TRICKLE UP - MALI

CASE STUDY

DRAFT

6 SEPTEMBER 2007

SEEP NETWORK’S POVERTY OUTREACH WORKING GROUP

MF/MED APPROACHES TARGETING VERY POOR PEOPLE

Jan Maes
September 2007
 TABLE OF CONTENTS

Executive Summary.............................................................................................................i
1. Context ...........................................................................................................................1
1.2. Local context – target area.......................................................................................2
2. Organizational Framework.............................................................................................8
2.1. International Organization.......................................................................................8
2.2. Local organization.................................................................................................10
3. Description of “Very Poor” Target Group....................................................................14
3.1. Individual and Household conditions
........................................................................................................................................14
3.2. Socioeconomic conditions.....................................................................................15
4. Poverty Targeting and Assessment...............................................................................17
4.1. Poverty measurement practices..............................................................................17
4.2. Available Poverty Data..........................................................................................18
4.3. Poverty Targeting...................................................................................................19
5. Products and Services...................................................................................................21
5.1. Financial Products..................................................................................................21
5.2. Microenterprise Development Services.................................................................23
5.3. Non-financial Services...........................................................................................26
5.4. Design and Product Development: .......................................................................27
5.5. Implementation Process ........................................................................................30
6. Results...........................................................................................................................32

6.1. Method of measuring results.......................................................................................32

6.2. Impact....................................................................................................................32
6.3. Cost Effectiveness and Sustainability ...................................................................33
Executive Summary
In 2003, Trickle Up initiated a successful program in the northern Mali regions of
Timbuktu and Gao that focuses on helping very poor people, primarily women (94%),
start or expand income generating activities, by providing conditional seed capital, access
to savings via savings group formation, as well as business training and counseling.
Trickle Up has built and trained a network of more than 20 non-governmental
organizations as partners, all local community development organizations in northern
Mali. These local partners identify potential microentrepreneurs, provide market-
oriented business training customized to low-literacy populations, administer seed
capital, and evaluate the success of the businesses.

In less than four years, over 10,800 microentrepreneurs received seed capital grants in the
amount of $100, and formed 430 business development savings fund (BDSF) groups,
with 25 members each.

Trickle Up uses a two-step poverty targeting approach. Geographic targeting is the first
step and programs are limited to the poorest regions of Mali: Timbuktu, Gao and Mopti.
Within those regions, where very poor people are the majority, TU partner agencies use a
participant selection tool, which focuses on three components:
- poverty
- commitment/motivation
- entrepreneurial ability

The poverty component scored each potential microentrepreneur on a set of locally

relevant and easily verifiable poverty indicators: gender of microentrepreneur, disability,
number of children, employment, school attendance of children, source of water for the
household, and number of meals consumed each day.

In order to assist very poor people in engaging in profitable income generation activities,
Trickle Up and its local partner NGOs offer microenterprise seed capital grants,
microenterprise training, and training to local groups of Trickle Up participants in
managing their own savings and loans. In addition to this “Trickle Up package’, local
partner NGOs often provide microentrepreneurs also with additional programs or
services, that might include capacity-building, health and hygiene, women’s
empowerment, agricultural extension, natural resource management, savings and credit
activities, literacy classes, artisanal skill development.

The seed capital grant is provided in two separate installments. The first installment (in
the amount of $80 or $90) is provided immediately after a business plan has been
prepared, and the second installment ($20 or $10) takes place after the entrepreneur
completes a business report, at least three months since the first grant or after the business
has at least gone through an entire business cycle, whichever is the longest period.

In order to receive the cash grant, participants need to meet a set of conditions, including:
- To complete a full business training curriculum (see further for more
information);

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 - To present a viable business plan and business report;
- To invest seed capital grant in business assets only;
- To contribute weekly savings of approximately $1.40 to Business Development
Savings Funds.

Trickle Up has found that very poor people, who struggle almost on a daily basis to make
ends meet, have a very low savings capacity which often prevents them from saving a
large enough lump sum to significantly change their income opportunities. Very poor
people also typically lack any regular cash inflow, and therefore cannot afford the risks
that come with a microloan. Trickle Up offers risk-free conditional seed capital in the
form of $100 grants, buttressed by high-quality training and access to savings and other
key services that are delivered by local community development organizations. This
model is based on the hypothesis that a large portion of the poorest people are excluded
from microcredit, whether self-excluded for fear of the risk, formally excluded because of
MFIs’ rules, or geographically excluded by virtue of a simple lack of MFIs in the area.
Further, Trickle Up posits that this group can ascend to the first rung of the microfinance
ladder with a unique package of risk-free seed capital, training, savings and other
services. TU fills a niche that remains unnoticed and underserved, yet that represents a
major proportion of the world’s poor.

In order to build their microenterprises and assets, TU entrepreneurs are required to join a
Business Development Savings Fund (BDSF) as soon as they receive their seed capital
grant. Each group is made up of 25 Trickle Up entrepreneurs selected by a local NGO
program partner, all starting their businesses at the same time and in the same village.
Mandatory weekly contributions start at approximately $1.40. These funds can be used
for business purposes only. Through the BDSF, women do not only improve their
financial security, but they also have access to additional capital should they need to take
out an individual business loan.

In addition, members can also request a loan. Individual loans for group members are at
5% interest rate. For some groups, non-members are also eligible to receive loans (for
business ventures) at a rate of 10%. Some groups also invest some of these savings in
high-profit group ventures, such as purchasing and selling grains, farm animals, and
produce.

Trickle Up’s mission is to empower people living on less than a dollar a day to take the
first steps out of poverty by providing them with resources to build microenterprises for a
better quality of life. Reaching very poor people is required by the Trickle Up mission
and this is made very clear as part of the contract with its local partner agencies. At the
same time, Trickle Up has in the past never been able to accurately and reliably measure
the poverty of its program participants. In Mali (and other core TU countries), a poverty
scorecard has been recently developed and will be field tested before the end of 2007.
Trickle Up plans to use this poverty scorecard routinely not only to assess the poverty
level of incoming program participants, but also to measure their movement out of
poverty as the program progresses.

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Compared to microcredit programs, the Trickle Up approach appears less cost-effective.
However, while TU continues to improve cost-efficiency through achieving larger
economies of scale, it also strongly believes that assisting very poor in sustainably
improving their livelihoods through microenterprise can only be achieved if sufficient
assistance is provided (through intensive microenterprise training and seed capital) to
move from below subsistence levels to economic self-reliance. Simply providing a loan
to very poor people would not achieve this and might further worsen their livelihoods. On
the other hand, Trickle Up is experimenting with new models to make its program more
cost-effective. In Mali, Trickle Up supported savings groups are not only saving on a
weekly basis to build up a loan fund, but each entrepreneur is also contributing a small
amount each week (during three years) to provide a seed capital grant for a future
microentrepreneur in her village.

SWOT Analysis:
Strengths
1) Trickle Up has a very strong commitment to assist only very poor people with
microenterprise support. This commitment is solidified in contractual agreements
with its local partner NGOs.
2) Trickle Up actively targets very poor people, first by geographic targeting,
followed by a poverty selection tool. Trickle Up is currently testing a poverty
scorecard to better gauge participant poverty levels.
3) Trickle Up’s approach takes into account one of the biggest obstacles to move out
of poverty for very poor people, i.e. their lack of access to capital and very low
risk-taking ability which prevents them from taking a loan.
4) Unlike credit approaches, Trickle Up seed capital can significantly improve the
living conditions of subsistence based households, improving their food security
for instance by increasing their food production for own consumption.
5) The program does not only provide access to capital, but also trains people basic
enterprise and financial literacy skills, assists people to form savings groups, and
very importantly, gradually builds their self-confidence.

Weaknesses
1) The TU model does not include financial self-sufficiency, which is the ultimate
aim of most microcredit programs. Trickle Up, however, is not a microfinance
program, and argues that in order to take a lasting step out of poverty, very poor
people need both training and seed capital to significantly improve their income
opportunities, enabling them to cross the poverty line.
2) Seed capital grants might send the wrong signal by not allowing budding
microentrepreneurs to truly understand the costs of doing business and perhaps by
not providing a strong enough incentive to make the microenterprise a success (as
they are not using their own hard earned capital). Both these phenomena occur
rarely, however. Very poor people tend to take this once-in-a-lifetime opportunity
very seriously, and even though the TU seed capital might be risk free, they still
take on significant risks by complementing the grant with their own assets, for
instance, or by foregoing other income opportunities (such as day labor) to work
on their new microenterprises.

