THE SEEP NETWORK’S POVERTY OUTREACH WORKING GROUP

PROMISING APPROACHES IN MF/MED SERVICES FOR VERY POOR PEOPLE

CASE STUDY # 6

“BEHIND THE VEIL”Access to Contemporary Markets for Homebound Women Embroiderers

in Pakistan

MENNONITE ECONOMIC DEVELOPMENT ASSOCIATES (MEDA) AND

ECONOMIC AND CAREER DEVELOPMENT INSTITUTE (EDCI)Funded by the USAID Implementation Grants program (IGP)

2003-2007

Case Study prepared by Mary McVay, consultant, in conjunction with:

Linda Jones and Helen Loftin, MEDA and

Perveen Shaik, ECDI

September, 2007

TABLE OF CONTENTS

Executive Summary..............................................................................................................i1. Context.............................................................................................................................1

1.1. Country Socioeconomic and Poverty Data...............................................................11.2. Local context – target area........................................................................................3

2. Organizational Framework..............................................................................................62.1. International Organization........................................................................................62.2. Local organization....................................................................................................9

3. Description of “Very Poor” Target Group.....................................................................123.1. Individual and Household conditions.....................................................................123.2. Socioeconomic conditions......................................................................................12

4. Poverty Targeting and Assessment................................................................................154.1. Poverty measurement practices..............................................................................154.2. Available Poverty Data...........................................................................................154.3. Poverty Targeting...................................................................................................16

5. Products and Services....................................................................................................185.1. Financial Products..................................................................................................185.2. Microenterprise Development Services..................................................................195.3. Non-financial Services............................................................................................225.4. Design and Product Development:.........................................................................235.5. Implementation Process..........................................................................................25

6. Results............................................................................................................................266.1. Method of measuring results..................................................................................266.2. Impact.......................................................................................................................26.3. Cost Effectiveness and Sustainability.......................................................................2

Conclusions........................................................................Error! Bookmark not defined.Appendices.........................................................................Error! Bookmark not defined.

Appendix 1. Contacts and Sources of Information........Error! Bookmark not defined.Appendix 2. Socioeconomic and Poverty Indicators: definitions, explanations and sources............................................................................Error! Bookmark not defined.

Annex A Market Research and Program Design Frameworks

Annex B (Attached as a separate file)Table One – results indicators

Annex C (photos)

1. Executive Summary

Mennonite Economic Development Associates (MEDA) and Enterprise and Career Development Institute (ECDI) are implementing the “Behind the Veil” program with a budget of $600,000 over 3 years. The program helps home-bound, rural women in Pakistan to reach lucrative urban markets for hand-embroidered cloth, through a network of commercial, women sales agents. It is an award winning value-chain development program that has reached over 9,000 women embroiderers by strengthening sustainable market structures and services. In addition to putting cash in the hand of women who – for the most part – have never been paid for their labor, the program empowers oppressed women. As one participant put it, “this woman (Perveen Shaik, ECDI’s program leader) has taken me step by step and shown me a world where I can succeed. Now I have seen what is possible and I will keep moving forward because I want to be a part of this world she’s shown me.”

Target Group MEDA and ECDI estimate that the women in the program are at poverty level 2 in a 5 tiered system, with 1 being the poorest. Quantitative indicators of poverty include: Average earnings from embroidery work were around $6 per month or $72/year

before the project. Poverty rates in the geographic areas targeted are estimated at 25% for two states and

33% for the third state. This compares to a national poverty rate of 35% (in 2001). These estimates are very rough and based on average figures and do not reflect the poverty rates or living conditions of the specific villages the program targets.

The program targets women. Pakistan has a gender index of 144. Adult literacy is 63% for men and 36% for women.

The program targets rural producers. The poverty rate in rural areas (40%) is significantly higher than in urban areas (23%).

MEDA and ECDI rely more on the following qualitative indicators of poverty: Gender: women have significantly lower economic opportunities, mobility, access to

resources and autonomy in Pakistan due to cultural and religious customs and other forms of gender discrimination. The program specifically targeted home-bound women by targeting areas of Pakistan where this tradition is prevalent.

Living conditions: The homes of target clients are run-down, built from mud bricks or mud and stick, often open to the elements. If the family owns animals, they are often tethered very close to the homes due to lack of land. Clients have no electricity, telephone, running water, sewage or toilet facilities and often use shared pit latrines or fields. Their clothing is old and worn.

Health conditions: children are visibly malnourished, have discoloured hair, have distended stomachs and vacant looks. Women look very old for their years, marry young. People have disabilities or scaring related to diseases, such as small pox.

Social conditions: Clients are living under social conditions in which it is difficult for them to assert their rights and they are often exploited by wealthier people. A “feudal” elite dominates rural society. Farmers are dependant for their basic needs on a traditional landlord, and do not have property rights over their land. Rural society is

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male-dominated. Purdah is common. Target clients are restricted from most forms of paid labor and from interacting with men. Since men control the markets and trading, women are therefore cut off from economic opportunity.

Working conditions and materials: clients find scraps of cloth to embroider and sell these “patches” to low-value markets through their male relatives as they are unable to go to markets themselves. They know little about the market and often pay more for their thread than they receive in payment for the product. In most cases, since women do not receive payment for the produce – payment is received by male relatives – they have little control over how the money is spent and are not aware of how much they really earn.

MEDA and ECDI describe their clients as not being the poorest of the poor in that they are not destitute, they are not starving, although they are sometimes hungry or malnourished. They have some kind of tenure in their homes, and access to health services and free primary school through the government. They also have a valuable and marketable skill – embroidery – and creative talent which they use to generate designs based on nature and their cultural traditions.

Targeting Methodology:This target population is new both to MEDA and to ECDI and was selected by the program designers primarily to fulfil personal mission and, in part, in an attempt to win funding. The entire program targeted the poor. MEDA’s tradition target population is the working poor and ECDI’s is middle class women. The main drive of the program, at the design phase, was to empower women using a value chain development approach. When looking for a sector with large numbers of active women-owned businesses, researchers discovered the embroidery sector as a high potential sector with large numbers of poor producers. Embroidered cloth is used to make Shalwar Kamiz, popular throughout the region among middle and upper class women. Specific geographic areas were targeted because they had high concentrations of embroiderers. Specific villages were penetrated through years of relationship building during entrepreneurship training programs and market research. Individual clients were not selected. Rather, they came forward to sell their products. The program did selected female sales agents. The SAs were selected based on certain criteria. After initial meetings and focus group discussions, women from the following categories were selected: those women who already had some REs working under them; women who belonged to a community or group where REs worked and were REs themselves with leadership potential; or were women with pronounced skills who were keen to have REs under them.

MED MethodologyThe program methodology is sustainable value chain development, and was the first sustainable value chain development program to reach very poor women. The program links rural embroiderers to high value urban clothing markets by identifying and training a network of women sales agents, helping them access markets, input and design services, and helping them to pass on inputs, design services and other support to the women embroiderers. The main innovations in reaching the very poor included:

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Helping them access high value markets through sustainable market mechanisms. Offering a holistic package of services to women, through sustainable market

mechanisms. Working with microenterprise intermediaries who have appropriate social connections

to target clients, and linking the sales agents with the range of businesses needed to get product to market.

Developing a market culture of social enterprise, rather than exploitative business practices, through training, leadership and ensuring adequate “competition” or market options for producers.

Program managers also emphasize the luck involved in finding large numbers of poor people with a marketable skill. To reach downmarket further, to populations without a marketable skill, the program would subsidise technical training and apprenticeships in embroidery (or in other marketable skills) to help get client market ready, and then apply the sustainable value chain development approach.

Results:The main impact MEDA and ECDI are assessing is increased sales (which in most cases translates directly to income because inputs are supplied by the buyer) and qualitative lifestyle improvements reported by women. Income:

o For most embroiderers, income prior to the program was negligible. The average income for all embroiderers reached as of June, 2007 (3 years into the program) is $170 a year.

o For more active embroiderers, average annual income was around $70 per year prior, and is now around to the program increased to $240.

Qualitative Improvements:o Almost all women report increased contributions to household decision

making, control over their income, greater respect from their husbands and in-laws, enhanced feelings of self-confidence, more hope for their future, and general empowerment.

o “Graduation:” Community sales agents have emerged from rural embroiderers to become sales agents.

o Leadership development: Sales agents have much greater mobility in their own communities and for traveling to urban centers to participate in exhibitions and to negotiate with buyers. These women have developed their capacity to travel across Pakistan, to run businesses, to engage with men in business, and to form support networks. Commonly, sales agents have become women’s advocates, community mobilizers and social entrepreneurs.

o Women groups: women participating in the market now have more flexibility to form and meet in all female groups, with increasingly less monitoring by men in the community.

Family benefits: Through women’s contributions, more children are attending school, household nutrition has improved, families experience increased facilities and comfort, and girls are being brought into the family business, and sons are growing up in households where mothers are respected contributors in thousands of families.

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Male Involvement: Men have become involved in the program in various ways – supporting their wives, mothers or sisters, accompanying their womenfolk to difficult areas, becoming partners in the business, picking up things at the market, making deliveries, and so on. In general, men seem proud of women’s accomplishments, and respect the value that they contribute to the household.

Organizational Aspects:Both MEDA and ECDI are small, entrepreneurial institutions that cultivate learning and give staff flexibility to try new things. In both organizations, extraordinary women leaders – recognized by international peers for their innovations - pioneered the program and led staff and the board toward a new way of working. The intended outcome was an enhancement to the organizational mission, and not a threat to “viability,” although doubts were expressed along the way about whether it was possible to work effectively with this population on a sustainable basis.

Cost-Effectiveness and Sustainability:The program is very cost effective: Less than $25/per client reached.The initiative is sustainable. The program has stimulated already hearty demand for rural embroidered clothing, launched into the market 213 sales agents (6 are men), who continue to bring additional sales agents and embroiderers into the market, and created a viable market for design and pattern services. The sales agents supply embroiderers with a full package of services, and embroiderers generally have a choice of buyers to work with. There is a fledgling association of sales agents in place gradually taking over many project functions.

Conclusion: “Behind the Veil” demonstrates that markets can work for the poor, and that sustainable value chain development – or market development - is a viable, cost-effective and sustainable approach to reducing the poor, even under challenging social and logistical conditions. Program leaders have ideas for how the model could be adapted to reach even further down market and to help marginalized people access a fuller range of social services that would translate the cash they earn into a better standard of living. They also recognize that more could be learned with a more rigorous poverty measurement and impact assessment system.

Strengths: internal to the organization that have made MEDA and ECDI successful and/or are needed to make other organizations successful to adopting sustainable value chain development strategies that reach the very poor: Innovative, entrepreneurial, insightful, skilled leadership with dedication to reaching

the poor using sustainable market systems. Funding for, management support and access to professional development in market

research and value chain development. Institutional autonomy/flexibility to adapt services and strategies to the market and the

target population. Sufficient funding: at least $500,000 for a 3 year period for a small market. Links, or the ability to establish social links, to communities and networks of the

target population, and entrepreneurs who can do business with the target population –

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the ability to work both with target clients and more sophisticated businesses in the market.

Weaknesses: or challenges internal to an organization, that it must overcome or mitigate in order to successfully adopt value chain development to reach the very poor – MEDA and ECDI overcame most of these challenges: Complexity of implementing value chain development, especially sustainable and

comprehensive approaches. The timeframe for building relationships and developing markets, compared with

funding program timeframes.

Opportunities: external conditions that make it easier for an organization to successfully adopt sustainable value chain development for the very poor: Target population with a marketable skill Demand for the products or services that the target population has skills and/or

resources to produce Sufficient density of populations or physical concentrations of producers

Threats: external conditions that could keep an organization from successfully adopting sustainable value chain development for the very poor: Insecurity, political instability and disruption Weather conditions, for agricultural related products and services Over-subsidized markets Conservative social movements, cultural or social constraints, for example men being

suspicious about the nature of the program Monopolistic or exploitative tendencies of traders Logistical and physical constraints to efficiently reaching more remote areas –

including natural disasters

Helen Loftin, the MEDA program manager, captures the spirit of the program as follows:“… the project is making a profound impact in the lives of these women. There is no preaching or sermonizing or criticisms of any sort. We make no comments or conduct no activities specifically directed at women’s social empowerment. And yet it’s happening for the women of this project. They are treated better by their families; they channel the funds back into the household through education, better nutrition, and medicines. Their children - their daughters - are learning about opportunities other than the yolk of poverty and suppression. And they have a spirit that goes beyond inspirational. It’s indominatable. It’s humbling. It reflects humanity at its best – in fact, it’s divine. In the midst of abject oppression and poverty – I experienced joy, generosity, ambition, good humour and pure hope. What better foundation for an entrepreneur? Or for a community?”Speech to MEDA associates, 2007.

Parveen Shaik, Executive Director of ECDI and the program’s founder and leader, offer the following advice for other practitioners: “Delivering on promises is key to success at the grass-root level. It is critical that the project team is committed and able to earn the

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respect and trust of women with whom they work. One of the main reasons this project was able to have such an overwhelming impact was that the rural women felt like they were truly a part of the initiative. They were always given complete information and the team never failed to actualize any promises that were made – large or small. ECDI’s past credibility in the sector and its large and varied experience meant that partners at all levels were eager to engage with the project. The fact that both project partners, ECDI and MEDA, did not break with cultural norms, such as covering their heads when in the villages and when interacting with rural women augmented their (the REs) ability to take part in the initiative and also generated trust and respect within the communities.”

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1. Context

Pakistan is a poor country with a rich history, diverse culture and economy, and unstable political environment. It is caught at the center of the “war on terror,” and some areas where the program operates are close to the border with Afghanistan. Natural disasters – drought, floods, cyclones and earthquakes – occur every few years. At the same time, the government reports significantly reduced poverty over the last five years, due to growth in agriculture, manufacturing and IT and services. Pakistan is a muslim country with a rich history, in the midst of social tension over how to interpret Islam in the modern world and what role the country should play in the current global war. Pakistan a range of divers cultures from modern cities in which women have significant freedom and flexibility, and traditional rural areas in which feudal landlords and/or religious leaders control almost all aspects of life. Purdah – the tradition of women being home-bound – is commonly practiced, in different forms in different parts of the country.

