<#8854#>MARKUS BUERLI, ADEN AW-HASSAN<#8854#>
International Centre for Agricultural Research in the Dry Areas (ICARDA), Natural Resource Management Propram (NRMP), Syria
<#8855#> Worldwide, microfinance has been recognised as a powerful tool for alleviating poverty and raising living standards. In Syria microfinance is a very new industry and started only after 1997. The Rural Community Development Project (RCDP), of the UNDP and the Syrian Ministry of Agriculture and Agrarian Reform, established Village Credit and Savings Associations (sanadiq, plural of sanduq) in a dry marginal region southeast of Aleppo city. The sanadiq are considered as promising institutions to provide microcredits to poor small farmers and landless workers in the dry marginal areas of Syria. Their institutional setup enables them to operate where other formal lending institutions do not because of inappropriate land tenure systems or because it is considered risky due to irregular land productivity resulting from low and variable rainfall.
The study is based on a formal survey conducted in the area of the RCDP. This area includes 156 villages and about 27,000~households. In the year 2000 the RCDP established the first sanadiq in 9 villages. Sixty households from these villages that borrowed money from a sanduq in the years 2000 or 2001 and another 60 non;SPMquot;=sanduq-members from the same villages were randomly selected and interviewed. Another 60 households from 7 randomly selected villages are used as counterfactuals. Beside the demographic data the formal survey was used to gather data on income, income generating activities, assets, education, food security, and livelihood strategies. These household characteristics, most of them livelihoods assets, were used to calculate composite poverty;SPMquot;=indices. These poverty;SPMquot;=indices are used to determine the poverty outreach of the project.
The impact of the sanadiq is analysed by Ordinary Least Squares (OLS) regression. The impact for specific poverty categories of households based on poverty;SPMquot;=indices can be shown. The paper shows the types of households that profited most and the household characteristics that determine non;SPMquot;=access to formal credits even if a sanduq has been established in their village of residence. By analysing farmers perceived limitations of the sanduq from the view points of members, dropouts and non;SPMquot;=members, the study presents the conditions under which the sanadiq can operate more successfully.
Keywords: Credit, impact, microfinance, poverty, Syria