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 3) Trickle Up’s approach by itself is not a sufficient solution in areas with
undeveloped or saturated markets To be more effective , especially in remote
rural areas. To be more effective under such conditions, Trickle Up is moving
further towards making new markets more accessible to the poor, including value
chain approaches.

Opportunities
1) Trickle Up’s approach targets a niche market that is difficult to reach by both
savings-led and credit-led microfinance. The chronically poor, people with
disabilities, people living with HIV/AIDS and other very vulnerable people have
difficulty generating a steady cash flow, no matter how small the required amount
to save or pay back a loan. Once their income activities take a jumpstart and
remain sustainable, they will be in a much better position to graduate to savings
and/or credit services.
2) Along the same lines, there are many opportunities for Trickle Up to partner with
existing microfinance institutions who want to reach out to people who are poorer
than their regular target clients. Trickle Up is already engaged in a few of such
partnerships, where Trickle Up helps program participants graduate to
microcredit. In Mali, a recent assessment of the microfinance players in the
Northern regions, where Trickle Up operates, has been undertaken to investigate
the feasibility of such ‘bridging’ strategies, where the most successful
microentrepreneurs can access bigger loans than they could obtain from their
BDSF.

Threats

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1. Context
1.1. Country Socioeconomic and Poverty Data

Table 1.1. Country Statistics

1.1.1. National Currency FCFA
Amount Year
1.1.2. Population (millions) 13.1 million 2004
1.1.3. Population density per square kilometre 10 2004
1.1.4. Percentage urban / rural population 30/70 2004
1.1.5. Inflation 4.0% 2004
1.1.5. Nominal Exchange Rate (current, X Currency per US$1) 208.71*2.8 2003
1.1.6. PPP Exchange rate 208.71 2003
1.1.7. HDI value 0.338 2004
1.1.8. HDI ranking 175 2004
1.1.9. GDP/Capita (PPP US$) 998 2004
1.1.10. Local currency equivalent of $1-a-day international poverty 225.41
2003
line ($1.08!)
1.1.11. Population below national poverty line (%) 1 63.8% 2003
1.1.12. Population living below $1 a day (%) 72.3% 2004
1.1.13. Population living below $2 a day (%) 90.6% 2004
1.1.14. Population growth rate 2.9% 2004
1.1.15. Life expectancy 48.1% 2004
1.1.16. HIV prevalence (% ages 15-49) 1.7% 2005
1.1.17. Malaria cases (per 100,000 people)
1.1.18. Population undernourished 28% 2003
1.1.19. Children underweight
Male 26.7%
1.1.20. Adult literacy 2004
Female 11.9%
Male 46%
1.1.21. Net primary enrolment ratio 2004
Female
Male N/A
1.1.22. Net secondary enrolment ratio
Female
1.1.23. Physicians per 100,000 people 8 2004
2.8% of
1.1.24. Health expenditures per capita 2004
GDP
1.1.25. Gender-related development index (GDI) rank 134 2004
1.1.26. Gender-related development index (GDI) value 0.329 2004

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 1.2. Local context – target area
1.2.1. Briefly describe local socioeconomic conditions
1.2.1.1. Geographic reference of location and size of population
Mali, a landlocked country in West Africa that covers 1.2 million square kilometer,
has an estimated population of 11.4 million, which is growing at 2.2% per year. The
overall population density is only 10 people per square kilometer. Over 80% of its
population is rural and 46% is under 15 years old. Almost 60% of Mali’s land area,
corresponding to the three northern regions of Timbuktu, Gao and Kidal, is semi-arid
or arid. Two of Africa's largest rivers, the 900-kilometre Senegal River and the 1 600-
kilometre Niger River, flow through the country. In addition to fishing and dry season
grazing areas, both rivers have vast floodplains where crops are cultivated; crops are
also grown around permanent lakes and depressions.

1.2.1.2. Local population characteristics:.

1.2.1.2.1. Ethnic groups
There are five major ethnic groups within the Northern Provinces: (i) the Songhoi or
Sonrhai, who are settled farmers along the Niger River; (ii) the Peuhl or Fulani, who
are semi-nomadic or transhumanting pastoralists utilizing floodplain areas as dry
season pastures; (iii) the Kel Tamacheq or Touareg; (iv) the Arabs or Maures, who
are nomadic herders; and (v) the Bozo, who are semi-nomadic fishers on the Niger
River. Relations between these groups are often tense because of competition for
land and water.

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 1.2.1.2.2. Most important economic activities
Mali's economy is based heavily on agriculture, which accounts for 40% of GDP,
75% of export earnings and 80% of employment. Its main crops are the traditional
staple foods rice, millet and sorghum, with cotton as the main cash crop in the south.
Crop production is dominated by smallholder subsistence farmers who sell only
between 15% and 20% of their output. Pastoralist animal husbandry is an important
source of livelihood in the north.
Since its currency was devaluated in 1993, Mali's GDP has grown by an average of
5% to 6% per year. Inflation has been kept under control and the country has
developed a comparative advantage, particularly with regard to livestock. Despite
significant progress, socio-economic development remains constrained by the
vulnerability of crop and livestock production to rainfall, a weak industrial sector, a
large informal sector, weak human resources and the degradation of natural
resources.

1.2.1.2.3. Cultural and religious background

Muslim 90%, Christian 1%, indigenous beliefs 9%

1.2.1.3. Natural resources, economic activities, markets, unemployment

Mali is the third largest exporter of gold in Africa. Phosphate, kaolin, salt, and
limestone are also mined. Subsistence farming, fishing and nomadic herding are most
common livelihood activities in the North.

1.2.1.4. For rural areas only: most important crops and livestock activities, water
supply (irrigation, rain fed), seasons and number of harvests, land availability,
ownership patterns and contracts.
Crop-raising in the north is limited to the floodplains of the two rivers (Niger and
Senegal) and to areas around permanent depressions and lakes. Soils are fragile, and
infertile, and input use is low. Production is mainly increased by expanding planted
areas; fallow periods are too short to restore fertility. There is considerable potential
for irrigation along the Niger River, where improved water control could reduce the
dependency to rainfall. The traditional crops of these areas – rice, millet, and
sorghum – have potential in local, national and regional markets.
• Livestock contributes 10% to 12% of GDP and 9% of 15% of export earnings.
Mali exports large quantities of meat to Algeria, Côte d'Ivoire, Ghana, Mauritania
and Senegal. Mopti is the main livestock-raising area, followed by Timbuctu, Gao
and Kidal. Productivity is low, however, as a result of disease, poor husbandry
practices and overgrazing. Animal health services are limited and the vaccination
rate here is considerably lower than the national average. The degradation of
rangelands and the diminution of water points have led herders to settle for longer
periods around permanent water sources. Competition with farmers is a source of
rising tension and the permanent presence of herds and flocks is degrading the
rangelands near water sources.
• Fishing is heavily dependent on the extent and duration of river flood regimes.

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 Approximately 80% of national output is caught in the Mopti region. Although
fishing is the traditional profession of the Bozo people, it is becoming a secondary
activity since most Bozo are now involved in farming.

1.2.1.5. Occurrence of droughts, floods, natural disasters or conflicts

Droughts and desertification are two major constraints. A desert locust plague ruined
the harvest a few years ago. Herders have been forced increasingly to keep their herds
and flocks near permanent water sources, which has resulted in tensions between
pastoralists and other herders, and settled farmers. Conflicts in the north during the
1990s have also led to insecurity, which perpetuates chronic poverty.

Other recurring events cause significant fluctuations in the economic and prices of
goods and services: drop in gold production, drop in the price of cotton, increase in oil
prices and fluctuation of the US dollar vis-à-vis the euro/CFAF.

1.2.2. Describe government policies aimed at the very poor

1.2.2.1. Social protection schemes by the government.
Despite the Government’s and development partners’ concerted efforts, access to
social services remains limited, particularly in the remote northern regions. In theory
67% of the population has access to a safe water source, but 66% of these are in
disrepair. In Timbuktu, 79% of villages do not have access to a modern water source;
in Gao, barely 10% have a borehole or modern well. Access to health services is also
weaker in the north. Although Mali allocates over one quarter of its budget to
education, enrolment remains low, particularly among rural children in the north. Girls
are often taken out of school to help care for livestock.

