ACF INTERNATIONAL NETWORK

Case Study
- Income Generating Activities -
Example of Georgia (Abkhazia/Samegrelo)

Tbilisi, Georgia
2008
Action against Hunger is a non-governmental, non-political, non-religious, non-profit
organisation that was created in 1979 in France. Its aim is to save lives by combating hunger,
physical suffering and the associated distress that endanger the lives of vulnerable children,
women and men in over 40 countries worldwide. ACF South Caucasus has been present in the
region since 1994 and is currently implementing programmes focused on economic
development, income generating activities, community development, food security, WASH, and
the Markets for The Poor approach.

Office of Accion Contra El Hambre

Makashvili Street 30
Floor II, Tbilisi 0108
Georgia
Tel: (995 32) 98 82 38
Hhttp://www.accioncontraelhambre.org

Warning
This document reflects exclusively the opinions, ideas and technical criteria of
its authors and/or of the organization responsible and not of other donors or
agencies mentioned in the document.
Table of Contents

1. Introduction ................................................................................................................................ 1 
2. Income Generating Activity (IGA) approach strategy ................................................................ 1 
3. Establishment of IGA group ...................................................................................................... 2 
3.1 Initiation and group formation .............................................................................................. 2 
3.2 Training programme for IGA group members...................................................................... 4 
3.3 Legal documents defining regulations ................................................................................. 5 
3.4 Development of the Business Plan ...................................................................................... 6 
3.5 The legal status and management structure used for IGA groups ...................................... 7 
3.6 Establishment of networking and groups of interest ............................................................ 8 
3.7 Monitoring of IGAs ............................................................................................................... 9 
4. Success and failure of IGA groups ......................................................................................... 10 
4.1 Success of IGA groups ...................................................................................................... 10 
4.2 Constraints and failures of IGA groups.............................................................................. 11 
5. Sustainability ........................................................................................................................... 13 
6. Lessons learned ...................................................................................................................... 13 

Tables

Table 1: Training topics for IGA groups ........................................................................................ 4 

Table 2: Legal documentation for IGA implementation ................................................................. 5 

References
1. Georgian State Statistics Department (SSD)

Table of Annexes
Annex 1: ECHO logical framework
Annex 2: Memorandum of Understanding
Annex 3: Contract
Annex 4: Land leasing contract
Annex 5: Internal regulations
Annex 6: Statute
Annex 7: Business plan
Annex 8: SWOT analysis
Annex 9: Type of organizations with purpose to generate profit
Annex 10: Work plan of group of interest
Annex11: Methodology of networking in IGA groups
Annex 12: Agricultural fair and booklet
Annex 13: Example of project monitoring matrix
Annex 14: Base-line questionnaire
Annex 15: Income monitoring table

Acronyms and Abbreviations

aHoP Assistant Head of Project
ECHO European Commission Humanitarian Aid Department
HoP Head of Project
ICRC International Committee of the Red Cross
IDP Internally Displaced Person
IGA Income Generating Activity
MFI Micro-Finance Institution
MOU Memorandum of Understanding
NGO Non-Governmental Organisation
SSD State Statistic Department
SWOT Strengths, Weaknesses, Opportunities and Threats
WASH Water, Sanitation and Hygiene
1. Introduction

The objective of this case-study is to contribute to ACFIN technical development and to

capitalise the experiences gained in the South Caucasus Mission. The study describes the
implementation of Income Generating Activities (IGAs) in the conflict regions of Samegrelo and
Abkhazia, and the principles and methodologies of this sector of intervention conducted by the
ACF food security team from 2003 to 2007.

This work captures best practices and lessons learnt in a complex local political and socio-
economic environment. The current case-study is aimed at reinforcing the practical work at
field level, and synthesizing all available information on implemented IGA projects for a better
understanding of the IGA implementation process; describing the principles and key points to
be considered for sustainable success of IGA groups.

The case study focuses on the Food Security Programme of ACF funded by ECHO from
January 2003 to December 2007. The principal objective of the programme was to improve the
living standards of vulnerable men and women in Abkhazia and Samegrelo. The specific
objective of the program was to improve the food security status of targeted vulnerable
population, men and women in Abkhazia, Samegrelo / Zemo-Svaneti (Refer to annex 1: ECHO
logical framework).

The IGA programme in Georgia was implemented in three phases. Phase 1 (January 2003 –
October 2003), phase 2 (November 2003 – August 2004, and phase 3 (October 2004 – August
2005). The periods (September 2005 – August 2006) and (September 2006 – November 2007)
were a repeat and consolidation of the initial three phase programme.

By the end of 2004 (beginning of the third phase), ACF had gained sufficient experience to
begin elaboration and capitalisation of the IGA approach strategy. Additional activities were
implemented to reinforce the impact and project sustainability. This was undertaken after a
thorough analysis and evaluation of the activities in the previous year, with the participation of
all stakeholders. The project included monitoring and follow-up of beneficiaries from the first two
phases and establishment of new IGA groups. During the third phase extra attention was paid
to: market-oriented activities to obtain more income and profit; enforcement of the group
management and ‘sense of ownership’ through proper group documents; registration and well
elaborated business plans. The networking had a very positive impact on the self-reliance,
motivation and future coordination between groups.

