RCPB Case Study Final

Cooperatives Learning to Move Down and Out
the Case of the Réseau des Caisses Populaires du Burkina

(RCPB) Adding Village Banking Combined with Adult Education
to Their Traditional Lines of Service
TABLE OF CONTENTS
Cooperatives Learning to Move Down and Out.................................................................1

the Case of the Réseau des Caisses Populaires du Burkina (RCPB) Adding Village
Banking Combined with Adult Education to Their Traditional Lines of Service..............1
Cooperatives Learning to Move Down and Out.................................................................4
Banking Combined with Adult Education to Their Traditional Lines of Service..............4
Cooperatives Learning to Move Down and Out..................................................................i
Banking Combined with Adult Education to Their Traditional Lines of Service...............i
Building microfinance institutions from scratch became the norm in the 1990s for
fostering outreach and down reach of financial services to the poor. This MFI building
movement was in reaction to lack of interest among traditional financial institutions in
the kinds of service delivery innovations needed to engage the truly poor, especially very
poor women in rural areas. While motivated by stronger social commitment and greater
innovative spirit, the institution-building movement is running into the same cost issues
as the traditional institutions have faced. Ironically, many of the new MFIs are reacting
in the same self-limiting ways that reduce commitment and innovation to engage the truly
poor, especially very poor women in rural areas. Even more ironic, one way to break
through this cost-structural impasse is to take advantage of the traditional financial
service infrastructure already located nearby where the very poor live...............................i
This case study examines the “promising approach” of grafting onto a financial
cooperative’s (or network of cooperatives’) existing service portfolios some of the same
service delivery innovations around which many of the MFIs have been built, but at
lower marginal cost for reaching out and down. The “Crédit Epargne avec Education”
program of RCPB in Burkina Faso is the longest lasting (since 1993), largest scale
(66,706 all-women members of 3,416 caisses villageoises in December 2006) case of this
kind of innovation, for which there exists relevant historical and recent data on growth in
outreach, poverty level of clients reached, impact on clients and communities, and
institutional performance and commitment..........................................................................i
Executive Summary.............................................................................................................i
1. Context ...........................................................................................................................1
2. Organizational Framework.............................................................................................9
2.1. International Organization.......................................................................................9
2.2. Local organization.................................................................................................12
3. Description of “Very Poor” Target Group......................................................................2
3.1. Individual and Household conditions
..........................................................................................................................................2
Specific data in this section is taken from a random sample of 210 CEE clients
conducted in 2003 (see Section 4 for information on sample selection). This data is
fairly representative of the overall CEE clientele, with perhaps a bias toward more
educational and economic opportunities due to the proximity to Ouagadougou.............2
3.2. Socioeconomic conditions.......................................................................................3
4. Poverty Targeting and Assessment.................................................................................5
4.1. Poverty measurement practices................................................................................5
4.2. Available Poverty Data............................................................................................8
4.3. Poverty Targeting...................................................................................................12
5.1. Financial Products..................................................................................................13
5.2. Microenterprise Development Services.................................................................16
5.3. Non-financial Services...........................................................................................18
5.4. Design and Product Development: .......................................................................20
5.5. Implementation Process ........................................................................................28
......................................................................................................................................29
6. Results...........................................................................................................................30
6.2. Impact....................................................................................................................30
6.3. Cost Effectiveness and Sustainability ...................................................................33
3

Crédit Épargne avec Éducation

Réseau des Caisses Populaires du Burkina (RCPB)
Burkina Faso
Author: marc bavois, Freedom from Hunger
August 2007
SEEP Network’s Poverty Outreach Working Group’s MF/MED Approaches Targeting

Very Poor People
Case Study No. X
The author wishes to particularly acknowledge the thoughtful contributions and

remarkable memories of Alpha Ouédraogo, Célestine Toé, and Daouda Sawadogo
(among former and current RCPB staff), and Chris Dunford, Kathleen Stack, Ellen Vor
der Bruegge and Christian Loupéda of Freedom from Hunger, as well as the research
assistance of Kimberly Peeren of Freedom from Hunger, yet retains exclusive claims to
any errors or omissions. Jan Maes provided a helpful review of an early draft.

Building microfinance institutions from scratch became the norm in the 1990s for
fostering outreach and down reach of financial services to the poor. This MFI building
movement was in reaction to lack of interest among traditional financial institutions in
the kinds of service delivery innovations needed to engage the truly poor, especially very
poor women in rural areas. While motivated by stronger social commitment and greater
innovative spirit, the institution-building movement is running into the same cost issues
as the traditional institutions have faced. Ironically, many of the new MFIs are reacting
in the same self-limiting ways that reduce commitment and innovation to engage the truly
poor, especially very poor women in rural areas. Even more ironic, one way to break
through this cost-structural impasse is to take advantage of the traditional financial
service infrastructure already located nearby where the very poor live.
This case study examines the “promising approach” of grafting onto a financial
cooperative’s (or network of cooperatives’) existing service portfolios some of the same
service delivery innovations around which many of the MFIs have been built, but at
lower marginal cost for reaching out and down. The “Crédit Epargne avec Education”
program of RCPB in Burkina Faso is the longest lasting (since 1993), largest scale
(66,706 all-women members of 3,416 caisses villageoises in December 2006) case of this
kind of innovation, for which there exists relevant historical and recent data on growth in
outreach, poverty level of clients reached, impact on clients and communities, and
institutional performance and commitment.
i
Executive Summary
Organizations
The Réseau des Caisses Populaires du Burkina (RCPB) is the leading microfinance
institution in Burkina Faso. Starting from a single cooperative in South-western Burkina
Faso in 1972, it currently enjoys national coverage and has significant presence in rural
areas with high poverty incidence.1 In 1993, RCPB adopted Freedom from Hunger’s
Credit with Education strategy, becoming the first cooperative institution to do so. In
keeping with cooperative culture, RCPB refers to the product as “Crédit Epargne avec
Education” (Credit and Savings with Education), hereafter abbreviated as CEE.
Target group
RCPB’s clientele prior to introducing CEE (and its mainstream clientele to this day)
came mainly from modest and lower-middle-class backgrounds, and was overwhelmingly
male. CEE offered RCPB the opportunity to address its mandate of community service
and inclusiveness, through increasing female membership, specifically reaching out to
previously un-served poor and very poor women in rural areas in a wider perimeter
around each cooperative or branch. RCPB’s CEE clients are typically illiterate, have
little or no formal education, and engage in subsistence agriculture. The infusion of
credit has allowed to them to expand or start small-scale income-generating activities in
the informal sector.
As of 31 December 2006, RCPB was offering the CEE service to 66,706 clients. A 2003
study of a representative sample of those clients found that 76% belonged to food-
insecure households (a measure of extreme poverty), while consumption data showed that
20% of clients were under a “dollar-a-day”, 70% were under “two-dollars-a-day” and
37% were below the national poverty line. Clients in rural communities, where RCPB
focuses its CEE outreach, had higher levels of poverty than those in peri-urban and urban
areas.
Targeting methodology
RCPB does not test or screen incoming clients for poverty levels. Client targeting is
limited to geographic and gender dimensions. Consequently, outreach to very poor
clients is achieved through promoting CEE in an inclusive way to all women in rural
communities with high incidences of poverty. The composition of groups in terms of
poverty generally mirrors that of the community as a whole. It therefore appears that in
the absence of an active screening process, Credit with Education will more reliably
achieve deep poverty outreach in rural communities with greater incidences of poverty.
Microfinance Methodology
Credit with Education combines a modified village banking product with nonformal
education sessions that promote behavior change in topics that most impact household
food security. Both services are delivered in the same meeting opportunity by the same
field agent, in the communities where clients reside. Each group is a full-fledged
1
52.3% of the rural population is under the national poverty line, while 92.2% of the poor in Burkina Faso
live in rural areas.
i
member in the cooperative, and opens a group (joint) account at the cooperative, where
individual savings and the group fund are kept.2
The product reaches the very poor primarily by being inclusive in nature (it attracts a
range of socio-economic circumstances, including the very poor, yet some of its features
make it less attractive to the better off), and has been adapted by RCPB over the years to
respond to client demand, in particular to take into account high levels of client illiteracy.
The product serves the very poor by offering them financial and non-financial services
that respond to their needs and wants and that are oftentimes not otherwise available in
their communities.
Organizational features
Crucial to RCPB’s adoption and true ownership of CEE in a very short time were the
organization’s mission and mandate, the leadership in place at the time, and the culture
that has grown around the product.
As a network of open-membership financial cooperatives, RCPB was seeking ways to

reach out to more women and to reach poorer clients. The organization’s mission and
mandate to serve the entire community could be achieved with a product that targeted a
completely new market segment in a profitable way, therefore accruing benefits to
existing members. Alpha Ouédraogo, RCPB’s General Manager in 1993 (now the
General Manager of CIF) immediately saw the social and business benefits of adopting
Credit with Education and was able to convince the institution to pilot it.
Initially, CEE was directed from the national office, which ensured close supervision,
timely adjustments, and created a strong culture among field staff. Conversely, as CEE
grew, RCPB wisely decentralized the service to anchor it at the cooperative level to
ensure local “ownership,” with technical supervision from regional units.
Another key to RCPB’s successful adoption of CEE was its flexibility with regards to
some of its key tenets: CEE required decentralized services, the substitution of group
guarantee for savings or physical collateral, credit before savings, delegated loan
disbursement authorization, even the prioritization of CEE recapitalization over other
loans. In the words of the current General Manager, CEE is a “produit phare” (beacon
product) for RCPB.
Results
Credit with Education is designed to increase client income and savings, improve client
knowledge and practices on key health, nutrition and microenterprise management topics,
and improve client self-confidence and status. In turn, these outcomes are expected to
lead to increased household food security and improved health and nutrition, which are
key determinants of extreme poverty.
2
Incremental client repayment installments are also kept in the group account, and transferred to the
cooperative at the end of the loan cycle.
ii
Several studies of RCPB’s CEE clients have shown that the anticipated outcomes have
been achieved, most notably with regards to increased income, asset acquisition, and
improved health knowledge and practices. However, there is no available longitudinal
data that could speak to demonstrated client movement out of food insecurity or above a
certain consumption level.
There has been less impact on cooperative membership than had been anticipated. Each
group is a cooperative member, yet most clients have been challenged (or unwilling) to
become individual members. RCPB has responded to the evolving needs of clients by
developing group lending products with education components (ACI, CFMU) that adapt
the “classic” CEE to mature clients and urban settings.
Cost effectiveness and sustainability

A decentralized product such as Credit with Education requires significant start-up costs
for equipment and the daily operations of a mobile team of dedicated field staff.
Introducing Credit with Education to an existing financial institution already established
in rural areas allows for considerable cost-effectiveness through “economies of scope,”
by leveraging existing physical infrastructure, management staff, and operational systems
(whether internal or provided by a federating body), as opposed to building a new
financial institution to offer the service. Working through cooperatives with available
liquidity and/or the ability to refinance across a wide network both reduces the cost of
funds and provides a profitable outlet to idle assets.
RCPB has been offering CEE for nearly 15 years, and has achieved overall operating
self-sufficiency (115.5% in 2006). A complete product-line costing of CEE is currently
not available, yet the service is part of a cooperative’s standard “package” and is in high
demand by cooperative managers, who are not overlooking their financial bottom line
imperative. In fact, although no formal financial analysis was available, the leadership
team at RCPB states that making CEE part of a new cooperative’s product line has
shortened the cooperative’s break-even time to 2 to 3 years.
Conclusion
Whether or not Credit with Education is a “promising approach” to reach the very poor
beyond the demonstrated successes of RCPB, as described in this case study, rests on the
ability of local organizations to adopt and successfully operate the product. Federations
of financial cooperatives in Mali, Benin, Togo, Senegal, Madagascar, and individual
cooperatives in the Philippines and Ecuador have shown this to be the case.
What follows is a SWOT analysis from the point of view of a network of financial
cooperatives (or a single financial cooperative) seeking to reach and impact very poor
populations by adopting a Credit with Education service.3
3
Several of the points below draw on Stack and Thys, “A Business Model for Going Down Market:
Combining Village Banking and Credit Unions”, 2000.
iii
Strengths internal to the organization that have made RCPB successful and/or are needed
to make other organizations successful to adopting Credit with Education to reach the
very poor:
• Steadfast vision of leadership for poverty alleviation
• Organizational mission to fight poverty
• Organizational mandate to serve the entire community
• Existing physical network in areas with high poverty incidence
• Existing back office systems that can be shared across product lines. This is more
readily found in federations
• Cheap, available liquidity for lending as the product grows quickly.4 This
requires savings intermediation in a specific area, or through a network, since
Credit with Education clients are net borrowers.
• Technical competence of leadership
• Experienced financial services institution – can better “own” and adapt the
product’s financial component
• Culture of market research and careful piloting
• Deep knowledge of community for better implementation
Weaknesses or challenges internal to an organization, that it must mitigate or overcome