1.2.2.2. Policies aimed to integrate the very poor, such as anti-discrimination and
affirmative action laws.
N/A

1.2.2.3. Property and land rights.

Family law favors men, and women are particularly vulnerable in cases of divorce,
child custody, and inheritance rights, as well as in the general protection of civil rights.
While the law gives women equal property rights, traditional practice and ignorance of
the law prevent women, even educated women, from taking full advantage of their
rights. Traditional practice discriminate against women in inheritance matters, and
men inherit most of the family wealth.
Hereditary servitude relationships continue to informally link different ethnic groups,
particularly in the north. There is evidence that members of the Tamachek community
continue to live in forced servitude and are deprived of civil liberties by members of
other ethnic groups. Members of the black Tamachek community, often referred to by
the pejorative label bellah, report on the continued existence of feudal slave-related
practices in the country.

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 1.2.2.4. Local government and non-governmental development programs.
The Malian Government’s Programme d’Appui aux Communes Rurales is a project
that works to improve access to social services (education, health, clean water) and
boost economic development. It provides grants ranging from $4,000 to $40,000 to
local groups to support community-based projects.

NGO players: Freedom from Hunger, Solidarité-Unité-Coopération, Coordination

régionale des ONG de Mopti, Mali Finance, Africare, among others. Note that they
may not specifically work in Gao, SEAD’s target area.

1.2.2.5. Other
N/A

1.2.3. Brief profile of microfinance environment.

1.2.3.1. List microfinance institutions (other than subject of case study) and other
financial institutions/services accessible by the poor.

As of 2003, the microfinance sector in Mali comprises 41 networks with 752 local
entities and a total membership of 614,000, covering close to one-third of all families
in Mali. The sector comprises three subsectors: cooperatives with 70 percent of total
outreach, so-called village banks (caisses villageoises) with 20 percent, and solidarity
credit groups in the Grameen tradition with 10 percent. The subsectors are similar in
operational terms, including joint liability. They differ with regard to savings in terms
of total resources: 57 percent among the cooperatives, 39 percent among the village
banks and 27 percent among the solidarity groups. The sector is highly concentrated:
88 percent of all deposits and 84 percent of all loans outstanding are in the cooperative
subsector, and two-thirds of that in just two networks.

The two most common types of microfinance providers in the rural North are the
caisses villageoises, and the credit cooperatives. For instance, two of the biggest credit
cooperative networks in Mali, Nyésigiso and Kondo Jigima have a presence in Mopti
and Timbuktu. The Nyèsigiso Network is a group of financial cooperatives made up of
a central credit union and 11 ‘mother coops’, with 25 associated outlets in the rural
areas. The regions of Timbuktu and Gao have the least coverage. There are no caisses
villageoises and the two microfinance models, savings and credit cooperative and
solidarity-based microcredit, only reach a fraction of the population.

1.2.3.3. Demand versus supply of microfinance services.

The Mopti region has a microfinance penetration rate of 7%. The bulk of microfinance
clients belong to caisses villageoises. The entire Timbuktu region counts slightly
above 6,000 microfinance clients, which for a population estimated at 300,000
represents a penetration rate of less than 2%. Most of these clients are members of
savings and credit cooperatives and solidarity based MFIs. The microfinance
penetration rate in Gao is even worse, with less than 0.5% of the active population
associated with an MFI or savings and loan cooperative.

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 A recent study estimated that less than 2% of the demand for microcredit was met in
the three regions where TU operates.

1.2.3.4. Depth of microfinance outreach.

Very poor people are rarely reached, except perhaps by the caisses villageoises, which
are only present in Mopti.

1.2.3.5. Existing MF/MED initiatives (other than case study) aimed at the very poor.
Nyesigiso credit union networks in Mali added Freedom from Hunger’s Credit and
Savings with Education (CEE) to the products and services offered to their clients. Not
sure if the CEE addition is implemented in any of the Northern regions of Mali. No
other MF/MED initiatives other then TU known to reach the very poor in these
regions.

1.2.4. Poverty
1.2.4.1. Existing Poverty data and geographic areas of the country where extreme
poverty is most concentrated.
Include both urban and rural areas where extreme poverty dominates most. Include
map and/or table with available poverty data (from national census, World Bank or
UN surveys, participatory poverty assessments, etc.)

Mali is one of the world's poorest countries and an estimated 88% of the poor live in
rural areas. Women are more affected by poverty than men; their access to health
services is extremely precarious. Of women over 15 years of age, 80% are illiterate
and cultural norms often limit their access to information, resources and participation
in decision-making. Chronic hunger affects at least one fifth of the population and
malnutrition is widespread.

The TU program targets Mali’s Northern rural regions of Timbuktu, Gao and Mopti.
Despite their productive potential, communities in northern Mali are the poorest in the
country. Poverty in the northern regions is characterized by environmental
degradation, lack of infrastructure and chronic food deficits. The conflicts in the north
that occurred during the 1990s have also led to insecurity, which perpetuates chronic
poverty. The rural poor are especially vulnerable to the fragile environment; many are
food insecure. With few assets or access to physical or financial resources, they
depend on income-generating activities with low productivity. In addition, they have
limited access to basic social services, primary health care, safe water, useable roads,
electricity and communication services.

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1.2.4.2. Does the target area fall within these extreme poor regions?
TU operates in three of the four regions with highest poverty incidence: Mopti,
Timbuktu, and Gao. The choice to target Northern Mali was based not only on the fact
that this region is the poorest of the country, but also the least served by microfinance
(and other development) programs.

1.2.4.3. If known, what is the proportion of population in the target area living below
$1-a-day and/or within bottom 50% of people living below the national poverty line?
See table above. Mopti is the region with the highest incidence of extreme poverty
(38.1%). Timbuktu also has a high rate of extreme poverty (26.4%), whereas Gao has
a relatively low rate of extreme poverty (11.1%).

1.2.4.4. Main determinants of poverty.

Despite their productive potential, communities in northern Mali are the poorest in the
country. Poverty in the northern regions is characterized by environmental
degradation, lack of infrastructure and chronic food deficits. The conflicts in the north
that occurred during the 1990s have also led to insecurity, which perpetuates chronic
poverty. The rural poor are especially vulnerable to the fragile environment; many are
food insecure. With few assets or access to physical or financial resources, they
depend on income-generating activities with low productivity. In addition, they have
limited access to basic social services, primary health care, safe water, useable roads,
electricity and communication services.

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2. Organizational Framework
2.1. International Organization
2.1.1. Name and type of the organization (INGO, multilateral agency, foundation, other)
Trickle Up Program, US-based international NGO

2.1.2. Organizational background

2.1.2.1. Mission and vision
Trickle Up empowers people living on less than a dollar a day to take the first steps
out of poverty, providing them with resources to build microenterprises for a better
quality of life.

2.1.2.2. Brief history

Trickle down economics was a political selling point in 1979 and Glen and Mildred
Robbins Leet weren’t buying it. Frustrated that huge sums of money allocated to top
levels of society never reached the world’s poorest, the Leets decided to reverse the
equation — from the bottom-up. In 1979, the Leets founded Trickle Up as an
empowering response to global poverty.

Trickle Up outreach began when the founders traveled to one of the Caribbean’s
poorest nations, Dominica. The Leets recognized what other poverty alleviation
programs were missing: that even the world’s lowest income people have
entrepreneurial potential. The model they created was simple, but effective.

With the assistance of local agencies and $1000 of their own money, Glen and
Mildred gave ten people grants of $100 to launch their own microenterprises. The
Leets provided them with Trickle Up business plans and reports to track business
expenses and earnings. New business activities ranged from building blocks to selling
eggs, jams, and school uniforms. Some of those businesses are still operating today!
Results were overwhelmingly positive in terms of quality of life improvements for
our entrepreneurs. Like this, the Trickle Up program was born.

Twenty-nine years later, Trickle Up is a critical vehicle for social and financial
empowerment. Trickle Up has helped people start or expand over 150,000 businesses
as a way out of poverty, affecting the lives of over half a million people.

1.1.2.3. Type of support: funding, capacity building, technical assistance, direct

service provider, other
TU provides business training, seed capital grants and support to help people launch a
microenterprise. Trickle Up offers grants, not loans, to our entrepreneurs, because
TU believes that this is the most appropriate way to assist the very poor to take a first
step out of poverty, and considers very poor people unable or unwilling to obtain a
microloan.