During this phase the IGA program attained a sustainable level and achieved significant impact
on the living conditions and food security status of beneficiaries. The project has been visited
by many other organizations, with ACF being recognised as a reference organization in Georgia
for the IGA approach to development.

The objective of the program was achieved through establishment of IGA groups made up of
between 5 to 10 households where they had the opportunity to implement market-oriented
income generating activities. This paper will present the methodology used and
recommendations for establishment of IGA groups.

2. Income Generating Activity (IGA) approach strategy

ACF has elaborated the following Income Generation Activity Group strategic approach based
on the experience gained during the five year implementation period of the ECHO programme;
implemented in 3 phases with the objectives and activities described as follows:

1st phase: Group formation and establishment of businesses

Activities:
• To assess the vulnerability level of the population with identification of potentially
motivated groups to achieve sustainable positive change. This undertaken for feasible

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 and profitable economic activities in the market environment. The objective of this
group of activities is to ensure selection of motivated groups that pursue activities of
economic potential in the defined market environment leading to sustainable and
positive change.
• General training with potential members on group formation, business plan
development, legal issues, accounting and management. Objective is to increase the
capacity of motivated groups and provide them with skills to effectively administer their
economic activities.
• Establishment of business plans, internal regulations, legal documents, land
agreements – thus ensuring formal recognition of the group and its activities.
• Specific training on technical issues and marketing according to the selected activities
to ensure groups have adequate technical skills to implement their activities.
• Providing the basic inputs for proper functioning with full participation of beneficiaries to
ensure transparency.
• Regular monitoring of activities, accounting, turnover and group management to ensure
accountability.

2nd phase: Diversification and consolidation of activities for existing IGA groups
Activities:
• Assessment of existing group motivation and activities implemented in the 1st phase
with the objective of evaluating phase 1. Results of the evaluation analyses and
recommendations adopted to improve implementation in phase 2.
• Assess new activities to be proposed according to the current market situation. The
objective being to assess the vulnerability level of the population with the identification
of the potential of motivated groups to achieve sustainable positive change. This
undertaken for feasible and profitable economic activities in the market environment.
The objective of this group of activities is to ensure selection of motivated groups that
pursue activities of economic potential in the defined market environment leading to
sustainable and positive change
• Update the business plan
• Provide additional specific trainings if needed
• Provide additional inputs with the full participation of beneficiaries
• Regular monitoring of activities, accounting, turnover and group management

3rd phase: Networking and capitalisation (Refer to page 8 for further information on networking)
Activities:
• Sharing experience and constraints or strengths among different IGA groups, experts
and supporters to widen the potential impact of the implemented activities.
• Formation of ‘groups of interest’ among IGAs to solve similar problems jointly based on
common interest and to provide a forum for discussion between IGA groups and
individuals hoping to replicate the IGA strategy
• Regular meetings of groups of interest to exchange ideas between participating group
members, protocols of meetings produced and shared between IGA groups.

3. Establishment of IGA group

3.1 Initiation and group formation

The first step prior to initiation of income generation activities for the vulnerable population is the
correct selection of beneficiaries and the villages where the activities are to be implemented.
The vulnerability and the potential in each of the villages should be determined. This includes:
high number of IDP’s/returnees, allowable security situation, vulnerable living conditions, a
minimum availability of resources and market possibilities.

a) Information meetings with local administration of every selected village were conducted to
introduce the intervention methodology of ACF where the goals and objectives of the

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 project were described. A verbal agreement should be given on: collaboration with local
administration to provide a list of the vulnerable population in the village, support in
preparation of leasing documents and assessing possible in-kind contribution to IDPs to
implement IGA groups. Other joint informational meeting with the population and local
government were conducted in the same villages. The decisions on further activities were
undertaken by villagers (men and women), taking into account the opinion of local
government representatives.

b) Selection of beneficiaries: the potential beneficiaries were selected based on vulnerability

lists: information on beneficiaries widely shared among the population. A list of vulnerable
households 1 has been published for every village, calculated according to the socio-
economic conditions of the household. According to the State Statistic Department in
Samegrelo and data from the local administration in Abkhazia, households below the
poverty line are considered as vulnerable (this differs for different years as the poverty line
is influenced by the inflation rate, which is constantly changing – for example: in 2004-
2005 households having less than 70 USD of subsistence wage were considered as
vulnerable. In 2007 this is defined as 70 – 75 USD). Priority was given to families with
disabled members and to women–headed families with small children. In addition to
vulnerability lists the following selection criteria were applied to all selected beneficiaries:
• Food insecure and those living below the poverty line
• Composition of groups: around 60% IDPs and 40% local vulnerable men and women
(Samegrelo)
• Possess a minimum amount of agricultural or commercial assets
• Rely on subsistence farming with little or no surplus profit
• Have potential access to land
• Motivated and have the potential (resources to contribute, e.g. skills and experience in
the activity) to become a member of an IGA group

These criteria were applied to both Abkhazia and Samegrelo during phases 1 to 4.

