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Case Study TUP Cambodia

Case Study TUP Cambodia

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Published by: Poverty Outreach Working Group (POWG) on Sep 09, 2010
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Jan P. Maes
Trickle Up’s Microenterprise Seed Capital and MatchedSavings for Very Poor People Living with HIV/AIDS inPhnom Penh, Cambodia
The Trickle Up Program is a U.S.-based organization engaged in microenterprisedevelopment for very poor households in 14 core countries, including Cambodia.Because it targets the most vulnerable sections of the population, such as the rurallandless, women-led households, people with disabilities, including those living withHIV/AIDS, Trickle Up employs a seed capital grant strategy to facilitate a client’smovement from absolute poverty toward economic self-reliance. Very poor familiesaffected by HIV/AIDS find taking a loan too risky, because they have no reserve to makeloan payments in case sickness or other family emergencies prevent their enterprises tomake a profit or to make any income at all.This case study describes Trickle Up’s collaboration with W.O.M.E.N., a smallCambodian NGO that provides home health care services and health education to slumdwellers affected by HIV/AIDS in Phnom Penh. As part of a two-year pilot project,funded by the Elton John Aids Foundation, Trickle Up has provided $100 seed capitalgrants to families in W.O.M.E.N.’s home health care program to start or expandmicroenterprises. These households also participate in a flexible individual savings program, in which the home healthcare teams are employed to collect savings duringtheir regular visits. Trickle Up encouraged these savings by matching a portion of theclients’ weekly savings amount during the first year after the seed capital grants had beendisbursed.
a.Socioeconomic overview
More than a quarter of Phnom Penh’s one million residents live in shantytowns andinformal settlements on public land. Unemployment is high and the HIV prevalence rateis higher than Cambodia’s average of 2.7%, the highest rate in Asia. Health services are poor and often hard to access by the poorest. Moreover, many of the slums are floodedduring the rain season, which causes many families to lose their belongings and to suffer from water-borne infections. People whose immune system has been compromised byAIDS suffer most.
b.Purpose of intervention
Drawing on the synergy between income generation and health care, the project aims tomaximize the chances that people living with HIV/AIDS stay healthy and run asuccessful business. The goal of Trickle Up is to assist the very poor in successfullymanaging a microenterprise, even if success is not guaranteed. As the case withW.O.M.E.N. illustrates, Trickle Up deliberately targets people who are committed toimprove their household income through enterprise but who are not eligible for loans or 1
other financial assistance. Because of their disease, people living with HIV/AIDS face ahigh risk of reduced income and higher medical expenses, which in turn forces them togo into debt and ultimately sell of their assets. Despite the fact that some households failto continue their business after some time (because of sickness or death of income earnersin the family), many are successful and use their profits to afford better medicine andfood, and even to send their children to school. To mitigate the risk of future disasters,Trickle Up promotes savings that can be deposited and withdrawn regularly and inflexible amounts by participants without having to leave their homes. As an incentive for savings, Trickle Up matches a portion of each participant’s savings. Since these familiesare vulnerable to economic shocks (slum fires, flooding) and health shocks (rain season,HIV-related symptoms), regular savings are meant to assist them in times of financialstress (to buy food and medicine during sickness and to restart their business once theyare strong enough again).
c.Description of target group/clients/members
Members involved in W.O.M.E.N.’s homecare program are HIV positive, which theylearned after taking a voluntary test. In many households at least one parent, usually themale and often the only breadwinner, has died as the result of the disease. At that time,in many families the virus has passed to the surviving spouse and several children,especially the younger ones. Frequent episodes of untreated sickness, lack of capital and previous business experience, and stigmatization are the most important hurdles these predominantly female-led households face when making a living.
II.Description of methodology:a.Summary of design concepts:
The project combines microenterprise development, promotion of savings and healthcareservices to poor people living with HIV/AIDS in Phnom Penh, Cambodia. A localTrickle Up coordinator is full-time in charge of the Trickle Up activities and steps (see below), but she is assisted by the homecare teams, who help her with savings collectionand who keep her informed about the participants’ health status. Through W.O.M.E.N.’shealthcare program, patients receive psychological and medical counseling and advice onsanitation and diet during frequent home visits by the teams, have access to some basicmedicines, and are referred to a local hospital for treatment in case someone becomesvery sick. Trickle Up’s microenterprise program consists of business training, business planning and $100 seed capital grants, given in two consecutive $50 disbursements. Thefirst disbursement takes place after completion of the business plan, and the second one iscontingent upon a successful business report. Once the enterprises are funded, weeklysavings are collected and matched up to a certain maximum. Savings are kept in acollective bank account for each group of 15 Trickle Up participants. From the beginning, at least two members of each family are involved in the program, so that oneof them can continue running the business in case another becomes sick or dies. The business leader is always an adult, but the business assistant can be an older child. Often,more than two people per family are involved. Each family is entitled to one Trickle Upgrant only.2
b.Process/steps in implementations:
Since the start of the pilot project in 2003, Trickle Up Program and W.O.M.E.N. have provided 120 predominantly female PLWHAs and their households with seed capital and business training to start or expand a business managed by the household.A Trickle Up coordinator, trained by Trickle Up Program, selects among the homehealthcare patient population would-be entrepreneurs who are willing to start or expand amicroenterprise. The Trickle Up coordinator then provides selected households (whoelect their business leader and at least one business assistant) with basic business trainingand mentoring to write their business plans. After completing their business plan, each business group receives a first disbursement of $50 of seed capital to buy equipment,materials and other items needed to start the business.After business startup, the Trickle Up coordinator visits each household once a week to provide further business counseling and to collect savings. Each business leader isrequired to save at least 500 Riel (12.5 US cents) a week into a
savings funds,from which money can be withdrawn at any time for any purpose. In addition, eachgroup was encouraged to save cash for a
savings fund, matched weekly up to amaximum of 2,000 Riel (50 US cents), and a cumulative maximum of 80,000 Riel ($20) per business group during one year of savings. Business savings can be withdrawn for  business use only, but the savings match is deposited into the personal savings account,thereby strengthening a household’s capacity to deal with financial emergencies caused by sickness, death or other events. After the one-year matching period, most participantshave saved at least $20 in their business accounts and received the same amount fromTrickle up for their personal savings account. After the matching period is over,households can opt to keep saving in the group bank account, or they can withdraw their funds if they prefer doing so.The Trickle Up coordinator also facilitates monthly mutual support meetings, attended bygroups of 15 microentrepreneurs, during which members exchange experiences related to business and health issues and receive occasional training to achieve the necessary skillsto conduct their own meetings and manage their funds. Each group of 15microentrepreneurs also opens a joint bank account to deposit their savings.
c.Methods of measuring results:
Even though seed capital grants and business training are standard ingredients in theTrickle Up methodology, the business savings concept was a new component in this pilot project and results only preliminary. An evaluation was performed one year into the program based on interviews and routine data collected by the field staff. Earlier, theimpact of the standard Trickle Up program had been assessed using a quantitative surveythat explored the various ways that participants had invested their seed capital and usedthe profits and savings.3

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