1.1. Country Socioeconomic and Poverty Data

Table 1.1. Country Statistics

1.1.1. National Currency Pakistan Rupee

Amount Year1.1.2. Population (millions) (WHO) 157.9 20051.1.3. Population density per square kilometre (PAP) 166 20021.1.4. Percentage urban (PAP) 32%1.1.5. Inflation (Government of Pakistan, Federal Bureau of Statistics)

3% 2002-2003

5% ’03-‘049% ’04-‘057% ’05-06

1.1.5. Nominal Exchange Rate (current, X Currency per US$1) (x-rate.com)

60.62007

1.1.6. PPP Exchange rate (World Bank: PPP/USD amount) 3.25 20071.1.7. HDI value (HRD 2006) .54 20061.1.8. HDI ranking (HDR 2006) 134 20061.1.9. GDP/Capita (PPP US$) (WHO) 2,500 20061.1.10. Local currency equivalent of $1-a-day international poverty line

1.1.11. Population below national poverty line (%) 1 35%Rural: 40%Urban: 23%

2000-2001

24% Rural: 28%Urban: 15%

2004-2005

1.1.12. Population living below $1 a day (%) (expenditure) 17% 20021.1.13. Population living below $2 a day (%) (expenditure) 74% 20021.1.14. Population living below $2 a day (%)1.1.15. Population growth rate (Population Association of Pakistan, 2.1% 2002

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quoting government sources)1.1.16. Life expectancy (WHO) 61/62 (m/f) 20051.1.17. HIV prevalence (% ages 15-49) (UNAIDS) 0.1% 20061.1.18. Malaria cases (per 100,000 people)1.1.19. Population undernourished

1.1.20. Children underweight (UNICEF- under 5, moderate-severe)38% 1996-

2005

Children underweight (UNICEF- under 5, severe )13% 1996-

2005

1.1.21. Adult literacy (UNICEF)Male

Female63%36%

2002-2004

1.1.22. Net primary enrolment ratio (UNICEF)

MaleFemale

95%65%

2002-2005

1.1.23. Net secondary enrolment ratioMale

Female31%23%

2002-2005

1.1.24. Physicians per 100,000 people .74 2004

1.1.25. Health expenditures per capita $48 2004

1.1.26. Gender-related development index (GDI) rank (UNDP) 144 20011.1.27. Gender-related development index (GDI) value (UNDP) .47 2001

1 Explain how the national poverty line is defined: The national poverty line is defined differently in different studies over the decades, although the basic measurement tool is a consumption assessment, not an earnings assessment. “Nevertheless, while there is no consensus on the precise level of poverty in the country at any given time, there is general agreement with regard to the trends in poverty since the 1960s.” Poverty declined from the 1960s-1990, then poverty increased from 22% to 35% in 1999, and has probably gotten worse since 1999-2001, due to slow growth, fiscal tightening, severe drought and a number of natural disasters. It is unclear how the war on terror or recent political tensions have affected poverty rates.” The 2006 Millennium Development Goals Report from the Government of Pakistan reports a reduction in the poverty rate from 35% in 2000-2001 to 24% in 2004-2005. The report notes, however, that 2000-2001 was a drought year, whereas 2004-2005 was a very strong harvest, which was then followed by less strong harvests.” Thus, there is some debate about recent poverty rates and trends, but an appropriate estimate is around one third of the population being poor.

1.2. Local context – target area

The program operates throughout Pakistan, targeting districts and specific areas where embroidery is prominent, women’s confinement is high, and poverty is evident.

1.2.1. Briefly describe local socioeconomic conditions1.2.1.1. Geographic reference of location and size of population“Behind the Veil” targets rural embroiderers in specific districts of three provinces: Multan in Punjab Interior Sindh: especially Thatta and Hyderbad Quetta in BalochistanThe program links women to buyers in urban areas of these districts as well as to markets in Karachi (Sindh) and Islamabad (Punjab).

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Pakistan is overwhelmingly Muslim. Cultural and religious practices vary in the country from more conservative to more liberal, particularly in terms of women’s autonomy or confinement. Historically, it has a feudal land ownership pattern which is still place in much of Sindh province, but there has been land redistribution in Punjab. Less than half of rural Pakistanis own land, and 40% of the land is owned by only 2.5% of the population.1 Women are reported as have very low levels of economic activity, working on their own farms when the family has land, raising small animals, working in landlord’s fields, or embroidering at home. Even sectors such as food production and processing, garment making and most handicraft sectors are male identified and dominated.

The government statistics are based on rural household consumption and expenditure. Poverty is associated with low education and literacy levels, lack of access to health, social and public services, and vulnerability to drought or flood for the rural poor. In terms of poverty in the target provinces, Balochistan is the poorest, then Sindh, then Punjab:

Human Development Indicators by Province2000-2001

Pakistan Integrate Household SurveyAdult Literacy Access to

drinking waterPunjab 49% 95%Sindh 51% 81%Balochistan 36% 37%Remaining context questions will be reported for each targeted geographic area in turn:

Quetta in Balochistan:The program targets slum villages on the outskirts of Quetta, which is the main commercial hub of the district.

1.2.1.2. Local population characteristics1.2.1.2.1. Ethnic groups

Balichi, Pashtun, Hazara – these are minority ethnic groups, and are very socially conservative and patriarchal. Communities tend to be autonomous from the government, and to resist involvement with outsiders and with government or NGO initiatives.

1.2.1.2.2. Most important economic activitiesLivestock, natural gas, fruits. In Quetta the main economic activities are commerce and trade and services.

1.2.1.2.3. Cultural and religious background

1 Mumtaz, Khawar and Meher M. Noshirwani, Scoping Study, “Women’s Access And Rights To Land And Property In Pakistan, IDRC.

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The population is muslim and very conservative. Women practice Purdah, are generally home-bound, and have very low access to education. Quetta is less conservative than other rural areas of Boluchistan, but still considered “tribal.” These communities are less inclined to integrate with government and NGO programs, very autonomous and closed to outside influence. Traditional and religious leaders have tremendous influence of social life.

1.2.1.3. Natural resources, economic activities, markets, unemployment (see 1.2.1.2.2)Women are chronically unemployed and have low access to economic opportunities. The men are engaged in wage labor and running informal sector businesses.

1.2.1.4. For rural areas only: most important crops and livestock activities, water supply (irrigation, rain fed), seasons and number of harvests, land availability, ownership patterns and contracts.1.2.1.5. Occurrence of droughts, floods, natural disasters or conflicts

Balochistan is an arid, largely mountainous province of Pakistan. It forms 44% of Pakistan’s land mass and has a 770 km long coast line, but is sparsely populated. It endures frequent spells of drought, flash floods and earthquakes. Though underdeveloped by any standards, Balochistan is rich in biodiversity and natural resources. “Wild variations in physical features and climate have produced diverse landscapes, ecosystems and habitats that are important as source of livelihoods and national and global heritage. Economically, its vast rangelands, large numbers of livestock, rich mineral and gas deposits, and good quality deciduous fruits are of significant value although there is relatively little industrialization in the province. Balochistan’s arid but diverse climatic zones have contributed to a rich animal and plants biodiversity while building a definitive culture heritage that allowed survival in this rugged and harsh landscape.” There has been significant rural-urban migration to the capital of the Province, Quetta, among local population and among Afghani refugees. The province hosts several million Afghan refugees.2

The targeted areas are slum villages surrounding the city of Quetta. Quetta is the provincial capital and the hub of commerce. Although its population is less than 500,000, it is the more densely populated district of Baluchistan. It rates in the middle range in the province in terms of most poverty indicators. It is very close to the border with Afghanistan and has experienced political and security unrest during the program including bombings and sabotage of the gas pipeline, which has sometimes prevented staff from traveling in the area.3

1.2.2. Describe government policies aimed at the very poorAccording to the government of Paksitan Poverty Reduction Strategy Paper4, the key “pillars of reforms initiated by the Government of Baluchistan are:Engendering growth.Managing the scarce water resources.

2 www.Balochistan.org3 Ibid and MEDA and ECDI, 20074 Government of Pakistan, Poverty Reduction Strategy Paper, 2006.

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Governance reforms.Improving human development.Addressing vulnerability to shocks.”Key focal areas include education, gender disparities, rural-urban disparities, access to drinking water, health infrastructure, improved governance and support of the private sector.

Based on reports from the program, the main government services that the target population has access to are: Basic community health service Free primary schooling5

1.2.2.1. Social protection schemes by the government.

These are not apparent.

1.2.2.2. Policies aimed to integrate the very poor, such as anti-discrimination and affirmative action laws.

These exist on paper, but the main activity the program reports is that girls are being encouraged to attend primary school.

1.2.2.3. Property and land rights.Very few poor people own any land. Women are not recognized as landowners. Families rent huts or squat.

1.2.2.4. Local government and non-governmental development programs.6

The following are a sample of development programs going on in the region: Replication of QKAEMP Sanitation Model

Releasing Confidence and Creativity (RCC): An Early Childhood Development Programme

Trial District Development Programme in Baluchistan Balochistan Road Development Sector Project The Project for Irrigation Water Management, Orchard Management and Drinking

Water Supply in Zardaloo, Balochistan The Project for Construction and Support of School of Medical Technology, Quetta The Project for Construction of School Building of Qandeel Model Public School

The program does not report their target clients being involved in any of these initiatives.

Multan in Punjab:The program works in rural villages in Mulan, which is the most accessible and open of the three districts. The program results here are higher.

5 ECDI, 20076 www.balochistan.org

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1.2.1.2. Local population characteristics1.2.1.2.1. Ethnic groups

Punjab is dominated by the Punjabi ethnic group, the largest in Pakistan, although there are significant populations of other ethnic groups throughout the province.

1.2.1.2.2. Most important economic activities

Agriculture, industry and mining, and crafts – Punjab has a rich and diverse economy. Multan, the target district, is also diverse.

1.2.1.2.3. Cultural and religious background

The population is muslim, but tends to be more liberal than other areas of the country. Many women practice Purdah and are home-bound, but more women than in others areas have access to education, employment and business opportunities. Although traditional and religious leaders till hold significant influence over social life, there has been land redistribution in Punjab and society is more open than in other parts of Pakistan.

1.2.1.3. Natural resources, economic activities, markets, unemployment1.2.1.4. For rural areas only: most important crops and livestock activities, water supply (irrigation, rain fed), seasons and number of harvests, land availability, ownership patterns and contracts.1.2.1.5. Occurrence of droughts, floods, natural disasters or conflicts

There are five rivers running through Punjab, making it a fertile agricultural area. Despite its dry climate, extensive irrigation makes it a rich agricultural region. Wheat and cotton are the largest crops. Other crops include rice, sugarcane, millet, corn, oilseeds, pulses, fruits, and vegetables. Livestock and poultry production are also important. The province is also playing a leading role in agricultural production. It contributes about 68% to annual food grain production in the country. Despite lack of a coastline, Punjab is the most industrialized province of Pakistan; its manufacturing industries produce textiles, sports goods, machinery, electrical appliances, surgical instruments, metals, bicycles and rickshaws, floor coverings, and processed foods. In 2003, the province manufactured 90% of the paper and paper boards, 71% of the fertilizers, 65% of the sugar and 40% of the cement of Pakistan. Punjab is also a mineral rich province with extensive mineral deposits of coal, rock salt, dolomite, gypsum, and silica-sand. In terms of natural disaster, flood is the most common issue.7

1.2.2. Describe government policies aimed at the very poor1.2.2.1. Social protection schemes by the government.

The poor people targeted by the program generally have none or very low access to services, such as water, electricity, sanitation/sewers, telephone, internet, etc. Roads are

7 http://library.thinkquest.org/06aug/02374/home.html

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of poor quality and transportation infrastructure inhibits trade and mobility. The two main services that the government provides fairly effectively are:

Basic health service (educational and preventative care at the village level) Free primary education

1.2.2.2. Policies aimed to integrate the very poor, such as anti-discrimination and affirmative action laws.

In Punjab, there has been land distribution in an attempt to end the feudal system. Gender balancing plans exist on paper, but the main activity the program reports is that girls are being encouraged to attend primary school.

1.2.2.3. Property and land rights.Land distribution has increased small holder land ownership, but land is still highly concentrated among the wealthy. Women’s right to own land is not recognized.

1.2.2.4. Local government and non-governmental development programs.

The Punjab poverty reduction strategy reform program is based on five main pillars:8

“Improving governance to build an efficient, accountable and service oriented public sector including strengthening key economic institutions at provincial and local levels;

Fiscal and Financial restructuring and management; Establishing an effective and transparent enabling environment for private sector

development to accelerate growth; Reforms to improve service delivery in basic social services; and Addressing vulnerability to shocks.

The program includes land redistribution, slum upgrading, improved rights and status for women, and improved water services.”

(Not much information on other local NGO programs was provided. I will try to follow-up on this a bit more.)

Interior Sindh: Thatta and Hyderabad: The program works in interior Sindh: in rural areas of Thatta, and peri-urban areas of Hyderabad. This is the most conservative area of the program.

1.2.1.2. Local population characteristics1.2.1.2.1. Ethnic groups

Sindh province in dominated by the Sindhi people, with a significant population of urdi speaking people who migrated from India during partition, as well as significant minorities of other “tribal” populations and migrants to Karachi from other parts of Pakistan. Thatta, one program target area, is mainly Sindh, and is the historical capital of the region and a very old, historically significant city. The program also runs a regional office out of Hyderabad, and reaches out to slum and peri-urban areas there.

8 Government of Pakistan, 2006.

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1.2.1.2.2. Most important economic activitiesAgriculture, industry, trade and crafts. Sindh has a rich and diverse economy. Thatta, one target district, has a rich craft tradition, as do many areas of Sind province.

1.2.1.2.3. Cultural and religious backgroundThe population is muslim, and very conservative. Many women practice Purdah and are home-bound, have limited access to education, employment and business opportunities. For example, there are honor killings in Thatta. In addition, rural areas are dominated by a feudal system. Landlords and religious leaders hold significant power in social life.

1.2.1.3. Natural resources, economic activities, markets, unemployment1.2.1.4. For rural areas only: most important crops and livestock activities, water supply (irrigation, rain fed), seasons and number of harvests, land availability, ownership patterns and contracts.1.2.1.5. Occurrence of droughts, floods, natural disasters or conflicts

Endowed with coastal access, Sindh is a major center of economic activity in Pakistan. generates almost 30% of the total national tax revenue. It has a highly diversified economy ranging from heavy industry and finance centered in and around Karachi to a substantial agricultural base along the Indus. Pakistan's rapidly growing information technology sector (IT) is also centered in Karachi and manufacturing includes machine products, cement, plastics, and various other goods. Agriculture is very important in Sindh with cotton, rice, wheat, sugar cane, bananas, and mangoes as the most important crops. Sindh is the richest province in natural resources of gas, petrol, and coal. The province is mostly arid with scant vegetation except for the irrigated Indus Valley. Sindh is well known for its various handicrafts and arts.9 Despite being near Hyderabad, a significant city, Thatta is surprisingly under-developed and traditional in its economy and outlook. In June, 2007, the coast of Sindh was hit by a significant cyclone, which also disrupted commerce and the program.

