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close this bookSustainability of Micro-enterprise Credit Schemes in Kenya's Informal Sector (K-REP, 1993, 14 p.)
close this folder3. CREATING SELF-SUSTAINING MICROENTERPRISES CREDIT SCHEMES
View the document3.1 Introduction
View the document3.2 Planning for Self-Sustainability
View the document3.3 Sustainability Ladder
View the document3.4 Role of monitoring and evaluation

3.1 Introduction

One word that is increasingly gaining currency in the development literature is the word "sustainability". The word may mean different things to different people but to people in the so-called third world countries (also called developing countries, underdeveloped countries and more recently countries of the South) that are involved in development programmes which depend on the largesse of foreign donors for survival it means being able to sever the umbilical cord that binds them to the donors.

For third world development organizations that depend on donor funds for both their existence and programme execution, "sustainability" means ability to continue involvement in development work, even after donor funds run out. To attain financial sustainability, sufficient revenues have to be generated from both programme activities and investments.

This is by no means easy to accomplish, particularly for institutions implementing social/welfare types of programmes with limited revenue base. Nevertheless, serious attempts are called for, given the ever changing donor climate whether influenced by politics or other factors. The current difficulties of acquiring donor funds and the bitter pills that come with the funds should jolt us towards giving sustainability more than just a casual glance.

Donors are increasingly paying greater attention to what happens after their grant ends, as many have been frustrated by the number of programmes which have "died" after funding is stopped. There is also unprecedented increase in demand for donor money, due to increased poverty in third world countries, and increase in disasters, man made and natural, as well as the number of agencies seeking donor financial support. Consequently, assistance is now directed to projects that not only yield the highest benefits to the people, but are also designed to become self-sustaining.

The purpose of this discussion is not to simplify an otherwise complex issue. It is widely recognized that certain development efforts (public goods) will always require subsidy. It would be foolhardy to suggest all development can become self-sustaining without considering the nature of the activities they undertake. The main focus of this short discussion is on "Sustainability for Micro-Enterprise Credit Schemes".