2.1.3. Development intervention approach

2.1.3.1. Primary target group and development focus

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TU supports very poor people, with a strong focus on women and people with
disabilities.
TU’s current geographic focus comprises West Africa (Mali and Burkina Faso), East
Africa (Uganda and Ethiopia), South Asia (India and Nepal), and Central America
(Guatemala and Nicaragua).
TU’s primary development focus is microenterprise development for the very poor.

2.1.3.2. Specialized in MF/MED or multisectoral

TU employs a grants-based MED approach to assist very poor households in
implementing (expanding, improving, starting) a microenterprise, and also assists
Trickle Up beneficiaries in managing their own savings groups.

2.1.3.3. MF/MED model

TU provides both enterprise development assistance (business training, facilitating
access to markets…) and access to finance (through conditional seed capital grants,
encouraging savings including formation of savings groups and access to microcredit).

2.1.3.4. Other sectors

TU works with local NGO partner agencies who implement this economic
empowerment program alongside their own social services to assist the very poor in
meeting basic needs.

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 2.2. Local organization
2.2.1. Organizational development (S)

Trickle Up has built and trained a network of 20 non-governmental organizations as

partners, all local community development organizations in northern Mali. These local
partners identify potential entrepreneurs, provide market-oriented business training
customized to low-literacy populations, administer seed capital, and evaluate the success
of the businesses. Sometimes these local NGO partners also integrate TU’s
microenterprise support package with their own social services and/or programs. These
are the current local NGO partners of Trickle Up in Mali:

Association pour l’Appui au Développement Intégré (AADI)

Agence Evangélique de Développement (AEDM)
Association des Groupements Villageois Féminins (AGVF)
AÏTMA
Association des Volontaires du Sahel (AVS)
Association pour la Promotion et l’Appui au Développement Local (APADL)
Action Recherche pour le Développement des Initiatives Locales (ARDIL)
Woïya Kondaye Espace de Réflexion et d’Entraide avec les Femmes (EREF)
Equipe de Recherche et d’Appui Pour le Développement (ERAD)
ESPOIR
Femmes Jeunesse Développement au Nord Mali (FEJEDENOM)
Groupe d’Animation Action au Sahel (GAAS-MALI)
Groupe d’Appui au Développement (GADEV)
Groupe de Recherche d'Etudes de Formation Femme Action (GREFFA)
Nouveaux Horizons
Organisation Pour un Développement Intégré au Sahel (ODI-SAHEL)
Organisation Pour la Gestion de l’Environnement au Sahel (OGS)
Solidarité Pour l’Autopromotion à la Base (SABA)
Sahel Etude Action pour le Développement (SEAD)
SELLE

Trickle Up’s partner agencies in Mali vary widely is size, capacity and area of focus, but
with the assistance of Trickle Up each agency integrates the Trickle Up microenterprise
approach with its existing services and programs to reach the very poor.

In Tombouctou, Action pour le Développement des Initiatives Locales (ARDIL) or

Action for the Development of Local Initiatives is present in four of the five regional
districts and supports a wide range of programs in various fields including community
development, health, literacy, and microenterprise. ARDIL works with several target
groups including women and people with disabilities.
In Niafunké (about three hours west of Tombouctou), Woïya Kondaye is the branch of a
national women’s organization working specifically with poor rural women.
In Gao, Sahel Etude Action pour le Développement (SEAD) or Study and Action for
Development in Sahel is one the most progressive organizations in the region. Founded in
1987, SEAD’s mission is to promote sustainable development through agriculture, animal

10
husbandry, access to water, and other community-development initiatives. SEAD’s
approach is rather innovative and focuses on capacity-building, research, and the
inclusion of gender perspectives.
In the village of Goundam (Tombouctou area), AITMA is a smaller organization that
works mostly with Tuareg communities on craft development. AITMA is also known for
being an organizer the annual international Festival au Désert (Festival in the Desert) in
Essakane outside of Tombouctou, which features traditional Tuareg music, dance, poetry,
and other art. Through AITMA Trickle Up provides grants and training to Tuareg women
in the communes of Gargando and Essakane.

Most of these NGOs are not primarily focused on microfinance/microenterprise

development, but rather on such diverse areas as natural resource management and
environment, health, agriculture, food and water security, education/literacy, women’s
empowerment, democracy and governance. Only a few were involved in savings and
credit, or income generation activities, before partnering with Trickle Up.

Rather than lumping all Trickle Up partner agencies in Mali together, the following
description focuses on SEAD as an example of a local partner agency.

Table 2.2. Institutional Background

Issues Observations
Sahel Etude Action pour le
2.2.1.1. Name of the organization or institution
Développement (SEAD)
14 rural communes and 1
urban commune (Gao) in
2.2.1.2. Geographic area of operation
three ‘cercles’ of the Gao
Region
2.2.1.3. Legal structure NGO
2.2.1.4. Registration status Registered
2.2.1.5. Regulation status N/A
2.2.1.6. Date established 1987
Multiple sectors: economic
activities, agriculture,
handicrafts/artisan support,
2.2.1.7. Specialized (MF/MED) or multisectoral livestock, irrigation,
environment, training and
research, education, health,
technology
Since 2004, when TU
2.2.1.8. Start of MF/MED activities
partnership began
Food security, education,
2.2.1.9. Core business (f.i. credit, savings, …)
health
2.2.1.10. Business model N/A
2.2.1.11. Target market – MF/MED Poor rural women
2.2.1.12. Number of clients/participants – MF/MED 1,225

11
 Issues Observations
47 (overall)
2.2.1.13. Number of staff 10 (Trickle Up program
activities)

2.2.2. Organizational development (S)

2.2.2.1. Mission and vision
SEAD’ mission is to contribute to the well-being of both the sedentary and nomadic
populations, particularly women and destitute children in the North of Mali through
technical support and assistance to local communities in areas of education,
production, mobilization of internal and external resources.

2.2.2.2. Brief history

N/A

2.2.2.3. Objectives
SEAD’s overarching objective is to contribute to sustainable development and
autonomous advancement of local communities, by
- To organize the sedentary and nomadic communities of Northern Mali
- Technical and institutional assistance to those communities
- To support to mobilization of internal and external resources
- To facilitate communication and collaboration among all stakeholders in the area.

2.2.2.4. Organizational culture, leadership, innovation (S, M)

SEAD is a well-functioning indigenous NGO with a strong organizational culture.
SEAD reviewed and rewrote its mission and vision within the past 2 years, and staff
feel strongly about both. Staff are very motivated and very loyal. It is a participatory
NGO with bottom-up leadership.

2.2.2.5. Organizational structure, roles and responsibilities (diagram may be helpful)

SEAD strives for participation, decentralization and bottom-up leadership. For
example, SEAD wanted every single one of its staff to be trained on TU so all could
participate.

2.2.2.6. General qualifications and profile of field staff (S, M)

Field staff are called animators. Their tasks involve:
- Inform and sensitize communities about Trickle Up program
- Selection of Trickle Up participants
- Microenterprise training (during six weeks)
- Assist in completion of business plans
- Distribution of seed capital grants
- Weekly follow-up visits with individual microentrepreneurs
- Training and technical assistance for business development savings funds (BDSF)
- Monitoring and evaluation, data collection for Trickle Up country office

12
 SEAD has a good proportion of women and men because it has a strong focus on
gender sensitivity. SEAD aims for its field staff to mirror its target population, and
most field staff come from the communities in which they work.

2.2.2.7. Training/sensitization (of staff, managers, board) on mission and poverty

outreach (S, M)
SEAD and other Trickle Up local partner NGOs in most cases already work with very
poor communities. Trickle Up also trains partner NGO staff in the importance (for the
TU mission) to reach the very poor and how to reach the very poor by using a TU
designed poverty targeting tool.

2.2.2.8. Incentives for poverty outreach (S, M)

There are no monetary incentives for poverty outreach, neither is there a conflict
between financial and social performance, because the local organization is not
directly involved in financial services.
The most important incentive for reaching the very poor is TU required selection of
very poor by using a locally relevant poverty tool. Selection of program participants is
not entirely based on poverty indicators, but on “commitment” indicators as well (such
as membership in solidarity group, previous participation in trainings, willingness to
participate in a savings group...). Furthermore, if partner NGOs don’t target the poor
by using the selection criteria, they cannot remain TU partners.

2.2.2.9. Governance
As a small NGO, SEAD is governed by a Board, and is subjected to periodic auditing
of its financial activities as required by most foreign donors.

