Business
Microfinancing with a difference
> BY GAYATRI IYER
Copyright © 2002 by The Earth Times. All rights reserved

"Massive infusions of aid do not benefit total society. They just benefit parts of it. Trickle Up was a fortunate name because people understood it," said Mildred Robbins Leet, co-founder and chair of the program.She and her late husband, Glen Leet, started a computer information service in the 1970s called Hotline International, which allowed people to follow and contribute to conferences around the world without being there physically. They covered five UN conferences. According to Leet, these were a "catalyst" in starting the Trickle Up Program.

At every conference, she said, they heard that "the rich were getting richer and the poor were getting poorer. The one question that emerged from the conference, whether it was about women or habitat or environment or population, was, 'How do you reach the poorest of the poor?' And we heard that over and over again," she said.

Leet used to work for International Council for Women of the US, followed by a stint at the International Peace Academy. Her husband was the first chief of community development at the UN. Combining their experience they started the Trickle Up Program from their apartment on the Upper West Side of Manhattan. It started off small with just the two of them and a part-time secretary.Thinking back, Leet said one of the biggest obstacles they encountered was the initial lack of recognition that they had a unique process geared toward eliminating poverty with a simple approach. "We told it to a lot of people and they would pat us on the back and say, 'That's nice, dear, good luck,'" she said. But the concept did spread. Now, according to Richenda Van Leeuwen, Executive Director of the Program, "We have developed a track record. We are known."According to Leet, the UN was a key informant for their cause. Through UN conferences the Leets were able to get out their message about their simple model.

Their idea was to give local entrepreneurs $100 apiece and provide them with business training. This training starts with a business plan, which the entrepreneur gives Trickle Up in exchange for the first installment of $50.Making this plan, Leet said, helps the entrepreneur map out his or her finances and business strategy. After the first three months (or, in the case of some livestock businesses, at the end of the first business cycle), the entrepreneurs have to present a business report to the program and are given the remaining $50.

This step, she said, encourages them to keep business records."It is a learning-by-doing process. You give people the opportunity to start a business by offering to use their skills to produce a marketable product and we provide the business skills," she said of the basic concept of the program.

The entrepreneurs are required to put in 250 hours of work toward their business in the first three months to "establish a rhythm of work." They then have to reinvest 20 percent of their profits into their business "so they learn to create their own capital."

Van Leeuwen, said that the program prefers to work with "poorest of the poor." In order to find the people most in need of such assistance, Trickle Up employs the help of local agencies and use of a "poverty effective tool." The agencies develop local indicators of poverty which are very region specific."We do not make millionaires, but what we do is enhance the livelihoods of these people and make their lives a bit better for themselves and their children," said Leet.

The Leets' first project was in Dominica in the Caribbean in 1979. They did some research at the World Bank on the "poorest of the poor" and chose this island country, with a population of 70,000, an economic growth rate of minus 5 percent and 45 percent unemployment.

Initially some agencies were doubtful that any business could be started with a mere $50. However, with the help of a few less skeptical agencies, the Leets helped start 10 business in two weeks. Seven years later, Leet said, seven out of those 10 businesses were still flourishing.

In 1994 the Trickle Up Program, which had worked only in developing countries, started projects in Brooklyn, New York. Judging from the success they were having in the developing world, Van Leeuwen said they were approached by people saying, "Why not try it here? There are people hungry in the US too."Leet told Earth Times Monthly that since 1994 the program has spread to 14 of the 50 states.

Its model for the US differs only slightly from the one used in developing countries. Instead of receiving $100, American entrepreneurs are given $700 to start their businesses. Wherever Trickle Up is working it is based on one thing and that, according to Leet, is "respect for people and a recognition that all people have skills. We are saying, 'Give them [the poor] a chance. You will be surprised to see how they reach out and take advantage of it.'"

Leet said she and her husband never realized how much Trickle Up would grow. The organization has worked in 119 countries since it was conceived.Leet still travels to areas where Trickle Up entrepreneurs are hard at work. Two years ago she revisited two women in Dominica who were among the first entrepreneurs. Not only were both their businesses flourishing but they were also able to put their children through college. Leet said she feels as if Trickle Up is improving lives "across generations."

After their first year in business, Trickle Up does not visit its entrepreneurs as often. Van Leeuwen said too much intervention may develop dependency. "We try to foster and sustain self sufficiency," she said.But the success they have had in alleviating poverty has, according to Leet, finally made some people realize "not to make decisions for people in the village." People in power do not know what the poor need, she said. They just assume it. "You need the participation of people at all levels if you're going to make any decisions about change that are going to occur in a village or in an urban area."

Glen Leet died in 1998, but his wife is still fully active in Trickle Up. "It was a wonderful partnership," she said of her marriage and the couple’s attempt to eradicate poverty. And what does she see in the future for Trickle Up? "The alleviation of poverty!" she said. She admits that it is a difficult goal to achieve. But she is also quick to point out that "perseverance" is her favorite word and she intends to persevere till she reaches her target.