1.2.2. Describe government policies aimed at the very poor

1.2.2.1. Social protection schemes by the government.

The poor people targeted by the program generally have none or very low access to services, such as water, electricity, sanitation/sewers, telephone, internet, etc. Roads are of poor quality. The two main services that the government provides fairly effectively are:

Basic health service (educational and preventative care at the village level) Free primary education

1.2.2.2. Policies aimed to integrate the very poor, such as anti-discrimination and affirmative action laws.

9 Government of Pakistan, 2006.

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None mentioned by the program

1.2.2.3. Property and land rights.There is feudal land rule with large land owners controlling the farming system and peasants working for a portion of land or of the crop. The poor are very dependant on landlords and are more or less trapped in their situation.

1.2.2.4. Local government and non-governmental development programs.

The Government of Pakiston PRSP described the poverty challenges in Sinhd as follows: “Pervasive poverty especially in rural Sindh (is) characterized by poor social services, large gender disparity, landlessness, and high dependence on public sector alongside the presence of large manufacturing, finance, and private sector as well as huge urban slums in Karachi, governance, poor fiscal and financial management till FY99.” The poverty reduction strategy is decribed as follows:“The Government of Sindh (GoS) has initiated a reform process with overarching objective of reducing poverty by promoting growth and accelerating human development. The reform program has three main pillars: Fiscal and financial management reforms; Improving governance and public service delivery; and Regulatory reforms and privatization.”10

(Not much information on other local NGO programs was provided. I will try to follow-up on this a bit more.)

1.2.3. Brief profile of microfinance environment.

Program clients have not had any prior access to microfinance or microenterprise development services. The program, this year, has introduced sales agents to several microfinance institutions, in the hopes that the sales agents will be able to expand faster with access to credit. The sales agents themselves often purchase inputs for women, which functions as both credit and quality control.

AKHUWAT is non-governmental, not for profit organization providing micro credit without interest to the poor “at their doorstep.” AKHUWAT charges only for their “service.” They are planning to open a program in Multan soon. To access credit, members pay around $8 membership fee, file an application with a copy of their national identity card and identify two guarantors. Initial loan sizes start from around $165 and go to a maximum of $420. If all the installments are paid on time, borrowers are eligible for larger amounts of credit. When presenting to program participants, AKHUWAT informed the women sales agents that there is no gender discrimination at AKHUWAT.

10 Ibid.

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P.R.S.P Multan was represented by a female loan officer when they made their presentation to the program sales agents. PRSP provides credit to the poor and also runs schools and health centers. PRSP forms separate male and female groups with 15 members for credit disbursement. One third of the groups is issued credit first, then 75% and later 90% and finally all of the group members. There are some areas that the program avoids due to chronic flood because the people there are migratory

After these presentations, twelve sales agents applied for credit.

More details are not available at this time.

1.2.3.1. List microfinance institutions (other than subject of case study) and other financial institutions/services accessible by the poor. Provide number of clients, if possible. The program historically does not interact with MFI, and ECDI did not have this information readily available.

1.2.3.2. Describe dominant microfinance models and services.Examples are individual or group loans (such as solidarity lending, self-help group lending and village banking), savings (voluntary/mandatory). Traditional (informal) microfinance models can also be listed if they are common.1.2.3.3. Demand versus supply of microfinance services.What indications exist on demand for financial services? How many clients are currently reached by microfinance and/or financial institutions in general?1.2.3.4. Depth of microfinance outreach.How poor are the majority of microfinance customers? To what extent are very poor people reached?1.2.3.5. Existing MF/MED initiatives (other than case study) aimed at the very poor.

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1.2.4. Poverty1.2.4.1. Existing Poverty data and geographic areas of the country where extreme poverty is most concentrated. 1.2.4.2. Does the target area fall within these extreme poor regions? 1.2.4.3. If known, what is the proportion of population in the target area living below $1-a-day and/or within bottom 50% of people living below the national poverty line?

Poverty rates by geography, 1999:Baluchistan and Sindh: 25%Punjab: 33%NWFP (North West Frontier Province): 33-45%AJK: 25%Jammu & Kashmir: unknown

Program Sites and level poverty rates (1999):Hyderabad, Sindh: 25%Thatta, Sindh: 25%Quetta, Balochistan: 25%Multan, Punjab: 33%National poverty rate: 35% (This is from a different report and may not be completely comparable)

The program is distributed across Pakistan in order for MEDA to gain experience working throughout Pakistan. As there are pockets of poverty throughout, the program nevertheless works with the poor. The program intended to work in North West Frontier Province – the poorest province - but it was too remote and unstable during the implementation period. MEDA and ECDI hope to reach there in a subsequent program.

* Hyderabad

* Thatta

* Multan

*

*

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1.2.4.4. Main determinants of poverty.Which factors are strongly indicative of level of poverty within target area or country as a whole? The statistics presented above are based on government rural household surveys that assess expenditure and consumption.

As a whole, the poor experience: Lack of services: electricity, water, sewer, telephone, health care Low Education levels, low literacy levels – especially for women Remoteness and/or urban squalor Low access to land, often through feudal systems in which the landlord retain

property rights. Women’s right o own property is not widely recognized. Poor housing conditions Poor health, low access to health care Social structures and constraints that support exploitative economic practices Market disruption due to insecurity, political factionalism and/or natural disaster

For the program target group, in addition: Gender: low education, home confinement, domestic violence, arranged marriages,

lack of access to and control over resources, lack of mobility, lack of autonomy to pursue economic activities, and isolation from markets

It is important to point out that the target population was firstly targeted for its strengths and resources, which are primarily their skill in embroidery, which is a reflection of the rich and diverse culture of Pakistan.

2. Organizational Framework2.1. International Organization

2.1.1. Name and type of the organization (INGO, multilateral agency, foundation, other)

Mennonite Economic Development Associates is an international NGO. It is is an association of “compassionate business women and men who invest in the lives of families living in poverty around the world.” MEDA is faith-based in the sense that the association helps “faith-oriented business owners, executives and leaders … to integrate their life values with business in practical ways to help the poor.” MEDA works in partnership with a wide variety of governments, foundations, NGOs and businesses and encourages poverty reduction and empowerment through sustainable work.11

2.1.2. Organizational background

2.1.2.1. Mission and vision

MEDA Mission

11 www.meda.org

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“As an association of Christians, in business and the professions, committed to applying biblical teachings in the marketplace, MEDA members share their faith, abilities and resources to address human needs through economic development.”

MEDA Vision

“...that all people may experience Christ's love and utilize their abilities to earn a livelihood, provide for families and enrich their communities.”12

2.1.2.2. Brief history

MEDA is currently structured around its key development strategies:+Microfinance+Production and Market Linkages (market development)+Investment Fund: for example, Microvest (mobilizes investment for microfinance banks)+MEDA Trade (a currency exchange business and service for NGOs)+Community Economic Development – microenterprise development in the US and CanadaThe main strategy supporting the Behind the Veil program is MEDA’s Product and Market Linkage strategy.

MEDA was founded in 1953. It initial efforts focused on mobilizing volunteer business people and investors to work directly with lower income farmers and entrepreneurs in developing countries. MEDA soon learned to leverage the impact of these members with full-time staff, partner agencies and increasingly efficient and effective program models. In microfinance, they strengthen and invest in sustainable microfinance initiatives. In Production and Market Linkages, they develop value chains to help marginalized entrepreneurs access markets and reap better returns from market engagement. Many of their programs combine finance with production and market linkage activities. MEDA has pioneered value chain development strategies, and developed tools which it shares through conferences, trainings and publications.13

2.1.2.3. Type of support: funding, capacity building, technical assistance, direct service provider, other

MEDA partners with on-the-ground organizations, linking them to sources of funds through joint proposal development and program implementation. MEDA provides technical assistance, direct program management and supervision, capacity building, and links to international learning platforms. Most of its partners are NGOs.

12 www.meda.org13 McVay, Mary and Steve Rannekliev, “Towards a Strategy for Business Development: Production and Market Linkages.” MEDA, 2005.

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2.1.3. Development intervention approach2.1.3.1. Primary target group and development focus

MEDA targets the economically active poor with economic development programs. They believe in offering a “hand-up” rather than a “hand-out.”

2.1.3.2. Specialized in MF/MED or multisectoral

Exclusive MF/MED approach … although MEDA is involved in developing some health markets, for example for insecticide treated mosquito nets.

2.1.3.3. MF/MED model

MEDA’s Production and Marketing Linkage strategy is a pro-poor value chain development strategy. MEDA conducted a market assessment to select the embroidery value chain as an appropriate value chain for reaching marginalized, low-income rural women. They identified viable consumer market opportunities, and addressed the product and market linkage constraints for the target women in reaching these markets. The results have been higher quality, more marketable products, that get higher prices, and more reliable supplies at affordable cost and/or on credit. MEDA has established a sustainable and growing market system.

The following diagram summarizes the way MEDA and ECDI view market structures and systems that they seek to improve so that they better link and provide benefits to marginalized producers.

2.1.3.4. Other sectorsNone.

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2.2. Local organization

2.2.1. Organizational development (S)

Table 2.2. Institutional BackgroundIssues Observations

2.2.1.1. Name of the organization or institution

Entrepreneurship and Career Development Institute (ECDI)

2.2.1.2. Geographic area of operation

ECDI’s head office is based in Karachi but activities and interventions are undertaken all over Pakistan.

2.2.1.3. Structure ECDI is governed by its Board of Directors. The President, supported by the Board and senior management, oversees the day to day administration of the institution.

2.2.1.4. Registration status

The institution is registered under the Voluntary Social Welfare Agencies (Registration and Control) Ordinance, 1961

2.2.1.5. Regulation status

N/A

2.2.1.6. Date established

ECDI was set up in March 1990

2.2.1.7. Specialized (MF/MED) or multisectoral

ECDI has evolved a more pronounced focus on BDS market development in recent years but its traditional areas of concern have remained women entrepreneurship promotion, technology dissemination, capacity and vocational skill enhancement. All interventions have a rigorous gender sensitization focus and aim to empower women to take control of their lives and destinies.

2.2.1.8. Start of MF/MED activities

- Small and microenterprise development since 1990 including management, leadership and entrepreneurship development training targeted at specifically at women. - Research and advocacy (including at important policy forums) on related gender and development issues since inception. - Since 2002, BDS market assessment in an organized and concerted fashion although earlier projects had done some work in three subsectors – frozen foods, vegetable dyeing and handmade paper.

2.2.1.9. Core business (f.i. credit, savings, …)

Capacity development of individual women entrepreneurs, institutional strengthening of other development agencies, research and resource development all centered around the promotion of women and their economic and social empowerment

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Issues Observations

2.2.1.10. Business model (prior to this program)

- Services for ME development were paid through third-party payers such as First Women’s Bank Ltd., UNICEF, CIDA and ILO. - Direct funding for project implementation, especially for pilot activities in the field.- Limited revenues raised through grant funding for project implementation.- Direct payment (subsidized at times) for training from middle-class women, stimulating a first generation of entrepreneurs.

2.2.1.11. Target market – MF/MED

Middle class women entrepreneurs and poor rural artisans as well as micro and small businesses.

Institutions such as NGOs, social security organizations, government employees, service providers such as MFIs

Earlier there was a stronger urban focus of interventions, but this has radically changed in the last 5 years.

2.2.1.12. Number of clients/participants – MF/MED

Other than the current project, over 2000 individual women entrepreneurs trained and developed; and 180 MED trainers developed

2.2.1.13. Number of staff

20 full-time staff members

8 active consulting staff

A resource person roster of 40 trainers

A wide network of field associates throughout Pakistan

2.2.2. Organizational development (S)

2.2.2.1. Mission and vision

ECDI’s vision is an equitable society that creates space for and empowers women to attain their socioeconomic potential.

ECDI’s primary mission is the creation of an enabling environment for the equitable socioeconomic development of women and youth in Pakistan through the enhancement of their entrepreneurial and managerial skills. The organization’s mission is directed towards its emergence as a recognized leader within the MED and BDS fields in the Asia-Pacific region.

ECDI offers specialised programs in entrepreneurship, BDS market development and career counselling for women and youth in Pakistan. It is deeply committed to

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education, training, research and field activities that allow it to support individuals, businesses and communities by advancing their income-generation capacities.

2.2.2.2. Brief history

ECDI is a pioneering non-for-profit autonomous capacity-development and knowledge-based institution headquartered in Karachi that facilitates the social and economic empowerment of women through small and micro enterprise promotion. The institution was established in 1990 to address women's developmental concerns and help expand their economic potential through entrepreneurship promotion, facilitation of business development services to urban and rural micro-enterprises, undertake poverty-alleviation projects and consciousness-raising on gender issues.

ECDI has conducted a range of gender sensitization activities on all 12 areas of concern as identified by the Beijing Follow-up Process. It has conducted gender sensitization workshops for government officials, NGOs, banks and police officers in collaboration with various bilateral partners. ECDI is a core member of the Beijing Plus 10 Process (Sindh Chapter) in Pakistan and is recognized for its consciousness-raising on critical gender issues

ECDI also offers a wide range of training programs (short courses, refresher courses and advance courses) for individuals seeking entrepreneurial careers and institutions working within the women and development and MED/MF sectors in Pakistan. By 2002, ECDI had trained over 2000 urban and rural potential women entrepreneurs. The institute also provides a range of services to enable micro and small enterprises in project identification, management and offers linkages to financial institutions and to the relevant technical experts and skills. More recently, ECDI has focused on sub-sector development and value-chain analysis and facilitates access to various BDS for MSEs. ECDI is a member of the SEEP PLP Network in Washington.

2.2.2.3. Objectives

ECDI believes that entrepreneurs are not just born but can also be developed through well-conceived interventions. Contingent on this belief, the broad objectives of the institute are:

To support the development, promotion and expansion of small and micro-enterprises owned and managed by women;

To enhance the number of motivated, competent women entrepreneurs in the country through concerted education and training programs;

To advance the managerial and leadership capabilities of existing micro and small-scale women entrepreneurs and expand the social base of the Pakistani women entrepreneurial genre;

To promote the fair integration of women, particularly those from rural areas, in mainstream markets by piloting and documenting new approaches to market access and disseminating best practices in the area;

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To contribute to new knowledge and insight in MED and BDS development and practice through research and pilot projects;

To enlarge the existing cadre of local trainers and community motivators to undertake women entrepreneurship development;

To advocate for greater policy and resource focus on women through awareness-raising and sensitization on a range of gender and other developmental concerns; and

To network with similar organizations and institutions to share learning and accomplish common goals.