2.2.3. MF and MED services

N/A – See section 5
2.2.3.1. MF model and products/services.
2.2.3.2. Description of main target group (if not the very poor).
2.2.3.3. Selection and/or eligibility criteria
2.2.3.4. Use of poverty assessment tool

2.2.4. Resources and external assistance

SEAD is funded by various international PVOs (including Cordaid, Trickle Up, WED)
and through collaboration with World Food Program and a decentralization program
initiative by the Government of Mali. Its annual budget is around $400,000.

2.2.5. Relationships (networks, partnerships, other institutions)

2.2.5.1. Networks
N/A
2.2.5.2. Partnerships
N/A

2.2.5.3. Other institutions

N/A

13
3. Description of “Very Poor” Target Group
3.1. Individual and Household conditions

3.1.1. Gender
93.6% are women

3.1.2. Age
Average age = 39 years

3.1.3. Disability and chronic disease

2.5% persons with disabilities

3.1.4. Culture or religion

N/A

3.1.5. Ethnicity
N/A

3.1.6. Membership to socioeconomic groups, such as caste and class

N/A

3.1.7. Household type, composition, marital status

Unmarried: 3.5%
Married: 37.8%
In polygamous marriage: 33.0%
Divorced: 6.5%
Widowed: 19.3%

3.1.8. Literacy
81.1%

3.1.9. Education
N/A

14
 3.2. Socioeconomic conditions
3.2.1. Refugee or IDP status
N/A

3.2.2. Economic conditions (F, C)

3.2.2.1. Underemployment
N/A

3.2.2.2. Income Sources

65% of program participants are the sole income earner of their household. 76.2%
cannot afford sending their children to school. Before participating in Trickle Up, 89%
of participants were engaged in the following income activities:
- Services: 7.0%
- Trade: 68.3%
- Services: 8.6%
- Handicrafts: 5.2%
- No income activity: 10.9%

Before entering the program, 32% reported that they had one meal per day, 53% had
two meals, and 15% had three meals.

3.2.2.3. Land ownership

TU microentrepreneurs do not own or lease land, but most have access to land for
cultivation. If cultivation does not meet household subsistence needs, people need to
buy food on the market. Gao has good market connections with Bamako and other
areas.

3.2.2.4. Asset ownership

N/A

3.2.2.5. Income level

Household incomes are very low, with the majority below $0.50 (at nominal exchange
rate) per capita per day.

3.2.3. Geographic conditions

3.2.3.1. Rural/urban, remoteness from trading centers and roads, population density
71% live in rural villages, 8% in peri-urban and 21% in urban areas.

3.2.3.1. Access to markets

This is different for each target area. Access to markets for urban and rural
communities depends on distance to the river Niger, which is the main trade route in
Northern Mali. All major towns are located at the river, and distance from the river
Niger varies for each village. Most Trickle Up partner organizations serve areas that
are relatively close to the river Niger compared to overall region.

3.2.3.1. Access to banks

15
 Branches of banks (and increasingly of some microfinance institutions) are only
available in the trading centers of Gao, Timbuktu, and Mopti.

3.2.3.1. Access to doctors and clinics

N/A

3.2.3.1. Proneness to natural disasters

Same as 1.2.1.5.

3.2.4. Major vulnerabilities and risks encountered by target group (F, C)

Lack of food security; lack of health care—malaria, HIV/AIDS; drought and
desertification, and recently, flooding.

16
4. Poverty Targeting and Assessment
Trickle Up Mali, and Trickle Up worldwide, does currently not assess poverty of clients,
but employs a poverty targeting tool, based on poverty indicators that are typically
determined locally. See section 4.3. for details.
Currently, Trickle Up Mali does not measure client poverty, but it has recently developed
a poverty assessment tool for Mali, which will be field-tested in November 2007. See for
details under 4.2. There is currently no USAID certified poverty tool for Mali.

4.1. Poverty measurement practices

The following information pertains to the Poverty Scorecard to be field-tested in late
2007 and to be used routinely starting in 2008.

This easy-to-use poverty scorecard for Mali was developed by Mark Schreiner and is
called a “judgmental” poverty scorecard, because indicators and points were selected
based on the experience and judgment of the analyst and of program managers in Mali.
The lower the score, the more likely a household is poor. The scorecard will help Trickle
Up to target services and track changes in poverty over time. All 20 indicators and their
possible responses are drawn from questions in Mali’s national expenditure survey, but
the poverty scorecard could not benchmarked to an objective, expenditure-based poverty
line, because the results of this 2001 national survey were unavailable. If they become
available in the future, the tool can still be benchmarked.

4.1.1. Poverty data collection

4.1.1.1. Which poverty indicators are collected?
These are the poverty scorecard questions. Note that answer choices are not included.
1. How many family members are 17 years old or younger?
2. How many children ages 6 to 14 attend school?
3. What is the highest educational level that the female spouse/head has completed?
4. How many members of the household work in agriculture, animal husbandry, fishing, or forestry?
5. How many members of the household hold a salaried job?
6. What is the main construction material of the residence’s roof?
7. What is the main construction material of the residence’s floor?
8. What is the residence’s main source of lighting?
9. What is the main source of drinking water?
10. What is the main fuel for cooking?
11. What toilet arrangements does the household have?
12. How many rooms does the household occupy?
13. Do you have an improved wood-burning stove?
14. Is there a kitchen?
15. Does the household own any plows, harrows, grain mills, tractors, motorized pumps, motorized cultivators, or vaporizers (pumps
for cotton)?
16. Does the household own any handcarts, bicycles, or motorbikes?
17. Does the household own any radios?
18. Does the household own any televisions?
19. Does the household own any telephones?
20. Does the household own any fans?

Minimum possible score (most likely poor): 0

Maximum possible score (least likely poor): 41

4.1.1.2. What poverty assessment tool is used?

“Judgmental” Poverty Scorecard

17
 4.1.1.3. When and how often are poverty data collected?
To be determined. Most likely: at entry, 1 year, 2 years, 5 years

4.1.1.4. Which clients are measured?

To be determined. Most likely all clients at entry and samples at 1 year, 2 years, 5
years

4.1.2. Use of poverty data

4.1.2.1. What, if any, are poverty categories distinguished by poverty data?
N/A

4.1.2.2. How are each of these categories defined?

N/A

4.1.2.3. How are poverty data used by organization?

4.1.2.3.1. For client monitoring?
4.1.2.3.2. For client screening?
4.1.2.3.3. For client targeting?
4.1.2.3.4. For impact monitoring/assessment?
4.1.2.3.5. For other uses?

4.2. Available Poverty Data

4.2.1. Poverty distribution results by internal poverty data collection method
N/A

4.2.2. Poverty data from a recent poverty and/or impact assessment study
N/A

4.2.3. Poverty Data obtained through use of USAID certified poverty tool
N/A
4.2.3.1. Which USAID certified poverty tool was used? Which poverty criterion was
used: $1 a day or bottom 50% below poverty line?
4.2.3.2. Provide details on poverty assessment exercise: time conducted, sample size
and selection…
4.2.3.3. Poverty results: proportion of very poor clients versus poor clients.

4.2.4. Interpretation of Poverty data

N/A
4.2.4.1. Comparison between internal and USAID poverty tool data
4.2.4.2. Organization’s own interpretation of poverty outreach

18
 4.3. Poverty Targeting
4.3.1. Does the organization use a poverty targeting tool?
Geographic targeting is the first step. Trickle Up has programs only in the poorest regions
of Mali: Timbuktu, Gao and Mopti. Within those regions, very poor people are in the
majority, and Trickle Up works selects suitable partner agencies with a mission that is
compatible with Trickle Up (especially in terms of reaching the very poor) and with
sufficient organizational capacity. Excessive costs or lack of suitable local NGOs are
sometimes an obstacle to reach the very poor in the most remote areas within those the
abovementioned three regions.

TU partner agencies use a participant selection tool, which focuses of three areas:
- poverty
- commitment/motivation
- entrepreneurial ability

Poverty is scored between a minimum of 2 and a maximum of 15 as follows. The

following table represents the poverty selection framework. Almost all poverty indicators
are easily observable/verifiable.

a) Gender F = 3 M=1 Physically Handicapped : Yes = +2

b) # of children : (0=0) (1-3=1) (4-8=2)
(8+=3)
c) Employed person in household; Social security Yes = 0
recipient? No = 1
d) If children are of age, do they attend school? Yes, all= 0 No, not all= 1
No children = 0
e) Where do you get water : ■ running water = 0 ■ private, shared, or public
fountain = 1 ■ River, stream, or rain water = 3
f) Number of meals per day : 3=1/ 2=2/ 1=3

4.3.2. What is the client poverty target level?

In order to be eligible for the program, a minimum score of 8 is required.

