India Journal: The Ultrapoor & the Very Poor

I recently returned from a 10-day trip to visit Trickle Up in India.  Inspired by the people I met every day, I kept a detailed travel diary.  In several installments  posted to the Trickle Up blog last week and this week, I hope to convey a first-hand view of the great work that Trickle Up is doing in India and our potential for even greater impact.  I invite your comments and questions, either posted to the Trickle Up blog or emailed to me directly  at This is part 5 in a series.

Bill Abrams
President, Trickle Up


Today is our second day of field visits in the state of Odisha, and we will meet with two Trickle Up groups, one our traditional ultrapoor group and one consisting of women whom we classify as “very poor,” which means they still live in poverty but not as severe as the others.  The difference? The very poor own at least a small plot of land, own a productive asset such as a bullock to plow their fields, and have at least one household possession such as a bicycle, mobile phone or an old TV.  These are subtle differences, nearly invisible to anyone who doesn’t spend time in villages learning how to read the economic and social landscape, but they are important in matching the level of poverty to how we design our program.

Of approximately 140 families living in this village, or roughly 700 people, 13 families are in the Trickle Up ultrapoor group and 10 in the very poor group.  The women in the ultrapoor group receive a Trickle Up seed capital grant of about $225 to fund their enterprises.  The women in the very poor group do not, instead having to finance their businesses through savings and borrowing.  Both groups receive training and support in how to manage a self-help group, which meets regularly to save money, lend to each other, and provide peer support.  The ultrapoor group started last February with a weekly savings obligation of 10 rupees (about 15 cents), the very poor 20.  This month, though, the ultrapoor group decided to raise its own savings amount to 20 rupees, as the increased earnings from their Trickle Up businesses give them more capacity to save.

ultrapoor-groupWe began working in India with people at both levels of poverty about a year ago for two reasons.  One is that levels of poverty can change over time; one household illness, one disappointing harvest, or one dowry payment can push a very poor family into ultrapoverty.  The second reason is that having a larger footprint in the village (together the two groups represent about 15% of the households) can result in greater respect and less isolation for the ultrapoor, as well as giving both groups more clout when lobbying authorities for free government latrines or ensuring that a widow receives the support payments that she is entitled to by law.  For our local partner staff at SEWAK, a Trickle Up partner for many years, there is only modest incremental cost to train and coach (“handholding” in Indian parlance) the very poor group.  The partner field staff is already travelling to the village for the day to work with our ultrapoor participants.very-poor-group

As is our practice, we encouraged each self-help group (SHG) to choose a name.  The ultrapoor group picked “Mother Teresa” and the very poor “Bharadi,” a Hindi word that roughly translates to “motherly outlook.”  The women in the Mother Theresa group all wore red saris, those from Bharadi wore green.

Most were engaged in agriculture – growing tomatoes, chilies, eggplant, okra, corn – with goats or pigs as well.  Each woman proudly cited the number of animals she had, also noting any recent sales.  One woman set up a small snack shop.

Most of our conversation was about their financial activities: weekly savings through their SHG, opening accounts at a local bank, and borrowing money for family or business needs.  The women of Bharadi explained that they had first tried to form a savings group, pre-Trickle Up, under a broad Indian government program to foster SHGs through modest financial incentives.  Their group initially failed because, without sufficient training and support, they took on more debt than they could handle.  With SEWAK’s guidance, they are learning how to manage both the savings and lending functions of the group.  “Now we have a ray of hope that we will do better,” explained the group leader.

Pradeep Ku. Brahma, SEWAK secretary (equivalent to chief executive), later told me that there are about 16,000 SHGs in the Sunderghard district but only a few hundred succeed on their own.  Part of SEWAK’s support is to help the groups set their own rules: the number of installments for repaying a loan, interest rates (5% for this group), loan amounts (for a medical loan, it ranges from 400-500 Rupees ($8-$10) to 1,000, depending on how sick they are), and penalties for late payment (2%).  More important than the financial penalty, according to the group leader, is the loss of prestige that would come with a default.  “It’s important to honor our commitments,” she said.