in order to successfully adopt Credit with Education to reach the very poor – RCPB
overcame most of these challenges:
• Lack of experience in offering decentralized services – must overcome
institutional / procedural challenges
• Initial bias against providing decentralized services
• Ingrained “savings before credit” culture – this is challenging when reaching out
to a group of net borrowers with limited assets
• Lack of competency in education design and/or delivery, which makes “owning”
the education component more challenging
• Slowness in credit processing (Credit Committee approval)
• Frequent turnover in governance, requiring frequent training and sensitization
Opportunities – external conditions that make it easier for an organization to

successfully adopt Credit with Education to reach the very poor:
• Available, proven technology with operational systems – less costly to adapt than
to design
• Organizational credibility in the community
• Little competition from financial service providers in many of the communities
• Integrated service a competitive advantage over competitors offering similar
financial products
• Portfolio diversification (in terms of clients; maturity; sector)
• Product attractive to funders interested in deep outreach
4
RCPB’s transformation rate (loans/savings) in 1993 was 22%. “Study Design to Assess the Institutional
Impacts of Credit with Education on Credit Unions in Mali, West Africa,” 1998.
iv
• Support organization with the competence and funding to support a launch
• Existing network of peer implementers for lateral learning (more relevant today
than when RCPB launched CEE)
• Prior client experience with group finance (ROSCAs)
• Regulatory scope to offer non-financial services
Threats – external conditions that could keep an organization from successfully adopting
Credit with Education to reach the very poor:
• Interest rate ceilings below what is required to fully recover the costs of providing
decentralized, integrated services.5
• Dispersed populations
• Movement of cash to and from the field
• Client lack of experience dealing with financial institutions
• Climatic threats to clients (drought)
• Seasonal nature of client investments
5
In UMOA countries, the PARMEC law caps effective annual interest rates at 27% - but is not always
enforced. The PARMEC law was adopted in Burkina Faso in 1994, yet has not prevented RCPB for
charging 10% flat interest on 4-month loans. Other institutions in the region have been adversely affected.
v
ACRONYMS
ACI Association de Crédit Intermédiaire

ADA Appui au Développement Autonome
AFRACA African Rural and Agricultural Credit Association
APIM - BF Association Professionnelle des Institutions de Microfinance du Burkina Faso
BCEAO Banque Centrale des Etats d’Afrique de l’Ouest
MFI Microfinance Institution
CA Credit Association
CEDRES Centre d’Etudes, de Documentation et de Recherches Economique et Sociale
CEE Crédit Épargne avec Éducation
CFA Communauté Financière d’Afrique
CFMU Crédit aux Femmes en Milieu Urbain
CIF Centre d’Innovation Financière (pre-2007)
CIF Confédération d’Institutions Faîtières (2007-)
CWE Credit with Education
DID Développement International Desjardins
FCPB Fédération des Caisses Populaires du Burkina
FSS Food Security Scale
IFPRI International Food Policy Research Institute
INAFI International Network of Alternative Financial Institutions
INSD Institut National de Santé et de Démographie
LSMS Living Standards Measurement Survey
OTIV Ombona Tahiry Ifampisamborana Vola
PPP Purchasing Power Parity
PRSP Poverty Reduction Strategy Paper
RCPB Réseau des Caisses Populaires du Burkina
ROSCA Rotating Savings and Credit Association
UMOA Union Monétaire Ouest-Africaine
URCPB Union Régionale des Caisses Populaires de la Bougouriba
USDA United States Department of Agriculture
i
1. Context
1.1. Country Socioeconomic and Poverty Data
Table 1.1. Burkina Faso Country Statistics
1.1.1. National Currency CFA Franc

Amount Year
1.1.2. Population (millions) 13.2 2005
1.1.3. Population density per square kilometre 48.18 2005
1.1.4. Percentage urban / rural population 17.9% / 82.1% 2004
1.1.5. Inflation 2.1% 2005
1.1.5. Nominal Exchange Rate (current, X Currency per US$1) 500 Dec 06
1.1.6. PPP Exchange rate 183.65 2005
1.1.7. HDI value 0.342 2004
1.1.8. HDI ranking 174 2004
1.1.9. GDP/Capita (PPP US$) 1,169 2004
1.1.10. Local currency equivalent of $1-a-day international poverty line 198.34 2005
1.1.11. Population below national poverty line (%) 1 46.4 1990-2003
1.1.12. Population living below $1 a day (%) 27.2 1990-2004
1.1.13. Population living below $2 a day (%) 71.8 1990-2004
1.1.15. Population growth rate 2.6 1975-2004
1.1.16. Life expectancy 48.5 2005
1.1.17. HIV prevalence (% ages 15-49) 2 2005
1.1.18. Malaria cases (per 100,000 people) 619 2000
1.1.19. Population undernourished 17 2001-2003
1.1.20. Children underweight 38 1996-2004
Male 29.4
1.1.21. Adult literacy 2004
Female 15.2%
Male 45%
1.1.22. Net primary enrolment ratio 2004
Female 35%
Male 12%
1.1.23. Net secondary enrolment ratio 2004
Female 8%
1.1.24. Physicians per 100,000 people 6 1990-2004
1.1.25. Health expenditures per capita 68 2003
1.1.26. Gender-related development index (GDI) rank 133 2004
1.1.27. Gender-related development index (GDI) value 0.335 2004
1
The national poverty line is defined as the amount of income needed to satisfy a
predefined level of well-being, and calculated in terms of consumption (PRSP July 2004
update).
Table sources:
• World Bank Burkina Faso Data Profile, April 2007
• United Nations Human Development Report 2006
• United Nations Human Development Report 2003
• Don Sillers PPP Table, 2005 data
1
1.2. Local context
The cooperatives of the RCPB network are present in 42 out of 45 provinces, and Crédit
Epargne avec Education (CEE) is offered throughout the network. This section will
therefore describe Burkina Faso as a whole, with particular references to rural areas,
where CEE service delivery focuses.
1.2.1. Briefly describe local socioeconomic conditions

1.2.1.1. Geographic reference of location and size of population
Burkina Faso is a landlocked country in the Sahelian region of West Africa. Its
population of 13.2 million inhabitants occupies a territory of 274,000 square
kilometers. Much of the population is concentrated in the Central Plateau region and
around Ouagadougou.6
Map 1.1: Map of Burkina Faso
Source: CIA World Factbook
1.2.1.2. Local population characteristics:
1.2.1.2.1. Ethnic groups

The Mossi are the largest single ethnic group (representing 48% of the population),
followed by a mix of about sixty ethnic groups, including Lobis (%); Bobos (6.8%);
Mandés 6.7%); Sénoufous (5.3 %); Gourousni (5.1 %); Gouramantchés (4.8 %)
6
World Bank Burkina Faso Data Profile, April 2007
2
and Touaregs (3.3 %); the remaining thirteen percent of the population is made up
of minor ethnic groups.7
Map 1.2: Map of main Burkinabè ethnic groups
Source: www.NationMaster.com
1.2.1.2.2. Most important economic activities
In 2005, the primary sector contributes 30.6% to the Burkinabè GDP,

while the secondary sector contributed 19.8% and the tertiary sector
49.6%.8
Despite agriculture contributing less to GDP than the service sector, more than 80% of
the population is engaged in subsistence agriculture, while stockraising is important to
both domestic consumption and export.
Cotton is the main cash crop and accounts for most of Burkina Faso’s export revenue.
Several million Burkinabè men live in Côte d’Ivoire (where their economic activities, and
related remittances, were recently affected by the political crisis), while others migrate
annually to neighboring countries for seasonal agricultural employment.9
1.2.1.2.3. Cultural and religious background

Muslims make up 50% of the population, Christians 30% and 20% have traditional
(animist) beliefs.
7
Kagone: Burkina Faso Pasture / Forage Resources Profile
8
9
CIA World Factbook
3
1.2.1.3. Natural resources, economic activities, markets, unemployment
A high proportion of the population is engaged in food crop production and stockraising,
and participates in the informal economy.
Information on markets is not available.
Natural resources include manganese, limestone, and marble.
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.
Food crops include millet, sorghum, maize, and rice. Cash crops are cotton (the country’s
most important export product), groundnuts, karité (shea nuts), sesame and sugar cane.
Livestock, once a major export, has declined.
Water irrigation is marginal, benefiting only 0.6% of cultivated land, and reaching only
15% of the potential irrigable land.10
The climate of Burkina Faso is Sudano-Sahelian, characterized by one rainy season and
one dry season, and increasing aridity from South to North.11 The dual climatic pattern is
intensely felt in the seasonality of client income-generating activities. Women’s work in
the fields during the rainy season leaves little income for other activities, and depresses
some of the cash economy activities.
1.2.1.5. Occurrence of droughts, floods, natural disasters or conflicts
Burkina Faso faces recurring droughts, which severely impact subsistence farming
populations. The 2004 locust outbreak affected food production.
Political unrest in Côte d'Ivoire, an important trading partner and the single most
important destination for Burkinabè migrant workers, has hurt Burkina Faso’s economy.
1.2.2. Describe government policies aimed at the very poor

1.2.2.1. Social protection schemes by the government.
Not available.
1.2.2.2. Policies aimed to integrate the very poor, such as anti-discrimination and
affirmative action laws.
1.2.2.3. Property and land rights.

Not available.
10
FAO – L’irrigation en Afrique en chiffres- Enquête AQUASTAT 2005 – Burkina Faso
11
FAO – L’irrigation en Afrique en chiffres- Enquête AQUASTAT 2005 – Burkina Faso
4
1.2.2.4. Local government and non-governmental development programs.
Not available.
1.2.2.5. Other
1.2.3. Brief profile of microfinance environment.

1.2.3.1. List microfinance institutions (other than subject of case study) and other
financial institutions/services accessible by the poor.
In addition to RCPB, which is the largest microfinance provider in Burkina Faso, the
following microfinance institutions were identified:
• Many savings and credit cooperatives and cooperative federations including :

o UCEC/Z (Union des Coopératives d’Epargne et de Crédit du Zoundweogo),
reaching 16,671 clients in 2006
o Several CVECA (Caisses Villageoises d’épargne et de crédit autogérées)
networks following the CIDR model, notably CVECA – Boucle du Mouhoun,
reaching 22,520 members in 2006, as well as 1,349 members in urban
ROSCAs
o URCBAM
o UCEC/Sahel
o Etc.
• Lending institutions including:

o GRAINE-Sarl (Groupe d'Accompagnement à l'Investissement et à l'Epargne –
non-bank financial institution that emerged from CRS village banking
projects), reaching 22,000 members
o FAARF (Fonds d’Appui aux Activités Rémunératrices des Femmes
o CREDO (Christian Relief and Development Organization)
• A number of other development projects include microcredit components

• Commercial bank down-reach is negligible for the time being, yet several are
opening “microfinance windows”.
1.2.3.2. Describe dominant microfinance models and services.
The dominant and most frequent institutional type in Burkina Faso are savings and credit
cooperatives, which offer savings and individual loans, while a number of projects and
NGOs offer group and individual lending products. Tontines (ROSCAs) are also
prevalent, particularly in rural areas.
1.2.3.3. Demand versus supply of microfinance services.

Not available.
5
1.2.3.4. Depth of microfinance outreach.
Not available.
1.2.3.5. Existing MF/MED initiatives (other than case study) aimed at the very
poor.
While the deep poverty outreach of the above institutions is unknown, a number of
institutions, some in partnership with Plan Burkina, are promoting savings-led groups in
an attempt to reach the very poor.
1.2.4. Poverty
1.2.4.1. Existing Poverty data and geographic areas of the country where extreme
poverty is most concentrated.12
The national poverty line in Burkina Faso is defined as the amount of income needed to
satisfy a certain level of well-being. In practice, it is computed to ensure the caloric
consumption required by a normal adult (2,300 calories).
The following table provides poverty measurement data from the three most recent
household surveys conducted by INSD.
Table 1.2: Burkina Faso Poverty Data

Year 1994 1998 2003
Poverty line (CFA) 41,099 72,690 82,672*
Incidence 44.5% 45.3% 46.4%
Urban incidence 10.4% 16.5% 19.9%
Rural incidence 51.0% 51.0% 52.3%
Urban contribution to total 3.8% 6.1% 7.8%
Rural contribution to total 96.2% 93.9% 92.2%
* US$ 484 at 2003 PPP
Source: INSD data quoted in July2004 PRSP update
While urban poverty has been increasing, the vast majority of the poor can be found in
rural areas, while over half of the rural population lives below the poverty line.
12
Unless noted otherwise, the information is this section is drawn from the July 2004 update to Burkina
Faso’s Poverty Reduction Strategy Paper, which in turns draws on data from nationwide surveys on
household living conditions, published by the Institut National de Santé et de Démographie (INSD)
6
Map 1.3: Incidence of poverty by administrative region, 1998 and 2003
Source: 2004 PRSP Update.
In 2003, the regions most affected by poverty (in terms of incidence) were: Northern;
South Central; Central Plateau; Boucle du Mouhoun; East Central; and Southwestern.
When looking at contribution to overall poverty, the regions that contain the greatest
number of the poor are the Boucle du Mouhoun and Hauts Bassins.
1.2.4.2. Does the target area fall within these extreme poor regions?
RCPB has near-complete national coverage, and will expand to the three remaining
provinces by 2010. The regions described above are already covered. The organization
has chosen to make CEE a standard component of its product offerings when opening
new cooperatives. The network’s expansion model takes into consideration the eventual
profitability of cooperative sites, in order to maintain the overall financial viability of the
network.
7
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?
The following information applies to the country as a whole:13
27.2% of the population lives below a dollar-a-day, while 71.8% lives below two dollars-
a-day. Rural / urban differentiation on these measures is not available.
46.4% of the population lives below the poverty line (52.3% in rural areas); the median
below the poverty line is not available.
1.2.4.4. Main determinants of poverty.

