Grameen Foundation focuses on working with the poor and poorest to faciliate access to appropriate financial services, actionable information particularly in health and agriculture, and income-generating opportunities. We have long had an explicit focus on the poorest, or ultrapoor, who we are defining as the approximately one billion people who are living on less that $1.25 day. However it is not an EXCLUSIVE focus, as you’ll see from the three examples I am sharing today, but as Dr. Yunus once said, it is really HARD to reach the poorest! You have to work at it. And if you don’t try, it won’t happen. I’ll be sharing with you our learnings from working with poorest through three of our initiatives all of which integrate livelihoods approaches.
First, I want to share a brief overview of the poverty levels for clients in each project. Using the Progress out of Poverty Index, or PPI, we track poverty data across our work. First, in Uganda, we are operating a mobile agricultural extension model that provides actionable information to Uganda’s farmers via Community Knowledge Workers, who are equipped with Android phones. There, 43.6% of the farmers we reach live below $1.25 day, compared to the 38% of the Ugandan population that lives below $1.25/day.In Indonesia, with our partner PT Ruma, a mobile microfranchise model, 9% of Ruma’s clients are below $1.25 day vs 18% for Indonesia overall, and 62% are below $2.50/day vs. 14% for Indonesia overall. So we’re doing a good job of reaching the poor there, but not as good as we’d like with the poorest, and I’ll be sharing some of our learnings around what has and has not worked in terms of recruiting the poorest. And in India, an ultrapoor pilot we launched in partnership with the Basix group, to apply an integrated livelihoods and financial services approach, we started with a small sample size of 200 households, 89% of which live below $1.25/day vs 32% for India overall.
Grameen Foundation is helping the poorest communities in rural Uganda by providing relevant, actionable agricultural information and making it easily accessible over a mobile phone. CKW program provides farmers with real-time information on a range of topics, including care of animals, planting crops, treating pests and diseases, and fair market prices for their produce and livestock. Our hypothesis is that information helps farmers improve their lives and livelihoods by increasing their productivity and income. Different from other agricultural programs, we reach the most rural, “last kilometer” villages by employing a network of CKWs. As poor farmers themselves, CKWs serve as “feet in the field,” visiting other poor farmers, helping them access specific information, facilitating adoption of the service and encouraging ongoing use. CKWs can earn up to the equivalent of $2 per day for their work, effectively doubling the income they make from their own farming production. CKWs also collect information from farmers via mobile phone-based surveys. This data collection is part of an information loop that helps improve services that better address farmer needs. Because organizations pay to have surveys administered, data collection is an important source of revenue and sustainability for the program. DASHBOARD!
In partnership with an Indonesian social enterprise we helped found, we created a unique “business in a box” micro-enterprise that enables people in Indonesia to sell pre-paid mobile phone airtime and other mobile services. By providing start-up capital, a mobile phone, point-of-purchase signage, training and access to a system to sell airtime, women are able to start and run a profitable business, and earn additional income. Results from the program have shown it to be ffectivein increasing participants’ incomes and improving financial stability.Not everyone is capable of starting and running their own business, we’ve also developed an application that Ruma entrepreneurs can use to connect Indonesians seeking service and labor jobs (for example, as drivers, day laborers and domestic help) with local employers. Individuals sign up to receive text messages for jobs in their area that match their skill sets.
Our partnership with Basix in India is centered around testing a sustainable approach to providing integrated livelihoods and financial services to the very poorest. The project has incorporated financial product adaptations to ensure they meet the needs and requirements of the poorest – most important, integrating flexibility into both savings and loans. The unique feature of this project in relation to other ultrapoor projects is that we wanted to see if we could build a sustainable business case around serving this target audience and integrating them into a microfinance institution’s customer base. There are still some questions marks around this, and while we do think it is feasible to serve this audience in a sustainable way on an ongoing basis, there is a also necessary grant component for the start-up and training elements. We will be publishing a case study with project results in December.
The two lessons that arose most consistently across all three projects are 1) The effort and creative approaches required to reach the poorest and 2) We have found that business performance is EQUALLY strong across the poor and poorest, which supports an organizational business case for working with the poorest – however, in some cases we found, not surprisingly, that the poorest needed extra upfront support to get on the right track.First, on targeting and reaching the poorest, we used a different approach in each projectIn Basix, we used a combination of the PPI and participatory wealth ranking, which for the most part reinforced each other but with PWR, rather than there being a stigma attached to being categorized as “poorest”, we found households were so eager to avail of services that they wanted to be in that category. Unlike most of our work in which we target both the poor and ultrapoor, this project was specifically designed to work with the ultrapoor, so we wanted to ensure all participants fell in this category.InCKW, we used a geographic mapping approach, identifying geographic areas that have the highest incidence of poverty (overlaying with population density and agricultural information) Coupled with the PPI this has proved successful in reaching a large proportion of the ultrapoor.With Ruma, we tested a range of approaches to reach the poorest, many of which didn’t work until we hit on the one that did. Let’s talk a little more about that.