2.2.2.4. Organizational culture, leadership, innovation (S, M)

ECDI’s staff visualise themselves as a family unit and are strongly committed to its vision and mission. ECDI’s success has been in remaining small and involving people who share its core values. Clients are treated as partners and enabled to make informed choices based on complete and accurate information.

2.2.2.5. Organizational structure, roles and responsibilities (diagram may be helpful)

The basic sub-divisions (by function):

Administrative and Finance UnitTraining and Development UnitCommunications and Outreach Unit

Other staff are divided either thematically or by their program/project affiliation.

2.2.2.6. General qualifications and profile of field staff (S, M)

The field staff, which interacts with beneficiaries/clients in the field, in particular the REs and the rural SAs, are referred to as the Rural Facilitators. They have graduate degrees; one has post-graduate qualifications as well. Some are very experienced (up to 12 years in the field) and others have been more newly engaged and developed. Field staff traditionally lives within the communities in which they operate, are fluent in the local dialect and familiar with local customs and traditions.

2.2.2.7. Training/sensitization (of staff, managers, board) on mission and poverty outreach (S, M)

All staff hired is oriented on ECDI’s mission and work and it is ensured that they understand and subscribe to its values. Capacity-building and in-house training is a regular feature of general staff development initiatives. Training is delivered by ECDI’s cadre of professional trainers, although external agencies/programs are also tapped into as and when required.

2.2.2.8. Incentives for poverty outreach (S, M)

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There are no monetary incentives for this – focus on the underprivileged and poor flows from ECDI’s core mission.

2.2.2.9. Governance

ECDI is governed by a Board of Directors who provide advisory services to the institution and are in charge of formulating its policies. The current board comprises of eight committed professionals who are experts in the fields of entrepreneurship, development, medicine and psychology.

2.2.3. MF and MED services

2.2.3.2. Description of main target group (if not the very poor).What is the total number of clients, by service (loans/savings), if known? What is poverty level, gender, social status, professional activities and business types, ethnicity, etc. of most clients?

Prior to this program, ECDI targeted middle class, educated, mobile and urban women hoping to start businesses. Now, their main target group is the poor, particularly the homebound and rural poor, and they work with working poor women as intermediaries.

2.2.3.3. Selection and/or eligibility criteria

What are selection criteria? What method is used to verify eligibility?

There were no standard selection criteria – it depended on the specific program.

2.2.3.4. Use of poverty assessment toolIs poverty of general clients assessed? By what method?

No.

2.2.4. Resources and external assistance

- Services for ME development were paid through third-party payers such as First Women’s Bank Ltd., UNICEF, CIDA and ILO. - Direct funding for project implementation, especially for pilot activities in the field.- Limited revenues raised through grant funding for project implementation.- Direct payment (subsidized at times) for training from middle-class women, stimulating a first generation of entrepreneursNo individual donation are solicited.

2.2.5. Relationships (networks, partnerships, other institutions)

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2.2.5.1. Networks

ECDI is a core member of the Beijing Plus 10 Process (Sindh Chapter) in Pakistan and is recognized for its consciousness-raising on critical gender issues. Because of it role as the leading entrepreneurship development organization for women, ECDI has extensive networks among women entrepreneurs – trainers, graduates, role models, etc. These have proved crucial in developing a network of sales agents and marketing channels for the embroidery sector. During the program, ECDI became affiliated with the SEEP Network, which linked ECDI with other practitioners around the globe embarking on value chain development for the poor.

2.2.5.2. Partnerships

The partnerships between MEDA and ECDI and then between ECDI and private sector businesses in the value chain are the main partnerships at work in this program. ECDI is in the process of forming relationships, and building on existing relationships, with microfinance institutions to offer credit to sales agents. They are also beginning to look more at whether and how women are accessing social services - education and health, for example - that will enhance the impact of increased income.

2.2.5.3. Other institutions

The main services identified are basic health care and primary education, provided by the government. These is, to date, no coordination of services to the poor.

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2. 3. Description of “Very Poor” Target Group

This program only targets the “very poor.” The program did not, in fact, set out to target the very poor. Rather, the program is focused on women’s empowerment and set out to select a value chain in which larger numbers of women were very active and that presented strong growth potential. The three sectors originally studied were garments, handicraft and IT. Researchers were somewhat surprised to find such low rates of women’s participation until entrepreneurs being interviewed pointed out the large numbers of women in all parts of the country engaged in embroidery. All middle class women involved in the research immediately recognized the untapped market potential because of their own unmet demand for embroidered clothing, and their knowledge of the market. The program leader, then the lead market researcher, gained introduction to a few women trading in and creating embroidery through the contacts she had with women she had previously trained. She was astonished at the poverty, and the low – often negative – returns for women embroiderers. Most were home-bound and had access to markets only through male relatives. They embroidered patches of cloth that they had left over from worn-out clothes. These were sold in very low value markets and made into garments. Yet, the demand for hand-embroidered cloth and clothing in urban areas was high and the price differential significant.

Given the targeting process, the program did not gather data on poverty levels of the clients – rather, the focus was on sales levels. Nevertheless, program leaders describe the poverty in visual terms (see attached photos). In Quetta, for example, the target communities are slums on the outskirts of Quetta. The homes have no services, are in poor condition, and are very close to one another, with animals living alongside people. One village in Hyderabad region is only accessible by walking over a railway bridge and along railway tracks, with open sewage running along side it, causing flies and stench in the heat. In a rural village in Thatta – Jar – there is a cluster of five homes build from mud brick with no greenery in sight, animals tied to homes, people sleeping in the open and houses without front walls. The target clients and their families show signs of malnourishment – especially children with orange hair, vacant looks. Malaria and dysentery are common.

In addition, poverty is reflected in women’s lack of mobility and autonomy. One reason it is challenging for the program to get a good baseline of women’s sales prior to the program is that many women sold products through their husbands, did not receive the cash from their work and therefore did not know their sales. When the program started and began gathering women embroiderers into meetings and other groups, in many villages the men insisted on attending or listening into the meeting to make sure the subject was ok. Men often accompanied women sales agents on their travels as guardians.

3.1. Individual and Household conditions

3.1.1. Gender

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Women

3.1.2. Age

All ages – some young and unmarried, some with young families, others with older children, some grandmothers.

3.1.3. Disability and chronic disease

Nothing specific, but general poor health conditions and low access to health care.

3.1.4. Culture or religion

Same as reported above.

3.1.5. Ethnicity

Same as reported above.

3.1.6. Membership to socioeconomic groups, such as caste and class

MEDA and ECDI estimate that their clients are in the bottom second tier of a 5 tier poverty rating – they are not destitute, they have an economically viable skill, but they are struggling to meet their basic needs and are socially oppressed. See opening description for more detail.

In most rural areas, clients are members of peasant households in a feudal system.

3.1.7. Household type, composition, marital status

The vast majority are married, generally living in extended family households, with women moving into the husband’s family. A minority are widows and a minority are young women, in line for arranged marriages.

3.1.8. Literacy

Clients are generally homebound and have never attended formal school. Some of the sales agents are literate.

3.1.9. Education

Younger women have often had access to some primary school, especially in Multan, Punjab, but less likely in interior Sindh and Quetta, Balochistan.

3.2. Socioeconomic conditions

3.2.1. Refugee or IDP status

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Not in general.

3.2.2. Economic conditions (F, C) 3.2.2.1. Underemployment

National statistics report very low levels of women’s participation in the workforce, due to women being home-bound. In addition to the embroidery work, women sometimes work on their own fields or work on landlord’s fields. In general, although women’s labor burden is significant due to lack of services, clients are looking for more opportunities to work and earn a living, from home.

3.2.2.2. Income SourcesWhat are the main income and/or subsistence sources of very poor clients?

Multan: AgricultureQuetta: Informal sector business and employmentSindh: Agriculture and informal sector business in the towns

3.2.2.3. Land ownership

Most client families do not own land. Women do not own land.

3.2.2.4. Asset ownershipWhat are typical assets (productive and/or household) owned by very poor people?People tend to own chickens and goats and their basic household furnishings and cookware.

3.2.2.5. Income levelProvide daily wage levels for labor (male/female) if available.

For farm labor, people may be paid wages, but are also often paid in kind. (Information on wages and family income of the target clients was not available.)

(see section 4.1.2 for details.)

Baseline annual incomes for least active embroiderers: 0 or operating at a lossCurrent program average annual income from embroidery: $148

Baseline average annual income for active from embroidery: $72 Current average annual income for active embroiderers: $260

3.2.3. Geographic conditions3.2.3.1. Rural/urban, remoteness from trading centers and roads, population density

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Multan, Punjab: These areas are rural, hard to reach by road, and along distance from major capital cities where demand is strongest.

Interior Sindh: The target areas in interior are both rural and peri-urban. Rural areas are hard to reach by road, but located relatively close to Hyderabad, a major metropolitan area. Peri-urban areas are densely populations.

Quetta, Balochistan: These areas are located on the outskirts of Quetta, the capital of the province, but the Province itself is isolated from the rest of Pakistan.

3.2.3.1. Access to marketsIn additional to physical barriers, producers experience social barriers. Prior to the program, market access was through male household members, who marketed through informal traders to low-value, local markets.

3.2.3.1. Access to banksNone

3.2.3.1. Access to doctors and clinics

Same as general population described above. Basic primary health case services are available, but access to treatment care is low, and varies depending on the region - with higher access in Multan and lower in Thatta and Quetta.

3.2.3.1. Proneness to natural disastersOnly to be completed in the rare case where the very poor target group experiences different natural calamities from the rest of the population, because the live in distinct areas where they are more prone to drought, flooding, etc.

Due to poor housing conditions, location of slums, and access to poorer land – i.e. unirrigated, for example, or more prone to floods, the poor are usually more affected by the natural disaster.

3.2.4. Major vulnerabilities and risks encountered by target group (F, C) What are most common vulnerabilities experienced by the very poor? How do they cope with them traditionally (before becoming clients)?

As a whole, the poor experience: Lack of services: electricity, water, sewer, telephone, health care Low Education levels, low literacy levels – especially for women Remoteness and/or urban squalor Low access to land, often through feudal systems in which the landlord retain

property rights. Women’s right o own property is not widely recognized. Poor housing conditions Poor health, low access to health care Social structures and constraints that support exploitative economic practices Market disruption due to insecurity, political factionalism and/or natural disaster

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For the program target group, in addition: Gender: low education, home confinement, domestic violence, arranged marriages,

lack of access to and control over resources, lack of mobility, lack of autonomy to pursue economic activities, and isolation from markets

Traditional survival strategies include: Work in the fields, Piecework, Selling a few eggs laid by family hens or milk from the goat In times of crisis, people generally rely on families or communities to act as their

social safety nets.

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4. Poverty Targeting and Assessment4.1. Poverty measurement practices

4.1.1. Poverty data collectionAre poverty-related indicators collected on clients? Not really

4.1.1.1. Which poverty indicators are collected? Embroider sales and empowerment data.

4.1.1.2. What poverty assessment tool is used? It is an impact assessment tool developed for the program.

Are the data collected through a standard survey? Yes.

4.1.1.3. When and how often are poverty data collected? The data that is collected is part of an M&E system – not a poverty targeting system. It is collected by gathering sales data from sales agents and by conducting in-depth interviews with a sample of 120 women. Data is gathered every quarter in order to report to the donor.

4.1.1.4. Which clients are measured? Sales data is collected from all sales agents and, thus, all clients. Empowerment data is gathered from a sample 120 of 9,500 clients from all 3 regions.

4.1.2. Use of poverty dataHow are poverty data used by the organization?

4.1.2.1. What, if any, are poverty categories distinguished by poverty data? None.

4.1.2.2. How are each of these categories defined? N/A

4.1.2.3. How are poverty data used by organization? To report to donors and researcher on the impact of the program.

4.1.2.3.1. For client monitoring? Yes. For example, if sales are low in some areas, program managers might pay more attention to these sales agents, identify challenges and help to resolve them through training, creation of additional market linkages, etc. Where sales are high and possibly unmanageable, the program might help to introduce more sales agents to the area, etc.

4.1.2.3.2. For client screening? No.4.1.2.3.3. For client targeting? No.4.1.2.3.4. For impact monitoring/assessment? Yes.Also used for product development?- only to indicate that new work is needed, but

not what type of work.

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4.1.2.3.5. For other uses? Fundraising, public relations, staff motivation, fulfilling existing obligation to donor.

4.2. Available Poverty Data

4.2.1. Poverty distribution results by internal poverty data collection method:See below.

4.2.2. Poverty data from a recent poverty and/or impact assessment study

The program primarily pays attention to sales from embroidery work. In general, buyers provide inputs and so the sales are the profits. The program does not have a baseline sales figure. The baseline for most embroiderers was very low, close to 0, with many operating at a loss. During market research, the program documented the average monthly sales of several very active embroiderers, and this forms as a baseline for more active embroiderers.

Sales data and the number of embroiderers is reported by sales agents to the program. They have little incentive to report correctly or incorrectly. The overall sales data is divided by the number of embroiderers selling to get an average. Around 2/3rd of the over 9,000 embroiderers reached are “active” at this point, and the second sales figure reflects sales of these more active producers. Figures are gathered in Pakistani Rupees and converted at the exchange rate at the time of the sales report. Sales data is collected from all sales agents and, thus, all clients. Empowerment data is gathered from a sample 120 of the 9,330 clients from all 3 regions.

Baseline annual sales for least active embroiderers: 0 or operating at a lossCurrent program average annual sales from embroidery, all clients: $148

Baseline average annual sales for active embroiderers: $72 Current average annual income for active embroiderers: $260

An “active” embroiderer is someone who embroiderers for over four hours per day. (How is this known, since the sales data comes from the SA – how do you know how many hours each person works?

4.2.3. Poverty Data obtained through use of USAID certified poverty tool N/A

4.2.4. Interpretation of Poverty data4.2.4.1. Comparison between internal and USAID poverty tool data4.2.4.2. Organization’s own interpretation of poverty outreach

MEDA and ECDI were very pleased to have the opportunity to target a viable economic sector in which so many poor women were engaged. Their poverty outreach is indeed higher than expected when they originally launched the program design. Now, reaching the poor has become part of ECDI’s mission and operating philosophy. MEDA, which

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had a stronger focus on the poor to begin with, has build capacity around targeting women. Both organizations plan to continue this trend. The program is hoping, with additional funding, to become more active in the NorthWest Frontier Province, for example, which is a lower income province. In Thatta, program managers would like to see higher participation rates of Hazara people, one of the more traditional closed ethnic groups. Program leaders have ideas for how to bring in additional women who do not know how to embroider yet, but they have no specific plans at this point. MEDA has obtained funds for a replication in other sector in Pakistan and is running women focused program in other countries, which was not the case prior to this program.