Not available.
13
8
2. Organizational Framework
2.1. International Organization
2.1.1. Name and type of the organization (INGO, multilateral agency, foundation,
other)
Freedom from Hunger is an international non-governmental organization based in Davis,

California.
Freedom from Hunger developed the Credit with Education methodology that is the focus
of this case study, and introduced it to RCPB in 1993.
2.1.2. Organizational background

2.1.2.1. Mission and vision
Freedom from Hunger’s Vision is a world free from hunger.
Mission statement:
“Freedom from Hunger brings innovative and sustainable self-help solutions to the fight
against chronic hunger and poverty. Together with local partners, we equip families with
resources they need to build futures of health, hope and dignity.”
2.1.2.2. Brief history

Guiding Freedom from Hunger’s sixty-year history is the overarching theme of evidence-
based, self-help innovations that address the causes of chronic food insecurity, delivered
through partnerships with local organizations.
In 1946, Clifford Clinton, a Southern California restaurateur, and Henry Borsook, a Cal
Tech biochemist, founded Meals for Millions (the precursor to the current-day Freedom
from Hunger) for the worldwide distribution of Multi-Purpose Food (MPF), a non-
perishable, high-protein powdered food supplement that Borsook had developed two
years earlier.
By the 1960s, with a large number of organizations distributing MPF, Meals for Millions
turned from relief to development, and introduced the “Appropriate Food Technology”
program whereby local people were trained in food science, nutrition, agriculture, and
food processing. Starting in 1978, the “Applied Nutrition Program” taught local
populations in developing countries to use greenhouses, seed banks, solar cookers, and
community gardens to address their own hunger and nutrition issues.
In 1979, Meals for Millions merged with the American Freedom from Hunger
Foundation, which had been founded in 1961 at President Kennedy’s behest. In 1987,
the organization’s name was shortened from Meals for Millions/Freedom from Hunger
Foundation to Freedom from Hunger, the current designation, to emphasize the long-term
challenge of creating a world without hunger. The organization worked through local
partnerships, developing culturally appropriate programs that prioritized helping children
by empowering their mothers.
9
In 1989, Freedom from Hunger implemented the first Credit with Education programs in
Mali and Thailand, and shortly made this approach its exclusive programmatic focus,
refining the methodology and adding education curriculum over the years. Freedom from
Hunger took two approaches to implementation: it founded two microfinance institutions
(CRECER in Bolivia and FOCCAS in Uganda, both now independent) who used this
methodology exclusively, and it introduced the product to existing financial institutions,
in particular credit unions and credit union federations, starting with the Réseau des
Caisses Populaires du Burkina in 1993.
After 2000, having reached several hundred thousand clients through direct partnerships
with local, independent microfinance institutions implementing Credit with Education,
Freedom from Hunger reaffirmed its focus on outcomes (sustainably reducing chronic
food insecurity and poverty on a large scale) and diversified its programmatic inputs,
developing a savings-led approach, expanding its range of education modules and adding
health protection products and services. The organization is currently piloting new
distribution mechanisms to get these products and services, as well as other
organizations’ innovations, to millions of chronically hungry families.
2.1.2.3. Type of support: funding, capacity building, technical assistance, direct

service provider, other
Freedom from Hunger’s relationship to independent organizations that implement Credit

with Education (such as RCPB) is that of trainer, technical assistance provider and
capacity-builder. Freedom from Hunger secures third-party resources from multilateral
and bilateral agencies, other INGOs, and foundations to cover the costs of its training and
technical assistance provision to local organizations. Freedom from Hunger also assists
the local organizations to secure operating and lending funds, as needed.
2.1.3. Development intervention approach

2.1.3.1. Primary target group and development focus
Freedom from Hunger focuses its efforts on the chronically hungry poor and frames its
work in terms of outcomes. All programmatic activities (inputs) address directly or
indirectly the three components of family food security – availability, access and
utilization.
Freedom from Hunger targets its programs toward women, particularly very poor
women, as entry-points to the household with particular responsibilities toward the well-
being of young children.
Programs are primarily designed for rural areas, but also reach peri-urban areas.
Freedom from Hunger has chosen to concentrate on a few regions of the world with large
numbers of chronically hungry people, relative political stability, and existing civil
society organizations with which to partner: South Asia (particularly India) and Southeast
10
Asia (particularly the Philippines), West Africa and East Africa, the Andean Region of
Latin America, and Mexico.
2.1.3.2. Specialized in MF/MED or multisectoral
Freedom from Hunger promotes the integration of services: the provision to the same
program participant of a bundle of financial services, behavior-change education sessions
(training in the areas of health, nutrition, microenterprise development, household
financial management) and health-protection products and services.
2.1.3.3. MF/MED model
Freedom from Hunger’s Credit with Education methodology originally combined a

modified village banking model (adding Grameen-inspired solidarity groups to the
FINCA model) with group-based, non-formal education on a variety of topics. Over
time, Freedom from Hunger’s improvements and implementing organization innovations
have broadened the financial service component options to encompass a variety of
lending and guarantee models. A common feature of these variants is regular group
meetings of participants, which provide the platform for training sessions and other
development interventions. A recent and more significant variation involves the
formation of savings groups, who intermediate their own savings without external grants
or loans – these groups also receive training sessions.
These products offered by a wide variety of institutions (NGOs, non-bank financial

institutions, rural banks, credit unions, credit union federations, regulated financial
institutions), either as a sole or main product offering, or as a specialized product line.
2.1.3.4. Other sectors
Freedom from Hunger also helps financial institutions establish linkages with other
organizations, particularly for health care provision and access to health protection
products.
11
2.2. Local organization
2.2.1. Organizational development (S)
Table 2.1. Institutional Background (all data as of 31 December 2006)

Issues Observations
2.2.1.1. Réseau des Caisses Populaires du Burkina
42 of 45 provinces have at least one
2.2.1.2. Burkina Faso
cooperative
103 individual cooperatives are either
2.2.1.3. Network of Financial Cooperatives grouped into Regional Unions, which
are federated; or are directly federated
2.2.1.4. Registered with and supervised by the Ministry of Entities belonging the three levels
Finance described above are each registered
2.2.1.5. Subject to the BCEAO’s PARMEC law
2.2.1.6. 1972
2.2.1.7. Financial services institution
2.2.1.8. 1993
2.2.1.9. Savings and lending cooperative
2.2.1.10. Build share capital; accept and intermediate
deposits; refinance individual credit unions as needed;
ensure cost-recovery
2.2.1.11. RCPB serves adult community members who live
or work in its catchment area. Membership represents 20% of the
population in RCPB’s collective
The target market for the Credit with Education products catchment area
are poor and very poor women in rural and peri-urban areas
2.2.1.12. 454,550 cooperative members, representing
The 454,550 share-holding members
954,761 men and women clients
are men, women, moral members and
Of these, 66,706 are CEE clients, 2,721 are ACI clients and
various types of groups
1,444 are CFMU clients *
2.2.1.13. 709 staff members
Of these, 113 staff are specifically involved with CEE, ACI Also 1,545 volunteer Board members
and CFMU
* This case study describes Crédit Epargne avec Education (CEE) as RCPB’s
main product for very poor clients. The Association de Crédit Intermédiaire
(ACI) and the Crédit aux Femmes en Milieu Urbain (CFMU) are respectively a
transition product for CEE clients and a urban adaptation of CEE; they are part
of RCPB’s outreach to the poor and will be referenced periodically throughout
the case study.
2.2.2. Organizational development (S)

2.2.2.1. Mission and vision
RCPB Mission statement:

“To help improve the living conditions of the working peoples of Burkina Faso, through:
12
• The mobilization of local savings
• The development of reliable and profitable cooperative savings and credit entities
• The promotion of appropriate and accessible financial services
• Democratic administration and management according to cooperative rules and
principles, while a focus on and respect for humankind”
RCPB Values:
• Respect for individuals
• Respect of the principles of honesty and integrity
• Respect for the common good
• Respect of law and regulations
• Respect of the organization
RCPB commitments:
• Pay attention and listen to members
• Be available and equitable toward members
• Fight poverty and relieve misery
• Strive for excellence and availability in work
2.2.2.2. Brief history
The birth of the current-day Réseau des Caisses Populaires du Burkina can be traced back
to 1972, when the Dissin financial cooperative was established in Bougouriba (Southwest
Burkina Faso) through the promotion and mobilization efforts of Canadian Michel
Lagacé from Développement International Desjardins (DID). Two more cooperatives
were launched in 1973, and the following decade saw the steady expansion of
cooperatives in the area. By 1984, eleven cooperatives were operating in the Bougouriba
and Poni regions and had formed a regional cooperative structure: the Union Régionale
des Caisses Populaires de la Bougouriba (URCPB).
Beginning in 1987, the leaders of the nascent network decided to take a longer-term,
more technical and more professional approach, and build local managerial competence.
Local managers were appointed to head each regional unit, with DID technical advisors
focusing on capacity-building. A National Coordination Unit was established (with a
mandate of purely technical support to the cooperatives), headed by a Burkinabè
seconded by a Canadian technical advisor.
During this period, RCPB which had previously focused on rural areas, expanded into
urban areas, in an effort to build cooperatives with very strong economic potential and
augment the total resources available to the network on its way to attain national
coverage. The network systematically developed medium-term and annual plans and
evaluations to direct its growth.
13
The early 1990s saw several attempts to integrate more women into the cooperatives
through group lending, in a deliberate effort to maintain focus on the institution’s poverty
alleviation mandate. The “Women’s Access to Credit” program (Accès des Femmes au
Crédit – AFCRED) in the Yatenga region combined group lending with literacy training.
This product showed poor results in terms of cost, revenues, impact and was ultimately
abandoned. In 1993, RCPB piloted Crédit Epargne avec Education (CEE), its adaptation
of Freedom from Hunger’s Credit with Education product. CEE was highly successful
and formally became a cornerstone of the institution’s growth and expansion strategy in
1996.
By 1996, RCPB counted three regional unions (URCPB; URCPN; URCPC) and two
“pre-Unions” in the Center East and in the West. The National Coordination Unit was in
the process of creating a national federating structure for the network, when URCPB, the
original regional union, dissociated itself from the network by calling for a hiatus (“temps
d’observation”). This rift within the network was the painful context in which the
Fédération des Caisses Populaires du Burkina (FCPB) was born in 1997.
In 2002, the URCPSO’s14 financial situation was so dire that the government temporarily
assigned the union to FCPB’s administration – a situation that continues in 2007.
URCPSO is expected to re-integrate RCPB formally once its economic troubles are over.
Since 2000, RCPB has emphasized capacity-building for its human resources (both staff
and Directors), has engaged in a systematic computerization process to improve data
reliability, and has broadened its market segments by finding new ways to finance
artisans (Société de Cautionnement Mutuel) and SMEs (Centre Financier aux
Entrepreneurs).
Today, RCPB is by far the largest MFI in Burkina Faso, and one of the strongest in West
Africa. With long-standing partnerships with DID and Freedom from Hunger, as well as
participation in the CIF Confederation, it is on a solid footing for pursuing growth while
maintaining focus on poor, rural women.
2.2.2.3. Objectives
RCPB is currently finalizing a 2008-2010 business plan that calls for complete national
coverage by expanding into the last three untouched provinces, growing total
membership (not counting the individual clients belonging to member groups) to
783,000, and restructuring and streamlining the network to ensure better service delivery
to the members.
2.2.2.4. Organizational culture, leadership, innovation (S, M)
Senior managers at the Federation level have a strong vision and a deep commitment to
reaching poor populations and achieving impact. The General Manager at the time of
14
URCPB under a new name
14
launching the product (now the Director of CIF, and still in frequent contact with RCPB),
the Regional Director in the launch zone (the current General Manager) and the Program
Manager hired to run CEE provide organizational continuity that transcends the
mandated Board rotations.
At all levels of the organization, poverty alleviation efforts are identified with the CEE
product. However, it is mostly at the senior management (Federation) level that the
converse is true, and that CEE is viewed in large part as a poverty outreach product.
Currently, local managers can take a “financial bottom line” perspective on the CEE
product since it expands their cooperative’s membership (in particular female
membership), grows, diversifies and improves the quality of the portfolio, and is
profitable.15 RCPB has become interested in Social Performance Management and will
begin instituting an SPM framework later in 2007, which should lead to more deliberate
sensitization and communication throughout the organization regarding poverty outreach
and CEE’s unique contribution to these efforts.
Senior staff, many of whom have considerable longevity within the organization, as well
as solid technical skills, enjoy good working relationships with the Directors and have
considerable influence in decision-making. Decision-making and innovation are top-
down. The Federation is able to build consensus among the Regions, who in turn ensure
execution at the cooperative level. Innovations and procedural changes are borne at the
Federation level.
RCPB is one of the most innovating microfinance institutions in the region. With market
research and product design input from CIF, RCPB carefully tests and pilots products
before rolling them out.
2.2.2.5. Organizational structure, roles and responsibilities
The RCPB network consists of 103 Cooperatives (Caisses Populaires), 4 Regional

