rs.100,000. The schedule (provided in the attached) monitoring plan calls for total disbursement in 8 months, and for recovery to begin after a 2-month grace period.
4. Does NEEDS have any prior experience in livestock projects? How will NEEDS ensure the sustainability of the livestock itself? Does the organization currently possess the skills/ knowledge to diagnose and treat livestock for diseases/ parasites? Please provide details (if applicable) regarding the involvement of a livestock professional in this project.
The NEEDs official working on this project has 6 years of relevant experience working with a national NGO (Khwendo Kor); additional officers with relevant experience, including a professional veterinarian, are profiled in the attached report.
NEEDS has identified main suppliers of layers in Peshawar, and an agreement will be signed to ensure continuous supply of the livestock. Once the loan cycle commences, the entrepreneurs (the women) will act as producers at local level. NEEDS can also purchase the chickens from these local producers for its clients.
5. How will NEEDS select “women headed households”? Please provide any community statistical data on hand that NEEDS will be using to select beneficiaries.
The secondary data will be collected from NADRA office, Tehsil Zakat committee and Benazir Income Support Program. Field staff can identify potential women headed houses during site visits; field staff will also closely coordinate with LHWs (Lady Health Workers) in the area for referring potential women headed houses. The selection of the clients will be based on the verification of the concerned councilor or from the member of local zakat committee. The project staff will also confirm client’s verification and guarantee. Please see selection criteria in the attached documents.
6. Please provide information on how and where the beneficiaries will rear the livestock. Where will the livestock be accommodated?
The population of the target area comprises of 18.9% Urban and 81.1% living in 5-10 Marlas houses with 7 members per family in average. Traditional sheds (10 ft length x 4 ft width x 3 ft height) made of mud and wood are used for keeping poultry at household level, and can be easily constructed using scrap wood. Each house in the target area has enough space to keep 10 to 20 hens. Some households construct the shed on the roof in case there is space on the ground inside the house. The kitchen wastages and remaining food are normally used as poultry feed.
7. How will NEEDS manage the recovered funds? Is the 60% retrieval rate an optimistic evaluation? Please provide details on how NEEDS will ensure a low default rate as this is critical to sustain this project. A separate account will be opened in local bank where all the transactions related to the project will be maintained. Complete financial records will be maintained for the project. The 60% figure only indicates that the recovery period of 60% loan will fall in the time cycle of one year. Based on NEED’s previous experience with Khwendo Kor on micro-credit for women, the default rate is estimated to be very low (2-5%)
To minimize the default rate the following measures will be taken for the proposed project;
- In-kind support rather than cash to ensure business establishment
- Ensuring saving by clients
- Support in market linkages
- Regular monitoring
- Ensuring social guarantees from the client – groups will be formed in which women have to provide social security for each other and one women is elected to collect instalments and manage group members.
Sadia Ijaz visited the site recently and found that the project is progressing well – several women are making good progress and the community feedback is very positive. For more details, please visit http://developpakistan.org/update-microfinance-charsadda-2/
Recently, the NEEDS team sent an update and reported that the project was a success as loan repayments were at 92%. More details can be found on the project update.
Mehreen Siddiqui, Operations Director of ADP, had the following conversation with Mr. Humayun of NEEDS earlier this week: 17-18 women have been provided with chickens in the past 4-5 days. These chickens are about 12 weeks old so – a good age for them in terms of egg production. Egg production drops down to 85% during the summer due to the heat, but that is normal. The budding entrepreneurs have been introduced to a doctor who has talked to them about keeping the chickens healthy. Vaccinations will also be given to the chickens at the required times.
Since availability of chickens is difficult in the area during winter, alternative options of empowering the women have been discussed, such as sewing, embroidery and sales of the products. The project team is in the process of deciding between exploring new options and sticking to livestock.
Mr. Humayun of NEEDS has reported that the poultry project has started successfully as of May 2011. A female staff member has also been recruited and she is under training on project implementation.
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