Putting the poor in business -- for $50. US couple sows 3rd-world wealth

ONE of Grace Mbakwa's most prized possessions is a tax certificate. It hangs on the wall of a tiny stall in the marketplace in Dschang, Cameroon, where she and her 10 business associates sell the clothes they make. It announces for all to see that their enterprise, Anyen's Fashion Home, is a success -- that it has become such an established part of the local economy, they even have to pay taxes.

In 1982, Mrs. Mbakwa and her friends were already making clothes, but they couldn't afford to rent a stall in the market to sell them. Often they couldn't afford the material to make the clothes. Their work was sporadic and disorganized, and Mrs. Mbakwa's eight children frequently went hungry.

The fact that Anyen's Fashion Home now has a tax certificate on the wall and a brisk trade in men's and women's clothing is the result of a two-member development agency called Trickle Up.

Glen Leet and Mildred Robbins Leet founded Trickle Up, or TUP, in 1979, when they funded a micro-enterprise not unlike Mbakwa's on the Caribbean island of Dominica. Their work resulted initially in the establishment of 10 small businesses in Dominica.

``We picked Dominica,'' Mr. Leet recalls in a gentle, relaxed tone with just a bit of irony, ``because it had an adverse balance of trade, a deteriorating economy, a high level of unemployment, and the lowest per capita income in the hemisphere next to Haiti. And it was nearby, so it wasn't expensive to travel there.''

News of the businesses the Leets helped start on Dominica soon spread. Since then, TUP has grown into an 80-nation network of 2,300 businesses throughout the developing world, with more than 516 on-the-scene coordinators.

The nonprofit organization operates with great simplicity. When at least five people have a business plan -- be it ever so simple -- and have filled out a carefully devised application form, they may qualify for a $50 grant with which to start their business. Three months later -- after they have worked a total of 1,000 hours and reinvested at least 20 percent of their profits in the business (though many reinvest as much as 100 percent) -- they get another $50. The amounts never vary, and never have to be paid back.

The philosophy behind Trickle Up is expressed in its name. It grew out of Glen Leet's 35 years of experience in international development, and his conviction that a country's economic well-being can best be achieved by directly helping ``the poorest of the poor.''

``We'd observed the results of programs that `trickle down,' '' says Mr. Leet. ``The idea is that if massive aid is poured in from the top, it will trickle down and benefit the poor. Unfortunately, it doesn't work very well. Very little of it actually does get down and benefit the poor.''

``Trickle Up funds,'' he explains, ``go directly to the unemployed people at the grass roots. Their increased productivity benefits themselves, their community, and their nation.

`` `Trickle Up' then meets `trickle down,' because there are some cases where `trickle down' is useful . . . when capital-intensive projects are needed. The best is a balance between the two.''

Hundreds of TUP coordinators around the world form the vital links between the Leets, who operate from a cozy apartment in Manhattan, and those countries where their seed money has sprouted enterprises. According to Mrs. Leet, a typical Trickle Up coordinator is a locally based employee or volunteer with a development agency -- someone who has firsthand experience of the economic problems of the community.

The Leets try to ensure that their most committed coordinators always have a few $50 checks on hand, so that if they come across a group that meets Trickle Up's requirements for starting a business, they can supply the funds on the spot.

A Trickle Up application form must be satisfactorily filled out before the first $50 check is handed over. It is designed to ensure that a group that plans to start a business has all the necessary ingredients for success. Line 1 of the application form reads, ``We plan to produce and market: . . . '' Whether the applicants put down bananas, bread, chain fences, clothing, or bricks, Glen Leet says, the wording of this question is highly significant.

``Those three words, `produce and market,' are part of the magic of why this works,'' he says. ``The world is full of people who decide what they want to produce . . . then they produce it and they're poorer than before because there's no local market for it. We encourage people to find out beforehand whether they can actually sell what they plan to produce.''

Lines 5, 6, and 7 ask for the number of people -- males and females -- expected to participate in planning. ``If we hadn't done that,'' says Mr. Leet, ``we probably wouldn't have realized that 80 percent of the people participating tend to be women. So these are innocent questions, but they're loaded, in a sense.''

But in a world where development efforts usually entail spending millions, how can $50, followed by $50 more three months later, set a business on its feet?

``We're talking about the poorest of the poor,'' says Mrs. Leet. ``If $100 is not enough, they're really not the poorest of the poor. There are many people to whom $50 is a fortune. And it's extraordinary what happens to them. It's not only giving them money to start a business, it's the psychological encouragement that makes them think, `They trusted me. They believed my plan was right and they gave me the money to get started.' ''

``That's really the most important product of Trickle Up programs,'' says Mr. Leet. ``What happens to people -- their sense of confidence, dignity, self-respect, and the feeling that life is something that they are doing something about -- that they're not just being hopelessly pushed around by circumstances.

Philip Reynolds, a senior project officer at the United Nations Development Program, is enthusiastic about the effects of Trickle Up. His department has provided the program with significant financial support. ``My division's involvement with TUP started in December '82. . . . In August '85, we signed the latest provision of $70,508 to be allocated to TUP,'' he says. ``TUP is a very good way of dealing with the massive unemployment in developing countries. With a very small investment it motivates people to solve their own unemployment problems.''

In addition to alleviating unemployment, the effects of aid to small businesses are seen in other areas, such as health. Mrs. Leet recounts an incident that took place in the impoverished slum of Mathare Valley in Nairobi, Kenya.

``Field workers there were teaching women who would come to the clinics with children suffering from malnutrition. Finally one of the nutrition workers said, `You know, this is kind of silly. I'm teaching them about nutrition, but they don't have the money to buy the food.' So she encouraged groups of these women to start businesses through Trickle Up -- very simple ones like buying food at the market and bringing it into the settlement to sell it. Now those women no longer come to the clinic. Their children don't need any extra feeding.''

``I want to tell you about another aspect of Trickle Up,'' says Mr. Leet. ``We have spent billions of dollars in Africa and other developing countries. We've sent in very capable and dedicated experts. . . . How could it be that so much goodwill, money, [and] intelligence can end up with so much increased poverty . . . malnutrition and starvation?

``There are a number of reasons, and one of them is the assumption that methods that are good in the United States will necessarily work in another country. So an expert would go to a country and say, `What this country needs is a small, technical clothing industry,' and so they'd put expertise and a lot of capital into it -- so much capital and so much training that a man could start a business and displace all the women who had been making clothes throughout the nation.

``The principal reason for unemployment and stagnation in the poorest areas of the world is that there's no money in circulation,'' says Mr. Leet. ``When a small business starts in a village, people produce a product that is sold in the village. The money stays in the community. Ours is a strategy that encourages people in small communities to be more productive.''

One burning question remains: Where (aside from such agencies as UNDP) do the Leets get all the money?

``It hasn't been easy, because we really have never had a full-fledged fund-raising campaign,'' says Mrs. Leet. ``We raise our money from individuals who hear about us. Or, as Glen says, I go to a dinner party and someone turns to me and says, `Tell me, what do you do?' ''

``And she tells them,'' says Mr. Leet, with a sly smile.