A26. Small-scale businesses in semi-urban Togo

Background & findings

Togo faces significant institutional and economic challenges and the poverty is high. The business climate is problematic with low investor confidence and low capacity of the banking sector to finance the national economy. Residents in small cities, such as Tsévié, tend to have very little income from their informal income-generating activities, which are often their only means of livelihood. In Tsévie, the living conditions of the populations, even if they are not always miserable, remain precarious on all levels.

Vision & mission

HR&S and Action10 have been working with S.E.VIE in Togo since 2012, targeting small-scale businesses and cooperatives. In order to reduce poverty, several initiatives have been taken by SEVIE and its partners including the implementation of the ActionInvest managed by Action10 and HR&S.

Programme

In 2018 we begun the small-scale businesses programme in Tsévié  with the aim to improve the living conditions of the population. We offer small loan to the poor, mainly poor women, to help them conduct income-generating businesses. By increasing the standard of living, we also icrease access to health care and education for children. Our intiative also supports the emancipation of women. The programme benefits from funding from Action10 and Stockholm Rotary International.

Achievements

The ActionInvest loans granted to the women of Tsévié have already enabled some of them to improve their living conditions a little bit.
The microcredit fund in the Tsévié region started in January 2019. Since then, 171 files have been processed. The microcredit fund reached 123 beneficiaries, 116 women and 7 men. The activities of the beneficiaries relate to small businesses, such as the sale of corn, beans, donuts, bags, clothes, shoes, rice, yams, fruit, etc.

Sustainability

HR&S claims that social enterprising is the only method to ensure sustainability. The start-up is done through international coaching and with start-up loan and the long-term management is through local social enterprising.

Alexis doing auditing at SEVIE Togo 2020
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State of the art, 31 December 2019

Activities and milestones

Ambitions

200 women and men should get loans for a certain period.

Outcome

The giving out loans started January 2019.

The period for one loan was five months, the first loan started in January, second batch in June and third in November.

Achievements per 31 December 2019 (Oanda exchange rates 9 April 2020).

Number of loans given out : 171

Number of loan-takers Women / Men: 116 / 07

Amount from Stockholm Rotary International : FCFA 4,200,000   Euro 6,400       SEK 67,964 

Size of loan capital given out: FCFA 4,543,054   Euro 6,900

Size of capital active per 31 Dec:  FCFA 4,485,545     Euro 6,800

Amount of interest earned (Interest rate 18%): FCFA 865,055   Euro 1,300

Amount not paid back:  FCFA 793,025        Euro 1,200

Support and Control

Financial auditor 2019, 2020: Alexis AKOTCHAYE

Coach 2019, 2020: Milohum DZAGLI

Measurable indicators

Progress markers (PM) Level 1, 2, and 3.

  1. Amount of capital available for loan.
    (As per bank account statement in between loans given out)
    PM 2. Euro 30.000

Outcome 2019 Many peoples were interested in it, but the limit funds did not permit to cover all of them.

  1. Level of pay-back by loan-takers.
    PM 1. 95%
    PM 2. 98 %
    PM 3. 100%
  1. Amount saved by loan-takers as part of the capital.
    5%

At the end of 2019, N/A

  1. Amount saved by SEVIE as part of the capital.
    5%

At the end of 2019, N/A

5.      Number of loan-takers addressed per year.

PM2. 200 persons per programme

At the end of 2019 123 peoples (116 women and 7 men) were involved in the programme on the field.

  1. The number of loans given out.
    At the end of 2019 171

7.      Sustainable business ideas

At the end of 2019, It comprised of peoples with small business such as sales of maize, beans and cakes, rice, yams and fruits, bags, clothes and shoes, drugs, etc.

8.      Social good

Outcome 2019 The programme was helpful for the local partners, families got resources to manage their home and send their children to school.

9.      Programme management by SEVIE

Outcome of 2019

  • Concerning the management and governance of the programme, we notice that SEVIE is a skilled and appreciate Association who knows how to manage these activities.
  • We appreciated the care and concerns from SEVIE towards the loan taker who may be new in her activities.
  • The SEVIE management enhanced its procedures of Finance administration and accounting.
  • We can note a lack of regularly reporting that could show the bank account statements monthly or quarterly, this should enable trust among all the partners. A lack of regularly report and communication that could show the bank account statements monthly or quarterly was a serious matter.
  • The reimbursement for the programme manager was delayed.
  • One problem is lack communication with the partners on each situation arising.
  • The person devoted to the programme doesn’t have enough tools for the management. They need to devote one person entirely to the programme.
  • The activities of the programme were not reported on, nor was decisions that were against the agreement.

