Community empowerment and sustainable livelihoods : transforming social capital into entrepreneurship in rural Southern Ethiopia

Abstract

The past decades witnessed that neither the private sector nor the government could provide an adequate socio-economic safety net for the poorest of the poor in the Third World. The community-based self-help approaches were hence widely used as alternative means to help the poor and marginalised to cope with livelihood shocks. This study examined the extent to which indigenous iddirs (local neighbourhood associations) and the externally-funded self-help groups (SHGs) could transform social capital into entrepreneurship thereby enhancing sustainable livelihoods. The study was conducted in three Southern Nation and Nationalities and People’s Region (SNNPR) rural districts, namely, Shebedeno, Wonago and Humbo. Mixed (quantitative and qualitative) methods were used to collect field data. Accordingly, closed and openended questionnaires and interview schedules were developed in English and then translated into Amharic (the national language). Instruments were field tested for validity and thereafter adjusted. A total of 220 (166 male and 54 female) people participated in the study. Data were entered into an Statistical Package for the Social Sciences (SPSS) database, and analysed by using basic descriptive statistics. Qualitative data were transcribed and analysed using Microsoft Office tools. The findings indicate that the SHGs’ members were relatively better educated than the rest of the population and some of them used this opportunity to pursue employment in government and the private sector. With regard to poverty status, iddirs members were poorer than those of SHGs (15.5% of the iddirs members reported that they are destitute compared to others in the community, as opposed to 3.3% of SHGs members). The study reveals that the livelihoods of some members of iddirs and SHG (particularly the latter) improved as a result of their involvement in these institutions although, at this point, the impact is insignificant. With regard to socio-economic decision making, more SHG members were involved in participatory decision making. However, iddirs leaders were still the dominant decision makers. The SHG level of participatory decision making could be the result of capacity building efforts by the promoting organisation, particularly, the Ethiopian Kale Heywet Church (EKHC). The study also shows that some of the iddirs and SHGs members were involved in informal rural entrepreneurial activities. However, their involvement did not indicate the utilisation of micro loan taken from the iddirs and SHGs for business purposes (97% of the iddirs and SHGs respondents utilised microcredit loans for consumption and other related purposes). On the other hand, the empirical evidence reveals that the amount of loan that iddirs and SHGs respondents received was very small. The general practice is giving small loans particularly to SHG members with repayments expected to begin as quickly and frequently as possible. Transforming social capital into entrepreneurship requires a cooperative approach, i.e. the involvement of development actors so as to enhance communities’ endeavour to achieve their livelihood objectives. Despite the wide prevalence of social capital in Ethiopia, this study indicates that its effective utilisation in community empowerment and sustainable livelihoods remains a challenge. Social capital is found to have a limited role in social entrepreneurship development and promotion not because it does not have potential, but because of the limited role of promoting organisations. The study shows lack of strong linkage between iddirs and promoting organisation (NGOs and Government). The study thus underlines the need for improving network and links with iddirs and SHGs and promoting organisations so as to create an enabling environment for sustainable livelihoods in the three rural districts under scrutiny.