The criteria for group selection is as defined in the project proposal submitted to ECHO, in
which the requirement was to include IDPs and local vulnerable population to promote
integration of the two groups. A minimum amount of agricultural or commercial assets were
included as such beneficiaries would be able to establish income generating activities (this
would have been more difficult for individuals with no assets). Access to land was required as
the beneficiaries could only implement agricultural activities if they had access to land.
 
In rural areas of Abkhazia, the selection criteria of beneficiaries for phase 5 only were identified
according to the district and based on surveys as follows:
• Age between 20 and 65
• Ownership of cattle – maximum 2 head per household (1 head of cattle in Lower Gali)
• Ownership of land – not more than 1000 m2 (not more than 1500 m2 in Lower Gali)
• Women-headed families
• Families with disabled household members
• Household living space – maximum three rooms (one room in Lower Gali)
• Household average monthly income less than 80 USD
• Not employed
• In Lower Gali, hazelnut production not more than 200 kg

As described in the above paragraph, selection of beneficiaries was made according to a

special study conducted in Lower Gali in which the description of assets were different because
of the nature of the assets held by the beneficiaries. This referred particularly to ownership of
cattle and land.

It is important to avoid including wealthy members in the IGA group; achieved by conducting
cross checks to ensure the beneficiaries really fit the criteria.

1
 In Samegrelo‐ list of vulnerable households is calculated by State Statistics Department (SSD);In 
Abkhazia‐ it is calculated by local( regional and village) administration; 

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After the elaboration of the potential member lists, the group formation process began. The
group members may not have much information about each other so it is important to give them
the opportunity to introduce themselves and to discuss their future cooperation. This process
took approximately two to three months to complete. The main objective of the group formation
was to encourage the development team spirit, and to identify, plan and organize their potential
business and management structure. The topics of training are presented in chapter 3.2
(Training programs for IGA members - Table 1, page 5).

c) The proper location of potential IGA group is identified. In rural areas activities are
agricultural, and in urban more non-agricultural; in both cases they should answer to the
market demands. An incorrect selection of IGA group location and activity can lead to the
failure of the project. A market survey on the proposed activity has to be conducted. This is
an important part of the business plan in which the following issues are considered:

• IGA activity planning to consider the product or service that will be competitive in the
market (limited in geographical area)
• Correct choice of product, which is both market oriented and can ensure food security of
households as the group members are vulnerable (among them 60% IDPs in
Samegrelo). Products in this group are: meat, dairy, crops, maize corn and soy bean,
which are the main sources of food in the target area.
• Selection of products or services which require minimal start-up investment as the
groups have limited capital assets.
• Correct choice of product or services, which are within the educational ability and
experience of the group.

ACF tried to consider all the above factors in IGA activity planning. In rural areas the
activities were mainly cattle, goat and pig breeding combined with fodder production to
ensure the nutritional requirements for their animals. In addition, apiculture and
ceremonial catering groups were also established. The majority of IGA groups chose
animal breeding activities as this is a significant agricultural activity; the products
obtained (fresh meat and pork, goat kid, piglet, milk and dairy products) do not need a
large degree of processing and high technology machinery, meaning they do not need
to have high expenses to produce the product; there is also a high demand for the
products in the market with peak seasonal demands in spring and winter when there is
a 25-50% under-supply. There is market demand (it will stay the same for the next 5
years) with a tendency for increasing demand. For the ceremonial catering, it is also
profitable in rural as well as urban areas due to the local traditions. There are
comparatively less beneficiaries in apiculture and pig breeding as the activities are
risky (diseases, climate), also there are limitations in goat breeding due to the natural
resources. Poultry breeding is not considered as there is a constant risk of different
diseases. In Urban areas the activities were beauty salons, ceremonial catering, small
trading, processing and confectionary.

3.2 Training programme for IGA group members

The training programme plays a crucial role in implementing Income Generation Activities in the
initial phases of working with the groups. This should continue during diversification and/or
consolidation of the activities. The training programme includes the accountancy/management
and technical aspects determined by the selected activities. Topics of trainings are presented in
table below.