Unions (Unions Régionales) and a Federation (FCPB).
15
The former General Manager has stated that launching a new cooperative with CEE has shortened the
break-even period from over 10 years to 2 to 3 years.
15
FCPB
URCPC URCPN URCPO

URCPC AT AT
AT AT AT
Bobo-
E /B /Sah
Ouagadoug Ouahigou /CN /CO /CS
ou ya Dioulasso M el
Koupela
17 14 22 19 9
Caisse Caisse Caisse Caisse Caisse
s s s s s 4
Caisse
s 7
Caisse
s 4
Caisse
s 7
Caisse
s
Graph 2.1: Structure of the RCPB network
1
The 103 individual cooperatives, which cover nearly the entire Burkinabè territory, fall
into nine geographic areas. The cooperatives in the four oldest geographic areas have
formed (and finance) Regional Unions, which are legal cooperative entities registered
with the Ministry of Finance. These four Regional Unions in turn have formed (and
finance) a national Federation which is also registered with the Ministry of Finance.
The cooperatives in the five other geographic areas directly belong to the national-level
Federation, without belonging to a regional entity.
The structure of individual cooperatives varies considerably, from single-employee

offices to multi-branch cooperatives with a dozen or more employees (manager, cashiers,
accountants, loan officers), according to the number of members and the level of
financial activity. They are chiefly responsible for credit and savings transactions with
their members.
Regional Unions provide technical services to their constituent cooperatives, such as

audit and accounting, as well excess liquidity management and refinancing. They also
manage credit above a certain amount, and provide a regional management function for
the network.
Cooperatives in the five areas without a Regional Union receive similar technical support
services from five Technical Units (Antennes Techniques), which are extensions of the
Federation with no independent legal structure or governing body.
The Federation is responsible for the overall strategic direction of the network. It sets the
expansion strategy and develops new products, establishes policy and operational
procedures, performs audit functions, and conducts recruitment and training for the entire
network. It ensures excess liquidity management and refinancing for its constituent
members. The Federation has external representation responsibilities toward donors,
partners, regulators and the microfinance industry.
The staff at the Federation level is organized into four main departments:
• General Manager’s Office (Direction Générale)
• Audit Department (Direction de l’Inspection Générale)
• Operations Department (Direction Réseau et Développement)
• Finance and Administration Department (Direction des Opérations)
2.2.2.6. General qualifications and profile of field staff (S, M)
RCPB traditionally provides centralized financial services to its members: transactions

are conducted within the cooperative or its service points (branches). Clients interact
with cashiers and managers, and borrowers with credit officers (the credit officers visit
clients for loan analysis and monitoring).
1
Two new, specialized field positions were created at RCPB to implement CEE. These
positions focus exclusively on CEE and its derivations, and do not work on the
organization’s mainstream product lines.
1) At the level of the cooperative, the animatrice (field agent) provides decentralized
services to clients in the communities where they reside, in a perimeter around the
cooperative or one of its service points. The animatrice’s major responsibilities are to:
• Form Credit Associations (Caisses Villageoises) and train their members in group
management and financial methodology
• Monitor the repayment of loans granted to the Credit Association
• Conduct education sessions on topics of health, nutrition, microenterprise
management, household financial management, etc.
• Prepare periodic performance reports
Animatrices are required to have a 10th-grade education and prior work experience with
facilitation responsibilities, preferably at an NGO, but there is no requirement to have
previously worked with very poor populations.
The animatrices are all women as are the clients they interact with, and they must be able
to speak the local language and often belong to the same ethnic group as the clients. The
educational requirement situates the animatrice in a higher socio-economic category than
the clients.
The animatrice reports administratively to the cooperative’s Manager or Credit Officer,

depending on the cooperative’s structure, but she is monitored by and receives technical
supervision from the coordinatrice who is employed by the Regional Union, and is
responsible for 15 to 20 animatrices. The coordinatrice’s main responsibilities are to:
• Monitor and provide feedback all aspect of the animatrice’s field work
• Provide in-service training to animatrices on various aspects of their jobs
• Engage in the recovery of delinquent loans
• Participate in the development and piloting of new products designed for women
members
• Prepare periodic performance reports
Coordinatrices, who are all women, are required to have a college degree, with three
years of experience in a microfinance institution. Again, there is no requirement for them
to have previously worked with very poor clients. Animatrices employed in cooperatives
that receive technical support from a Technical Unit rather than a Regional Union are
supervised directly from the Federation, until the Technical Units become fully staffed
and their costs can be borne by the cooperatives they serve.
The wide difference in education levels between the two field positions is such that
coordinatrices must be recruited externally rather than promoted from the ranks of
animatrices.
2
2.2.2.7. Training/sensitization (of staff, managers, board) on mission and poverty
outreach (S, M)
When Credit with Education was first introduced to the organization in 1993, senior
managers, and Federation- and Regional-level Directors participated in a workshop
designed and facilitated by Freedom from Hunger staff. This workshop engaged
participants to analyze the benefits and challenges for the institution to adopt the new line
of service.16 In particular, RCPB was able to reflect on the opportunity to reach an un-
served client segment: very poor women living beyond the cooperatives’ traditional
catchment area, or unable to avail the services offered by the cooperatives.
Staff recruitment within RCPB is centralized: the Federation fills all open positions for
the entire network, and conducts initial staff training. Further in-service training is
provided at the Regional level. Training on CEE is focused on direct implementers
(animatrices and coordinatrices), while cooperative Managers and Directors receive an
orientation to the product, its objectives and procedures.
The field staff (animatrices and coordinatrices) are initially trained using curriculum
developed by Freedom from Hunger, with local adaptation to the institutional context.
The CEE Program Manager and the Federation’s training department facilitate the
training. Animatrices then typically shadow veteran colleagues in order to better
assimilate the field realities and subtleties of their duties. Over time, field staff receive
in-service refresher trainings, as well as trainings on additional educational modules.
These trainings take place at the regional or federation level, depending on how well the
training is assimilated at the regional level, and how widespread the need for a particular
topic is.
Cooperative Managers receive an orientation to the CEE methodology, such that they are
able to monitor the animatrices and their performance. Directors are also sensitized to
the product, in particular Credit Committee members who must delegate their loan
approval authority to field staff in order to ensure rapid group recapitalization at the end
of a loan cycle. These trainings are performed by the area’s coordinatrice, or by the CEE
Program Manager, using a scaled-down version of the MOT. At this level, greater
emphasis is placed on increasing membership by reaching out to underserved
populations, than on the fact that these are “very poor” populations.
2.2.2.8. Incentives for poverty outreach (S, M)

RCPB currently does not use a performance incentive system (monetary or non-
monetary) for any of its employees. The performance evaluations of an animatrice do not
specifically address the poverty level of the clients she is responsible for.
2.2.2.9. Governance
16
This workshop was later standardized into a Management Orientation Training (MOT) that is conducted
with an institution interested in implementing Credit with Education.
3
The three-level structure described in Section 2.2.5 is echoed in the governance structure.
Each cooperative belongs to its members, who elect a Board of volunteer Directors.
The Directors of the cooperatives in a given region elect the Board of their Regional
Union.
Finally, the Federation is governed by a thirteen-member Board, composed of Regional

Union Directors.
At each of these three levels, Directors (Dirigeants) serve for three-year terms (renewable
once) and belong to one of three bodies:
• the Executive Committee (Conseil d’Administration);
• the Credit Committee (Comité de Crédit);
• the Audit Committee (Comité de Contrôle)
Each of the three levels holds Annual General Meetings for its members; and prepares
annual financial statements.
2.2.3. MF and MED services
What follows is a description of RCPB’s mainstream product offerings, apart from the
three group products targeting women (CEE; ACI; CFMU). These will be described in
Section 5. A number of financial products is currently under development and/or being
piloted; these are not described here.
2.2.3.1. MF model and products/services.
The foundation of RCPB’s activities is deposit services for its members. The average
savings as of 31 December 2006 was $418 per member (account) or $199 per individual.
Ordinary saving accounts (sight deposits) have no minimum or maximum balance,

transaction size or transaction frequency. Members make deposits and withdrawals in
person at the cooperative or its service point during opening hours. Ordinary savings are
not remunerated.
Term savings of 3 months or more are remunerated at 1.5% to 2.5% percent, but these
represent less than 2% of total savings.
All of RCPB’s loan products have a compulsory savings requirement, which can be met
by freezing a set amount upfront or having an automatic monthly deduction from one’s
salary deposit.
4
Table 2.2: RCPB loan product characteristics (excludes poverty-focused Credit with Education products)
Loan type Uses Max. Max. amount Published Application Savings Loan
length interest rate fee req. insurance***
Consumption Salary advance 1 mo. 25% salary None 5% plus 2% none
1,000 CFA
(US$5.45)
Social events 12 mo.
Assets 24-48 mo. • 5,000,000 CFA
Housing 60 mo. (US$ 27,226) 10% flat per 1% plus 25%** 1% under 24
Agriculture Inputs 10 mo. • less than 10% of year, prorated. 1,000 CFA months.
Equipment 60 mo. cooperative’s (US$5.45)
Sector-specific credit* 12 mo. total savings Note: 5% flat 1.5% above
Commerce Inventory 12 mo. • dependant on per year, Note: staff 24 months.
Market advances 12 mo. monthly income prorated, for and
Equipment 24 mo. staff and Directors
Group Joint or similar 12 mo. 250,000 CFA (US$ Directors only pay the none
undertakings 1,361) per person 1,000 CFA
and 5,000,000 CFA (US$5.45)
(US$ 27,226) per
group
* Directed credit to cotton and rice production.
** The 25% forced savings on consumption loans are waived for members whose salaries are paid directly into their account at
the cooperative. They instead have 5% of their monthly net salary frozen on a savings account.
*** Borrowers must contract loan insurance that covers outstanding loan balances in the event of death.
1
2.2.3.2. Description of main target group (if not the very poor).
As of 31 December 2006, 954,761 persons were benefiting from RCPB’s services (and
being cooperative members, were all savers). Of these, 540,382 belonged to groups
(Credit with Education or other groups) and 11,375 were moral members, bringing
RCPB’s cooperative membership to 454,550, of which 108,788 had active loans.
RCPB clients are 72% men and 28% women, and mainstream clients come from modest
and lower-middle-class backgrounds: farmers, small business owners, salaried workers,
artisans, professionals. Groupings other than CEE/ACI/CFMU groups are organized
around joint or similar economic undertakings.
2.2.3.3. Selection and/or eligibility criteria
RCPB membership is open to all adult men and women who reside or work in the
geographic area served by a cooperative. Moral members and groups can also join.
All members can apply for loans starting three months after joining, with a few
exclusions related to poor repayment records, salary direct deposits outside of the
cooperative, police records, and old age in the case of large loan requests.
2.2.3.4. Use of poverty assessment tool

Not applicable – the poverty level of general RCPB members is not assessed.
2.2.4. Resources and external assistance
As of 31 December 2006, RCPB’s total assets were worth US$ 99.2 million, including an
outstanding loan portfolio of US$ 62.7 million. Client savings were the largest liability at
US$ 69.5 million (70% of assets), while net worth was US$ 15.3 million (15.47% of
assets), the bulk of which consists of reserves and cumulated donations, and US$ 463,261
in member shares.
In 2006 RCPB did not borrow externally, while in 2005 and again 2007 it serves as a
channel for directing credit to the cotton sector (with 1.5 billion CFA and 1.7 billion CFA
loans from BOA).
Total donations from the organization’s inception have not been recorded, due in part to
the late federation of the cooperatives, but have been estimated by Planet Rating at 6
billion CFA (US$ 12 million).17 Main funders include ACDI, DANIDA, PA/FMR, the
EU and UNDP.
17
Planet Rating Rating of RCPB, July 2005
1
Liquid Assets 25,089,890 Restricted funds 752,196
Outstanding Loan Portfolio 62,753,862 Member deposits 69,586,101
Receivables 5,133,802 Accounts payable 13,524,241
Fixed Assets 6,230,612 TOTAL LIABILITIES 83,862,539
Net Worth 15,345,626
TOTAL ASSETS 99,208,165 LIABILITIES + NET WORTH 99,208,165
Table 2.3: RCPB Balance Sheet as of 31 December, 2006 – $US (500 CFA=$US1)
OTHER NET
WORTH
15.0%
MEMBER
CAPITALIZATION
0.5%
RESTRICTED
FUNDS
14.4%
MEMBER
DEPOSITS
70.1%
Graph 2.2: RCPB Asset Coverage

