Credit program outcomes: coping capacity and nutritional status in the food insecure context of Ethiopia

This paper presents findings of a survey that was primarily intended as (1) an assessment of coping capacity in drought and food insecure conditions and (2) a microfinance program outcome study. A three group cross-sectional survey of 819 households was conducted in May 2003 in two predominantly rural sites in Ethiopia. Established clients of the WISDOM Microfinance Institution were compared with similar incoming clients and community controls. No overall pattern of enhanced prevalence of coping mechanisms was observed in any participant group, suggesting that participation in the lending program did not affect coping capacity at the household level. No significant differences in mean mid-upper arm circumference or prevalence of acute malnutrition were found in males or females when the total sample was assessed. In the primary survey site, Sodo, female clients and their children had significantly better nutritional status than other comparison groups: the odds of malnourishment in female community controls compared to established female clients was 3.2 (95% CI: 1.1-9.8) and the odds of acute malnutrition in children 6-59 months of age were 1.6 times greater in children of both male clients and community controls (95% CI: .78-3.32). Household food security among female client households in Sodo was significantly better than in other comparison groups according to a variety of indicators. As compared to female clients, male clients and community controls, respectively, were 1.94 (95% CI: 1.05-3.66) and 2.08 (95% CI: 1.10-4.00) times more likely to have received food aid during the past year. Findings of the present study suggest that microfinance programs may have an important impact on nutritional status and well-being of female clients and their families. That female clients were significantly less likely to be food aid recipients suggests that microfinance programs may be successful in reducing vulnerability to prolonged drought and food insecurity.