Table 1: Training topics for IGA groups

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 Trainings Topics presented to IGA groups
• Detailed explanation of the project goals and purpose
• Introduction, identifying the motivation of unification and willingness to share the work
together
• Positive and negative aspects of working in a group (positive: advantage of the
knowledge, experience and various capabilities that different members of the group
offer, distribution of tasks leading to specialization by members of the group, ability of
a larger labour force; disadvantage: members fail to assume responsibilities, lack of
transparency, unequal distribution of tasks, low cultural acceptance of group work)
Group formation
• What is the legal status most appropriate for group (discussions with participation of
legal specialist, after selection of proper legal entity group stating to work on bylaw
elaboration and registration of group)
• Identification of business idea appropriate to the area, capacity and possibilities of the
beneficiaries
• Participation in the preparation of group documentation (memorandum of
understanding (MOU), contract, internal regulation, leasing documents, business
plans) is a part of group formation process
• Drawing up of Statute and registering of IGA groups as legal entities
• Introducing tax policy of legal entities
Legal management
• Land legality, positive and negative sides of different enterprises
• Elaboration of internal regulations and contracts
• Necessity of business plan, business description and opportunities
• Information on market situation/market survey
• Definition of target market
Business plan elaboration
• Marketing decision
• Loss and profit report
• Financial management
• Necessity of following accountancy
• Registration of incomes, outcomes and profits
Accountancy • Monthly and annual reporting
• Balance sheet
• Credit transactions
• Methods of intensive feeding
• Preparation of animal shelters for winter
• Winter ration for animals
Animal and crop
• Use of conserved fodder
husbandry
• Land cultivation
• Crop production
• Fertilizing of soil: inorganic and organic
• Preventive measures
Veterinary • Infectious and non infectious diseases
• Animal health care

Sometimes additional technical training is provided due to the specific activity – for example:
beekeeping. The training process is not limited to educational sessions and regular field visits
are also part of this process.

3.3 Legal documents defining regulations

 
Table 2 presents a summary of the required legal documents for IGA implementation:

Legal document Purpose

Memorandum of Understanding
Contract (agreement)
This is an agreement on the terms of collaboration between groups and
ACF.
In the memorandum we are offering the group the terms on the basis of ACF
goals, personally to create joint activity within the group that will drive to
raising their income and achieve economic growth.
The terms of support and material assistance is also stated in MOU
(trainings, funds) (Refer to annex 2: Memorandum of Understanding).
Concrete measures and responsibilities of both sides to follow the terms of
MOU are stated in the contract.
At the same time the group and ACF share (in cash and in kind), trainings to

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Land/office area leasing contract
Internal Regulations
Statute
be conducted to develop the business are identified here.
Contract also contains the terms of contract cancelling (Refer to annex 3:
Contract).
This is the document proving the assets (land, office area) to conduct the
activity and run business is legal ownership of the group (minimum from 3 to
5 years) that is also guarantee for the group sustainable activity (Refer to
annex 4: land lease contract).
It is an internal document elaborated by IGA group members to regulate the
internal management of the group; the document is elaborated with support
of legal specialist and social worker. It is important to elaborate this
document at the period of group formation, as the participative sessions are
required to validate this document (Refer to annex 5: Internal Regulations).
It is a legal document which is approved by the tax department and
established according to the legislation of the country. After validation of this
document the newly established legal entity is being recognized by different
stakeholders: (tax department, court, and bank) (Refer to annex 6: Statute).

All the mentioned documents are of equal importance and should be established in IGA groups
to ensure transparent and participatory decision making processes, increase the sense of
ownership, self confidence and trust among the IGA group members.

3.4 Development of the Business Plan

The feasibility of the activities was thoroughly validated by the ACF team based on the business
proposals submitted by potential groups. The ACF marketing specialist supported the business
plan elaboration implemented by group members. The business plan is the main working
document for the IGAs, which is the basis for the management of the activities and evaluation of
the economic results obtained (Refer to annex 7: business plan).
The business plan describes the general market situation in the field, market description,
competitors, target market and planned realisation, marketing strategy, cost formation,
distribution, advertisement and promotion of implementation, location of the activity, equipment,
enterprising process, raw and supplementary materials and management plan. It includes a
financial plan and a SWOT analysis (Refer to annex 8: SWOT and leasing documents - table 2
page 5).

The SWOT analysis is the basic starting point for the business plan. The process of analysis
itself gives group members the opportunity to arrive at the proper conclusion at the beginning of
their activity on the basis of qualified discussions and objective information. The process
ensures IGA members have relevant information on possible activities and take into
consideration a perspective of the target market over an average of 3 years.

This tool helps them to plan IGA group short- and long-term objectives:
• Short-term objectives - annual planning of groups (definition of own capacities,
resources, start-up activities, market study, registration of group, establishing the
relation with local administration, land leasing, space renting activities, and improving
personal skills and knowledge).
• Long-term objectives - more oriented on diversification or consolidation of their
profitable activities and strengthening their positioning in the market players chain,
considering their potential and possible challenges, and further creation of networks
with different profit and non profit organizations.

A SWOT analysis is undertaken at the beginning of business planning and is the main basis for
the marketing approach in the selected activity. In the process the group identifies the target
market, product/service to be produced, competitiveness, group potential and real threats.
Experience has shown the main basis for group sustainability is correct decisions taken on the
basis of SWOT analysis. The reality of the business plan and the sustainability of the group very
much depend on these decisions. Procurement and supplying of inputs for IGA groups is
carried out according to the business plan.