RCPB Asset Coverage at 31 December 2006
In 2006, RCPB’s total income was US$ 13.1 million. The operating cost ratio was
10.08% while the 30-day portfolio-at-risk at year’s-end was 6.55%.
2
2.2.5. Relationships (networks, partnerships, other institutions)
2.2.5.1. Networks
RCPB participates in the following networks:
Name Role to RCPB Value for poverty outreach

APIM-BF National promotion and coordination of
microfinance
CIF18 Product development Product development for very poor
Social performance management Social performance norms (planned)
Refinancing
Information technology
AFRACA Lateral learning on agricultural and rural
www.afraca.org finance
INAFI Training and lateral learning Focus on women clients
www.inafiafrica.org
ADA Financial performance evaluation
www.microfinance.lu
Proxfin Lateral learning with DID partners Focus on social impact
West African Credit with Lateral learning on CWE product and

Education Practitioners operations
Table 2.4: RCPB network participation
Due to its longevity implementing this product, RCPB is also a regional leader among
West African Credit with Education practitioners, and while much of the learning is
“exported” by RCPB toward the other organizations, periodic conferences co-convened
by CIF and Freedom from Hunger are the opportunity to maintain institutional focus on
the very poor, through discussions on topics such as client responsiveness and social
performance management.
18
CIF (formerly Centre d’Innovation Financière; Confédération des Institutions Faîtières since 2007),
owned by six leading West African Credit Union Networks, and headed by the former FCPB General
Manager, plays a key role in product innovation among its members. In particular, it has participated in
most of RCPB’s market research activities and led the development of “second-generation” products aimed
at mature CEE clients. The new Confederation will provide its members with a wider range of services as
shown in the table.
3
2.2.5.2. Partnerships
RCPB enjoys a long-standing partnership with Développement International Desjardins

(DID), which has supported the network technically and financially from its inception.
The focus on institutional strength and viability promoted by DID have made it possible
for RCPB to diversify its product offerings toward the very poor in more rural areas.
2.2.5.3. Other institutions
PSI (Population Services International) disseminates health products and health messages
in Burkina Faso. During periods when RCPB was providing education sessions on
malaria prevention and treatment, clients have been able to purchase insecticide-treated
mosquito nets and treatment tablets from PSI distributors. The education sessions helped
create demand for these health products, and RCPB coordinated with PSI to ensure
product availability.
1
3. Description of “Very Poor” Target Group
The following information concerns clients belonging to CEE groups. Clients belonging
to ACI groups are all “graduates” from CEE, while clients belonging to CFMU groups
differ mainly in that they live in urban areas, with consequent differences in the
availability of education and employment opportunities, and service infrastructure.
3.1. Individual and Household conditions
Specific data in this section is taken from a random sample of 210 CEE
clients conducted in 2003 (see Section 4 for information on sample
selection). This data is fairly representative of the overall CEE clientele,
with perhaps a bias toward more educational and economic
opportunities due to the proximity to Ouagadougou.
3.1.1. Gender
All participants in CEE are women
3.1.2. Age
The minimum legal age to belong to a Credit Association is 18. 88% of clients are under
50 years of age, with the oldest clients in their 60s and 70s. The average age of clients is
38, while the median is 35.
3.1.3. Disability and chronic disease

Not available
3.1.4. Culture or religion

Not available – assumed to follow national distribution (Muslim 50%; Christian 30%;
animist 20% - see Section 1.2.1.2.3)
3.1.5. Ethnicity
Not available – assumed to follow national distribution (48% Mossi – see Section
1.2.1.2.1)
3.1.6. Membership to socioeconomic groups, such as caste and class

Not available.
3.1.7. Household type, composition, marital status

The average household size is 11.
47% of clients were in monogamous relationship, while 41% were in polygamous
relationships. 10% of clients were widowed.
3.1.8. Literacy
69% of clients are illiterate, while 7% can read a local language.
3.1.9. Education
2
4% of clients finished secondary school, while 12% of clients only completed primary
school.
.
3.2. Socioeconomic conditions

3.2.1. Refugee or IDP status
Not available - clients more typically come from well-settled communities.
3.2.2. Economic conditions (F, C)
The data in this section is taken from a longitudinal study undertaken the Burkinabè
consultancy firm Sud-Consult in 2003, 2004 and 200519. It used a baseline sample of 302
incoming CEE clients in three regions.
3.2.2.1. Underemployment
Not available
3.2.2.2. Income Sources

A majority of clients engages in subsistence farming.
The Sud-Consult study showed that the most frequent activity undertaken with loan funds
were agricultural product processing and selling (millet beer, shea butter, etc.), food
vending, and grain selling. The microenterprises are typically not the main source of
household income.
3.2.2.3. Land ownership

Not available.
3.2.2.4. Asset ownership

Not available.
3.2.2.5. Income level
The Sud-Consult study compared the self-reported profitability of client microenterprises

upon entry into the program (2003) and after two years. It found that microenterprise
income has increased on average by 74%, while profitability had progressed from 20% to
30%.
3.2.3. Geographic conditions

The information in this section generally describes rural areas of Burkina Faso where
RCPB implements CEE.
3.2.3.1. Rural/urban, remoteness from trading centers and roads, population

density
Coulibaly and Coulibaly/Lankoande, Suivi d’impact du Programme Crédit, Epargne avec
19
Education- Etude d’impact, Rapport de synthèse, 2005.
3
69% of clients live in rural communities.20 Access to roads varies, and during the rainy
season reaching clients communities is quite challenging.
3.2.3.1. Access to markets

RCPB targets communities in which the population has regular access to markets within
a reasonable vicinity, to ensure outlets for income-generating activities.
3.2.3.1. Access to banks

Clients in peri-urban areas have access to a variety of financial institutions.
Clients in some rural areas have access to other financial cooperatives who provide
centralized services, which effectively restricts access. In general, RCPB’s network
reaches deeper than its competition, and provides proximity (decentralized) service
delivery.
3.2.3.1. Access to doctors and clinics21

Access to medical services is poor. 26.6% of rural residents do not have access (defined
as 30 minute distance) to healthcare facilities. Health and Social Promotion Centers (the
second tier in a five-tier medical facility system, staffed by a trained midwife and nurses)
performed nearly half of all consultations in 2003, and doctors only performed 3% of
consultations (for the population as a whole).
3.2.3.1. Proneness to natural disasters

Not applicable.
3.2.4. Major vulnerabilities and risks encountered by target group (F, C)

Not available.
20
Dataset from HMQ study.
21
July 2004 PRSP update
4
4. Poverty Targeting and Assessment22
4.1. Poverty measurement practices

Client poverty measurement is not currently part of RCPB’s routine activities. However,
an external study conducted in 2003 generated data regarding the poverty level of the
institution’s CEE clients, and the findings are presented and discussed here.
In June 2003, Hugo Melgar-Quiñonez (Assistant Professor of Nutrition, Ohio State

University) led a research team in Burkina Faso that conducted a survey for Freedom
from Hunger using two poverty measurement tools (hereafter – HMQ study)23. The
study focused on RCPB clients and included other community members.
This section also presents additional data from other African Credit with Education
practitioners who share similar characteristics with RCPB.
4.1.1. Poverty data collection

4.1.1.1. Which poverty indicators are collected?
Two poverty indicators were used in the 2003 HMQ study:

1) The level of household food security during the twelve months preceding the
interview. While the concept of food security is universal, this indicator must be
adapted to the national (if not regional) context to ensure relevance to culture and
to dietary habits.
2) The daily consumption per capita during the previous twelve months, computed
from annual expenditure data in specific categories.
Both indicators offer interesting insights into different aspects of poverty. While the
consumption indicator is more sensitive across a wide spectrum of poverty levels, the
food security indicator readily identifies severe poverty and provides gradations within
that range.
4.1.1.2. What poverty assessment tool is used?
The HMQ study in Burkina Faso administered two poverty measurement tools to the
same population sample, related to the two poverty indicators selected.
1) a Food-Security Scale (FSS) adapted by Freedom from Hunger from an existing

U.S. Department of Agriculture Food-Security Scale. The USDA’s FSS was
22
In this section, the PPP exchange rate used is 170.82, computed for 2003 when the data was collected,
while the “dollar-a-day” line is 184.48 CFA, also for 2003.
23
Melgar-Quiñonez, Testing Food-Security Scales for Low-Cost Poverty Assessment, 2004. The primary
purpose of this work, and of similar work carried out in Ghana, Bolivia and the Philippines, was to test the
correlation between the FSS and the LSMS consumption module benchmark, and to determine whether the
FSS could serve as a proxy indicator for poverty by correctly classifying households above or below an
internationally-defined poverty line. The data collected during this work provides useful information on
the poverty levels of RCPB’s clients.
5
originally developed for use in the United States, and had already been adapted
for use in Mexico. This tool characterizes a household’s level of food security
using a series of predetermined individual interview questions that query the
respondent about his or her household’s food consumption during the previous
twelve months. In Freedom from Hunger’s adaptation of the tool, nine questions
query respondents on the occurrence of specific measured levels of food
insecurity during the period; eight of these questions have a follow-up that seeks
to qualify the frequency or chronic occurrence of these conditions. This dual
scale (occurrence and frequency) helps identify progressively higher levels of
food insecurity among respondent households, and ultimately registers the most
severe food insecurity that occurred at any time during the year (other than very
rarely).
2) The LSMS consumption module from the Living Standards Measurement

Survey developed by the World Bank, which in its entirety was used to construct
the $1-a-day and $2-a-day international poverty lines. The questionnaire used in
this study included the following sections:
• Household roster
• Education for each household member
• Food and cooking fuel
• Food as payment for employment
• Food consumed from own business
• Non-food items
• Daily expenses
• Health
• Dwelling expenses and services
• Remittances
• Durable goods
For both tools, it is critically important to word the questions in a way to take into
account local dialects, practices and values. Local enumerators performed a first
adaptation of each tool’s questionnaire, after which the tools were tested with a focus
group of CEE clients sharing similar characteristics with the sample, before questionnaire
finalization.
Both questionnaires are individually administered by an enumerator. The consumption

module tool can take over an hour to administer, especially if large household rosters
must be created, and is sometimes administered over several sessions to prevent response
quality drop-off. The FSS can be administered in ten to fifteen minutes.
The FSS’s sensitivity is restricted to the “very poor” end of a range of poverty levels,
while the consumption module’s sensitivity applies to a much broader range.
4.1.1.3. When and how often are poverty data collected?
6
The HMQ study was conducted in June 2003 and has not been repeated to date. Clients
were interviewed in their community of residence.
4.1.1.4. Which clients are measured?
See Section 4.2.2 for a description of the sample and methods of the HMQ Study.
4.1.2. Use of poverty data
The poverty measurement exercise was a one-time event, and conceived and directed by
Freedom from Hunger. RCPB has not used the data collected for internal purposes. The
HMQ study served to establish the accuracy and applicability in Burkina Faso of the FSS
as a low-cost and valid measure of household food security and poverty levels.
4.1.2.1. What, if any, are poverty categories distinguished by poverty data?

4.1.2.2. How are each of these categories defined?
The poverty categories are part of tool design.
1) The Food-Security Scale yields a “raw score” of 0 to 9 (0 being most food-secure, and
9 most food insecure). The original USDA categorization, whose dichotomy is useful in
statistical analysis, is as follows:
• Scores 0-2: “food-secure household” which may (or may not) be poor, but not
so poor as to not be getting enough to eat
• Scores 3-9: “food-insecure household” which can be interpreted as “very
poor”
The sensitivity of the tool within the “food-insecure” (“very poor”) range has allowed
Freedom from Hunger to introduce a second cut-off point to the FSS, resulting in the
three following classifications:
• Scores 0-2: “food-secure household”
• Scores 3-5: “moderately food-insecure”
• Scores 6-9: “severely food-insecure”
Yet, the FSS says little about (does not distinguish between) households that are food-
secure (i.e. not defined as “very poor”).
2) The LSMS consumption module aggregates annual household consumption, which is

then divided by the number of household members and by 365, yielding consumption per
capita per day in CFA. In order to relate this finding to international poverty definitions,
conversion to US$ uses a purchasing power parity (PPP) adjustment.
• Consumption per capita per day under a “dollar-a-day”24 : “very poor”
• Consumption per capita per day under “two dollars-a-day”: “poor”
24
US $1.08 per day in 1993 PPP prices
7
In the HMQ study, the PPP adjustment placed virtually all households above the poverty
line in two countries, which seemed counterfactual to the researchers. 25 Consequently, in
the report, consumption per capita per day in CFA was converted to US$ at the prevailing
market exchange rate out of concern for uniformity. However, data presented in Section
4.2.2 uses PPP adjustments.
4.1.2.3. How are poverty data used by organization?
The study was studied and conducted by Freedom from Hunger, with minimal
involvement on RCPB’s part. The data set for RCPB clients has not been studied to its
fullest extent.
4.1.2.3.1. For client monitoring?