Ruma has faced many problems in identifying and recruiting the poorest. We worked with them to pilot test five strategies, four of which have failed and one has worked well:FAILED: Equipping “standard” field officers with additional tools and targets to help them to reach the poor more effectively. This was too slow and they struggled to move the dial on recruiting poorer entrepreneurs. Additionally, Ruma’s field staff are younger males, who did not seem to have sufficient trust with more senior women. They were not seen as peers, so even when they were able to target an ultra-poor household, they were typically not able to convince the woman to adopt the business. FAILED: Hiring “special” field staff who solely recruit the poorest. This was too slow and suffered from the same problem – these recruiters were not seen as peers and did not have experience actually running the business itself.FAILED: Working through partners that have touch points with the poorest. First, we found very few organizations actually had touch points with the poorest. A handful of large nonprofits already had touch points with the poorest but they had distinct programs that were already in place and were slow and inflexible to include our solution. A handful of very small community-based organizations also had touch points with the poorest, but it was not possible for Ruma to manage this complex set of relationships with very small organizations who would help with only 5-10 ultra-poor clients each. The scaling strategy was not clear.FAILED: Using the government-issued cards to identify poorest households. This was grossly inaccurate in identifying the poorest. When cross-referenced with the PPI, almost none of them were poorest.SUCCESS: Empower an existing Ruma entrepreneur to become a “hub” in her community and to recruit the poorest. She is seen as a trusted peer and as someone who has real experience operating the business. This gave a huge amount of credibility. This has been most efficient (by far). Ruma is embracing this hub model as their operating model moving forward.
The second global lesson learned was around business performance at the client level. This chart shows monthly transaction data of the Ruma entrepreneurs, which we track via the technology platform back end, which you see on the y-axis. The x-axis shows PPI scores, with the poorest to the left and least poor to the right. This U-shaped was really surprising to us – we expected to see more activity among the least poor, so to see not only that the poorest can be just as active as the less poor, but some of the poorest were the most active, is fascinating.Another learning was that the product needs to be delivered in a different manner (with training and liquidity financing) to the poorest -- the first month was critical in terms of ensuring the ultrapoor engaged longer term. We saw that the poorest were dropping out in larger numbers early on, but if we provided more support in the first month, they could be just as successful as the less poor entrepreneurs. Additional training has been required by the ultra-poor. Especially in the first 2-4 weeks. Ruma has structured a nonprofit organization called Jangkau that will focus on providing these additional supports. This training issue has been compounded by the fact that Ruma is expanding the number of products that each agent can sell. With multiple products comes complexity. This puts additional pressure on Jangkau to provide the training, and has also led to Ruma considering a segmentation of its products – where some can be sold by the ultra-poor (things like airtime with existing demand and no quality concern) but other products like savings or insurance would need to be sold by less poor members of the community due to social factors beyond their control. One strategy to mitigate the social element and allow poorer people to still sell the products and services is to focus heavily on the branding of the organization. Signage, shirts and a major push to build trust in the brand can de-personalize the transaction and limit these social effects. Many microfranchise organizations use this approach (Living Goods with their uniforms, etc).
In addition to the overall themes we have identified, there are some interesting individual learnings coming out of each project, I want to share a handful, particularly those that challenged our assumptions about working with the ultrapoor. In CKW, Poverty vs acreage correlation: More of a u-curve when you correlate poverty against acreage. Poorest fell both in the 1-acre zone and 5-acre zone. Something else going on aside from land size – hypothesis it is a combination of other things – access to services, information, finance that are keeping the poorest in poverty – not land size. Poorest face more information poverty and are more voracious users of the service. We think this is because you don’t have radio, phone, or other access to information, so CKW becomes more of a lifelineWith CKW, we also found no difference in performance levels between the poorest and the less poor. With the Basix project, the most surprising learning for us was the eagerness and ability of the women to save in small, irregular amounts. Flexiblesavings builds confidence and trustYou do not have to offer a cash hand out in order to gain trust and build incomes early on if you are able to structure livelihood support earlyUganda Poverty does not correlate with acreage Female CKWs disproportionately serve more female farmers It’s difficult to recruit ultra poor female CKWs as CKWs must have literacy, time to spare, and someone to watch after their children while they workIndia: Flexible savings builds confidence and trustThe women in the BASIX project were very successful savers. In fact, by X date, the 200 households were able to save X Rupees and X ASHGs opened a formal bank accountBased on Grameen Foundation’s experience, is it possible to craft sustainable models that work with the poorest?”