4.3.3. Staff use of poverty targeting (S, F)

4.3.3.1. Training/sensitization (of staff, managers, board) related to poverty outreach
How is staff trained in poverty targeting?
Partner NGO field staff have been trained in using the participant selection tool, and
understand about the importance of reaching the very poor to the mission of Trickle
Up. If local partner NGOs do not already have a strong focus on the most vulnerable
community members, the Trickle Up program and support enables organizations to do
so.

4.3.3.2. Staff incentive schemes

There are no explicit staff incentive schemes to reach the very poor.

19
 Reaching the very poor is a commitment by local partner NGOs, which is also
formally addressed in the agreement between each partner NGO and Trickle Up.

4.3.4. Issues with poverty targeting (S, F)

Often demand for participating in Trickle Up’s microenterprise program is much higher
than available resources, which is one of the reasons that other selection criteria
(motivation, entrepreneurial ability) are used in addition to poverty criteria.
Poverty selection criteria might be more or less relevant depending of the poverty level of
the target area. In relatively well-off areas, selected participants might be better off than
those selected according to the same criteria in a very poor area.
Until now Trickle Up has not been able to test the accuracy of the poverty selection tool.
Planned poverty assessment by using a recently developed poverty scorecard for Mali
will allow for comparing poverty levels among different partner NGOs and target areas.

20
5. Products and Services
Trickle Up and its local partner NGOs offer microenterprise seed capital grants,
microenterprise training, and training to local groups of Trickle Up participants in
managing their own savings and loans. In addition to this “Trickle Up package’, local
partner NGOs often provide microentrepreneurs also with additional programs or
services. These programs depend on local partner agencies’ own mission and activities,
and vary from one agency to the other. They include capacity-building, health and
hygiene, women’s empowerment, agricultural extension, natural resource management,
savings and credit activities, literacy classes, artisanal skill development.

5.1. Financial Products

In terms of financial products, Trickle Up provides new program participants with a seed
capital grant to start a new enterprise or to expand/enhance an already existing income
generating activity. The capital grant is provided in two separate installments. The first
installment (in the amount of $80 or $90) is provided immediately after a business plan
has been prepared, and the second installment ($20 or $10) takes place after the
entrepreneur completes a business report, at least three months since the first grant or
after the business has at least gone through an entire business cycle, whichever is the
longest period.

Among the conditions for the seed capital grant are:

- To complete a full business training curriculum (see further for more
information);
- To present a viable business plan and business report;
- To invest seed capital grant in business assets only;
- To contribute weekly savings of approximately $1.40 to Business Development
Savings Funds (see below)

TU entrepreneurs are also required to join a Business Development Savings Fund

(BDSF) as soon as they receive their seed capital grant. Each group is made up of 25
Trickle Up entrepreneurs selected by a local NGO program partner, all starting their
businesses at the same time and in the same village. Mandatory weekly contributions start
at approximately $1.40. These funds can be used for business purposes only. Through the
BDSF, women do not only improve their financial security, but they also have access to
additional capital should they need to take out an individual business loan.

The groups manage themselves, elect their own executive committee and set their own
rules. All members meet every week to make contributions, initially 1$ each, starting
from the first week of business. The microentrepreneurs will participate in consecutive
saving cycles, which end by withdrawing the accumulated savings by each member to
reinvest in their microenterprise. These withdrawals increase in size over time and are
paid back to the group fund without interest.

In addition, members can also request a loan. Individual loans for group members are at
5% interest rate. For some groups, non-members are also eligible to receive loans (for
business ventures) at a rate of 10%. Some groups also invest some of these savings in

21
high-profit group ventures, such as purchasing and selling grains, farm animals, and
produce.

After having operated largely informally (without legal status) these groups acquire their
formal status (association) to access more services with other authorities (banks,
government services, etc). Trickle Up provides the models and tools to do so during the
training.

Table 5.1. Microfinance Product Details

Product Features and Policies
5.1.1. microcredit
5.1.1.1. Individual or group product
5.1.1.2. Loan terms (maturity, interest
rate, interest type, flexibility)
5.1.1.3. Loan source
5.1.1.4. Loan use
5.1.1.5. Loan size (first loan, average
loan, maximum loan size)
5.1.1.6. Meeting requirement and
frequency
5.1.1.7. Mandatory savings requirement
and amount
5.1.1.8. Collateral requirement
5.1.1.9. Other eligibility requirements
5.1.1.10. Loan default policy
5.1.1.11. Repayment flexibility
5.1.1.12. Other
5.1.2. microsavings
5.1.2.1. Individual or group
5.1.2.2. Savings Type
5.1.2.3. Deposit/collection location
5.1.2.4. Deposit frequency, amounts,
flexibility
5.1.2.5. Meeting requirement and
frequency
5.1.2.6. Savings terms (interest rate,
minimum deposit, …)
BDSF members can borrow individually from
the group fund
6-12 months, 5% monthly interest, first two
months no payments
BDSF (members’ own savings)
Business-related
Variable – set by group. Loans range from
$100 – $1,200, depending on size of group
fund
BDSF group meets every week.
Mandatory savings is 500 CFA ($1)
No
Viable business plan, in good standing,
contributed all mandatory savings
Many groups require members to pay a fine if
they cannot pay back a loan.
Groups introduce some flexibility as needed,
with group consensus.
N/A
Group (BDSF)
Mandatory
At group meeting, kept in lockbox
Weekly, approx $1.40. Sometimes groups
mutually agree on a savings holiday for 1 or 2
weeks for special occasions
Required; weekly.
No interest, but group fund accumulates
through interest charged on individual loans.

22
 Product Features and Policies
Savings are withdrawn by all group members
5.1.2.7. Withdrawal and savings use simultaneously after certain savings cycle.
policies Withdrawal is for enterprise use only, and is
paid back to the group without interest.
Yes. Both group accounting and individual
5.1.2.8. Record keeping and accounting
passbooks.
Sometimes in group enterprise opportunities;
5.1.2.9. Investment of deposits
also as external loans to non-members
5.1.2.10. Other N/A
5.1.3. microinsurance
5.1.3.1. Microinsurance Type N/A
5.1.3.2. Group or individual product N/A
5.1.3.3. Term N/A
5.1.3.4. Eligibility requirements N/A
5.1.3.5. Renewal requirements N/A
5.1.3.6. Rejection rate N/A
5.1.3.7. Voluntary or compulsory N/A
5.1.3.8. Product coverage (benefits) N/A
5.1.3.9. Key exclusions N/A
5.1.3.10. Pricing – premiums N/A
5.1.3.11. Pricing – co-payments and N/A
deductibles
5.1.3.12. Pricing – other fees N/A
5.1.4. microgrants
5.1.4.1. Individual or group product Individual household
5.1.4.2. Amount (and number of grants) $100, in two instalments: $80/90 and $20/10
5.1.4.3. Eligibility requirements See requirements explained above.
5.1.4.4. Grant use and other conditions Microenterprise only.
5.1.4.5. Savings requirement or matched
No
savings arrangement
5.1.4.6. Straight grant, no interest or Grant requires microentrepreneur to
partial repayment contribute 500 CFA per week to BDSF
5.1.4.7. Other N/A

5.2. Microenterprise Development Services

Microenterprise training takes place in 6 half-day training sessions over the course of
three weeks. The purpose of these sessions is to allow those involved to become
accustomed to the use of business concepts and to participate in practical exercises that
will prove to be extremely useful. The first session is entitled “Identifying Products and
Services” during which participants receive an introduction to Trickle Up, an overview of
the program, and establishment of the rules. They also try to come up with business ideas
and become familiar with the business plan.

23
Session 2 is called “Competition” and this is when participants show their business plan
and explain their activity. Then they hear stories and are made to think about competition
in a number of different contexts, such as strengths and weaknesses of products,
differentiation, as well as determination of price in order to be competitive in the market.
The goal is to determine how they can be most successful with their business activity.

Session 3 expands on the concept of differentiation and is called “Market Study.”

Participants are encouraged to carefully examine the market in which they will be
working so that they can decide who will be their potential clients and how much people
will pay for their product. They should also be thinking about how many clients they will
have each day and how many products they will sell.