Recommendations from the coach and auditor 2019

  • Employ an accountant.
  • This person must have a monthly salary, enough and in time.
  • Monthly bank account statements and reconciliation.
  • A person must be entirely devoted to the programme in order to have enough time.
  • The person in charge must visit the loan takers regularly, address their challenges and prevent business and financial complications.
  • This person must have a monthly salary, enough and in time.
  • Have to fix a deadline to recover the loan, and restart the next programme one month later in order to control the programme. Still, the money shall not lay idle on the account and overlapping programmes shall be in place.
  • Mobile money transfer and other systems can be used in the future to reduce at the maximum some costs.
  • Arrange workshops to teach to loan takers.
  • The capital must be sustained in order to generate enough income to cover salaries for an accountant, the programme manages, bank fees.
  • The evaluation and the follow-up of this programme must be planned.
  • Regularly report and communication is the pillar of TRUST. Reports have to be shared.
  • The time required to reach a sustainable economy can be expected two to three years may be required. Five years would be the best.

Activities and milestones

Achievements for 2019, per 31 December 2019. (Oanda exchange rates 9 April 2020)

Number of loans given out                                                         171
Number of loan-takers Women / Men                                    116 / 07
Amount from Stockholm Rotary International                      FCFA 4,200,000   Euro 6,400      
Size of loan capital given out                                                      FCFA 4,543,054    Euro 6,900
Size of capital active per 31 Dec                                                 FCFA 4,485,545    Euro 6,800
Amount of interest earned (Interest rate 18%)                      FCFA 865,055        Euro 1,300

Action10 visited a Rotary club

The Action10 President visited a local Rotaly club in Lomé during the programme start-up, to seek collaboration. She then proposed to Rotary that the programme should benefit from a professional external auditing.

Outcome 2019 SEVIE

  • The programme was helpful for the local partners, families got resources to manage their home and send their children to school.
  • Many peoples were interested in it, but the limit funds did not permit to cover all of them.
  • The SEVIE Coordination enhanced it procedures of Finance administration and accounting.
  • We appreciated the safeguards concerning the loan taker who may not be new in her activities.
  • We can note a lack of regularly report that could show the bank account statements monthly or quarterly, this could set trust among all the partners.
  • Concerning the management and governance of the programme, we notice that SEVIE is an old Association and knows how to manage these activities.
  • But the main problem is communication on each situation. They need to devote one person entirely to the programme.
  • A lack of regularly report and communication that could show the bank account statements monthly or quarterly was a serious matter.
  • The person devoted to the programme doesn’t have enough tools for the management.
  • Any situation did not reported – The interest rate at the beginning of the programme was not take into account by the coordination to take some decision to cover the salary of the secretary and to be able to get necessary for communication and transportation related to the programme. – So the payment of the salary was delayed. As it was calculated the interest may be sufficient for this purpose.

Finding Agency

Within ROPE we are using the Stakeholder Analysis tool. As a consequence of the Accountability management package, we extend the traditional Stakeholer management tool to also capture Agency for change in realtion to accountability.

Strategy for change

We shall develop and implemented a strategy for change for SEVIE and loan-takers, capturing social good, sustainable economy and accountability. As a result of Auditing and coaching reports from 2019 the below is proposed for the continuation of the programme.

Social good

The loan-takers lives are improved.

Opportunities for loan-takers

  1. Loans are available, for loan-takers at the right level and to everyone who needs it.
  2. The interest rate is fair, 10 %
  3. Awareness raising and training workshops are offered by SEVIE and L&D together, and the participant loan-takers understand about the programme and about how to run a profitable business.
  4. The loan-takers appreciate and understand the programme, run their businesses in a good way and are loyal to the programme.

Opportunities for SEVIE

  1. Capital is available, for SEVIE at the right level and when they need it.
  2. Awareness raising and training workshops are offered by L&D , and the participant SEVIE staff and stakeholders understand about the programme and about how to run a profitable business.
  3. SEVIE appreciates and understands the programme, and are efficient and effective as well as transparent and accountable to the parners.

