Poverty is a cause or consequence of social, economic, political injustices including geographical marginalization and greed. Its symptoms are many and varied including high rates of preventable diseases: infant mortality, malnutrition, low education and participation in decision making, violence, HIV/AIDS and limited opportunities in communities around the world.
To alleviate poverty requires a multi-facet approach. This is more so because poverty, ignorance and diseases breeds a complex web. Each of them is either causing or resulting in poverty. CRESS capital unlocks the world’s poor potentials. It will alleviate poverty in a sustainable manner causing the poor to gain self-esteem, understand the relationships between lack of access to basic needs, information and exposure to diseases and other ills.
CRESS capital is a package containing financial and non-financial services delivered simultaneously to working poor. Non-financial services are needs assessment based capacity building activities delivered in the form of trainings workshops and educational talks. Financial services are primarily cash delivered in a sequential order starting with the “C” and ending with the last “S” in the acronym CRESS. The components are:
Cultivation capital (C) is the first component in CRESS capital loan package. It is available for anyone in real need who is determined to change her or his situation and is capable of starting some income-generating activity. They are considered first time borrowers or clientele. Participants must complete the program minimum training requirements. Educational topics are community specifically derived. Cultivation capital loan are start off capital and the amounts are usually small. Maximum loan amount in each community is determined by a number of factors including current prices of goods and services. Both the largest and smallest Loan amount to individuals in lending groups is set by the program. They are meant to help working poor who are determined to change their socio-economic situation to build skills in a variety of areas including credit management, marketing, leadership, conflict management, and technical skills in a self-chosen economic activity. Cultivation capital helps participants to cultivate healthy practices.
Reinforcement capital (R) is the second component in CRESS capital loan package. It is accorded to clients who have repaid in full Cultivation capital loan and completed minimum training requirements. Educational topics are determined from challenges witnessed while executing the Cultivation capital phase of CRESS, anticipated challenges of managing bigger loan and some problems plaguing the community. Reinforcement capital loan are strengthening capital and the amounts are slightly bigger than cultivation loan capitals amounts. The ceiling is set by the program. Loan amounts to individuals in lending groups depends on a number of factors including performance in the Cultivation capital phase. Reinforcement capital helps reinforce areas of strength and aid to release hidden potentials.
Expansion Capital (E) is the third component in CRESS capital loan package. It is awarded to third time borrowers of CRESS capital loan. It is accessible to borrowers who have successfully drawn, utilized and repaid in full Cultivation and Reinforcement capital loans, and completed capacity building training in identified areas. Educational topics are determined from emerged and emerging problems and values to be promoted. Expansion capital loan are for business extension and the amounts are comparatively bigger components of CRESS. The program set the ceiling and loan amounts to individuals in lending group depend on performance in the Reinforcement Capital phase among other factors. Expansion capital helps expand areas of growth and build on released hidden potentials.
Sustention Capital (S1) is the fourth component in CRESS capital loan package. It is given to semi-finalist of CRESS capital loan borrowers who have repaid Expansion capital loan and completed required need based trainings. Educational topics integrate expressed needs, information gaps and must-know info about financial markets. Sustention capital loans are for solidifying market gains and the amounts are usually bigger than previous components of CRESS innovation. The program set the ceiling. Loan amounts to individuals in lending groups depend upon a number of factors including repayment records and participation in program activities during previous loan phase. Borrowers are expected to meet most of the general conditions to access loans from financial intermediaries in the community. Clients businesses are expected to reach some level of financial viability. Sustention capital helps clienteles to continue to grow business and take advantage of economic opportunities.
Seed Capital (S2) loan is the last component in CRESS capital loan package. It is meant for graduates who have drawn, utilized and repaid in full all four previous components of CRESS innovation, completed recommended trainings and meet general conditions to obtain regular loans from formal financial intermediaries in the community. Educational topics include challenges and opportunities in the markets and identified information gaps to healthy practices. The program sets the ceiling. Loan sizes are within the range granted by commercial banks to small sole proprietors in the community. Loan amounts to Individuals in lending groups is determined by a number of factors including credit history, participation in program activities and type of business. Seed capital helps clienteles to try out in a supportive environment the factors prevailing in the global market.
Problems facing the poor are not in isolation. CRESS innovation approaches poverty alleviation in a grounded and holistic manner. It recognizes that poverty, diseases and ignorance have an intimate relationship and the target population, the poor best understands its perspective and thus must be at the forefront of development ventures. This innovation provides both first-aid and long-term poverty alleviation tools as it delivers financial and non-financial services simultaneously under supervision and peer support for a specific duration.
The financial component will be disbursed in a sequential order starting from Cultivation, Reinforcement, Expansion, Sustention and Seed capital (CRESS). It will be disbursed to members in lending groups of five to undertake self-chosen income-generating activities. Members will ensure proper utilization and repayment of CRESS loans. Needs base non-financial services such as educative talks on disease prevention is integrated. Borrowers will meet at least once a month in a formal setting to undertake the following amongst others; participate in educational talk on identified topic of concern, take and repay loans, share experiences, assess promotion readiness and discuss pressing needs.