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3.5 The legal status and management structure used for IGA groups

The majority of IGA group members have lost most of their productive assets prior to
implementation of the IGA intervention. They have also lost the motivation and self confidence
to initiate and implement activities by their own capacities. To increase self-confidence and
motivation of those individuals, ACF proposed the legalisation of IGA groups and selected the
appropriate form, with the support of legal specialists, to give groups the sense of ownership.

Legal entities applied by IGA groups are: Cooperatives in Samegrelo, Partnerships and Farm
Units in Abkhazia. The groups were registered after careful study of all aspects of the range of
available legal entities. Farm units and Partnerships were selected due to the different
legislative requirements in Abkhazia. A Farm unit is the simplest form of group legalisation
which can be applied to any agricultural activities, and is based on the agreement of its
members. Partnerships were created for non-agricultural activities. (Refer to annex 9: Type of
organizations with the purpose to generate a profit).

According to the legislation, the property of selected entities is registered as the capital of group
members; Groups retain their rights upon disposal, meaning they can remove the amount of
capital share which they deposited when the cooperative was established. This condition was
also defined in the Internal Regulations.

Accordingly, IDPs or locals have a right to their capital share reimbursed plus any increased
contributions they made. This gives them an additional opportunity to develop new, or continue
their present activity in the place of return, and also gives motivation to continue with their
current activities.

In both cooperatives or farm units and partnerships, the internal management structure is the
same for the groups created in Samegrelo and Abkhazia and is produced in accordance with
local legislation. The organigram illustrated below was developed in participation with group
members in accordance with the legislation.

General meeting

Board of observers (in case of Abkhazia - Director)

Boards of directors (in case of Abkhazia - Executive director)

Staff Accountant Assistant

The main tool for group management and decision making are the Internal Regulations. The
main decision-making body is the General meeting. Decisions at general meetings are
accepted by majority vote, except for certain questions stipulated by internal regulations.
The roles and responsibilities of the office bearers are:

• The Board of observers (in case of Abkhazia - Director) is created to control the
organization administration work, implementation of different activities, to examine
accountancy, cattle and stock state, to examine annual balance, to offer
suggestions and proposals on distribution of annual profits or expense coverage.

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 • Board of directors/ Executive director is established to approve the organisation
normative documents and staff schedule, employ and dismiss hired workers,
conclude agreements, give power of attorney, establish accounts, give
organisational directions in the form of documents; the system of wages and
agreement. These matters are all raised in the General meeting.
• The accountant is responsible for accounting, bookkeeping of the enterprising
activities conducted by the cooperative, responsible for the relations with Bank and
keeping minutes of the meetings.
• Assistant selected defined by the specific cooperative activity, e.g. veterinarian
assistant is responsible to conduct preventive measures for animals, check health
and monitor the cattle ration, in service and trading sphere he/she is responsible to
product or service realisation and promotion, and to ensure technical assistance to
the cooperative.
• Staff is the members or the cooperative/partnership/farmer unions who have rights
to plan and monitor the schedule of working, deliver necessary information conduct
everyday activities. The detailed information and group responsibility and roles of
above mentioned management structure is presented in the Internal Regulations
(Refer to annex 5: Internal regulations).

3.6 Establishment of networking and groups of interest

The three main problem areas which have been identified by groups are organisational,
machinery and marketing of their produce.
• Organisational - Joint transportation of fodder from factories to the field, joint delivery of
bee hives to the rotation of pastures (alpine pastures) in order to increase the
productivity, joint contracting of auditors to monitor accountancy.
• Machinery - IGA groups joint renting of tractor to cultivate the land and bring the hay
from the meadows
• Marketing - Joint sale of produce, selection of better customers (market)

Group discussions on how to overcome these problems were conducted leading to the
establishment of groups of interest and a network between groups and other stakeholders. This
led to an improvement in commercial relationships, and established linkages between
producers, potential middlemen and processors. Through information dissemination and the
exchange of experience between IGA groups, several joint activities were implemented for
example: joint sale of produce, bulk purchasing fodder, renting machinery and contract auditors
for accountancy (Refer to annex 10: Work plan of groups of interest).

Many problems were discussed and resolved between different groups through cooperation and
creation of groups of interest. ACF was generally unable to provide financing, but many groups
continued to show interest in coordinating activities. ACF closely monitored the networks and
supported these groups in organisational and technical issues. Exchange field visits between
IGA groups are a useful activity for setting up a functional and effective network (Refer to annex
11: Methodology of networking for IGA groups)

An agricultural fair was organized for the end of August 2005 with the active participation of IGA
groups (Refer to annex 12: Agricultural fair and booklet). All preparatory work (such as
informational bulletins, invitation letters, meeting with town and district administration and
Governor) was undertaken by ACF staff. The Agricultural fair lasted for one day in Samegrelo
and one day in Abkhazia. All international and local NGOs implementing the projects in these
areas were invited including: donors, local authorities, financial and tax departments, and local
TV companies. Each IGA group (4-5 members from each IGA group) presented their production
and made small presentations of activities and gave interviews to TV companies. The events
were broadcast on local TV channels.