Sustainable economy

Loans are paid back, by the clients, as agreed. Loans are paid back, by SEVIE, as agreed.

Pay-back by loan-takers is ensured

  1. Garantees are arranged through a cooparative approach, to increase the likelihood of funds to be paid back through other cooperative members and the social awareness created.
  2. The programmes is informed about to important social leaders, to increase the likelihood of funds to be paid back through the social preassure created.
  3. Loan-takers save a certain % of the loan prior to that the loan is given out. This adds to the capital and makes the programme manager more careful with the capital.
  4. SEVIE saves a portion of the funds paid back, which is released when the deal is settled, increase the likelihood of funds to be paid back, as the loan-taker will benefit.
  5. Awareness raising workshops are run by SEVIE, and the participant loan-takers understand about equal partnership.
  6. SEVIE state the good example, by being accountable themselves and pay back the Action Invest funds to the SEVIE Action10 account. If not, we can never expecte accountability for the programme as a whole.
  7. If funds are not paid back, the social pressure is activated.

The capital in the fund is used for the right purpose by SEVIE

Pay-back by SEVIE is ensured

The ActionInvest is a lending opportunity for our partners, including SEVIE. It is not a donation as Action10 and HR&S are neither aid institutions, charity institutions nor banks, but institutions favouring Social enterprising, scientific research and innovation. Everything transferred to SEVIE shall be paid back (except for transfers between 2009 and 2012 which were used to establish the mode of collaboration).

  1. Garantees are arranged through a cooparative approach, to increase the likelihood of funds to be paid back through other cooperative members and the social awareness created.
  2. The programmes is informed about to important social leaders, to increase the likelihood of funds to be paid back through the social preassure created.
  3. Awareness raising workshops are run by L&D, and the participant SEVIE staff understand about equal partnership.
  4. SEVIE contributes to the capital which will indicate whether the meaning of “Equal partnership” is properly understood and agreed with.
  5. If funds are not paid back, the social pressure is activated. This conscerns previous and future loans taken.

Covering costs with income only

The capital on the account shall be large enough to cover the costs according to ActionInvest regulation, i) salary of (or contribution to) the project manager, ii) bank and money transfer costs, as well as iii) support and control assignment reimbursement (auditor, survey manager, and coach; € 500 but minimum € 300 per assignment). We propose an account with € 30,000 )and the interest rate shall not exceed 10 %, as this is fair towards the loan-takers).

The reimbursement of credits is made weekly according to the person’s capacity and according to the activity carried out. The income can actually be increase as we collect the funds (repayment and interest) weekly, and thus can give it out again. Thus the same capital can generate income among several loan-takers. This has to be carefully regulated, calcuations made and reinvestments agreed on.

  1. A proper business plan is developed and maintained.

Minimizing costs
Payments of the capital amount are made to the UTB bank account at the end of each month and the amounts of members’ savings and the daily reimbursement of credits are transferred to the COOPEC cooperative savings account in order to avoid bank fees.

Transparency and accountability

Internal oprerations

Accounting

Recruitment of an accountant. This person shall be paid through the income from the programme.

  1. Development of a manual on Financial administration and accounting. A manual was developed by Action10 many years ago and even translated to French before sharing with SEVIE. This time it is better if SEVIE developes their own manual, and shares this one with the partners.
    1. Cash withdrawals from bank account by SEVIE staff, requires two people´s signatures.
  2. Financial administration and accounting
    1. Well managed internal and external financial transactions.
    2. Clear books.
    3. Systematic recording of various operations and classification of accounting documents by nature of the operations carried out.
    4. The association has a general book for all the loan takers
    5. Each loan taker must have two duplicated books that contains every transaction, one with the loan taker and the other with the Association.
    6. Well recorded receipts. Every receipt should be signed in two sample (one with the loan taker and the other with the Association for reporting or auditing).
    7. Well managed bank account where all programme related funds are kept.
    8. The credit lasts 5 months. Bank account statements shall be collected every month and a compilation every five months, when the credits are paid back, shall be shared with the coach and the partners, to be infromed that the full capital has been retrieved from the clients, and been transferred to the account.
    9. This is to be complemented with monthly bank account statement reconciliation to ensure that withdrawals from the account are used according to the ActionInvets agreement.
    10. Properly managed procurements.
    11. Respected agreements with partners.
    12. A financial report must monthly be compiled and share with partners.
    13. Preparation of annual financial statements (balance sheet and income statement).
    14. Well prepared financial annual reports.

