‘It’s not charity’: A report on an evaluation of the Uniting Country SA Micro Credit Loan Scheme and client outcomes

Microfinance schemes have been established in low and middle income countries for more than half a century, and in Australia for more than 35 years. Microfinance programs in low-income countries commonly offer enterprise-based community loans whereas, in wealthy countries, microfinance schemes tend to offer small-scale personal (usually individual) no or low interest loans, also termed as consumer smoothing. The Uniting Country SA (UCSA) microfinance program provides access to two types of interest-free credit to low-income clients, the UCSA Micro Credit Loan (MCL) scheme and the Good Shepherd No Interest Loan Scheme (NILS). Clients may access a NILS loan to pay for large, essential household items to a value of$1500, which must be substantively paid prior to applying for another loan. The UCSA MCL scheme may also be used to purchase household items, and can be used to pay for services (e.g. medical appointment, car servicing). The UCSA MCL scheme also provides an open line of credit up to $800.This report documents study findings of an evaluation of the UCSA Micro Credit Loan scheme’s client outcomes and provides a program logic and recommendations for the future of the scheme. The study involved surveys of staff, volunteers and clients, plus in-depth interviews with workers.