4.3. Poverty Targeting

4.3.1. Does the organization use a poverty targeting tool? NO

Geographic targeting, sector targeting.

4.3.2. What is the client poverty target level?

Program leaders estimate that the level is 2 of 5 – with 5 being wealthy, 1 being destitute. Critical to program success is the fact that clients have a marketable skill.

4.3.3. Staff use of poverty targeting (S, F) 4.3.3.1. Training/sensitization (of staff, managers, board) related to poverty outreachHow is staff trained in poverty targeting?

This is done informally through inspirational program leaders. ECDI hired new staff to work directly with the poor, while existing staff worked more with urban sales agents and more sophisticated businesses in the chain.

4.3.3.2. Staff incentive schemes

None related to poverty targeting.

4.3.4. Issues with poverty targeting (S,F) If organization is using a poverty targeting tool, what issues has it encountered by using the tool?

From the researcher’s perspective, the M&E tool has several issues: It is not a poverty targeting tool and does not report comparable, statistical poverty

levels. The data is gathered, but not fully analyzed. This is partly due to lack of resources,

but also because program management is more motivated by and focused on empowerment information, rather than statistics. Statistics are produced for the donor, and are of limited quality anyway due to the circumstances of the clients and the limitations of available tools.

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There is no baseline data collection, and no national statistics are provided for comparison, so it is difficult to compare the results with other programs in other contexts.

Having said this, there are no easy answers to most of these challenges. Targeted households are very socially closed and secretive, particularly at the beginning of the program and at the beginning of their interaction with the program. The women themselves could not report their household incomes, although they probably could report consumption patterns. However, this type of survey requires more skill and time than the program ahs at present. Additional resources would at least facilitate better processing of existing data.

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5. Products and Services5.1. Financial Products

Table 5.1. Microfinance Product Details N/AThe program advises sales agents to provide materials to poor producers and advises agent on how to track and deduct the cost of materials form the final price, and to inform clients about the cost of materials. This functions, from the point of view of the client, as a form of no-interest credit.

5.2. Microenterprise Development Services

Table 5.2. MED Service DetailsService Types and Features

5.2.1. TrainingTraining is provided to sales agents who provide both individual and group training to

producers. Th e following described the content of the training from sales agent to producers

5.2.1.1. Financial literacy5.2.1.2. Business planning and management

5.2.1.3. Marketing

Yes, but mostly product development, quality control, the importance of responding to

market demand, and what the current demand is.

5.2.1.4. Recordkeeping and bookkeeping5.2.1.5. Skill development Yes5.2.1.6. Technical assistance (Not sure what this means?)

5.2.1.7. Training methodHands-on, individual and groups, and

mentorship by group leaders and sales agents5.2.1.8. Other?5.2.1.9. Costs to client Built into the price of the product.

5.2.2. Business Consultancy and Advisory ServicesSimilarly, the program provides this to sales agents who work as described above with

individuals and groups.5.2.2.1. Individual or group sessions5.2.2.2. Frequency5.2.2.3. Topics

5.2.2.4. Confidence BuildingThis occurs as part of the process, but is not

an explicit topic.5.2.2.5. Other5.2.2.6. Costs to client

5.2.3. Market Linkages5.2.3.1. Input supply Yes5.2.3.2. Marketing Assistance Yes5.2.3.3. Market Information Yes5.2.3.4. Producer organizations Often

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Service Types and Features5.2.3.5. Business linkage promotion Yes5.2.3.6. Quality Control Yes5.2.3.7. Other Technology, product design5.2.3.8. Costs to client Provided by and paid for by buyer

5.2.4. Other5.2.4.1. Employment generation5.2.4.2. Technology development Yes

Provide any further narrative and details relating to microenterprise development services that were not captured in the table above.

Program Goal and Purpose:

The MEDA/ECDI Program, Behind the Veil, is a 3-year, $600,000 initiative to enable homebound rural women in Pakistan to increase incomes and contribute to household revenue by reaching lucrative markets for hand-embroidered garments. To overcome women’s isolation, the program trained women sales agents and established a multi-layered network of women sales representations who work closely with rural embroiderers – providing designs and inputs, quality control, and often production space. This network has grown to reach 9,330 embroiderers and – for active embroiderers – has tripled incomes. It continues to grow and expand on a sustainable basis as existing sales agents expand their networks and as embroiderers graduate to become sales agents themselves. The following program description puts the program into “value chain” terminology. 14

Market Selection and Research:

The program was pre-ceeded by 3-5 years of research and relationship building by MEDA and ECDI. Ultimately, MEDA determined to address the problem of women’s oppression and poverty, and partnered with ECDI because of their strong presence, operations and 16 years of training women entrepreneurs. MEDA had recently adopted and was helping to pioneer sustainable value chain development approaches and determined to use this approach. In selected sectors, the main productive sector with significant opportunity was embroidered clothing. As it turns out, the majority of producers are poor. There is very high demand for Pakistani clothing - Shalwar Kameez among the emerging middle class, and hand embroidered cloth is valued. However, the demand is for innovative hand-embroidery and clothing styles with more modern designs – designs that are less labor intensive than traditional designs because they are more simple and minimalist. A critical part of the market research was to determine the extent

14 This program description is based on and in some parts excerpted directly from McVay, Mary, Alex Snelgrove, and Linda Jones, “Program Design Toolkit: From Information to Action: Value Chain Development Toolkit for Practitioners.” MEDA, 2007.

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and nature of this demand, and the strengths and constraints for poor women in respond to this opportunity.

Market Strengths and ConstraintsMarket research revealed that the majority of rural embroiderers were unable to reach identified growth opportunities or interact with potential buyers and market intermediaries due to a reliance on male family members for trading activities. While the target clients had excellent technical expertise, the products produced tended to be of inferior quality with outdated designs. The inability of these clients to interact with markets hindered both delivery of critical support services as well as stronger market links. The diagram below illustrates, on the right, the common market structure that traps women in production with low prices and marginal returns.

Sustainable SolutionsMarket research uncovered a fledgling business model for replication which had excellent potential to help the two organizations achieve their goal of increased incomes for rural women. Under this model, homebound women were able to sell their products to retailers through female sales agents in a socially appropriate manner. This type of business is illustrated in the center and labeled as “urban sales agents.” Men would generally not object to women buyers coming to their homes to do business with the

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women in their households. At the same time, the model solved the isolation issue by providing producers with a link to the market, through which critical support services, such as information, modern designs, and inputs, could be channeled. This business model was expanded by the program to help rural women reach higher value, higher return market. It is through the sales agent that sustainable market access and business services have reached target low-income clients.

Interventions – Program Activities and Client Services

Based on additional market research and stakeholder input, MEDA and ECDI developed a strategy to facilitate the following three service packages:

1. Embedded package of market access, product development and input supplies to rural embroiderers (REs) provided by women sales agents (SAs): The project introduced mobile female sales agents directly to rural embroiderers, creating the market link and developing an avenue for information flow from markets to producers. Key activities included identifying women who already acted or were willing to act as sales agents to rural women embroiderers. In order to work against the development of monopolies, multiple introductions were made, affording rural embroiderers with a choice of intermediaries. A training program was also developed to build the capacity of new and existing sales agents in areas such as community outreach, sales and marketing, and business development. To develop the necessary links with buyers, sales agents were assisted with establishing contacts and fostering relationships with retailers, exporters and exhibition organizers.

2. Market linkage services for urban garment makers, provided by other women sales agents: The project also trained a second set of sales agents to strengthen market linkages between urban garment makers and high-value, urban retailers and exporters. Through workshops, meetings with buyers and sales agents, mini exhibitions, and other relationship building activities, the sales agents facilitated information sharing and introductions among women’s businesses in the garment market.

3. Product development and design services to rural embroiderers, provided by mobile women sales agents: By introducing a new range of customers, the project attempted to demonstrate to designers that there is demand from rural women for their services. At the start of implementation, it became apparent that SAs were unable to access these formal design services. However, an additional value chain actor was identified: the tracer designer. These individuals, mostly men, design the embroidery stencils and imprint the designs on the fabric; mobile SAs were able to interact with these men and could afford their services. Helping improve the quality and innovativeness of these trace designs has proven to be a successful way to introduce contemporary designs into the market.

During project implementation, various challenges arose that required modifications to the project model. For example, it was envisioned that the REs would reach male wholesalers and retailers through direct links with female sales agents. However, the level of segregation was deeply entrenched; mobile SAs from urban areas were able to

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interact with the market but had difficultly gaining trust in the community. A many-tiered sales agent model (with Community Sales Agents (CSAs) purchasing from REs and selling to urban-based Local Sales Agents (LSAs)) developed; over time CSAs were able to expand their business and started to compete with LSAs. Some local sales agent sell wholesale, while other have home-base boutiques. Other developments, such as producer groups and buying houses have added richness to the value chain and provided greater choice for remote, isolated women entrepreneurs. These evolutions, and other examples of the project’s ability to respond to market signals, have been integral factors in the program’s success.

5.3. Non-financial Services N/A

5.3.6. Empowerment and confidence building

The program does not specifically discuss or confront women’s lack of power or autonomy. Rather, the program activities result in empowerment and increased mobility. And, this was intentional. Gender relations are constrained to the point that direct confrontation can be dangerous and unproductive. Clients were interviewed during the market research phase, and a sample is regularly interviewed by independent program staff (independent of sales agents). At the final stages of the program design, managers held workshops with businesses in the value chain, including embroiderers. However, clients have not been directly involved in program decisions. Sales agents, however, have formed an association and have been more directive about next steps in the program. Clients have more negotiating power than before when they were dependant on male relatives. In addition, the program works to provide clients with a choice of sales agents and cultivates a social enterprise approach to business to help clients have more power in the market. In less viable and accessible areas, it is harder to provide clients with many choices, and society is more hierarchical, so women are more vulnerable in these situations.

5.3.7. Graduation of very poor clients into mainstream MF/MED services: N/A

The “graduation” that the program sees and promotes is of embroiderers becoming sales agents and sales agents working with layers of different community-based sales agents.

5.4. Design and Product Development:

5.4.1. Program rationale/ theory of change?5.4.1.1. Main issues and challenges of very poor clients which the organization seeks to addressThe program designers identified the following critical constraints for very poor women:

o Lack of mobilityo Market linkages through spouses and other male relativeso Poor access to market information, quality and standard inputs, designs

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o Poor quality productso Low priceso Lack of coordination and common marketing strategy with the value chain

It is important to note that the program is also based on the strengths and opportunities that the client and their situation present. These include:

o Technical skill based (embroidery)o High market demand for the skill and general product category, and unmet

demand at relatively higher prices in some growing marketso Nascent or emerging business models that work for marginalized women, that

could be expanded

5.4.1.2. Intended outcomes and impactsWhat are the intended (short-term) outcomes at client, household, microenterprise and community level? What types of impact are expected in the long term?

Goal: to enable homebound rural women in Pakistan to increase incomes and contribute to household revenue by reaching lucrative markets for hand-embroidered garments. Specific intended impact are set at the market, intermediary/provider, microenterprise, individual and household level.

o Market: restructure the embroidery market to help rural, home-bound

women access high value opportunities, and expand demand for rural embroidery work through the sales agents network.

Develop a viable market for design services to enhance product value

o Intermediary/provider: build the capacity of women sales agents, embroidery designers, and other intermediaries to respond to market demand and to help rural embroiderers to respond to market demand.

o Microenterprise – Rural Embroiderers: Increase sales (it is implied that this will mean increased return per hour of work, although this was not measured) through: improved access to inputs, markets, market information, designs, quality control services and techniques.

o Client: Increased income (equivalent of sales), autonomy, empowerment, mobility, social interaction with women, decision making power. (Tracked by asking the opinion of the client.)

o Household: Improved health, increased school enrollment, improved living conditions, improved status of women in the household. (Tracked by asking the opinion of the client.)

5.4.1.3. How are products and inputs designed to achieve those intended impacts?

The strategy is to help homebound women reach high-value domestic markets for hand-embroidered garments by strengthening business support services and marketing links. MEDA/ECDI devised a comprehensive, holistic package of services, based on market research and stakeholder input. The services are:

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o Delivered through profitable businesses on a sustainable basis. Services to the target clients are paid for by the provider with proceeds from product sales – they are part of the cost of doing business. Design services are purchased and then passed on from one business to another as part of a business deal.

o Targeted to different groups of entrepreneurs – rural embroiderers, sales agents, and urban garment makers – so as to address constraints all along the value chain from producer to consumer. They are not targeted solely to the poor clients.

o Customized to the culture, education level, and demand of the different groups of target businesses.

The three packages are:

1. Embedded package of market access, product development and input supplies to rural embroiderers (REs) provided by women sales agents (SAs)

2. Market linkage services for urban garment makers and rural embroiderers, provided by other women sales agents

3. Product development and design services to rural embroiderers, provided by mobile women sales agents.

In addition to the comprehensive package of services, a critical element of success in reaching the rural embroiderers is the characteristics and capacity of the intermediary, the sales agents (SAs). SAs are women who mobile, have or are able to develop social contact with the rural embroiderers, the target clients. They are literate, have experience in business, embroidery, or related crafts, and generally have both a business and social motivation. Some are located in the villages where women embroiderer. Some are in neighboring towns, and others are in the cities where products are sold. Some are wholesalers while others have home-base boutiques themselves. It is a vibrant, competitive market.

5.4.2. Concept development 5.4.2.1. Client Survey Demand/Needs assessment15

MEDA and ECDI undertook market research on women microentrepreneurs across regions and industries in Pakistan between 2002 and 2004. The timeframe was lengthy because MEDA and ECDI were participating in a SEEP Network Practitioner Learning Program.16 Throughout the market research phase and implementation, MEDA and ECDI have conducted secondary source research, market observation, key informant interviews, focus group discussions, in-depth interviews, stakeholder meetings and action research. The process was qualitative and interactive, and driven by specific program 15 This market research description is based on and in some parts excerpted directly from Miehlbradt, Aly and Linda Jones, “Market Research Design Toolkit: From Information to Action: Value Chain Development Toolkit for Practitioners.” MEDA, 2007.16 The Small Enterprise Education and Promotion Network, Participatory Learning Program, funded by USAID and involving an extensive peer learning agenda.

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design choices and hypothesis about how the program might work. Some of the activities and their results are described below. Because market research is a significant part of value chain development, and of this program in particular, it is presented in some detail. Annex A present diagrams of MEDA’s market research and program design processes, as laid out in their toolkit series: Information to Action: Value Chain and Market Development Toolkit Series for Practitioners.