Programme operations

Recruitment of a / support our present programme manager. This person shall be paid through the income from the programme. This could preferable be Délali ADEDJE.

  1. Development of the annual business plan.
  2. Management of giving out the loans
    1. Responsible for managing the credit files granted to members.
    2. Put in writing all the procedures for granting and repaying credit.
    3. Compliance with the ceilings (minimum and maximum) in amounts provided for by the credit policy.
    4. The systematic signing of guarantees in each credit file before any release.
    5. The preparation of the report allowing regular monitoring of credits and payments into the account.
    6. Use software adapted to the activity other than the Excel spreadsheet currently used.
  3. Recovery of loans
    1. Putting in writing procedures for recovery and management of unpaid bills.
    2. Presentation of recovery actions in written reports.
    3. Implementation of other alternatives in agreement with the partners to recover the unpaid ones so as not to cause extension of loan times.
    4. Acquisition of a motorbike for travel.
  4. Agreements
    1. Memorandum of understanding and agreements shall be in writing and be signed.

Internal Support & Control

  1. An independent Board of Trustees shall be selected, Bord meetings held minimum twice a year and minutes from the boardmeeting shall be shared with the coach and the partners. Board members are not paid.
  2. Recruitment of a security guard to guard the premises.
  3. Recruitment of an internal controller or, failing that, having a contract with a firm for periodic inspections.

External Support & Control

  1. The RISE Centre assigns a coch, a survey manager and an auditor. The purpose is to ensure programme effectiveness and efficiency, financial bookkeeping and partner communication, transparency and accountability.

Coaching: To improve leadership, employee accountability, teamwork, sales, communication, goal setting and strategic planning.  The coaching is based on the Real-time Outcome Planning and Evaluation (ROPE).  For the coaching period, goals are set and indicators developed, and the output and outcome are measured real time. The coaching shall also support the development of a programme with sustainable economy as this is the practice of providing support and advice HR&S and Action10. It shal include coordination in order to help SEVIE recognize ways in which they can improve the effectiveness and efficiency of their social businesses. Interactions are monthly face-to-face meetings with all assigned administrators and managers with follow-up communication in-between meetings.  Evaluation planning and progress measurement are made and an nnual coaching reports presenting the year’s activities and a written assessment.  The coach will also visit the programme sites as often as is required.

  1. The RISE Centre offers workshops on topics of relevance, such as business management, accounting, evaluation planning (ROPE), and survey management (TestE).

Communication

  1. Trust and truth should be maintained between actors of the programme.

State of the art, July 2020

REPORT from Meeting between RISE Center Togo and S.E. Vie, 27/06/2020
Notes by RISE Centre Secretary Elisabeth DRAFOR

AGENDA

  • PRESENTATION OF THE PARTICIPANTS
  • ROLES AND MISSIONS OF RISE TOGO PRESENT TO S.E.VIE
  • VARIOUS DISCUSSIONS

PARTICIPANTS

RISE Centre TOGO
➢ Mr DZAGLI MILOHUM
➢ Mr ALEX AKOTCHAYE
➢ Mr KOMI ABAVE
➢ Mrs ELISABETH DRAFOR

S.E.VIE
➢ Mr FRANCOIS KLUTSE
➢ Mme DELALI ADEDJE

Following the presentation; various discussions were held, the relation in particular between the partners.

* The ongoing ActionInvest project between S.E.VIE and Action10 with support from HR&S; the coaches mentioned above will be coaching and the auditor will be auditing.

* Funds to be transferred by RISE CENTER TOGO to the account of S.E.VIE.

*The Village cooperative project: SEVIE presented the major difficulties.
✓ Transportation
✓ The unwillingness of the women to pay back the loan given their vulnerable living conditions.

With that, RISE TOGO and SEVIE agreed that it is necessary that these problems have be taken into account during the current and any future projects. The solution lies in the agency; to identify the person representing the cooperative and who will be in charge of paying back loans.

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