The Agricultural and Small Business Fair had the following objectives:
• To inform customers about IGA group products /services

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 • To establish links with local producers/enterprisers that need stable source of raw
materials
• To improve the link between IGA groups for sharing of experience and establishing new
networks
• To raise the interest of operating donors, investors, local authorities and initiate potential
relations
• A good opportunity to advertise and sell their products ,

The Agricultural and Small Business Fair was held three times between 2004 and 2007.
Holding the agricultural fair three years in succession demonstrated the high motivation and
interest of farmers to participate; it was a good opportunity and useful for both IGA group
members and potential customers.

3.7 Monitoring of IGAs

 
Before project initiation, time should be devoted to the design of the monitoring matrix as this is
the guide for measuring how the situation is evolving as a result of the actions undertaken,
quantifying the level of results achievement, and identifying the need to intervene. The
monitoring matrix is a specific table which includes information on the frequency and content of
monitoring measures - based on the logical framework of the project. The monitoring matrix
should be used by the team as an analytical tool. (Refer to annex 13: Example of monitoring
matrix).

The team should define and discuss the monitoring matrix and be aware of the responsibilities
of every team member; the definition of this formal system will help in the implementation of the
follow up. The type and frequency of monitoring is as follows:
• The baseline survey monitors household socio-economic conditions. Surveys are
recommended at project inception, mid project and at the end of the project (Refer to
see annex 14: baseline survey questionnaire). This information was used to establish
the database of the project.
• Monitoring of IGA group accountancy should be conducted at least once a month
(dependent on the number of IGA groups), the special form for the accountancy follow
up should be elaborated by a socio-economist and the HoP/aHoP (Refer to annex 15:
income monitoring table).
• The project team technical staff is responsible for monitoring of the construction and
rehabilitation work conducted by group members. In parallel to the monitoring, the
consultation provides on-site support to improve project implementation. On a monthly
basis the technician provides a narrative report on activities, monitoring findings,
conclusions and recommendations.
• Monthly meetings where IGA group members are asked to participate to strengthen the
team, while discussing constraints and future plans. Protocols of meetings produced by
IGA group members and copies provided to ACF field staff.
• Monthly monitoring of trainings undertaken according to the schedule.
• Supply of inputs is undertaken according to the logistic procedure and business plan
established by IGA groups. It is important to involve the group members in all the
stages of procurement including selection of suppliers and preparing the agreements.
Copies of paid bills are kept with IGA groups and registered in the accountancy books.
• Visual monitoring of administrative activities by the technical staff to observe the
evolution of activities, filing system, schedule of activities, responsibilities within the
group, relations between the group members and ACF staff, integration level of IDPs
and returnees, and motivation of group members.
• The agronomist monitors land cultivation during the different cultivation and planting
stages such as: ploughing, disking, harrowing, planting, weeding, and harvesting. The
frequency of the monitoring was a minimum of twice a month during the cultivation
period.

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4. Success and failure of IGA groups

4.1 Success of IGA groups

After the withdrawal of ACF a survey was conducted of several IGA to identify positive and
negative examples from a sample of IGA groups supported by ACF. A total of 40 IGA groups
(20 Samegrelo and 20 Abkhazia) with different activities were interviewed to identify the
successes and failures of the groups. These were used as an indicator of those factors which
could determine potential success or failure of IGA groups. According to this survey
questionnaire, 88% of the interviewed IGA groups were functional and well managed – this after
the withdrawal of ACF from two to four years previously. From the 88%: 15% (in Samegrelo)
stopped for a limited period then restarted their activities after a period of 5 to 6 months; 73% of
groups were fully functional without any break in activities.

The 15% of IGA group members interviewed in Samegrelo who had stopped their activities for
5-6 months was due to the loss of poultry or bees. Restarting activities was difficult for them as
reserve funds were insufficient to cover the necessary investment. Only one group managed to
take a loan from a Micro Finance Institution (MFI), but the procedure of loan repayment brought
disagreement among group members as some refused to contribute due to family needs.
Nevertheless, this case gave them the opportunity to learn more about group work.