The aim of the initial market research was to decide the project purpose by: 1) determining if cross-cutting support services for women microentrepreneurs could be upgraded for the growth of a variety of industries, or 2) selecting one sub-sector and preparing a market development program for specific value chains in that industry. In either case, the impact goal was to increase sales of women microentrepreneurs in rural, urban and / or peri-urban regions in Sindh, Balochistan and Punjab, and enable them to contribute to household incomes.

Because of its familiarity with the region, MEDA did not undertake extensive secondary source research. In fact, from an earlier study MEDA and ECDI had learned that increasing sales and income through improved market access were top priorities for women entrepreneurs across Pakistan, but that they lacked the necessary market linkages. A key element of secondary source research in this phase focused on collecting lists of service providers (commercial and NGO) for further investigation.

The first round of the research process, was centered around the research question “Are support service providers market-driven, and able to provide assistance to women microentrepreneurs to reach more profitable markets?” The research team conducted in-depth interviews with a range of approximately 115 service providers identified from conventional sources (the secondary source research above): government lists, directories, membership roles, and knowledge of the existing formal market. The team learned that service providers – both public and private sector – were not market driven but tended to be product driven – focusing on getting input supplies, technical support and other assistance to women without a clear understanding of what the end market demanded or how to reach promising new markets.

However, the research team felt that this information was incomplete – that there were issues relating to appropriate products and market access that they did not understand. The next round of research used in-depth interviews with women entrepreneurs to answer the questions “How are women currently reaching markets, and why do they think that they are not able to increase sales or access new market opportunities?” The 56 women interviewed across regions and industries indicated that because of mobility restrictions, they did not have good awareness of market demand, could not obtain quality input supplies and new designs, and did not have beneficial links to markets. In the case of rural women, market engagement took place through a male family member – often through a middleman – and women producers had little control over their work.

The market research had cut across three subsectors: handicrafts, garments and information technology. During this phase of the market research a fourth industry presented itself that became the focus of the remaining research effort: hand-embroidered garments. This industry was of interest to MEDA because the producers of hand

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embroidery are largely poor, homebound, rural women with few choices for income generation.

The research team recognized a market opportunity when they learned that pockets of homebound women were reaching lucrative markets for embroidered garments in large cities, based on commission work for urban women intermediaries – generally women who had roots in the same village or ethnic community. The business model was a promising ‘outlier’. So, the third round of market research was aimed at answering the question “Do middle class urban consumers represent a market opportunity for homebound women embroiderers?” The research team interviewed a few key informants including owners of home-based boutiques, retailers, wholesalers and consumers. These interviews confirmed that there was unmet demand for quality hand-crafted garments.

In the fourth round of research, the team wanted to understand “Can the model be scaled up? Can women intermediaries proactively reach more markets and more producers? Would women intermediaries want to develop their capacity to provide essential support services, such as product design and quality control, to rural women?” The research team conducted focus group discussions with support service providers to determine if their services could be improved, if public sector players could commercialize their services, and if women intermediaries following the incipient model would be available from this group. Interestingly, providers were very aware of their shortcomings and requested support from MEDA and ECDI to access new markets, introduce innovative designs, improve quality control, and interact with each other to develop a stronger industry and network. The research team also learned that a small group of women who owned homebased boutiques in towns and cities were willing to interact directly with producers, participate in capacity development, and be involved in market development activities. These women had greater mobility than their rural counterparts and seemed a likely category of SE with whom to replicate and enhance the rudimentary women intermediary model.

As a market development proposal was being prepared, the team carried out a final round of pre-implementation research: a stakeholder meeting with representatives from a specific value chain to answer the question “Will value chain players begin to understand each others’ issues, start to develop trust, and agree to participate in a market development program?” Thirty SEs – embroiderers, women intermediaries, suppliers, wholesalers (two rather rich and powerful men) – in Multan in Punjab province participated. Amazingly, learning of the meeting from intermediaries, some women embroiderers traveled up to five hours by bus to participate even though they had never ventured outside their communities before. The stakeholder meeting revealed that there was considerable dissatisfaction and even distrust amongst the various SEs. For example, women embroiderers stated that they made samples and even filled orders but were not compensated for their time; wholesalers said that the work was inferior and could not be sold at market rates to recover their investment in materials. The stakeholder meeting allowed the airing of these concerns, and then brainstorming of solutions. In the meeting, the researchers presented the ‘value chain as a team’ concept, with a common goal, that needed to work together to realize greater benefits for all. The researchers also presented the costs along the value chain so that producers would understand why there was a significant differential between their compensation and the price at which goods retailed.

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These two activities helped relax some tensions between value chain players and contributed to productive problem solving by the group, and a willingness to participate in a facilitated market development program.

The final program design that was funded revolved around the business model of the women sales agents. Before program activities could be developed to foster this model, greater market research had to be undertaken to ensure that it could be feasibly scaled. Demand from potential program clients for the services offered through this model was assessed. Capacity and interest of female intermediaries was also determined through a series of provider diagnostics. Brainstorming sessions with key stakeholders in the sector, including retailers, wholesalers, and producers validated the appropriateness of the selected model and identified potential intervention strategies.

Since program launch, action research has continued to lead to adjustments in program implementation. For example, MEDA and ECDI learned that urban-based boutique owners were becoming somewhat monopolistic. The program implemented action research to test the formation of producer groups with lead producers who would negotiate for the group. The model worked well and has been rolled out across the program. The program now promotes choices for market access. Producers are free to continue working with traditional middlemen, directly with boutique owners, or to participate in these informal business collectives.

5.4.2.2. Competition analysis

“Competition” came up at three levels in this program, and was considered by MEDA/ECDI as follows:1) MEDA/ECDI launched their market research with an examination of existing providers. This was less to assess “competition” than to assess how a program might strengthen this “market” of providers. MEDA/ECDI quickly realized that the government and NGO providers were not market-driven, but that private business were more market driven and potentially as or more capable of reaching the target clients. 2) In selecting the value chain, MEDA/ECDI selected a value chain with few other active development organizations.3) In its value chain analysis, MEDA/ECDI examined the market potential for embroidered products, against the “competition” of modern, Western clothing and against printed domestic and imported cloth. They found an on-going and unmet demand for traditional embroidery with more modern designs. They considered whether women embroiderers would experience higher returns if they worked to satisfy this demand. Although a financial analysis was not undertaken, it was clear that the more modern designs were less intricate and labor-intensive, although demanding slightly different skills and consistent quality.

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4) In its value chain analysis, MEDA/ECDI also considered the competitive position of rural embroiderers compared to urban embroiders and found low supply and lower skill levels in the urban areas, again leading the program to conclude that there was market potential for rural embroiders.5) In focusing on women sales agents, there were compared to the existing, male-dominated channel and found to have higher potential for enhancing market performance and benefits to rural women.

5.4.2.3. Self-assessmentDoes the organization conduct self-assessments? If so, how are they conducted? Who is involved? What have been lessons learned from such exercises?

MEDA undergoes regular self-assessment as part of its regular retreat and planning sessions. These are participatory with staff coming together from around the globe. Learning is incorporated into new programs and strategies, and sometimes documented in published strategy papers. So far, the lessons from this program are mostly positive and affirming that sustainable value chain development can and should be targeted to women producers, and that adaptations need to be made to effectively reach women.

5.4.3. Product/Service design 5.4.3.1. Product/service design processExplain how the organization decided to provide products/services to very poor clients, how these were designed?

It is in MEDA’s mission to help poor clients, but the decision to exclusively target women ….

ECDI, which had previously targeted middle-income women, was excited at the prospect of conducting value chain development in conjunction with MEDA as an effective women’s empowerment strategy, and was surprised and pleased to end up working more with the poor. Now, this is a critical part of the mission.

(For how these were designed, see above section 5.4.2.1.).

5.4.3.2. New versus modified products/services for very poor clientsWas a new product/service specifically tailored to the needs of very poor clients or was an existing product/service tweaked to meet their needs? What were the cost trade-offs?MEDA and ECDI embarked on a pioneering sustainable value chain development strategy at the same time as MEDA and ECID reached out to very marginalized women for the first time. This was a co-incidence. The strategy was not seen as particularly effective for reaching the very poor. Rather, MEDA and ECDI set out to demonstrate that the strategy could reach the very poor.

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I think the main difference between their model and some other value chain models is working with a network of microenterprise intermediaries. Most value chain development programs find it more efficient and easier to work with a few “lead firms” who purchase from sub-contractors. The thinking is that it is more difficult to build the capacity of and influence the culture of informal intermediaries than a few corporations or larger businesses. This case demonstrates the potential for informal intermediaries to perform well in reaching the poor and being socially responsible.

5.4.3.2. Risk assessment and product designWhat types of risks were identified for working with very poor clients? How did this affect product/service design?

MEDA/ECDI have considered risks as part of their logical framework process. The following risk analysis is excerpted from the program logframe. Although some risk also occur in reaching less marginal microenterprises, they are exacerbated when attempting to reach more marginalized people.17

Program Risks, Assumptions and Mitigation Strategies(Excerpted from the program logframe)

Goal Level: Potential ConflictASSUMPTIONS Regional political factors in the country do not hinder operations of project staffRISK INDICATORS – Mitigation Strategies Project operations avoid high-conflict areas and ensure project representation in rural

areas

Purpose Level: Gender relations, Sales agent capacity, Provider behaviorASSUMPTIONS1. Community leaders and male family members allow women to participate and apply

training and techniques2. Sales agents’ literacy and, numeracy skills allow them to work with embroiderers and

manage business. 3. Monopolistic buying patterns are not continued by female sales agents. 4. Formal value chain players willing to work producers and agents in the informal

sector.

RISK INDICATORS – Mitigation Strategies Community leaders are aware of income opportunities for women through the project. A range of training modules and delivery mechanisms are offered to meet the varying

levels of literacy of female clients Link agents to relevant organizations working in areas of literacy and numeracy. Substantial numbers of agents recruited with importance of win-win relationships

highlighted.

17 Adapted and exerpted from McVay. Snelgrove and Jones, 2007.

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Producer groups help discourage monopolies Range of market opportunities acknowledged by formal actors. Links developed with a range of market opportunities. Service providers represent both formal and informal sectors.

Activity/Resource Level ASSUMPTIONS Geographic isolation and weak infrastructure do not impede access to markets or for

project staff.

RISK INDICATORS – Mitigation Strategies Project staff based in rural areas.

5.4.3.1. Prototype development and testing

During the design phase, the program was part of an international group of organizations piloting market research and design, and the program sought the advice of an international expert in sustainable approaches to value chain and market development. As an “implementation grants program” partner, the program continues to participate in peer exchange and learning through the SEEP Network. However, the actual program was designed and implemented internally.

5.4.4. Pilot testing

5.4.5. Rollout

5.4.5. Product/Service review and assessment: Pilot and roll-out …

The program did not have a “testing and rollout” development process, as such. But there were phases and different avenues to recruitment and training of sales agents.

1. The first sales agents were identified during market research work 2-4 years prior to the program launch. They were identified by the program leader through her network of former trainees – a few were trainees, and others were known by trainees who work in NGOs, governments and businesses now. The initial sales agents were unique in their communities, ironically, as leaders and outcasts (for example a widow who was returned to her original family home). These women provided the initial model upon which the program was based, and they became the first sales agents.

2. Once the program got going, in some communities, ECDI, which is known for conducting business trainings, announced that they were having an event for embroiderers. Traders and producers came thinking that their

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goods would be purchased. Indeed, ECDI did purchase their products and also provided some market advice, got to know the more experienced embroiderers, and invited them to the program as potential sales agents.

3. Later, the trainings and the subsequent market linkage activities became known as helpful and more women came forward for training and services.

4. Finally, many new sales agents are becoming part of the market without formal training, or are being invited in by sales agents who need additional representatives to reach more embroiderers.

These sales agents fell into three categories. Urban, mobile women who have home-based or store-front boutiques selling

clothes who already have some connections with rural embroiderers. Rural women who are leaders of groups of women who embroider. They may

already play a role in taking rural products to markets. In rural areas in which there were no clearly identified leaders, the program leader

would meet with embroiderers in a village and get to know them, and identify among them a social entrepreneur, or or someone who was interested in selling the products, exhibited concern for others, and had some experience with embroidery and had a flair for business, were linked to the REs.

Most of the sales agents were poor themselves and/or just one level above poverty and had strong links among poor women embroiderers. The sales agents themselves link with and “select” the poor women, although in many cases it is the producers who are select the sales agent.

5.4.6. The Product Development Cost 5.4.6.1. Total cost Any information available on the total cost of developing a new product or service?5.4.6.2. How were they funded?Which financial resources make new product development possible?5.4.6.3. Outsourcing during the development processDid organization outsource the product development process? If so, to whom? Why?

It is difficult to estimate the cost of the program design. (Could we provide the cost of the market assessment and proposal development?)

5.4.7. Feedback loopWhat are the organization’s systems of information flow and feedback? What type of essential client information is used to better understand their needs and ultimately guide decision making for product development?

ECDI staff are in constant contact with sales agents and are constantly devising new activities to support their innovations and help them overcome their challenges. This often involves sitting with groups of embroiderers alongside the sales agents (who is often one of the embroiderers) and identifying and addressing specific and program-wide challenges. In addition, ECDI surveys a samples of embroiders

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5.5. Implementation Process

5.5.1. ProcessProvide a short step-by-step description of the process (and timeline) from targeting a new area or group and selecting/recruiting clients to providing products/services and potentially graduating very poor clients to new services.

The program doesn’t really work this way – the market and program develops in a much messier and organic manner. Roughly speaking, the main process was:

1) Market research, relationship building and program design: 2-5 years, depending on how you define it.

2) Year 1 and ongoing: Sales agent recruitment, training, market linkages – happened at the same time as embroiderer groups recruitment and identification.

3) Year 2 and on-going: Identification and incorporation of design services - identifying and selecting designers and tracer designers and linking them with sales agents.

4) Year 3 and on-going: supporting buying houses (a higher level wholesaling and market linkage business) and a sales agent association.

5) Exit: throughout the program, a critical step in program activities is planning the market “exit.” This involves ending activities that are no longer needed and turning over on-going activities to a sustainable entity. So, for example, some program staff in rural areas are setting up business guidance units for supporting sales agents. Buying houses are facilitating market linkages. The sales agent association is identifying challenges and beginning to troubleshoot.

