NGO Another Way (Stichting Bakens Verzet), 1018 AM Amsterdam, Netherlands.


                                                                                    01. E-course : Diploma in Integrated Development (Dip. Int.Dev.)


Edition 01: 10 December, 2009



Tekstvak:         Quarter 3.










Study points : 05 points out of 18

Minimum study time : 125 hours out of 504


The study points are awarded upon passing the consolidated exam  for  Section C : The Model.



Block 8 : Economic aspects.


                            [Study points 03 out of 18]

[Minimum study time: 85 hours out of 504]


The study points are awarded upon passing the consolidated exam  for  Section C : The Model.



Block 8 : Economic aspects.


Section 1 : Project costs.[40 hours]


01.  General introduction. (02 hours)

02. General sketch of the financial structures.(02 hours)

03. Short budget analysis. (02 hours)

04. Budget organisation. (02 hours)

05. Description of the local contributions. (02 hours)

06. Method for calculating local contributions. (02 hours)

07. Relationship between local money and formal money.(02 hours)

08. The budget (02  hours)

09. The budget in a form requested by donors/financing parties. (02 hours )

10. Annual expenses (budgets per year). (02 hours )

11. Quarterly budgets. (02 hours )

12. Excel spreadsheets for the preparation of the budget.(02 hours )

13. The sustainability of the system.(02 hours )

14. Tenders. (02 hours )

15. The bank structures with limitations imposed on the project coordinator.(02 hours )

16. Auditing structures. (02 hours)

17. Protection of donors and financing parties.(02 hours )


Section 1 report :  (06 hours) .




Section 1 : Project costs.  [40 hours]


13. The sustainability of the system. (At least 02 hours )


The typical Model budget provides for a formal money expenditure of € 3.750.000 for each project area with 50.000 inhabitants. Obviously, it is better for the local populations if that initial investment takes the form of a gift. In that case, at the close of the first ten-year operating cycle the Cooperative Local Development Fund will have enough money to finance major extensions to the structures set up during project execution, or to retain plenty of funds to finance the interest-free micro-credit system. Where the funds are provided on the form of an interest-free ten-year loan, the Local Development Fund will have enough money to be able to pay the initial capital back. In that case, the value of micro-credit loans conceded will drop sharply, and slowly build up again during the second ten-year operating cycle as it did during the first cycle.


The net revenues shown are, in principle, enough to repay an interest-free formal money loan for € 3.750.000 Euro in a single lump sum after ten years, taking the various project reserves into account. Each family usually has 5 members, and pays  0,60 Euro per person, or 3.00 Euro per family per month. After 4-5 years, the contribution will be introduced to Euro 0,75 per person per month.


First four years



Monthly contributions (10000 families at @ Euro 3 p.m.)


Operation and maintenance (formal money costs)


Net available revenues



Six following years




Monthly contributions (10000 families at @ Euro 3,75 p.m.)


Operation and maintenance (formal money costs)


Net available revenues




Three-tiered social security structures are available to help the most needy families to meet their obligations. For information on these structures refer to : the social security structures in section 2 social structures in block 4  the structures be created.


Section 2 the management of the structures of this block 8  economic aspects covers the day to day management of the structures in detail. For the moment, it is enough to point out that on the basis of the above tables showing net revenues of € 260.000 per year over  4 years, and € 350.000 a year over 6 years gives a total of € 3.140.000. The remaining € 610.000  to complete coverage of the initial finance for  € 3.750.000 is covered by repayment of capital initially invested in productive units such as the units for the manufacture of products from gypsum composites, the mini-briquette production centres, the local transport cooperatives, the fund to launch the solar home systems programme etc, and the reserves built up. Most of these repayment will be made over the first  3-4 years of operation. They are paid into the Cooperative Local Development Fund where they are continually recycled for the financing of interest-free micro-credits.


Photovoltaic lighting system for study purposes are covered under item 70210 of the budget. These can, should this be considered necessary, be repaid by the local tank commissions over time.


In the unlikely case there should be a small hole in the fund towards the end of the first ten-year operating period, the monthly contribution of  the families can be slightly increased in the final years of the cycle to cover it.

At the close of the first ten-years operating cycle, after eventual reimbursement of initial finance, or where applicable investments are made for the extension of project structures, an important credit balance build up during the second ten-year operative cycle to finance interest-free micro-credits  and to finance capital replacements at the end of the second ten year cycle.

The amount in the Cooperative Local Development Fund would once again temporarily return to zero. It will increase again during the third ten-year cycle , at the end of which finance will be available to further extend the project structures.

The system is therefore inherently permanent and sustainable.

Payments for drinking water installations in schools are included in the monthly contributions made by the families.

The payment for photovoltaic lighting and refrigeration installed in clinics in the project area is included in the monthly contributions made by he families.

It can be expected that the monthly contributions made by the families be covered, partially if not entirely, by savings made on the expenditure before  project execution started. For example, on the purchase of wood for cooking, the purchase of drinking water, the purchase of batteries for radios and similar, the purchase of petroleum for traditional lighting  For a detailed costs and benefits analysis refer to section 3 costs and benefits analysis of this block 8 economic aspects of the course.


1. Research.


The system described in the Model is «inherently sustainable ». In very simple terms, on one page, explain this concept to representatives of women’s groups in your project area.


2. Opinion.


Few traditional  development projects are truly sustainable. On one page, explain the main reasons for this..


3. Opinion.


Select at least three of the most important development projects in your chosen area. After a short introduction, on one page per project, make an analysis of their sustainability, taking integrated development concepts into account End each analyss with a conclusion on the real sustainability of the project and compare this with the claims presented to donors. End your essay with a short general conclusion


 Eighth block :  Economic aspects. 

 Eighth block :  Project costs.

Main index  for the Diploma in Integrated  Development  (Dip. Int. Dev.)

 List of key words.

 List of references.

  Course chart.

 Technical aspects.

 Courses available.

Homepage Bakens Verzet


"Money is not the key that opens the gates of the market but the bolt that bars them."

Gesell, Silvio, The Natural Economic Order, revised English edition, Peter Owen, London 1958, page 228.


“Poverty is created scarcity”

Wahu Kaara, point 8 of the Global Call to Action Against Poverty, 58th annual NGO Conference, United Nations, New York 7th September 2005.



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