Livelihood training in Ethiopia

Funding required: $181,900

This project will help: 1,577 households in SNNPR and Oromia

Estimated completion date: June 2026

Country: Ethiopia

Executive summary

In Ethiopia, where more than 22 million people live below the poverty line, 82 per cent of household heads have not completed even their primary education. For those living in extreme poverty, this number rises to 94 per cent, according to a national poverty assessment done by the World Bank Group in 2020. The link between education and poverty is clear; lack of education and/or skills training means that caregivers can’t get decent jobs or support their families adequately. This has a profound impact on children, who are among the most vulnerable to the effects of poverty.

In the Southern Nations, Nationalities, and Peoples Region (SNNPR) and the Oromia region of Ethiopia, the situation is especially dire. The combined impacts of drought, desert locusts, economic decline, high food prices and social unrest have all been exacerbated during the COVID-19 pandemic, leaving the most vulnerable families struggling to survive. About 80 per cent of the families Compassion is serving in these regions are barely able to eat two meals a day, with many children suffering from severe malnutrition. Most caregivers are working as day labourers or petty traders, earning as little as 4 cents per capita—well below the international poverty line of US$1.90 per person. The pandemic has only deepened their poverty, slowly eroding any possibility of improving their lives.

Twenty of Compassion’s church partners in these regions want to do something to help. They know that by empowering caregivers to learn new skills and manage their finances wisely, their economic situation could drastically improve in a relatively short period of time. That’s why some of our partners have already taken the first step, organizing caregivers into small savings groups where they are learning how to save regularly and support one another through small loans. However, because of their extreme poverty, caregivers will need more help to get ahead. Our partners want to develop a more robust network of self-sustaining savings groups, as well as offering caregivers valuable skills development training and access to investment capital.

Did you know?

Since 2000, the percentage of all Ethiopians living in poverty has dropped by 33 per cent. However, since 2005 there has been no improvement for the lowest income households, who have only seen their poverty worsen.



Compassion partners with churches in some of Ethiopia’s most vulnerable communities, where many families are living in extreme poverty. Since the onset of the pandemic, an already dire situation has become significantly worse. In the SNNPR and Oromia region, our church partners report that many families are barely able to eat two meals a day, leaving many children severely malnourished. Lack of education is the primary factor impacting poverty for these families, with caregivers unable to access any kind of skills training that could help them improve their quality of life. Twenty of our church partners in these regions have identified 1,557 households in desperate need of help improving their income. Some churches have already organized caregivers into small savings groups so they can begin learning the basics of financial management, but they just don’t have the resources to provide the training and capital that caregivers will need to start their new businesses and run them successfully.

The need

Lack of education is a primary driver of extreme poverty across Ethiopia. Most caregivers in the SNNPR and Oromia region work as day labourers or in petty trading, barely earning enough to survive. An already dire situation has steadily worsened in recent years due to drought, violent conflict, economic decline and the impact of COVID-19. Caregivers in these regions would benefit greatly from skills training; however, the cost is far beyond what they can afford. Twenty of our church partners in these two regions of Ethiopia want to step in and make a lasting difference for the most vulnerable families.

You can help 1,557 households improve their income and quality of life through savings groups, skills training and working capital for caregivers. The first step will be reorganizing all caregivers into 105 savings groups, ensuring the numbers are distributed more evenly. The second step of this intervention will involve skills development training for caregivers, completed in two separate phases. Caregivers will then be able to apply for loans, which will be distributed in rounds based on need, as well as other criteria including attendance at group meetings, regular contributions to savings groups and overall trustworthiness.

By providing caregivers with new skills training and the financial assistance they need to launch their businesses, our partners expect families to see a drastic improvement in their quality of life, giving them hope for a much better future.

What your gift will do

Your gift will help 1,557 caregivers in Ethiopia learn new skills and start small businesses, including:

  • Self-help group activities:
    • Socio-economic assessment
    • Awareness training for caregivers
    • Capacity-building training for 60 self-help group committees (three committee members from each group)
    • Phase 1 trainings such as Purpose of saving, Constitution and passbooks, Group business, Self-help group record keeping, Problem solving, Individual business skills, Purpose of loan, Loan repayment rules and Record keeping (10 half days of training at each centre)
    • Phase 2 training covering Communication, Record keeping, Leadership, Market analysis, Marketing and promotion, SMART goals (10 half days of training at each centre)
    • Ledger books, minute books and attendance register for each group
  • Funds for microloans and loan-based working capital for 60 self-help groups
  • Livelihood activities:
    • Baseline livelihood assessment
    • Capacity-building training
    • Income-generating skills training


  • Local contribution: US$11,818.77
  • Handling of funds: Compassion Ethiopia will distribute funds and ensure that this intervention remains within budget.
  • Monitoring and follow-up: Churches will monitor the progress of each self-help savings group and submit regular reports throughout this intervention. Each church will also continue to monitor its local situation closely, making adjustments as needed due to any external challenges such as inflation, extreme weather or political strife.

No less than 80 per cent of your donation will be used for program activities and a maximum of 20 per cent for fundraising and administration. If we exceed our funding goal for the initiative shown, the remaining funds will be used to fund other programs where the need is greatest.