Not applicable.
4.1.2.3.2. For client screening?

Not applicable.
4.1.2.3.3. For client targeting?

Not applicable.
4.1.2.3.4. For impact monitoring/assessment?

Not applicable.
4.1.2.3.5. For other uses?

Not applicable.
4.2. Available Poverty Data
4.2.1. Poverty distribution results by internal poverty data collection method

No data is collected internally – see results from HMQ study in 4.2.2
4.2.2. Poverty data from a recent poverty and/or impact assessment study
The HQM study took place in July 2003. Hugo Melgar-Quiñonez worked with local
research firm CEDRES (Research Center of the University of Ouagadougou) and
received logistical support from RCPB and CIF. Twelve surveyors, two supervisors, and
three data-entry teams a local team of surveyors. The surveyors were selected for having
at least a Bachelor’s degree in a relevant field, fluency in local languages, and were
trained on the survey’s concepts and methods. They participated in tool adaptation and
refinement.
The surveyors administered each of the two tools to a sample of 330 respondents, 210 of
which were CEE clients and 110 non-CEE clients.
25
The HMQ study rejects the explanation of an inadequate sample, stating that “more likely, the problem
relates to the PPP adjustment method’s relevance to the sites chosen for this research”.
8
The study area, chosen in consultation with RCPB, surrounded Ouagadougou and
included rural villages, which is representative of the various locales in which RCPB
operates (69% of respondents reside in rural areas; 31% reside in peri-urban and urban
areas). Credit Associations were randomly selected in the area, and 8 to 10 clients were
randomly selected in each of these Credit Associations. As a result, they were
representative of RCPB’s overall CEE clientele. If anything, their relative proximity to
Ouagadougou with more developed infrastructure and markets would suggest that they
might be less poor than RCPB’s overall CEE clientele.
4 to 5 individuals were then selected in the Credit Association’s vicinity. These

individuals were screened to not be participants in any microfinance program, and were
sought out to be poorer or better-off than CEE clients, based on their income-generating
activities (for the purposes of testing the sensitivity of the tools at various poverty levels).
The CEE clients surveyed had been in the program on average for 4.4 years. Non-clients
were surveyed to provide a wider range of poverty levels in an effort to assist the
correlation work.
Food security data results
Table 4.1: Levels of food security
Sample Sample food- food- moderately severely food-

Size secure insecure food-insecure insecure
CEE clients 210 24% 76% 19% 57%
CEE clients < 1 yr 43 16% 84% 30% 54%
CEE clients > 1 yr 167 27% 73% 16% 57%
CEE clients – rural 145 22% 78% 17% 61%
CEE clients – urban 65 28% 72% 23% 49%
Three quarters of CEE clients in the sample were food-insecure. The breakdown of the
food-insecure group according to the second cut-off point indicates that over half of the
clients in the sample were severely food-insecure. The difference in food-security levels
between incoming clients and more “veteran” clients was not statistically significant.
Consumption data results26.
The mean expenditure per day per capita for clients was 397 CFA (US$ 2.32) with a
standard deviation of 666 CFA. When clients were disaggregated by rural and urban
dimensions, there was a striking difference in the mean expenditure per capita per day
between rural clients (mean: 298 CFA – US$ 1.74) and urban clients (mean: 620 CFA –
US$ 3.63).
26
this data comes from additional analysis on the dataset, and is not part of the HMQ report
9
Below, an analysis of the client expenditure per capita per day is presented to
demonstrate poverty lines according to the dollar-per-day PPP and two-dollars-per day
PPP poverty lines and the national poverty line as defined by Burkina Faso. The cutoffs
for being over or under the poverty lines are reported:
Table 4.2: Client Expenditure per Capita

CEE clients CEE – rural CEE – urban
Cutoffs Over Under Over Under Over Under
Dollar-a-day 79.5% 20.5% 74.5% 25.5% 90.8% 9.2%
(184.48 CFA / day)
Two-dollars-a-day 30.5% 69.5% 24.1% 75.9% 44.6% 55.4%
(368.96 CFA / day)
National poverty line 62.4% 37.6% 53.8% 46.2% 81.5% 18.5%
(82,672 CFA / year)
One fifth of the clients in the sample were under the dollar-a-day line, while 70% were
under two-dollars-a-day, indicating that the majority of the clients were located between
the dollar-a-day and two-dollars-a-day poverty lines. Less than half of the clients were
under the nationally-defined poverty line. The higher poverty incidence among rural
clients than among urban clients was statistically significant for all three poverty lines.
The food-security and consumption data give quite different interpretations of the level of
poverty of CEE clients in this sample. This is perhaps unsurprising, since the measures
are of different dimensions and calculations of poverty. The reader may decide which
dimension (and measure of that dimension) better represents the true experience of
poverty in Burkina Faso. The rural / urban comparison does indicate at a minimum that
RCPB is effectively reaching out to poorer clients to focusing its CEE service into rural
communities.
4.2.3. Poverty Data obtained through use of USAID certified poverty tool
Not applicable - no tool has been certified to date for Burkina Faso.
4.2.3.1. Which USAID certified poverty tool was used? Which poverty criterion
was used: $1 a day or bottom 50% below poverty line?
4.2.3.2. Provide details on poverty assessment exercise: time conducted, sample
size and selection…
4.2.3.3. Poverty results: proportion of very poor clients versus poor clients.
4.2.4. Interpretation of Poverty data

4.2.4.1. Comparison between internal and USAID poverty tool data
Not applicable.
4.2.4.2. Organization’s own interpretation of poverty outreach
10
The data from the HMQ study is not used by RCPB; overall the institution is satisfied
with their level of poverty outreach.
Promising Approach Note: Poverty Outreach

Studies in a number of other African institutions who adopted Credit with Education as
did RCPB, and are similar to RCPB in many ways, have yielded the following poverty
data:
• In two Malian cooperative federations offering Credit with Education products,
local informants used Participatory Wealth Ranking to sort all households in nine
communities into four relative wealth rankings defined as:
i. Households which are food-secure
ii. Households vulnerable to food insecurity
iii. Households with periodic food insecurity
iv. Households which are chronically food-insecure
The wealth distribution (expressed as food security) of Credit with Education
clients mirrored the overall wealth distribution in the communities in general. Very
poor (chronically food-insecure) clients were represented in the credit associations,
but not disproportionately so. Focus group discussions revealed that some poor
women self-excluded from participating, but were not being systematically
excluded by better-off members or by program representatives.27
• In the same two Malian cooperative federations, a respondent-defined “basic
needs index” showed that Credit with Education clients were in the relatively
poorest category for total cooperative clientele.
• An IFPRI study of the OTIV cooperative federation in Madagascar using the
CGAP Poverty Assessment Tool found that Credit with Education were the poorest
within the institution.28
• Finally, a study conducted in the Lower Pra Rural Bank in Ghana found that
Credit with Education clients had no important differences with overall community
members, with respect to household assets and consumption. The communities
themselves showed high incidences of chronic food-insecurity (“very poor”).29
It appears, then, that even absent an active screening mechanism, Credit with Education
attracts members from a range of poverty / food-security segments, including the poorest
segments, especially when the service is delivered to a poor rural, community.
[end of Promising Approach Note]
27
Nteziyaremye and MkNelly, “Mali Poverty Outreach Study of the Kafo Jiginew and Nyèsigiso Credit
and Savings with Education Programs”, 2001 .
28
Lapenu, Sharma and Ralison, “Assessing the Relative Poverty Level of MFI Clients – Development of
an Operational Tool: Synthesis Report for the Case Study of OTIV-Desjardins in Madagascar.”, 2000
29
MkNelly and Dunford, “Impact of Credit with Education on Mothers and Their Young Children’s
Nutrition: Lower Pra Rural Bank Credit with Education Program in Ghana”, 1998.
11
4.3. Poverty Targeting
RCPB does not use a specific tool for poverty targeting. The design of Credit with
Education, this aspect of which has been retained by RCPB, does not include specific
tests and ranking for incoming clients. Rather, product features are such than when
introduced into communities with high levels of poverty, particularly in rural areas, it can
attract and meet the needs of very poor populations.
4.3.1. Does the organization use a poverty targeting tool?

RCPB relies on geographic and gender targeting, and uses a product whose entry
conditions and features are appropriate and attractive to very poor clients. During
community promotion events, the animatrice encourages wide participation, and explains
that the service is designed for poor women. The animatrice is trained to focus on
women who have income-generating activities, but lack the financial resources to grow
them. She also informally assesses the women’s living conditions, and the health of their
children.
4.3.2. What is the client poverty target level?

Not applicable.
4.3.3. Staff use of poverty targeting (S, F)
4.3.3.1. Training/sensitization (of staff, managers, board) related to poverty

outreach
Animatrice training includes practicing community promotion activities.
4.3.3.2. Staff incentive schemes
RCPB does not currently use an incentive system.

Animatrice performance is evaluated according to total outreach, interest revenue
generation and delivery of education sessions. Evaluations do not specifically address
poverty outreach.
4.3.4. Issues with poverty targeting (S,F)

Not applicable.
12
5. Products and Services
RCPB’s “mainstream” products are described in Section 2.2.3. This section examines in
detail the institution’s poverty-focused Credit with Education products, looking mainly at
Crédit Epargne avec Education (CEE), and referring when relevant to two related
products, Association de Crédit Intermédiaire (ACI) and Crédit Féminin en Milieu
Urbain (CFMU).
As explained in Section 4, CEE’s target market segment is poor and very poor women,
however other female community members are not excluded from participating by the
animatrices. Still, CEE is sufficiently distinctive from RCPB’s other product offerings
(in terms of delivery mechanism, as well as the education component) that it can be
considered as targeting the very poor, with incidental participation by clients who are not
“very poor”.
CEE is the adaptation by RCPB of the Credit with Education methodology developed by
Freedom from Hunger in the late 1980s. It consists of women-focused village banking30
integrated with nonformal education sessions for essential life skills that improve child
health and nutrition, women’s health and self-confidence, and microenterprise
management.
Both the financial and non-financial components of the product are delivered to group
members during the same meeting by a single field staff person, the animatrice (see
Section 2.2.2.6), who offers only this product, and is the only staffperson to offer it. Both
components are integral parts of the product, and are presented as such to clients:
attendance during the education session is compulsory, and the fee structure does not
distinguish between financial and non-financial services.
The various components of CEE are examined in greater detail in the sub-sections below.
5.1. Financial Products