Most of the IGA groups have profitable activities and potential for development because of:
• improved technical capacity
• improved organisational capacity
• increased management and accountancy skills
• applied new technologies
• attracted new investment
• motivation of group members

Most IGA groups:

• are self-reliant, self-sufficient and have a strong collective spirit
• are continuing to function as groups and have increased their income significantly
• are consolidating their activities and are able to cover their expenditure for their
businesses
• show willingness and ability to solve their problems by themselves
• have no wish to change their legal status, as it is responding to their requirement
• have achieved a spirit of entrepreneurship which is very positive for the future
development of their activities
• all IGA groups are registered in a tax department, so they are accountable according to
their legal status and requirement; all the tax obligations are included in the business
plan

The annual income of IGA group members on average has increased by up to 420 - 720 USD
per household.
The minimum monthly income of households is about 35 - 60 USD as indicated by a survey
conducted by ACF, which is 59.3% of average household monthly income. 85% of IGA groups
have reserve cash for emergency cases, future reinvestment and land cultivation.

Figure 1 shows the level of reinvestment by IGA groups according to activity over one year,
note that the poultry group lost their assets due to widespread chicken disease; they then
stopped their activity:

10
The graphs below illustrate expense distribution in comparison with the income received for the
different stages of IGA implementation (example given from an IGA program implemented in
September 2005-August 2006).

Base line survey (Fig. 2) Mid-survey (Fig. 3)

Utilities 7 7
40 Utilities 72
HH item s 0 10
40 HH items 72
House 0 House
40 3
repair repair 72
New IGA

N e w IG A

5 base-line mid -term

Education 40 Education 2
Income 72
Income
Clothes 2 Clothes 10
40 72
Health 6 Health 12
care 40 care 72
Food 25 Food 30
40 72

Final survey (Fig. 4)

Utilities 7
115
HH item s 10
115
House 5
repair 115
New IGA

20 final
Education
115
Income
Clothes 15
115
Health
12
care 115
Food 45
115

4.2 Constraints and failures of IGA groups

Several factors caused an IGA failure rate of about 12 % - identified through the survey
conducted by an external economist as follows:
• Internal tensions between members due to reluctance to work in a group
• Low profitable production as a result of market competition
• Animal/poultry diseases leading to livestock loss
• Loss of fodder by natural and climatic conditions such as drought or flood.

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In urban areas there was a focus on non-agricultural activities which are specific to the area and
require low investment to start the business. This includes for example: shops, confectionary
outlets, food processing, beauty salons and other non-agricultural activities. The IGAs located
mainly in urban areas have more competition as they require less investment to initiate the
business so more individuals have sufficient capital to begin. The result of this is that the finite
numbers of potential customers have to choose from an increasing number of service providers.

For those 12% of IGA groups which ceased activities, the group capital was distributed equally
between group members. The main problems and difficulties that groups had to face could be
divided into the following categories:

А. Technical constraints
• Problems with transportation
• Second hand and dilapidated equipment
• Poor harvest due to climatic conditions
• Seasonality of production linked with seasonal demand of consumers

Possible solutions:
• Small production volume could be compensated by stable high quality products
• Diversification of activities during off-season periods
• Fund raising
• Renovation of equipment
• Long term credit
• Consideration of the climatic condition during the planning of activities

Grant amounts provided to IGAs were not enough to purchase new equipment and machinery
due to the high cost. The decision was taken to purchase second hand equipment, but this
requires higher reinvestment from groups to renew them. From very beginning the issue of
reserve cash was discussed with group members and agreed in the internal regulations.

В. Financial constraints
• Financial limitation
• Rental and taxes rates increase
• Price instability

Possible solutions:
• Attraction of additional financial resources; although MFI are reluctant to invest in
agriculture
• Awareness of legislative changes

C. Marketing constraints
• Low local demand on product
• Increased market competition
• Demand on production is determined by seasonal needs

Possible solutions:
• Improve market value by exploring new market opportunities
• Product promotion
• Production of high quality products (packaging, labelling)

Some groups interviewed (2.7 % of the total IGA groups supported) involved in poultry breeding
and pig breeding are in debt due to:
• Lack of production
• High competition
• Increased tax payment
• Disagreement between group members
• Weak marketing
• Epidemic diseases
• Poor agricultural seasons

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Note that some of the solutions identified may be outside the core mandate of ACF. This could
be addressed by effective networking with other organisations which have mandates to
intervene in these sectors.

