The Trickle Up Solution
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A Grants-Based Approach
One of the elements that makes Trickle Up’s program unique is our grants-based approach: we provide small seed capital grants, ranging from $100-$250, which participants use to start or expand a microenterprise.
Because Trickle Up targets the extreme poor, those living on less than $1.25 a day, we provide seed capital grants rather than microloans. Microcredit can be an excellent tool for those who have enough stability and skills to manage and pay back small loans. But the ultra-poor cannot even take this risk because their incomes are too low and volatile due to irregular and infrequent wage labor, health emergencies, and other challenges that they often face. Additionally, most people living in extreme levels of poverty would not qualify for microloans.
The income-generating initiatives that Trickle Up helps foster are small businesses, such as rearing goats or ducks, or starting a catering business with enough capital to buy ingredients and a small stand in the marketplace. These livelihood activities often help supplement other work a participant is already doing to survive, such as daily—but generally unreliable—wage labor or seasonal work on a farm.
Trickle Up works to help the very poorest diversify their livelihoods and stabilize their income sources, which is what the Spark Grant helps participants do. When the poor are able to diversify, they are better able to increase and stabilize their income. This stability helps protect them against risks such as crop failure, rising food prices or illness. Importantly, they are building on a base of physical assets that can be drawn upon in times of hardship.
Having a source of income from a Trickle Up business not only helps participants increase income and build assets, it also reduces their vulnerability to shocks and better prepares them to weather the harder times.