5.5.2. LogisticsWhat are important logistical considerations in reaching and assisting very poor people? Issues can include mobility/distance, selection, training, monitoring/counseling, money transfer… Lack of mobility, homebound Husband and community reluctance for women to meet outside the home No telephone communication? No computer, internet Physical distance from markets Language barriers? Illiteracy – need for person-to-person interaction Lack of access to cash and to good input supply outlets

These were overcome, in part, with the program business model and women-to-women marketing, by hiring program staff from the target areas, through cell phone technology, and the use of practical drawings and samples rather than written instructions. The strong drive of the end market demand - and increasingly their social objectives - fuels the intermediaries to overcome these constraints.

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5.5.3. Information SystemHow are data obtained, processed, analyzed and used? Who keeps what type of records (and in what form)? Details on type of data can be further explained in 6.1.1.

Sales agents keep manual record which they provide to program staff, who enter them into MS excel and process using MS excel. In addition, staff interview a sample of individual clients and write down responses which are later recorded into and processed using Excell.

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6. Results

6.1. Method of measuring results6.1.1. Type of dataWhat information does management use to track results (effectiveness), performance (efficiency), client feedback and impact?

1) MEDA/ECDI report quarterly quantitative data to USAID that is also used as a bottom-line set of data for program managers to use in assessing progress. See Annex B “Table One.” This is a standard USAID table for the Implementation Grants Program. It includes data on effectiveness, efficiency, client satisfaction and impact at the market, program and client levels.

2) In addition, ECDI managers gather and report to MEDA the following impact data, which is also used to refine program strategy:

Market Level: how the structure of the market is shifting, for example:o whether and how gaps in market function are being filled and how

profitable and sustainable these new activities are.o Whether there is sufficient competition in the market, or whether

monopolies are developing. Provider/BDS level:

o Qualitative benefits (empowerment, mobility, security) for sales agents; challenges and strategies for overcoming these challenges in procuring from clients and reaching markets.

o Development of business structures, models and partnerships that help providers reach more rural women and more efficiently reach markets.

o Development of associations and their focus on social enterprise – the promotion of both business and social goals in developing the market and their businesses.

o Involvement of men as sales agents, monitoring the challenges and benefits of men in the market and in the associations. Involvement of husbands and male relatives in escorting and/or protecting women sales agents.

Client/Rural Embroiderer level:o Empowerment, mobilityo Qualitative reports of change in the household – economic and social

shifts such as children eating better, children in school, providing clothing for children, cleaner houses, healthier families, women making more decisions in the household, women having more of a voice in their choice of a spouse, etc.

o Development of associations3) MEDA/ECDA find it more useful to track results according to the type of business in

the market, rather than or in addition to the type of business service being accessed. So, their impact charts are divided into the following businesses:

Rural Embroiderers (REs) Sales Agents (of which there are community and local levels)

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Urban Garment Makers, and their employees or subcontractors Pattern makers Buying Houses

The main clients are the REs, but the other businesses are also microenterprises, and the employees and sub-contractors are likely to be poor.

6.1.2. Data analysis and useHow are the data analyzed? How often? How are the data used for day-to-day operations, for strategic planning?

The data are used to report to donors and to support program management. Sales data are used to assess progress in specific target areas, among specific staff and specific sales agents – issues are identified and explored and addressed to the extent possible. Sales data will also be used to assessing where and why the program was more effective, and what adjustment might be needed going forward.

6.2. ImpactReview of existing evidence on outcomes and impact. Compare with 5.4.1.2. Intended Outcomes and Impact.

6.2.1. Poverty Impact 18

The program has effectively linked 9,330 rural embroiderers with high value urban markets through a sustainable system of 213 mostly women sales agent. Client-level impact is assessed in terms of sales generated to embroiderers, outreach to embroiderers and improvements in embroiderer quality of life.

Sales:o For most embroiderers, income prior to the program was negligible. The

average income for all embroiderers reached as of June, 2007 (3 years into the program) is $170 a year.

o For more active embroiderers, average annual income was around $70 per year prior, and is now around to the program increased to $240.

o Additional income has been generated by 213 sales agents, 6 buying houses, 5 input suppliers, 40 tracer designers, and 200 urban garment markets, who employ poor workers. These are all microenterprises and some sales agents and garment makers were poor when the program began.

Outreach: The program has reached 9,330 embroiderers. To date, 6,150 women on average sell every month. While there are no statistics on the exact poverty level of these women, the program reports them as all being poor.

18 Some of the following passages are excerpted directly from a MEDA Impact Analysis produced by Linda Jones in July, 2007.

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Improvements in embroiderers’ lives:Almost all women report increased contributions to household decision making, control over their income, greater respect from their husbands and in-laws, enhanced feelings of self-confidence, more hope for their future, and general empowerment. In a few instances, we have heard of unmarried women becoming more vocal about the kind of man they would like to marry, and have requested that their parents seek a partner who will support their desire to be an entrepreneur after marriage.

In addition to these specific impact on the poor, the program has supported social change by empowering a generation of women entrepreneurs who are mobile and successful.

Community sales agents (who were originally REs), local sales agents and buying house operators have much greater mobility in their own communities and for traveling to urban centres to participate in exhibitions and to negotiate with buyers. These women have developed their capacity to travel across Pakistan, to run businesses, to engage with men in business, and to form support networks. Commonly, CSAs and LSAs have become women’s advocates, community mobilizers and social entrepreneurs.

6.2.2. Client satisfaction and feedbackWhat have been client satisfaction levels with services provided? What suggestions are made to change products/services? Client satisfaction is measured, in part, by the percent of clients who are repeat users:19

13. Microenterprise client satisfaction9 -Targets    

 a. Package of Services from Women Sale Agents to Rural Homebound Embroiderers in Selected Areas

 Repeat Clients

 Close to 95%

 b. Market Access Services from Women Sales Agents to Micro Urban Garment Makers in Selected Areas Repeat

Close to 85%

 c. Product Design Services from Commercial Independent Designers to Microentrepreneurs: Repeat

Close to 75%

Provide three short client stories, including at least one that was not successful, on which services were used, how they were used, and what the main impact was on the client, her household income, etc.

The following are 2 stories of successful client, and one of a less successful one.Shehnaz (Qasimbela, Multan region)

Shehnaz has been involved with the Behind the Veil project from its very onset. She is married and has four children. Her husband earns a steady, but limited, income as a bicycle mechanic in a workshop and Shehnaz has always had to work to supplement the family earnings. When Hina, Shehnaz’s project Sales Agent, met her, she was economically stressed and unable to meet her family’s needs. Being highly skilled at

19 From Table One, see Annex B.

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needlework, Shehnaz worked throughout the month on piecework and small orders from wholesalers but she would earn around Rs. 800 per month. Shehnaz now earns between Rs. 5000 – 6000 per month. She is able to contribute significantly to household expenditures and can afford to buy books and send her children to school. She recently enrolled one of her younger children in a private school, which was always a dream for her. Shehnaz also manages to put aside Rs. 500 every month as savings. Her husband’s respect for her has increased greatly and Shehnaz’s opinion is valued in household decision-making. Shehnaz’s future looks bright.

Mukhtaraan (Qasimbela, Multan region)

Mukhtaraan belongs to Multan region. She is married to a much older man who is unemployed. She lives with him and her seven children in a traditional joint family system. Life was very hard for Mukhtaraan. She was responsible for all household chores such as cooking and taking care of the children as well as earning to support the family. Mukhtaraan was often tired and disheartened – despite all her efforts, she was only able to make Rs. 1000 per month. Through the project, Mukhtaraan got linked to a Sales Agent who supports her in producing beautiful hand-worked fabrics for sale. She has taught two of her daughters how to embroider and they help her in production. She now earns between Rs. 7000 – 8000 per month and is able to meet her family’s basic needs. Mukhtaraan recently purchased a refrigerator on installments, and also bought herself a pair of gold earrings. She manages to save Rs. 1000 per month for herself. Before joining the project, only 3 of Mukhtaraan’s children were attending a government school. Now, all her younger children go to school as she is able to afford associated expenses.

Profile of an RE who faced the most challenges

Shaista (Nawab Pur)

Shaista is a married woman who lives with her husband in a traditional joint family system. She lives in a far-flung village in the Multan region and is completely homebound. Shaista and her husband do not have any children but still barely manage to earn enough to support themselves. She is under great pressure from her in-laws because she has not yet had children which are very valued in rural communities. Shaista’s husband is a wage-based farmer who works on other people’s land for some small compensation. Shaista used to produce small patches of work on old cloth or whatever other scraps of cloth were available, which her husband took the market for her. Her monthly income, prior to the project, was very low, averaging Rs 300 only. Shaista has

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now been linked to a Sales Agent, who pays her for her work and supplies to a local shopkeeper in a low-value market. Her income has increased to Rs. 600, but Shaista still has to struggle to survive. She is working hard with support from her Sales Agent, who provides her with order work, all required input supplies and design services. With her determination to succeed, we hope that things will be better for her in the future.

The following stories are all from sales agents, which is the main point of contact for the program.

Shahida, Quetta: Shahida is a Balochi girl from a conservative community. Although there was some family resistance, Shahida participated in the program and became a sales agent. She brought many Balochi women into the program (50 REs) who are now benefiting from increased income and market access. Shahida attended exhibitions in Karachi and received orders from wholesalers – in particular, her short shirts were very popular. While in Karachi, a man saw her and a marriage proposal was made to her family – the young man moved to Quetta in order to advance his cause. Shahida wanted to be sure that she could continue in her business before agreeing to the match, and this has been affirmed.

Saleem, Multan: Saleem was an extremely downtrodden woman in the conservative Nawabpur village 18km from Multan – known for honour killings, and orthodox social practices against women. Saleem herself was emotionally and verbally abused by her husband by her husband, and was completely covered in a black veil in any public venue. Her face is marked with pocks from smallpox. When she first attended program trainings, she did not remove her veil in the training venue and her husband would wait outside the room for her. The family was very poor, with two adobe rooms and a small courtyard. Saleem became a CSA in her neighborhood in Nawabpur and she currently represents 130 REs. She is known to be extremely fair and socially minded. As her prosperity has increased, she have provided more for her family and community. At home, she enlarged her house which now has two upper rooms. During the day, she has turned the main floor rooms into a children’s school which community children now attend for a small private school fee (a sorely needed service in many such communities) (70 Children registered – 50 boys/20 girls). Saleem’s daughter is a teacher in this school. In her community, Saleem has also enabled other women to develop their businesses – not just REs, but she has also assisted women to become a tracer designer, input supplier, fabric shopkeeper. She says she also encourages women to stand up for their rights and to not allow themselves to be mistreated as she once was. As a result, Saleem is now respected both at home and in the community; she is no longer abused by her husband, but seen as a valuable contributor. Saleem travels to Karachi to participate in exhibitions, and on her own initiative has developed relationships with buyers and shopkeepers from whom she takes orders and distributes in the community. We don’t think that Saleem’s story will end here.

Zohra, Hyderabad: Zohra was married to a much older man who was infirm and suffering from a form of dementia. In order to support the family, she would go from door to door selling fabric for women’s outfits. On joining the program, she set her goals

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higher, both in terms of the quality of the product and the price it would fetch, and in how she would engage in the market. Zohra has opened an upscale boutique in Hyderabad (her nephew- sister’s son financed her). Her oldest daughter is currently registered in college, she helped her widowed sister who has since joined the Behind the Veil program, and she has a steady upper income client base. The entire family has benefited from Zohra’s efforts.

Shahida: Sahida was hired as a rural facilitator for the project and by having a native Balochi, the project was set to make significant inroads into Balochistan – where they told they’d never b able to go. With Shahida on the team, the numbers for rural embroiderers and sales agents grew. Shahida opened doors for the program and got it established in Balochistan. But one of her brothers had an issue with her traveling to the villages, even though he or his brother would accompany her. As the project prepared for an exhibition in Quetta, the capital of Balochistan, Shahida disappeared. Nobody knew where she was or at least, nobody would say. Perveen, our partner, arrived in Quetta and made her way over to Shahida’s home where her brother ‘greeted’ her. He didn’t know where she’d gone – he wouldn’t say any more than that. The rural facilitators provide the office for the project – it’s part of the employment deal. Perveen told the young man that the project required access to the office and persuaded him to unlock the door. The place was trashed. Papers strewn all over, posters torn, a real mess. The exhibition went on without Shahida. Two weeks later, Shahida phoned quietly told Perveen that she could not continue as rural facilitator. Another has been hired (non-Balochi) to replace Shahida. To this day, she has never told Perveen where she went or what happened to her. And Perveen does not ask. Instead of working for the program, she has taken the role of community sales agent and she has also opened a buying house in her home. This provides her a more moderate level of activity and yet still provides some income. This enterprising young lady has already established her products in the high-value boutique in the Quetta Serena Hotel.

6.3. Cost Effectiveness and Sustainability

6.3.1. Scale and replicability6.3.1.1. Strategy for scale?

The program has already exceeded it goal of 6,000 embroiderers.

The market development approach used by the program incorporates has three strategies for reaching scale:

1. Leverage: MEDA/ECDI worked with sales agents (intermediaries/providers) who in turn worked with target MEs. This leveraged their outreach: the program trained 213 sales agents who in turn reached 9,000 target clients.

2. Market Growth: Because the sales agents are driven to expand, and because the program stimulated additional consumer demand for product, the sales agents are expanding by hiring and training additional sales agents who reach out to additional women.

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3. Sustainable market institutions: MEDA/ECDI have built the capacity of 6 sustainable buying houses (wholesale businesses) that link rural and urban embroidery traders. New sales agents who want to enter the market can get in through these buying houses. These new sales agents reach out to additional rural embroiderers. In addition, MEDA/ECDI have built the capacity of a sales agent association which works to continually development the market including supporting new entrants that will in collaboration with other sales agents.

6.3.1.2. Replicability of program or service

The program replicates itself as described above – through market forces, market mechanisms and leadership stimulated and supported by the program. In addition, MECA and ECDI have recently received a large grant from Canadian International Development Agency (CIDA) to develop additional value chains in Pakistan with the goal of reducing poverty for marginalized women. The program has won the CIDA Award for International Cooperation, which indicates its relevance for other market contexts and regions. MEDA has developed a toolkit series to support replication of this model by other institutions in other place and markets.

The essential factors for replication of this strategy by another institution include: The market research and program design process presented briefly in Annex A and

detailed in the program design toolkit series. A commitment to reaching marginalized populations through sustainable market

systems. A belief that market can work better for the poor, and that they can be influenced to do so.

Training and capacity building for sustainable, pro-poor value chain development. Adequate skill set for implementing complex programs and a capacity building budget and plan.

Adequate funding for the planed scale of market ($500,000 for 2-3 years for relatively small market that can reach 5-10,000 people is good estimate.)