While each group stores weekly contributions in a metal lockbox, they periodically deposit their savings at a bank that is about an hour away, by foot and bus.  In addition, most of their savings are recirculating as loans, which I always tell donors and others who ask me about the risk of theft.  (I am reminded of a meeting I had several years go with the head of one of the largest US family foundations.  She asked a lot of questions about the savings box before moving on to other topics.  As she left our meeting, she leaned over and whispered to me, “Don’t forget about security for those boxes.”)

Echoing the comments we heard the day before about dignity, the woman talked about how having a bank account was a huge boost for their own self-respect and respect by others.  “Previously we were afraid to talk to the bank manager,” one woman explained.  “Now we have no fear to talk to the bank manager.”  Sewak accompanied them on their initial visit but now, she added, “we go on our own.”  That notion of being included in the economic and social life of their community was a frequent motif; in the words of one member of Bharadi: “We are not isolated.”

id-card-photo“We feel dignified, we feel like we are like any other citizen,” another woman told us.  “This gives us a different kind of identity.  A passbook recognizes us as a citizen.”  It also serves as a bona fide photo ID, enabling women to vote in government elections.   Another woman boasted that she has a bank account while her husband didn’t.  “We are one step ahead,” she said with a grin.

With thanks to Sewak for their training how to improve their well-being and health, the women spoke movingly about the changes that were already taking place in their lives, about one year into the three-year Trickle Up program.  All members were now sending their children to school.  “Before we didn’t realize its importance,” one woman said.  With the collective voice of the SHG, a widow was able to secure a food supplement from the local government.  Now instead of seeking treatment from a local healer, known as a “quack,” they know they can go to the local health center or hospital.  They learned about hygiene -- how wearing chappals (sandals) prevents disease, the importance of washing vegetables, and that clean clothes are important.  “Now we wash our children’s clothes twice a week,” one woman explained.

I asked them their goals two years from now, when they will graduate from Trickle Up.  In addition to wanting enough food to eat year-round and their children doing well in school, they talked about improving their houses.  Their goal: a two-room house in good condition, with a toilet and a separate kitchen.  As important as goals and aspirations are, the group also outlined their strategies for achieving them.  On improved sanitation, for example, they described how SEWAK’s guidance and the size of the two groups will give them the knowledge and political clout they need to lobby local government officials to provide community toilets that will serve about 5 families each.   It would take 6-12 months to achieve that objective, they estimated, with individual household toilets a subsequent goal.

After peppering them with questions for over an hour, I invited them to ask me some.  “Tell us about your life,” was the reply.   At such a moment one is acutely aware of all the privileges of life that accrue simply because of where you were born.  It’s likely that I was the first white person they’d ever met, that they’d never seen an airplane flying overhead (once at  similar group meeting, our local partner described it as a flying bus), and had no exposure to television or other outside influences.  I explained that I lived in a big city, in a building with three other families, had 9 rooms in my apartment.  I lied a bit when I said I had two toilets because, at the moment, it just seemed too much to tell the truth (4).  They seemed to find some common ground when I said my main meals consisted of rice or pasta, vegetables and fish or chicken.  I did not observe that what I eat for dinner might feed 3-5 members of their family.  They liked the fact that my daughter is a teacher, my son a college student, and my wife a writer.

Next in the series: MODI'S "DECISIVE BREAK"
Mr. Modi was elected Prime Minister in May in a landslide victory.  India is the largest democracy in the world, with 554 million people voting (66% voter turnout) -- compared to about 130 million people (57% turnout) voting in the 2012 US presidential election. I am an absolute novice at understanding Indian politics but, following the Indian news closely during the election and on this trip, I am impressed by the scope of his ambitions. Yet, "Mr. Modi, where is the change?" was the headline of a column in the Business Standard.  "At some point, the prime minister is going to have to stop talking and start doing," wrote columnist Mihir S. Sharma...