For session 4 entitled “Calculating Costs and Projected Sales”, those involved present
what happened in their market study homework and begin thinking about all steps that
will go into the business and all costs they will incur when starting up the business. They
learn to calculate sales through examples, and also determine the cost of raw materials,
working capital and equipment used.

“Calculating Profits” is the subject of training session 5. This is only possible if

participants were able to calculate their expenses during the previous session, which will
then be subtracted from the total sales. Then in groups they must calculate the percentage
of profit for the example business and work to calculate their own profits using one of the
work sheets.

Once the Business Plan is completed for Trickle Up, the Business Development Savings
Fund must be explained in detail. That is why Session 6 focuses on “Training the
Entrepreneurs on the Business Development Savings Fund.” The BDSF is an essential
part of the program and exists to help the microentrepreneur finance his/her business and
allow it to grow. Those involved learn about investing into the fund, participating in
savings groups, and using the fund to increase business revenue. This is also a way for
the partner NGO to work alongside the entrepreneur and solve problems that may arise.

The NGO partner agency field staff does not only provide this training, but assists each
microentrepreneur individually on a regular basis, starting with the formulation of the
business plan to calculating revenues and profit to reinvesting in the microenterprise.

24
Table 5.2. MED Service Details
Service Types and Features
5.2.1. Training
5.2.1.1. Financial literacy Yes
5.2.1.2. Business planning and
Yes
management
5.2.1.3. Marketing Yes
5.2.1.4. Recordkeeping and
Yes
bookkeeping
5.2.1.5. Skill development Yes
5.2.1.6. Technical assistance Yes
5.2.1.7. Training method Group training
5.2.1.8. Other N/A
5.2.1.9. Costs to client None
5.2.2. Business Consultancy and Advisory Services
Both group and individual counselling
5.2.2.1. Individual or group sessions
sessions
6 times during the first 6 months, once at the
5.2.2.2. Frequency end of the 1st year, twice during the second
year and twice during the third year.
5.2.2.3. Topics Same as business training topics above
Yes, this is an important part during training,
5.2.2.4. Confidence Building
practical exercises and individual sessions
5.2.2.5. Other N/A
5.2.2.6. Costs to client None
5.2.3. Market Linkages
5.2.3.1. Input supply No
5.2.3.2. Marketing Assistance No
5.2.3.3. Market Information No
5.2.3.4. Producer organizations Sometimes, through BDSF
5.2.3.5. Business linkage promotion No
5.2.3.6. Quality Control No
5.2.3.7. Other N/A
5.2.3.8. Costs to client N/A
5.2.4. Other
TU-supported microenterprises often
provided increased employment for
5.2.4.1. Employment generation household and non-household members
(especially in case of anise group income
projects)
In some cases: anise farming and food
5.2.4.2. Technology development
preservation

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 5.3. Non-financial Services
Providing non-financial services is at the discretion of the TU partner agency, and if they
are provided, these services vary from partner agency to partner agency.
Plans exist to roll out literacy and other social capital development training through the
TU Mali-developed Alpha Business training kit, but implementation depends on funding.

Table 5.3. Non-financial Services Details

Service Types and Features
5.3.1. Nutrition

5.3.2. Health and Sanitation

5.3.3. Education

5.3.4. Social Capital Development

5.3.5. Other

5.3.6. Empowerment and confidence building

A major element of the BDSFs is confidence-building and empowerment for group
members. Though clients are not involved in product and service design at the TU Mali-
level, they take ownership of their BDSFs through leadership positions on committees,
group decision-making and creation of their group’s by-laws. Those who are selected as
BDSF representatives and participate in regional and sub-regional meetings build further
confidence through those meetings. Anecdotal evidence suggests that clients do have

26
more negotiating power in business transactions, especially when making group
investments.

5.3.7. Graduation of very poor clients into mainstream MF/MED services

TU is currently exploring a pilot “bridging” pilot with the IFC and ICCO/Terrafina. It
would link the oldest entrepreneurs with MFIs. Next step is a project design phase.

5.4. Design and Product Development:

5.4.1. Program rationale/ theory of change?

5.4.1.1. Main issues and challenges of very poor clients which the organization seeks
to address
People in chronic poverty lack of access to the assets necessary for a higher standard
of income or welfare, whether these assets are thought of as human (access to
education, healthcare), natural (access to land or other natural resources), physical
(access to infrastructure), social (access to networks of obligations) or financial
(access to financial resources and services). Very poor people spend most of their
disposable income on food and other basic needs without meeting these. As a result,
rather than building up assets they are often forced to take on debt and/or sell their
little assets.

TU assists very poor people by focusing on critical human, financial and social assets
to jumpstart their microenterprise activities and gradually improve their livelihoods
towards self-reliance.

5.4.1.2. Intended outcomes and impacts

If successful, the microenterprise activities will enable TU microentrepreneurs to
gradually accumulate and strengthen their livelihood assets, expand their choices for
livelihood strategies, and ultimately achieve self-sufficiency. TU entrepreneurs and
their households will become more resilient to shocks, downward trends and seasonal
changes as the result of their accumulated assets and diversified income strategies.
Less poor people can increasingly choose from a wide diversity of livelihood
strategies to meet their various needs at different times.

5.4.1.3. How are products and inputs designed to achieve those intended impacts?
TU provides support to the following core assets for microenterprise growth:
- Microenterprise development training (human capital). To improve
microenterprise and basic financial literacy skills of people with low or no
literacy.
- Savings services (financial capital) enabling TU entrepreneurs to build their
savings for the purposes of microenterprise expansion, provision of essential
household needs, and risk mitigation.
- Conditional seed capital (financial capital). Provide conditional seed capital to
eligible entrepreneurs in amounts that are sufficient to start a microenterprise. The

27
 current standard amount of $100 in two installments will be flexible to take into
account local conditions and microenterprise needs.

5.4.2. Concept development

5.4.2.1. Client Survey Demand/Needs assessment
No

5.4.2.2. Competition analysis

Competition in the Trickle Up context would mean any other entity offering financial
and enterprise development services to very poor sections of the population. The only
source of credit available to very poor people in the regions where Trickle Up operates
are local money lenders. In the example of the anise value chain, some business
services (including credit) are offered by middlemen buyers, who typically do not
reach very poor people, as these services are prohibitively expensive for very poor
households who are subsistence farmers, but ant to start a new income generation
activity.

5.4.2.3. Self-assessment
Trickle Up (USA headquarters) has recently undertaken a complete self-assessment of
the organization and as a result has formulated a new strategic direction that is seen as
significantly different from the past in important ways. These include a stronger
geographic focus and presence in fewer countries coupled with increased
decentralization; a stronger emphasis on other necessary microenterprise inputs than
seed capital, such as microenterprise training, promotion of sustainable savings
mechanisms, and linking Trickle Up microentrepreneurs to new markets.

5.4.3. Product/Service design

5.4.3.1. Product/service design process
Trickle Up’s standard product, seed capital in the form of two consecutive grants
triggered by a business plan and business report respectively, was expanded in the
context of Mali to better respond to local needs. These innovations were possible,
because Mali was the first country for Trickle Up to establish a permanent country
office, and came at a time where change was encouraged due to the strategic review
that was taking place within Trickle Up headquarters. As a result, the Mali program
became a bit of a laboratory for testing changes to the basic model. These changes
included organizational support (technical and financial) to establish Trickle Up
savings groups (Business Development Savings Funds), market research and
enterprise services for value chains with strong potential for very poor producers, etc.

5.4.3.2. New versus modified products/services for very poor clients

N/A. Trickle Up intends to serve only very poor clients.

5.4.3.2. Risk assessment and product design

28
 The uniqueness of Trickle Up’s approach is strongly related to risk assessment.
Trickle Up believes that the very poor lack sufficient assets to take the risks associated
with taking out a loan. Unlike less poor microentrepreneurs, who usually already have
a fairly predictable (i.e. less risky) income stream in addition to the anticipated income
resulting from a microenterprise financed by a microloan, the very poor do not have
any regular cash income or savings to make the required loan payments in case their
business venture would fail. Trickle Up agrees with the very poor that the risk of a
microenterprise loan is too high and therefore provides microenterprise capital in the
form of a conditional grant instead of a loan. Microgrants also allow very poor
microentrepreneurs to purchase long-term productive assets (such as a building,
equipment, bicycles, animals, and tools) that do not generate an immediate return.
The Trickle Up seed capital grant strategy is designed to reduce the risk to an
acceptable level for very poor households and individuals who want to engage in a
microenterprise activity.