Sustainable Approaches with the Ultra poor Grameen Foundation’s work with the poor and poorest Camilla Nestor, VP Financial Services Grameen Foundation SEEP 2012 Annual Conference Building Inclusive Markets: Impact Through Financial and Enterprise Solutions
Poverty Levels Total BASIX clients: 200 BASIX India % below $1.25 88.9% 32.7% % below $2.00 98.6% 68.7% Total CKW clients: 114,218 CKW Uganda % below $1.25 43.6% 38% Total PT Ruma clients: 15,000 PT Ruma Indonesia % below $1.25 9% 18.1% % below $2.50 62% 46.1%National poverty rates from World Bank indicators SEEP 2012 Annual Conference Building Inclusive Markets: Impact Through Financial and Enterprise Solutions
Community Knowledge Workers (CKWs)• Real-time feedback loop• Poverty & livelihood data, disease trends• On-demand impact tracking• Research and market data collection• Validated results CKWs provide information on 35 crops , 6• Automated web-based types of livestock, weather, quality standards; tools, analytics and MobileMoney agent locations; market prices; dashboards (current seed suppliers dashboard is here: http://grameenfoundation.force Sourced from and reviewed by experts .com/ckw/apex/Dashboard?sfdc .tabName=01r70000000HaJA) SEEP 2012 Annual Conference Building Inclusive Markets: Impact Through Financial and Enterprise Solutions
PT Ruma “Business in a Box” Key success factors in starting a … microfranchise “business in a box” business…. solution Idea Technology “What business should I start?” Platform Skills & Confidence Proven Established “How do I start and run the Business Brand Model business? How to plan for growth?” Capital Training & Working “Where do I get the money to Support Capital start and grow the business?” SEEP 2012 Annual Conference Building Inclusive Markets: Impact Through Financial and Enterprise Solutions
Livelihood Pathways for the Poorest (LPP) in partnership with BASIX• Livelihood training, credit and savings services all delivered through adapted self-help groups (ASHGs)• Sequenced skills, knowledge and self-confidence building• Livelihood development – Incense stick rolling – Rooftop gardening – Goat rearing and poultry management training• Innovative lending model• Inter-group savings – Groups with large sums of money opened formal savings accounts SEEP 2012 Annual Conference Building Inclusive Markets: Impact Through Financial and Enterprise Solutions
Global Lessons Learned• Reaching the poorest, particularly women, requires extra effort and creative approaches – Targeting and segmenting – Women’s time restrictions, cultural inequalities, and lack of self-confidence require creative solutions• Business performance is equally strong across poor and poorest clients – supporting the business case for working with the poorest - In some cases the poorest require additional training SEEP 2012 Annual Conference Building Inclusive Markets: Impact Through Financial and Enterprise Solutions
Targeting: Failures ... and a Success In terms of recruiting the poorest entrepreneurs –PT Ruma hit a few stumbling blocks before figuring out what worked: FAILURES SUCCESS Field officers “plus” Empower existing female “Special” field staff to Ruma entrepreneur to recruit the poorest recruit poorest • The women were seen Working through as trusted peers partners Using government identity cards SEEP 2012 Annual Conference12/5/2012 Building Inclusive Markets: Impact Through Financial and Enterprise Solutions
Business Performance of RUMA EnterpreneursPoverty level has not been a good predictor of performance 8
Project Lessons Learned •• No relationship between • Poverty does not •The women in the BASIX entrepreneurs’ poverty correlate with project are very successful level acreage savers: in the first 9 and activity level • Poorest are more months, the 130• Female entrepreneurs are voracious users of the participants saved about trusted recruiters information $776 or $6 each. 9 out of 13 ASHGs opened a formal • No difference in bank account performance levels between poorest • Trust is gained through CKW and less poor building confidence, not SEEP 2012 Annual Conference just through cash hand- Building Inclusive Markets: Impact Through Financial and Enterprise Solutions outs