Table 5.1. Microfinance Product Details
Product Features and Policies
5.1.1. microcredit – CEE product
Credit Association (Caisse Villageoise):
20 to 30 women are organized into solidarity
groups of 4 or 5 members. Group Officers
(President, Secretary, Treasurer and
5.1.1.1. Individual or group product
Education Animator) are elected from
different solidarity groups. RCPB makes the
loan to the group, which then on-lends to its
members.
30
The FINCA village banking model was modified by requiring group members to first form Grameen-
inspired solidarity groups, which together form the village bank. The solidarity guarantee for loan
repayment is double: at the solidarity group level, and at the village bank level.
13
Loan cycles begin at 16 weeks, and can
increase to 24 weeks in subsequent cycles.
5.1.1.2. Loan terms (maturity, interest Interest charged is 10% flat per cycle
rate, interest type, flexibility) (regardless of cycle length), with total
principal and interest due divided into equal
repayment instalments.
Available liquidity at the cooperative from
member savings (some cooperatives are
5.1.1.3. Loan source
refinanced within the network, either
regionally or nationally)
Loans are intended for small-scale income-
5.1.1.4. Loan use generating activities, but in practice are used
for any business or household purpose.
A member’s first loan is between 3,000 CFA
(US$16) and 30,000 CFA (US$163).
5.1.1.5. Loan size (first loan, average The maximum loan is 250,000 CFA (US$
loan, maximum loan size) 1,361) per member
The average outstanding loan balance per
member is 47,788 CFA (US$260).
Meetings are initially weekly, and typically
5.1.1.6. Meeting requirement and
become biweekly or even monthly as the
frequency
group progresses through loan cycles
5.1.1.7. Mandatory savings requirement Each member must make a 100 CFA (54
and amount cent) savings contribution at every meeting.
5.1.1.8. Collateral requirement No physical collateral is required.
5.1.1.9. Other eligibility requirements n/a
5.1.1.10. Loan default policy
All cash collections during the cycle are
deposited onto the group account at the
cooperative. At the end of the cycle, the
group makes a single lump-sum transfer to
5.1.1.11. Repayment flexibility the cooperative representing all the principal
and interest due. As a result, some flexibility
can be tolerated during the loan cycle by the
animatrice, as long as the final payment is
met on time.
14
• A double-solidarity mechanism (at the
solidarity group level, and at the group
level) acts as a guarantee mechanism.
• Each group must purchase a register from
RCPB for each cycle for 1,500 CFA
5.1.1.12. Other (US$8.16), and each member must
purchase an individual passbook from
RCPB for 40 CFA (22 cents) per cycle, or
175 CFA (95 cents) for three cycles)
• Group application fee of 1,000 CFA
(US$5.45) per cycle
5.1.2. microsavings – CEE product
Individual savings as well as contributions to
5.1.2.1. Individual or group a group solidarity fund (whose amount is set
by the group)
Savings are held on a group (joint) account at
5.1.2.2. Savings Type
the cooperative
Savings are collected at periodic group
meetings, and deposited by a group
5.1.2.3. Deposit/collection location
representative into the group account at the
cooperative.
5.1.2.4. Deposit frequency, amounts, See 5.1.1.6. Deposits occur after each
flexibility meeting.
5.1.2.5. Meeting requirement and
See 5.1.1.6.
frequency
5.1.2.6. Savings terms (interest rate, Savings on the group account are not
minimum deposit, …) remunerated.
Withdrawals from the group account are
controlled by RCPB and are only possible
when groups change cycles, with written
5.1.2.7. Withdrawal and savings use approval from the animatrice. In practice,
policies members make “savings withdrawals” during
loan meetings by bringing less than their
scheduled payment, thus indirectly accessing
their savings on deposit in the group account.
Each group has a passbook for its joint
account at RCPB
Each group keeps a register for transactions at
5.1.2.8. Record keeping and accounting
the cooperative as well as group transactions
Each member keeps an individual passbook
to track her own transactions
5.1.2.9. Investment of deposits n/a
5.1.2.10. Other
5.1.3. microinsurance
5.1.3.1. Microinsurance Type Not applicable
15
5.1.3.2. Group or individual product
5.1.3.3. Term
5.1.3.4. Eligibility requirements
5.1.3.5. Renewal requirements
5.1.3.6. Rejection rate
Currently groups who borrow from RCPB do
5.1.3.7. Voluntary or compulsory
not participate in the mandatory loan
5.1.3.8. Product coverage (benefits)
insurance program, although it might be
5.1.3.9. Key exclusions extended to them in the future.
5.1.3.10. Pricing – premiums
5.1.3.11. Pricing – co-payments and
deductibles
5.1.3.12. Pricing – other fees
5.1.4. microgrants
5.1.4.1. Individual or group product
5.1.4.2. Amount (and number of grants)
5.1.4.3. Eligibility requirements
5.1.4.4. Grant use and other conditions
5.1.4.5. Savings requirement or matched Not applicable
savings arrangement
5.1.4.6. Straight grant, no interest or
partial repayment
5.1.4.7. Other
In order to receive services from the cooperative, the group must become a moral
member by purchasing a share (worth 500 CFA ,or US$2.72, the same as individual
members) at the time of joining the cooperative and opening a group (joint) account.
This group account records transactions between the group and the cooperative, while
group registers and individual member passbooks record transactions between the group
and its members.
The group account at the cooperative has a monthly 100 CFA (54 cent) maintenance fee.
5.2. Microenterprise Development Services

Table 5.2. MED Service Details
Service Types and Features

5.2.1. Training
5.2.1.1. Financial literacy Clients receive training on business concepts and skills
that are relevant for the management of microenterprises
such as petty trade and small-scale transformation and
selling. The following content is covered over the
16
5.2.1.2. Business planning course of three multi-session microenterprise
and management management education modules (Manage Your
Business Money; Increase Your Sales; Plan for a Better
Business).
• Differentiating between business and personal
5.2.1.3. Marketing money.
• Tracking, planning and investing business money
• Calculating profit
• Planning the allocation of business profit
5.2.1.4. Recordkeeping and
bookkeeping • Managing credit sales
• Marketing
• Business assessment and business planning
5.2.1.5. Skill development Not applicable
5.2.1.6. Technical assistance Not applicable
The animatrice facilitates a series of thirty-minute
5.2.1.7. Training method learning sessions that use participatory activities to
engage clients on new information*
5.2.1.8. Other?
There is no additional cash cost to the client to receive
education sessions, beyond the costs already described
in 5.1.1.2 and 5.1.1.12.
5.2.1.9. Costs to client
The learning sessions typically last 30 minutes and are
part of the meeting clients already attend to conduct
financial transactions.
5.2.2. Business Consultancy and Advisory Services
5.2.2.1. Individual or group
sessions
5.2.2.2. Frequency
5.2.2.3. Topics Not applicable
5.2.2.4. Confidence Building
5.2.2.5. Other
5.2.3. Market Linkages
5.2.3.1. Input supply
5.2.3.2. Marketing Assistance
5.2.3.3. Market Information
5.2.3.4. Producer
organizations
Not applicable
5.2.3.5. Business linkage
promotion
5.2.3.6. Quality Control
5.2.3.7. Other
5.2.4. Other
17
5.2.4.1. Employment
generation
Not applicable
5.2.4.2. Technology
development
* See Section 5.3 for more information regarding training methodology.
5.3. Non-financial Services
RCPB trains its clients using a number of education modules that have been developed by
Freedom from Hunger for use in Credit with Education programs (see list of topics in
Table 5.3.3)
These modules are specifically tailored for poor, illiterate adult women and use adult
learning principles to facilitate the acquisition of new knowledge, skills and attitudes and
lead to behavior change. Each module is structured into a number of sessions (usually 8
to 10) that follow a progression and cover several aspects on a given topic. RCPB adapts
each of the modules to the specific local circumstances and health policies of Burkina
Faso, in order to increase their relevance and applicability to clients
Education is dispensed by the animatrice during regularly-scheduled meetings in thirty-

minute learning sessions that engage group members in participatory activities, having
them interact with and analyze new information, and collectively generate solutions to
local problems and personal obstacles. Stories, role-plays, pictures and small-group work
allow all members to participate in a safe environment with no expectation of educational
background, literacy or numeracy levels.
Periodically the animatrice will contact local resources from the Ministry of Health to
attend education sessions and provide additional information.
Table 5.3. Non-financial Services Details

5.3.1. Nutrition
Not applicable
5.3.2. Health and Sanitation
During periods when RCPB was providing education sessions on malaria prevention and
treatment, clients have been able to purchase insecticide-treated mosquito nets and
treatment tablets from Population Services International (PSI) distributors. The
education sessions helped create demand for these health products and RCPB
coordinated with PSI to ensure product availability.
5.3.3. Education
In addition to the three microenterprise management topics described in 5.2.1, RCPB
offers education sessions to its clients from among the following topics:
18
Breastfeeding Diarrhea management
Integrated Management of Childhood
Infant and Child Feeding
Illnesses
HIV/AIDS Prevention and Care Malaria prevention and management
Family Planning Self-esteem
Note: RCPB has plans to introduce household finance management topics in the future.
5.3.4. Social Capital Development
Not applicable
5.3.5. Other
Not applicable
The Self-Esteem module developed by Freedom from Hunger (see Table 5.3.3) contains
eight learning sessions designed to help participants value and use their differences and
skills, and develop the confidence to set and achieve goals. One session specifically
addresses domestic violence. RCPB received this module in 2007 and will add it to its
portfolio of modules.
In addition to this particular module, specific features in the product design put clients in
situations that are likely to increase their confidence and transfer to other areas of their
lives:
• Group members elect the group officers, and some serve as group officers
• Group members collectively manage the group’s affairs (e.g. bookkeeping,
meetings, conflict resolution)
• Group members voice opinions and think critically in a safe environment while
participating in learning sessions
Finally, the clients’ increased income and knowledge are expected to translate into
greater status and influence in their households, among their peers and in the community.
5.3.7. Graduation of very poor clients into mainstream MF/MED services
An initial expectation when Credit with Education was introduced to RCPB was that after
participating in CEE for a number of cycles, women would “graduate” to individual
membership at the cooperative, and avail RCPB’s “mainstream” products. It became
apparent after a number of years that despite participation in CEE, women still faced
obstacles such as additional documentation and fees to become individual members, a
high up-front savings requirement to access credit31, as well as the physical distance from
RCPB points of service. To respond to these concerns, as well as address the divergent
loan size needs of group members that were both straining the solidarity guarantee
mechanism and loan size ceiling of CEE, RCPB developed a “transition” product called
31
CEE clients are not salaried workers, and must therefore keep 25% of the loan amount on deposit, which
is unattractive relative to CEE loans of comparable amounts.
19
ACI (Association de Crédit Intermédiaire), designed for existing CEE clients. ACI is a
“solidarity group” product with an average of 6.5 members. ACI groups are born from
mature CEE groups and typically enjoy larger loan amounts (ACI loans can begin at
75,000 CFA, or US$408), longer loan cycles (up to 10 months) and less frequent
meetings and repayments (monthly), while the education sessions provided focus more
often on microenterprise management. There are currently 416 ACI groups, compared
with 3,416 CEE groups, which indicates that many client needs are met in the CEE
groups.
RCPB has also introduced another solidarity group product that grew out of the original
CEE product, targeting new female clients in urban areas: Crédit Féminin en Milieu
Urbain (CFMU). CFMU groups have on average 3.8 members, and also have larger loan
amounts, longer loan cycles and less frequent meetings and repayments. There are
currently 372 CFMU groups.
Both the ACI and CFMU products are implemented by the same animatrices who also
offer CEE, based on their area of operation, rather than on product specialization.
There is no systematic tracking, and only anecdotal evidence, of clients graduating from
any of these three group products (CEE; ACI; CFMU) to becoming individual members
in the cooperative. There is some evidence from this program as well as other Credit
with Education programs that some “graduates” who become individual members at the
cooperative choose to still participate in group activities to meet with their peers, receive
education sessions, and take out loans if they find them more advantageous than
individual loans. Recently Freedom from Hunger worked with RCPB to understand
clients’ attitudes and behaviors toward becoming individual members, and developed
curriculum aimed at better explaining, promoting and increasing individual membership
among group members.
5.4. Design and Product Development:

Credit with Education is a product developed by Freedom from Hunger, and
implemented by local organizations in a variety of institutional and regulatory settings.
Credit with Education was initially implemented by Freedom from Hunger staff in
Bolivia, Honduras and Thailand, by a local NGO in Mali and by two Rural Banks in
Ghana. The product was therefore field-tested, and many of its features and procedures
established, by the time it was introduced to RCPB in 1993.
Credit with Education implementation is always informed by the local context and the
implementing organization’s desire and capacity to “own” the product and innovate. In
this regard, RCPB’s experience offers rich insights, since this pioneering organization has
stayed at the forefront of product innovation.
This section on product design, development and roll-out speaks to Freedom from
Hunger’s broader experience with Credit with Education, with particular references to
RCPB’s experience and the particular adaptations required for that institution.
20
5.4.1. Program rationale/ theory of change?
How are the program’s services and products (and other outputs) envisioned to create
changes?
5.4.1.1. Main issues and challenges of very poor clients which the organization
seeks to address
Very poor populations are particularly vulnerable to chronic hunger and malnutrition.
Poverty and hunger and closely tied – each condition worsens the other. An estimated
815 million people of the 1.2 billion people under the dollar-a-day threshold are
undernourished, which can stunt growth and mental development, sap energy, hinder
fetal development and contribute to mental retardation.
The very poor need a combination of services to address their condition. Oftentimes,
their remoteness makes it challenging for service providers to reach them (especially
reach them sustainably); when service providers are present, they are not always prepared
to deal with very poor clients’ circumstances, such as lack of information on vital topics,
illiteracy, lack of self-confidence, and heightened vulnerability to risks and shocks.
Finally, women have traditionally had less access to many resources and services than
men have – in particular, credit in the absence of collateral.
5.4.1.2. Intended outcomes and impacts

See Section 5.4.1.3 for a combined discussion of inputs, outcomes, and impact.
5.4.1.3. How are products and inputs designed to achieve those intended impacts?
The diagram below depicts the rationale for Credit with Education, or theory of change.
The program relies on multiple inputs reliably delivered to the same participants. In the
model, the combined and reinforcing effects of these inputs yield a number of specific
outcomes, which in combination increase the likelihood of impacts.
21
Diagram 5.1: Freedom from Hunger’s Credit with Education Strategy
From inputs to outcomes