5.4.3.1. Prototype development and testing

N/A

5.4.4. Pilot testing

The basic Trickle Up grants based approach has been in use for three decades. However,
in recent years new program innovations have been field-tested, especially in Mali. Mali
was the first country where TU established a permanent country office, which was a pilot
test by itself and at the same time the field presence enabled testing out new approaches
much better than before. In that sense, the Mali program has been a testing ground for
many innovations that are to become part of the new strategic direction that Trickle Up
has set in the last two years. The following are examples of innovations which have been
field tested:
- A small set of Trickle Up microentrepreneurs participated in testing new
enterprise development services, such as technical assistance and access to new
markets, for anise farming and food preservation.
- The BDSF mentioned elsewhere are another innovation that was pilot-tested and
then adapted countrywide
- A recent pay-it-forward model (see also 6.3.4.) started as a pilot in January 2007.
All TU microentrepreneurs starting this year will participate in the pilot.
- A new training manual (including a literacy component) has been developed and
funding is being sought to pilot-test.

5.4.5. Rollout
N/A (the new services have not yet been replicated at scale)

5.4.5. Product/Service review and assessment

Feedback was given by local partner NGOs involved in pilot-testing.

5.4.6. The Product Development Cost

5.4.6.1. Total cost
N/A

29
 5.4.6.2. How were they funded?
Donor (Argidius Foundation) provided funds to pilot-test access to new markets and
support to very poor entrepreneurs. IFC funding also allowed to operate a country
office. This, together with the higher scale of the Mali program compared to other
Trickle Up country programs, allowed for relatively cost-efficient approach to new
product testing.

5.4.6.3. Outsourcing during the development process

No, but there was close collaboration with the Ministry of Agriculture.

5.4.7. Feedback loop

Currently, microenterprise performance data (sales, investments and expenses, profits)
are the main indicators to test effect of new products. Significant improvement in
M&E data collection and use are underway as part of new strategic plan.

5.5. Implementation Process

5.5.1. Process
Local agency applies to become partner NGO
Training of partner NGO
Selection of entrepreneurs
Formation of BDSFs
Training of entrepreneurs
Preparation of business plan
First disbursement of $90 to entrepreneurs
Microenterprise investments and operation
Regular visits with microentrepreneurs
Preparation of the business report (after approximately three months?)
Second disbursement of $10 to entrepreneurs
Continuing and expanding microenterprise activities
One-Year evaluation
Continuing work with BDSFs (training, capacity-building, legalization into
assocations)
Continuing data collection (after 1 and 2 years)

5.5.2. Logistics
The most important logistical consideration for both partner NGO field staff and TU Mali
staff is travel, sometimes under harsh conditions. Partner NGO staff need to be mobile
to maintain frequent visits with TU entrepreneurs during training, capital disbursement,
business counseling, M&E, etc. TU Mali staff also frequently visits NGO partner sites,
for capital disbursement, training, and M&E. The cost of use of a vehicle is significant.

5.5.3. Information System

30
Data are collected on each Trickle Up microentrepreneur by the partner NGO starting at
the time of selection. The partner NGOs complete written forms and provide those to the
Mali country office, where data are entered, processed and analyzed.
Each partner agency is responsible for conducting individual surveys with selected
microentrepreneurs and submitting the completed forms to the Trickle Up Mali Office
once all surveys are completed. A basic training by Trickle Up staff on how to conduct
the surveys is provided to partner agencies at the start of the program.

31
6. Results

6.1. Method of measuring results

6.1.1. Type of data
Information on entrepreneurs at baseline is collected through two main documents: a
Selection Form, including poverty, motivation, and capacity criteria and a more
comprehensive Baseline Survey Form, which includes data such as number of meals per
day, source of water, income resources, household expenditures…

In addition to baseline data on general living conditions of the entrepreneurs and their
households, Trickle Up Mali collects business plans and business reports, respectively at
the start of the program and after three months of business activity. Those two documents
include business-related data such as amounts for working capital, sales, and profit.

Performance of the BDSF groups is tracked by monitoring savings and loan data.
TU Mali field staff also meet with BDSFs and conduct surveys on overall functioning
(bylaws, management, transparency) of the groups.

One year after the seed capital grant disbursement, partner agencies conduct a second
survey which serves to compare the situation of entrepreneurs at baseline, one year later
and two years later.

6.1.2. Data analysis and use

Data collected on each form is entered by Trickle Up - Mali staff and aggregated by
partner agency.

The compiled data are shared with all partner NGOs and discussed during periodic
partner meetings. Trickle Up and partners look at differences in data between partner
agencies operating in similar areas and seek explanations when such cases arise. This
procedure aims to cross-check results and helps partner NGOs understand factors that
influence microenterprise performance.

A narrative report interpreting the raw data is then produced by the Mali office, which
includes sections on income, expenditure, savings and credit, job creation, and
livelihoods (health, nutrition, education, community life, etc.).

6.2. Impact
6.2.1. Poverty Impact
Internal data collection shows consistent increase in number of meals eaten and increased
income by TU microentrepreneurs and their families. The percentage of families eating
three meals a day increased from 25% to 85% after the first year of program
implementation.
TU is planning to use the recently developed Poverty Scorecard as a poverty monitoring
tool in future.

6.2.2. Client satisfaction and feedback

32
Client satisfaction is not routinely assessed by Trickle Up, neither are program
participants considered as clients. However, while staff testifies that satisfaction with the
program is generally very high, when asked what could be improved, microentrepreneurs
often mention: access to greater capital, more business training and literacy training.

6.3. Cost Effectiveness and Sustainability

6.3.1. Scale and replicability
6.3.1.1. Strategy for scale?
What is the planned scale for Mali?
One of the biggest limitations to scaling up is the size and capacity of local NGOs.
Trickle Up partner NGOs typically lack the capacity to reach and follow up more than
100 microentrepreneurs each year. So, further scaling up is achieved by partnering
with more and bigger NGOs.

6.3.1.2. Replicability of program or service

Replicability depends on a number of factors:
- Presence of local NGOs willing and able to implement Trickle Up programs
alongside other programs.
- If partner NGO also implements microcredit activities, these need to be clearly
(preferably geographically) separated from microgrant programs.
- For a seed capital grant approach to be effective, very poor people need to be able
to meet their minimum basic needs, especially in terms of food security and
healthcare.

6.3.2. Financial and operational self-sufficiency (if applicable)

6.3.2.1. Financial expense ratio
N/A

6.3.2.1. Operational expense ratio

N/A

6.3.2.1. Cost per client

Still to be provided....

6.3.2.1. Clients per staff member

At the partner NGO level, on average each field agent works with 75
microentrepreneurs in 3 BDSF.
TU-Mali has a total staff of 6, which includes driver, accountant, etc.

6.3.2.1. Average loan balance per borrower

N/A

6.3.2.1. Average savings balance per saver

Approximately $100 after two years as member of a BDSF group

33
 6.3.2.1. Portfolio at risk
N/A

6.3.2.1. Tailoring of product/service

N/A

6.3.2.1. Other
N/A

6.3.3. Cost-effectiveness of non-financial services?

Not available. Non-financial services are currently not offered by Trickle Up. In case
they are offered by partner NGOs, they are solely responsible for implementation and
costs.

6.3.4. Strategies to cover/reduce costs?

Even though the Mali program is currently Trickle Up’s biggest program in terms of
number of new microentrepreneurs assisted each year (including training, seed capital
grants, assistance to BDSFs, and business counseling), further scale-up will reduce costs
significantly through better economies of scale.
Trickle Up’s grant-based microenterprise development approach is dependent on external
funding for providing microentrepreneurs with access to seed capital. Even though the
Trickle Up approach is fundamentally different from traditional microfinance, it has
initiated an innovative “Pay-It-Forward” (PIF) system in Mali. Once microentrepreneurs
join a BDSF and have received their seed capital grant, they start not only saving to fund
their own credit fund, but they also contribute a small amount each week towards the
seed capital grant for a future entrepreneur. By saving $1.40 each week, each
microentrepreneur will have saved $218.40 after 3 years (156 weeks), of which $100 is to
be used as seed capital grant for a new microentrepreneur, $14 to support the local NGO
to train and monitor new BDSFs, and the remainder to stay in the BDSF’s own credit
fund.

34