The Botswana National Literacy Programme (BNLP) was officially launched in 1981 as a major adult literacy initiative. Literacy was in this case defined as reading, writing and calculating. However, experience over the years of implementation showed that provision of the 3Rs is not enough but literacy needs to be made functional in order to be useful to the learners in their daily lives. Income generating projects were therefore introduced to the National literacy programme as a way of making literacy functional. It has been realized however that the BNLP supported income generating projects are failing or not doing well. The aim of this study was therefore to investigate the performance of income generating projects supported by BNLP in relation to projects meeting member' objectives, group dynamics, economic growth, members' health status, commitment to the projects, use of literacy skills in running the projects, conducting feasibility studies before embarking on income-generating projects, business management, availability of start up finance and follow up. Hypotheses of this study stated that the BNLP-supported income generating projects are failing because of projects not satisfying members' needs, group disputes among group members, lack of growth, ill health lack of members' commitment to the projects, inappropriate literacy curriculum, inadequate feasibility studies before starting the projects, business management, lack of finance and lack of follow up after training. The methodologies used for this study were participatory and survey research. Qualitative strategies were employed using focus group discussions, force field analysis, observations and questionnaires. Stratified random sampling, was employed to select the sampled population often operating and ten non-operating income-generating projects in the South East, Southern and Northern regions of Botswana. Purposive sampling was employed to select all twelve trainers of the income generating projects within the same regions. The results of this study were analysed using SPSS 11.5, and manual inspection. The results of this study supported this hypothesis to a great extent in that causes of failure of the projects were because the personal objectives of project members were not met, there was a problem of group disputes among members, ill health of some members was affecting their production, literacy skills learnt in literacy and income generating skills provided by BNLP were not adequate to be used in the running of the project and business skills are taught separately from the basic literacy skills of reading and writing and numeracy. Feasibility studies were not conducted before embarking on income generating projects and there was mismanagement of the projects. Inadequate follow up was also seen to be one of the contributory factors to the failure of projects. Hypothesis of this study was also partially rejected in a sense that, the results showed that almost all the projects received some grants to start their projects and therefore start up finances were not a problem but rather a problem of shortage of funds for expansion, Lack of ensuring sustainability of projects was due to mismanagement of the funds by the office bearers and mostly LGLs. Recommendations of this study directed to income generating-project members included settling group disputes, conducting feasibility studies, embarking on relevant projects individually or as groups. Policy recommendations included support of individual and group projects, running a pilot project where appropriate literacy needs of the piloted projects will be provided, involvement of the participants in decision-making concerning their projects and curriculum. The policy recommendation included ensuring that funds are only given to viable projects and literacy curriculum is relevant to the running of income generating projects to ensure sustainability. Recommendations for further studies included BNLP conducting an in-depth study to establish the prospects and problems of group approach in income generating activities, investigate the level of skills that the BNLP supported income-generating projects and their trainers possess and their specific needs for skills development and lastly evaluate the training materials used in both literacy classes and income-generation training to get more insight on what is lacking, and how this could be improved. / Thesis (M.Sc.)-University of KwaZulu-Natal, Pietermaritzburg, 2006.