PECULIARITIES OF CRESS CAPITAL LOAN
CRESS capital loan is an innovation in the fight against global poverty in many ways. Clients will receive hands-on trainings and peer’s guidance education in self-chosen income-generating activities. For example, if a potential borrower wants to trade in baking & retailing of donuts, the borrower will have received practical skills on step-by-step instruction to prepare donuts and marketing techniques in addition to basic life skills determined from analyzing the individual and community values and needs. Integrated into such basic skills trainings will include healthy practices (e.g. hand washing), credit management, leadership skills, conflict resolution and CRESS content and program rules. Peculiarities in this innovation include:
Financial and non-financial services are provided simultaneously. Clients financial, capacity, information and life-skills needs are assessed. Proposed solutions spearheaded and prioritized by target clientele are delivered concurrently.
Financial services are delivered sequentially in a progressive order starting with “C” and ending with the last “S” in the acronym CRESS.
In the same forum clients receive educative talk, loans and withdraw from savings and make loan repayments, present emerging problems, review, evaluate and formulate current and relevant plan of activity. Center meetings is the one-stop-shop for all financial and non-financial services. Borrowers who are willing, trying and struggling receive support and those that are capable but sluggish and not in compliance receive pressure from peers. Peer support and peer pressure is a fundamental security guard in CRESS capital loan innovation.
Borrowers choose center meeting venues in their community. Program staff travel to this one-stop-shop to meet and conduct business with clients regularly at least once a month for about ninety minutes on average. Simultaneously in a coordinated manner educative talks are conducted as financial transactions including loan disbursement, repayments, savings activities are being executed. Program staff goes to meet clients in their community for most transactions, thus increasing client’s savings on energy, time and money.
Entry and exit conditions
Eligibility conditions are defined in each community. Procedure to access services is disseminated widely. Clients know what to expect and when. The “C” is the entry level and the last “S” of the acronym CRESS is the exit level. Conditions to access each component of CRESS is communicated.
Center meetings are conducted in a business-like manner thus providing borrowers with some aspect of financial market place experience. Skills needed for success in today banking are progressively integrated as clients move up CRESS ladder. Even though conditions and procedures in this industry might be uniform in each community, CRESS innovation tailor aspects of its program to meet the requirements of formal financial intermediaries before participants exit the program.
Emergency or adversity funds are available to members who suffers a disaster and loss portion or all investment capital. Such unforeseen comes in different forms and sharps. They are not limited to natural disasters but includes man-made tragedies. Emergency fund are also intended for members who might have a problem that could leave them with no choice than usage of their investment capital and consequently imminent closure of business or default in repayment of primary loan. When disaster hit most people need a helping hand. This is even more true with the underprovided. The poor need a piece of fish to sustain them before they can start or continue fishing. Such needs could be direct or indirect but have the effect of retarding clients from taking charge of their destiny.
Clients receives and enjoy peer support and are motivated by reasonable peer pressure from lending group, center members and from staff of the program even outside center meetings. Clients talk beyond credits and receives invaluable and the inexplicable comfort of modern day support groups. They offer and receive shoulders to lean on to express daily challenges.
Burying the dead with dignity is also the desire of the have not. The cost of funeral services is an expense especially in communities where the concept of life insurance is rudimentary and its affordability among the poor entails sacrifices of items high on their scale of preference. Bereavement insurance is given to families of deceased clients to assist with funeral arrangement for their loved ones who are oftentimes the breadwinners.
Loan Forgiveness is granted towards outstanding balances of deceased clients. Loans are forgiven to the extent of lending group compliance and participation in program activities. This consideration serves as motivation for members to always strive to do better.
Information is power. Continue tailor educative talks to narrow information gaps and bridge resources is another arm of this innovation in the global effort to alleviate poverty. In each community members will identify prevalence rate of problems, trace causes, brainstorm on possible solutions and seek to redress identified and pressing problems. The program takes advantage of the unappreciated strength of clients and other partners especially those present in the community to educate on preventive and curative actions.
Supervision and Support
Borrowers take advantage of planned and announced and unannounced supervision of loan capital utilization by members of lending groups, members of the center where the group is part and staff of the program including donors and other partners. There is continuous support for those that are weak and sufficient pressure for those that are capable but not complying.
Both graduates and dropouts of CRESS capital loan innovation are given an opportunity to elect to participate in CRESS capital loan Alumni. A forum that offers its members limitless opportunities. For borrowers who have found new friends, a forum to reconnect. For those with new ideas, a forum to share, get critique, advertise and receive some peer support. For those who enjoyed other aspect or services reserved only for CRESS active members, a forum to review packaging and delivery of such services to alumni. Although the reunion could take different forms in different communities the primary objective is to provide members with opportunities to continue to better their lives and encourage members to give for the course, poverty alleviation, and to give back in their communities.
National and International Events
Active participation in an event provide a unique opportunity to reflect on the circumstance that created the event, options that were available and the choices that were made. CRESS participants are encouraged to actively participate in local, national and international events. Participation increases client’s awareness, build self-esteem and trigger reflection on what they hear, they see, live and feel in their homes and communities.
Participation in decision making is a human right. Problems facing the poor are dynamic. On regular basis clients evaluate both their needs and content of existing programs to formulate current and relevant activities. This continuous identification and prioritization of needs throughout the program cycle encourages the poor especially women to take leadership role at program, family and community levels.
A stitch in time save nine. Sometimes these would-be beginning entrepreneurs are challenged from all angels. Their past experiences scare them from dreaming again not to talk of dreaming big. They are frail and need support and encouragement to start again. They have what it takes. Their survival skills alone are a big resource. The program strives to build on these survival skills while trying to assist our target clientele with diverse first-aid services e.g. empathy, taking their photograph or giving a drink of water.