An understanding that market (value chain) development itself is usually not a social enterprise for the implementing institution. Donors should remove expectations cost recovery at the implementing agency level.

Adequately functioning economy and strong demand for some kind of product or service that the poor have capacity to create and deliver. (Value chain development is being adapted for even more challenging economies and markets, but may require different approaches.)

Visionary and entrepreneurial leadership.

6.3.2. Financial and operational self-sufficiency (if applicable)Provide information on following ratios, if applicable. Indicate whether ratios relate to entire client population or to very poor clients only.There are several layers of sustainability that are possible in business service and value chain development models, including:

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1. The enterprise: which ultimately generates increased income and assets for owners and employees.

2. The value chain: the business relationship that takes SE product to markets, generating sales for SEs.

3. Business service (or support product) markets: that either sand alone and directly serve SEs, or that support a more competitive value chain.

4. Secondary business service markets, that serve other business service markets, for example the market for training SE radio journalists and producers, or the market for artificial insemination training to rural veterinarians.

5. Sustainability of market facilitation or leadership, for example of the role of trade associations or local government in conducting value chain development or business service market development activities.

Generally, in market development, sustainability is looked at well beyond the enterprise, specific, selected services providers, or specific buyer-SE relationships. In this program, sustainability has been achieved as follows:

1. The enterprise: Sales have tripled, indicating that embroidery is significantly more attractive and viable than before.

2. The value chain: Sales agents are earning approximately 15% gross profit margin and have sustainable links to buyers through a network of rural and urban sales agents and two buying houses. Rural embroiderers have a choice of sales agents, so the market has healthy competition. In some areas, independent input markets are functioning so that women are not necessarily dependant on sales agents for input supply.

3. Business service (or support product) markets: Sales agents continuously provide up-to-date market information, designs and inputs to rural embroiderers as part of their business dealings. Various businesses in the market - retailers, garment makers, buying houses and sales agents - purchase design patterns from designers and channel them to their producers through sales agents. The program is in the process of linking sales agents to microfinance institutions who can provide credit to the market on a sustainable basis.

4. Secondary business service markets, that serve other business service markets: some program staff are beginning to sell sales agent training packages to new and existing sales agents.

5. Sustainability of market facilitation or leadership, for example of the role of trade associations or local government in conducting value chain development or business service market development activities. The two buying house and the sales agent association are providing some leadership for continuing to develop the market. ECDI has led the project throughout and together MEDA and ECDI have developed both

53

organizations’ capacity for sustainable and pro-poor value chain development. ECDI has several offers of partnerships on the table for on-going work, including an offer to expand this program to another region.

Explain if other measures are used (for non-credit programs especially). Many of these measures are not appropriate because MEDA and ECDI did not intend to establish a social enterprise or otherwise recover costs with this initiative. Rather, market facilitation is seen as a temporary subsidy to stimulate market sustainability.

6.3.2.1. Financial expense ratio6.3.2.1. Operational expense ratio6.3.2.1. Cost per client: less than $236.3.2.1. Clients per staff member – Clients per provider instead?Each sales agent, on average, serves around 35 rural embroiderers.

6.3.2.1. Average loan balance per borrower6.3.2.1. Average savings balance per saver6.3.2.1. Portfolio at risk6.3.2.1. Tailoring of product/serviceIf products/services were tailored specifically to the needs of very poor clients, how did this affect cost and efficiency?

6.3.2.1. Other?

6.3.3. Cost-effectiveness of non-financial services?Distinguish different types of non-financial services and indicate cost and cost recovery.

6.3.4. Strategies to cover/reduce costs?Why measures were taken to reduce costs and to make products/services financially sustainable. Examples are delivery mechanisms, technological innovation, scale, cross-subsidization, private or public partnerships… Distinguish between financial and non-financial services. If no full cost recovery, what is the strategy for future sustainability?+Hiring less expensive and experienced staff and building their capacity, using more experienced consultants/trainers+Working with less sophisticated providers (pattern designers rather than elite designers)+Sales agents working hard to overcome barriers for working with groups of women outside their homes – for example inviting husbands to attend to convince them that the focus is business.+Sales agent creating multi-level marketing structures to reach larger rural areas

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Annex B: Market Research and Program Design Process

Formulate Research Questions

Identify Information

Sources

Specify Information

Required

Organize Information

Plan Information Gathering

Choose Research

Tools

Gather Information

Program Design

Develop Hypothesis

Conduct Research

Analyze Information

Make Decisions

Figure 2: The Market Research Process

Sustainable Solutions Finder: How will the problems be solved, on a commercially sustainable basis?

Budget Guide:How much will the program cost?

Will it be cost-effective?

Logical Framework: How will the program measure

success?

Implementation Planner: Who will do what? When? What capacity is needed?

Risk Manager: What might jeopardize the

program? What can be done to mitigate such risks?

Interventions Table: What will the program do to support

sustainable solutions?

Strengths & Constraints Analyzer:What positive value chain elements will be enhanced? What barriers will

the program address?

Goal & Purpose Articulator: Who will the program benefit and how? Which market opportunities will drive the program?

Broadly, how will the program achieve this goal?

Market Research

Figure A: Program Design Tools and Decisions

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ANNEX X: Table One – Results

MEDA PERFORMANCE TARGETS AND TABLE 1

ASSESSING THE MARKET FOR GOODS & SERVICES (Final Sales1)

  Year 1 Year 2 Year 3

Only applicants targeting a specific subsector

MARKET-LEVEL2 (Embroidered garments)      1. Annual value of sales (in US$)  $52.5

m $55.1 m  $57.9 m PROGRAM-LEVEL3 (Hand-embroidered garment subsector)      2. Annual value of sales (in US$)4 0.8 m  2.4 m  4.0 m

ASSESSING THE DEVELOPMENT OF THE BDS MARKET

  Year 1 Year 2 Year 3

All applicants

MARKET-LEVEL (Hand-embroidered garment subsector)      3. Total number of BDS providers, by service5      

 

a. Package of Services from Women Sale Agents to Rural Homebound Embroiderers in Selected Areas 18  36  70

 

b. Market Access Services from Women Sales Agents to Micro Urban Garment Makers in Selected Areas  18 36 70

 

c. Product Design Services from Commercial Independent Designers to Microentrepreneurs: Sales Agents, Retailers, Garment Makers and Exporters 4 8 12

PROGRAM-LEVEL       4. Number of BDS providers participating in the program, by service      

 

a. Package of Services from Women Sale Agents to Rural Embroiderers  15 30  60 

 

  i. Percent private, for-profit providers  100%  100%  100%

 

b. Market Access Services from Sales Agents to Urban Garment Makers  15 30  60 

    i. Percent private, for-profit providers

 100%  100%  100%

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MEDA PERFORMANCE TARGETS AND TABLE 1

 

c. Product Design Services from Commercial Independent Designers to Microentrepreneurs:  3 6   9

 

i. Percent private, for-profit providers  100%  100%  100%

5. Total number of firms acquiring BDS from program-supported providers, by service6

TOTAL 1575 3150  6270

 

a. Package of Services from Women Sale Agents to Rural Homebound Embroiderers in Selected Areas  1500 3000 6000 

 

b. Market Access Services from Women Sales Agents to Micro Urban Garment Makers in Selected Areas 45 90 180

 

c. Product Design Services from Commercial Independent Designers to Microentrepreneurs  30 60 90

6. Number of microenterprises7 acquiring BDS from program-supported providers, by service

TOTAL  1575  3150  6270  a. Package of Services from

Women Sale Agents to Rural Homebound Embroiderers in Selected Areas  1500 3000 6000 

  b. Market Access Services from Women Sales Agents to Micro Urban Garment Makers in Selected Areas 45 90 180

  c. Product Design Services from Commercial Independent Designers to Microentrepreneurs  30 60 90

7. Microenterprises as percent of total firms (line 6/line 5)  100%  100%  100%8. Number of woman-owned microenterprises acquiring BDS from program-supported providers, by service

TOTAL  1590  3180  6330  a. Package of Services from

Women Sale Agents to Rural Homebound Embroiderers in Selected Areas

 1500 3000 6000 

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MEDA PERFORMANCE TARGETS AND TABLE 1

 

b. Market Access Services from Women Sales Agents to Micro Urban Garment Makers in Selected Areas 45 90 180

 

c. Product Design Services from Commercial Independent Designers to Microentrepreneurs  30 60 90

9. Woman-owned microenterprises as percent of total microenterprises (line 8/line 6) (A few men will be included in the retailers and exporters who purchase product design services)  99+%   99+%   99+%

ASSESSING THE BDS PROVIDER

  Year 1 Year 2 Year 3

All applicants (as is feasible)

10. Total earned revenues from participating providers (do not include any grants or donor contracts)

Product DesignersSales Agents

4,800.58 m

9,6001.75 m

19,2002.92 m

11. BDS Providers' profitability Based on gross margins over revenues.

Product DesignersSales Agents

100%15.4%

100%15.4%

100%15.4%

ASSESSING THE IMPACT ON THE MICROENTERPRISE CLIENT (Program Level)

  Year 1 Year 2 Year 3

All applicants

12. Annual value of sales by microenterprises participating in program (in US$)8

Rural Embroiderers

Garment MakersSales Agents

TOTAL

90,00067,50090,000247,500

270,000202,500270,000742,500

450,000337,500450,0001.24 m

13. Microenterprise client satisfaction9 -Targets    

 

a. Package of Services from Women Sale Agents to Rural Homebound Embroiderers in Selected Areas

 Repeat Clients

 Close to 95%  

  b. Market Access Services from Women Sales Agents to Micro Urban Garment Makers in Selected Areas

Repeat Close to 85%

 

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MEDA PERFORMANCE TARGETS AND TABLE 1

 

c. Product Design Services from Commercial Independent Designers to Microentrepreneurs: Repeat

Close to 75%  

ASSESSING THE FACILITATOR'S COST-EFFECTIVENESS (PROGRAM-LEVEL INDICATORS)

  Year 1 Year 2 Year 3

All applicants

14. Total program costs (USAID and other) 172,557 172,35115. Total program costs per microenterprise served (line 14/line 6) 54.78

 27.49

OTHER INDICATORS

  Year 1 Year 2 Year 3

All applicants

16. Exchange rate used to calculate US$ figures  60  60  6017. Estimated percentage of microenterprises on line 6 who have poverty loans from any source    0  0

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TABLE ONE – NARRATIVE EXPLANATIONLine 1. This figure is estimated as follows: According to the World Bank, approximately 5% of Pakistan’s 140+ million people are middle class. Approximately half of these are adults under the age of 65, and approximately half of those are women. This means that there are about 1.75 million middle class women in Pakistan. Each of these women buys approximately 10-12 outfits (salwar kameez) per year, and clothes with embellishments such as embroidery, trims, beadwork are very popular. Currently, Pakistani hand-embroidered outfits in contemporary designs and high quality are not readily available, however we can safely assume that one of their 10 outfits has some kind of embroidery (local hand-done, machine, imported cloth). Each outfit retails for 1800 to 2000 rupees ($30-$33). We have selected the lower price $30 as part of our aim to be cautious in all of our targets and estimates.Line 2. Rural women can easily embroider the fabric for 6 – 8 outfits per month. Of the targeted rural microentrepreneurs, we estimate that 3 of these outfits will be suitable for contemporary urban markets within six months of intervention. This means that 4500 outfits per month starting at 6 mos., 9000 at 18 mos. and 18,000 at 30 months – each sold at $30. (Therefore 27,000 outfits in year one, 81,000 in year two, and 135,000 in year three).Line 3. Figures are based on our SEEP PLP market assessment in rural regions of Sindh, Balochistan and Punjab as well as the urban centers – Karachi, Quetta and Multan. We found that, although there are models, it is extremely rare for there to be commercial women sales agents. Also, despite the existence of independent product designers, they do not serve microentrepreneurs in the hand-embroidered garment subsector. As a result, our market figures are only slightly higher than our program figures. We do expect non-program figures to rise slowly during the course of the program and to keep rising when the program is complete.Line 4 a. and b. The target numbers for women sales agents are modest, since recruitment, training, commercial launching, and mentoring will not be a trivial matter. Line 4 c. Since commercial designers are new in the subsector, it will take time to establish them, and we will begin with only one per urban center to start, enabling us to test service delivery and payment mechanisms, and to provide models for other designers.Line 5 a. These targets are based on each women sales agent establishing a relationship with 100 rural hand embroiderers. The totals seem ambitious, but in our SEEP PLP research, we heard of local buying monopolies where a single middleman bought all the products of 100’s of women and/or tens of villages. Once relationships are established and families/women hear of new market opportunities, sales agents will be connected to networks of extended families. Line 5 b. Our estimates in terms of micro urban garment makers are as follows: if each woman sales agent works with 100 rural embroiderers, and purchases 3 outfits from each one, then each sales agent will handle 300 hand embroidered outfits per month. If the average garment maker in the program stitches 100 outfits per month for a sales agent (may be one to several employees), then the sales agent will need to have relationships with 3 garment makers.Line 5 c. Same as 4 c. Starting with 5 clients per designer and rising to 10 by the end of Year 3.Line 6 – 7. All targeted firms will be microenterprises.Line 8 – 9. All targeted microentreprenurs will be women except for a few retailers and exporters who may purchase design services from commercial designers.Line 10. This will not be the only source of income for independent commercial designers who will continue with current clients at the same time. The figure is based on 1 day per week per designer at a rate of 2000 rupees per day. The revenues for sales agents is the amount realized for hand-embroidered suits sold to retailers and exporters before any costs have been deducted (e.g., Year one – 27,000 outfits x 1300 rupees per outfit – or $21.67 each).Line 11. Profitability for sales agents is based on gross margins – that is profit after all direct costs are deducted from revenues (inputs, embroiderers fee, garment makers fee). It does not include deductions for other costs such as transportation, marketing, design work. The gross

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margin for each suit is 200 Rs (approx $3.33). Profitability for product designers, based on gross margins, is 100% since cost is chiefly labor/design time.Line 12. The sales for the each member of the hand-embroidered garment value chain are as follows: embroiderer receives 200 Rs ($3.33) per outfit, the garment maker earns 150 Rs ($2.50) for each one sewn, and the sales agents markup to the buyer is 200 Rs per suit. These are all based on the more modest retail price of 1800 Rs., although the average is 1800 – 2000 for day wear, and some of these outfits may sell for much more.Line 13. We anticipate that the rate of repeat clients working with sales agents will be very high since the sales agents will establish the relationship before working with the embroiderers, and since there are not a lot of alternatives. The repeat rates are lower for garment makers and product design purchasers, as other options do exist, and some clients may try out the service but with less commitment.

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