5. Sustainability

The sustainability of IGA groups at different levels was defined from the outset of the
intervention:
• Political sustainability. Ensuring good relations between local authorities, different
national organisations and IGA groups is essential for group sustainability, because all
the work they have being developing and planning to do in the future is in close relation
with these structures. These activities are: registration of groups, land and venue
leasing, land surveying and advertisement of products. As an example, IGA
implementation in Lower Gali gave the opportunity to create and improve the relations
between returnees and local authorities as for many years they did not have close
contact in the above mentioned areas.
• Financial sustainability. IGA groups can be divided into two areas: agricultural and non-
agricultural. The generation of income in these activities can be seasonal or yearly. To
have financial sustainability over the year, IGA group members were trained and
supported by the ACF market specialist and socio-economist. The accurate planning of
production cycles according to market demands is the main factor to reach financial
sustainability.
• Technical sustainability. During project implementation IGA group members had the
opportunity to obtain and/or improve skills and knowledge of the selected activities. The
technical training and consultations were given according to the standards required to
establish profitable activities. Cultural and traditional demands were considered in the
planning of non–agricultural activities, for example ceremonial services were designed
according to Abkhaz and Megrelian traditions. Technical training was oriented to
products for the local market; the local demands were studied by an ACF market
specialist.
Realistic business plans were worked out in a participatory way with active technical
support and consultations by ACF. Awareness of marketing approaches is necessary
for activity selection and planning. This approach helps IGA groups to avoid making
incorrect decisions from the outset.
• Social sustainability. Motivated beneficiaries with the same interests were selected
according to project criteria that were well-defined and with a clear goal; sense of
ownership and self-confidence was the result of creating and developing income
generating activities. The registration of IGA groups as farmer unions and partnerships
and cooperatives, creation of internal regulations, land and/or venue leasing were the
main factors in building feelings of ownership. This also built trust among group
members. A high level of trust towards the organisation was created through
participation and transparency at every stage; IGAs were created in Lower Gali
(Abkhazia) where there are a high number of returnees and in Samegrelo which has a
high number of IDPs. The exchange visits between different IGA groups and the
organisation of agricultural fairs gave the opportunity for returnees and IDPs to be
integrated into the socio-economic life of Abkhazia and Samegrelo.
 

6. Lessons learned

Key points to be considered for IGA implementation:

1. High level of vulnerability of group members: destitute and very vulnerable people are
not suitable for these types of IGA groups. They have limited access to food and will be
unable to reinvest money into anything except food. Such beneficiaries are better
described as candidates for food security assistance. Selection criteria should be
defined precisely, considering the potential of farmers. In addition, this group of
vulnerable people have limited motivation as they are more concerned with overcoming

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 the difficulties of daily survival. This group does not fall within the criteria for ACF IGA
assistance; ICRC and social welfare assistance is more appropriate for this specific
group.
2. Compatible level of vulnerability of group members: contributions of group members
need to be equal to have a strong group. Thus the same level of poverty/vulnerability is
favoured. Group members need to know each other so they have a relationship based
on trust and have common interests.
3. Experience of group members: it is necessary that at least some of the group members
have experience in the activity chosen by the group. This knowledge will be reinforced
and improved by the supporting team, and other group members will gain knowledge
and skills during the implementation of activities and trainings.
4. Market-oriented activities: the market in the area needs to be well studied. The potential
of the village/community needs to be taken into consideration, the availability of inputs
in the area, appropriate low-technology systems and those adapted to socio-economic
context and knowledge.
5. Group sustainability: can be reinforced by producing the necessary legal documents
such as land rental agreements, internal regulations, inventory lists, work plans and
other related documents. It should be ensured that all inventories are group owned.
Registration as a legal entity is strongly promoted and has shown to be a key issue for
the sustainability of the group. This increases the self-confidence and trust between
members of the group and it eases the relationships with government structures, which
recognise them as a formal body. The internal organisation should include aspects of
accountability, governance and transparency defined in documentation developed by
the group.
Financial sustainability can be enhanced by developing internal mechanisms to
generate a financial reserve which can be used for purchasing group assets – for
example: machinery. A reserve would also enable the group to have more flexible
business plans – especially to reduce their dependency on external funding. Food
insecurity arising from limited access to food items is often a result of substantial shocks
to financial capital. Almost all households are cash poor; establishment of a reserve
fund would permit the development of agricultural and other small income generating
activities to improve their long-term food security. An amount equal to 15 to 25% of
group income is a realistic reserve fund accumulation; the actual figure defined in the
Internal Regulations.
6. Business plan: A business plan, gives the group a future perspective of their activities. It
will improve the sustainability of the group. A 2 year business plan is favoured at the
start of the IGA group and in the second year of implementation a 5 year business plan
is made by the group itself, without external involvement or support.
7. Capacity building: Most of the IGA groups expressed their willingness to receive training
in advanced knowledge on different spheres based on modern technologies and the
demands of the market.
8. Participatory approach: Local authorities and other stakeholders are not always aware
of the community development approach used by humanitarian organisations. It is
important for them to become more involved in defining the needs and constraints of
their community; achieved by working together with development agencies in the
application of participatory methods to reach consensus on prioritising tasks for
community project support.
9. Security situation in the Lower Gali region is constantly changing, therefore, the
following factors to manage the situation were considered:
• close cooperation with local authorities and regular, joint monitoring of the security
conditions
• communication with local facilitating coordinators responsible for implementation of
the activities
• communication and maintenance of transparency with all stakeholders in the
districts
• working only at grass root level without taking a stance on politics or religion
• ACF regularly updating security rules
• the IGA program has shown to have a positive impact on the general security
situation with results showing that an increase in income and food security (and
improved living conditions) has decreased the security fears of many people and

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villages. The example of ACF has also encouraged other NGOs to return to the
conflict areas

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