Beyond microcredit—the Trickle Up Program

Abstract

Microloans for businesses on the Grameen or BancoSol model are designed to serve well only one sub-set of a very diverse microenterprise market. This market has varied needs which cannot all be met by a loan methodology designed for high-turnover, experienced microbusinesses needing working capital. A wider variety of financial (and non-financial) services to microenterprise needs to be offered, responding to the variety of needs in the marketplace. Conditional grants for businesses offer an alternative to an exclusive focus on microcredit as a way to provide capital to the poorest entrepreneurs. This article describes the Trickle Up conditional grant programme, in which a single small grant, usually for a start-up, is offered to poor entrepreneurs. This programme is often run alongside, and not in competition with, microcredit programmes for more experienced business people. With regard to sustainability, the emphasis is not so much on the recycling of funds for institutional sustainability, but on the sustainability of the business, and the benefits that thus accrue to some of the poorest households.