Providing women with small working-capital loans allows them to invest more in their
microenterprises, increasing their incomes and making the incomes more regular. The
service’s savings requirement, as well as the group account at the cooperative, are
opportunities to build liquid assets which can be used for income smoothing. With
opportunities for self-employment and greater contributions to the household, women’s
self-confidence and status increase.
The introduction of new information during education sessions, using participatory

activities, results in improved knowledge and practices among group members, in the
areas of health and nutrition (especially for children) and microenterprise management.
Better business management can further improve incomes, while improved health can
reduce household expenditure on health care.
Both credit and education inputs are provided to women’s associations. In addition to
the cost benefits to the institution of providing services to groups, and, to the benefits of
tapping into latent group knowledge for more effective education, groups are the platform
in which women can increase their self-confidence. Through working together and
managing their group, women create bonds of solidarity, build the skills to interact in the
public sphere, and can seek support to deal with household issues. Self-confidence is a
key to trying and adopting new practices.
22
From outcomes to impacts
Increased income controlled by women is more likely to improve household food
security (access to food) and in particular the food consumption of young children.
Increased knowledge and practices about nutritional practices such as giving colostrum,
exclusive breastfeeding and the introduction of complementary foods results in better
health and nutrition, especially among young children.
Increased income is more reliably steered toward more nutritious foods by women with
correct knowledge as well as the self-confidence and status to make decisions within
the household.
While the benefits from credit and group participation are restricted to clients (increased
economic activity may impact the community through the multiplier effect, but this
impact is difficult to establish), clients are encouraged to share new information and
practices they acquire during education sessions with peers and other community
members.
Providing inputs
This causal chain (inputs – outcomes – impacts) is best delivered by an organization on a
large-scale, which can enjoy greater cost-effectiveness, achieve self-sustainability, and
continue providing services with minimal external assistance.
5.4.2. Concept development
The Credit with Education concept was developed prior to Freedom from Hunger’s
partnership with RCPB.
4.4.2.1. Client Survey Demand/Needs assessment

In the mid-1980s, Freedom from Hunger began researching the emerging microcredit
field. Under the USAID Aries Project, Jeff Ashe led the review of seven of Freedom
from Hunger’s applied nutrition programs that included a credit component, to
understand client needs and demands and assess the strengths and improvements required
to bring the credit programs in line with emerging principles for successful lending to the
poor. The learning from this assessment, together with the PISCES study, and
interactions with John Hatch and the Grameen Bank, influenced the development of the
Credit with Education model.
5.4.2.2. Competition analysis

The Credit with Education product was developed with knowledge of other existing
group lending products, and an understanding of their applicability to very poor clients.
However, competition at the implementing-organization level was not systematically
analyzed during the concept development stage, beyond the observation that most
microcredit programs seldom reached into remote rural areas, and did not always reach
the very poor.
23
Freedom from Hunger has found that in many areas where Credit with Education
implementers and other group lenders were in direct competition, Credit with Education
implementers were willing and able to reach more remote areas,
Competition analysis is an integral part of each implementing institution’s strategic

planning process regarding a Credit with Education launch, and expansion into new
geographic areas.
Many organizations around the world offer decentralized village banking programs, with
a variety of approaches to offering complementary services to clients receiving financial
services. An emerging alternative is the promotion and training of savings groups,
whereby groups meet regularly, set bylaws and intermediate their own savings. This
methodology cannot generate the same level of income for the implementation
organization, yet does not require organizational input beyond a certain period of time for
the group members to receive ongoing (internal) financial services.
5.4.2.3. Self-assessment
During the concept development phase, Freedom from Hunger surveyed participants in
its existing integrated nutrition program in seven countries, to inquire about which
services should be reinforced or added. The vast majority of clients indicated their
keenest interest in credit programs.
5.4.3. Product/Service design

5.4.3.1. Product/service design process
Freedom from Hunger reviewed available literature on group lending products, and
selected features from several models (FINCA village banking; the solidarity groups in
the Grameen model) to create the financial services component of Credit with Education.
An additional innovation was the expansion of the field agent’s role as a training session
facilitator. Education modules were developed on topics that would have the greatest
impact on hunger, especially the nutrition of infants and young children. Modules are
designed by researching the health issues that have the greatest impact on poor nutrition
and health to incorporate recommended practices ; researching client behavior
(knowledge, skills and attitude) related to the practice; and designing participatory
activities (learning tasks) that the group members will undertake during the learning
sessions.
5.4.3.2. New versus modified products/services for very poor clients
Freedom from Hunger adapted the FINCA village banking model to include Grameen-
style solidarity groups whose dual function was to provide a first level of solidarity
guarantee (the village bank as a whole provided a second level of solidarity guarantee)
and to mitigate the risk of a particular subset of peers taking over the management of the
24
village bank (village bank officers were required to each come from different solidarity
groups). However, in keeping with the village banking model, the financial organization
still made a loan to the village bank, which then on-lent to borrowing members at the
same time.
Beyond these financial refinements, the most important modification came from adding
education session facilitation duties to the field agent’s responsibilities.
From Freedom from Hunger’s point of view when designing the original service, apart
from the monitoring and reporting system redesign, the most significant costs to adapting
existing technologies involved the design and testing of education modules
From RCPB’s point of view in 1993, adopting Credit with Education offered a proven
way to reach and impact an un-served client segment in their area of operation.
5.4.3.2. Risk assessment and product design
The following risks were identified by RCPB staff and Directors prior to the pilot – they
mainly reflect apprehension due to working with a new population perceived as
inherently more risky. However, the overall product design was not changed as it had
already proven effective in other contexts.
• Client illiteracy: what is their capacity to manage their own funds, conversely
what is the risk of engaging external bookkeepers?
• Decentralization of financial service: disbursement safety; animatrice honesty
• Client ability to repay loans, due to poverty levels and lack of understanding of
own financial flows
• Delegation of loan approval in contradiction of the cooperative’s bylaws
5.4.3.1. Prototype development and testing

The following initial modifications to Credit with Education stem from RCPB’s status as
a financial cooperative.
One of RCPB’s goals in offering CEE was to increase membership at the cooperative
level. Consequently, each group opened a group account at the cooperative and paid a
full share.
RCPB also changed the original Credit with Education methodology by introducing
weekly deposits of cash collections in the group account by the clients, in order to reduce
the risk to animatrices, promote a savings and deposit culture, and ensure that clients
were not constituting a liquid internal lending fund, which would have potentially
undermined the cooperative’s interest income by creating an alternative to RCPB loans.32
In light of the struggles experienced with bookkeeping and proper understanding of loan
32
The internal fund, which allows group members to lend to one another while capturing the interest in the
group fund, is a component of village banking retained by Freedom from Hunger, and used by some Credit
with Education practitioners (particularly CRECER in Bolivia).
25
amounts due to the institution, it is likely that adding internal lending would have
experienced difficulties.
5.4.4. Pilot testing
The launch of CEE at RCPB was principally funded by UNICEF, with additional funding
from IFAD, FICAH, USAID and Freedom from Hunger. RCPB provided all loan funds
from the start, from member savings.
RCPB chose two pilot areas in the central region, where the Regional Director (currently
the General Manager) was eager to innovate and reach a new group of clients. Initially
three Credit Associations were formed in Kienfangué (20 kilometers from
Ouagadougou), and two Credit Associations were formed in Sabou (90 kilometers from
Ouagadougou).
The Credit Associations received education on diarrhea management and prevention

during their first loan cycle.
Many clients were initially reluctant to borrow, and chose to save and only participate in
learning sessions. In one of the Credit Associations, only 3 women out of 40 members
took loans for a total of 14,000 CFA. In addition to client self-confidence issues, which
motivated RCPB to ask for the development of education modules on microenterprise
management, seasonal effects came into play – clients undertake fewer income-
generating activities during the rainy season, focusing instead on their fields. To this day,
RCPB experience seasonal shifts in credit requests.
5.4.5. Rollout
It is difficult to pinpoint the timing of the following adaptations RCPB made to the CEE
product, and to qualify them as occurring during a “pilot” period or a “rollout” period.
o Simplification of the group accounting system. The level of client illiteracy,
sometimes impacting all group members, was putting pressure on the animatrice
to perform all bookkeeping duties for the credit associations, or putting the group
at risk of potentially unscrupulous external bookkeepers.
o The transition from 4-month loans to 6-month loans was sped up to respond to
client demand.
o The flat 10% interest rate for 4-month loans was applied to 6-month loans (rather
than a 15% flat rate, which would have maintained the 2.5% per month base rate).
This change was instituted to reward client loyalty and incentivize retention, as
well as increase initial demand.
Program reviews also revealed poor client understanding of their personal savings,
amount of group fund, and other key financial data. Apart from the accounting system
simplification mentioned above, RCPB renewed its focus on animatrice training and
group self-management, rather than alter the core methodology.
26
The pilot and initial product expansion were closely directed by the National
Coordination Unit (precursor to the Federation), which managed project funds and
directly supervised the animatrices. The local cooperatives executed transactions with
groups and administratively housed the animatrices. In 1996, at the end of the three-year
trial RCPB had set, CEE membership had exceeded 10,000 women, and the institution
decided to make CEE an integral part of its strategy, and to roll it out throughout the
network.
This decision principally affected management systems, as the Federation wanted to truly
anchor the product at the cooperative level. The cooperatives became responsible for
animatrices and operating costs, while regional coordination, supervision, monitoring and
reporting were devolved to Regional Unions.
5.4.5. Product/Service review and assessment
There are several levels of review on product performance.
Freedom from Hunger typically conducts an assessment following the first loan cycle of
an institution’s first batch of groups to see what adjustments must be made to product
features and to procedures.
Subsequently, an institution designs its own review and assessment procedures. At

RCPB, the CEE Program Manager consults coordinatrices frequently and organizes
annual meetings with coordinatrices and animatrices to discuss the state of the product.
RCPB also regularly focus groups with clients.
5.4.6. The Product Development Cost

5.4.6.1. Total cost
The total cost of developing Credit with Education is difficult to estimate, since the
methodology and the procedures and manuals were revised over several years, through
work with a variety of implementing partners.
5.4.6.2. How were they funded?

Freedom from Hunger and implementing organizations received funding from a variety
of sources to develop and implement Credit with Education. Funders included UNICEF,
IFAD, FICAH, Plan, USAID, in addition to support raised from the general public by
Freedom from Hunger.
5.4.6.3. Outsourcing during the development process

Not applicable – Freedom from Hunger staff developed the Credit with Education, with
contributions from Jeff Ashe, Muhammad Yunus, John Hatch and others, and relied on a
number of local partners as testing implementers.
27
5.4.7. Feedback loop
RCPB relies extensively on market research, particularly focus group discussions, to

obtain information from and about CEE clients. The data collected mainly concerns
client satisfaction with product features and procedures. Information collection activities
usually stem from low performance such as drop-outs, poor repayment, etc.
5.5. Implementation Process

5.5.1. Process
When introducing CEE to a new cooperative, it is essential to get buy-in from its Board.
By now, the product is sufficiently-well anchored into the organization’s strategy and
regional plans that this process goes smoothly. After hiring and training animatrices as
described in Section 2.2.2.7, the following process is followed expanding into a new area.
1. Community investigation. The animatrice and/or coordinatrice maps the area

with all its communities and main infrastructure, and visit the most promising
communities to gather information about their physical environment,
demographics, economic activities, financial and other service providers.
2. CEE promotion. The animatrice meets community leaders and opinion leaders
to introduce the organization and describe the service. The community is then
asked to sponsor and schedule a community meeting, during which the animatrice
explains how CEE works; highlights the benefits of memberships; and explains
how to form Solidarity Groups and start a Credit Association.
3. Credit Association organization and registration. In a later visit to the
community, the animatrice encourages the creation solidarity groups of 4 to 6
people, and the union of 4 to 6 solidarity groups into a credit association. At a
later date, she registers the group.
4. Credit Association training. The animatrice trains the group over a period of
five meetings on selecting group rules and bylaws, electing officers, beginning
savings deposits, and analyzing loan requests.
5. Inauguration and first loan cycle. The cooperative’s manager validates group
preparation and officially inaugurates the Credit Association by disbursing the firs
loan. The group meets weekly to save, repay its loan and receive education
sessions.
6. Ongoing service provision. The Credit Association progressively requires less
monitoring from the animatrice as its members are able to manage their own
affairs. Some Credit Associations get to a point where they become ACIs – this is
mainly a formalizing of trends in terms of group size diminution, and increasing
loan sizes.
5.5.2. Logistics
28
The key logistical factors for cooperatives, who have an established physical
infrastructure, are the result of adding the decentralized service delivery of CEE. Field
staff (animatrices and coordinatrices) must be mobile to interact with clients in their
community. The cooperative’s manager or a Director must attend field disbursements.
Internal auditors from the organization also need to visit a sample of groups over the
course of the year. Besides the cost implications of adding a vehicle fleet, year-round
access to groups is a challenge, given infrastructure conditions, particularly during the
rainy season.
Additionally, cash movement creates risks for both the organization and the clients.
RCPB makes field disbursements, while client representatives must make deposits into
their group accounts at the cooperative, which can represent significant transport and
opportunity costs.
5.5.3. Information System
RCPB uses two systems for collecting information about CEE:
1. A dedicated monitoring system for CEE starts at the Credit Association level and
converges at the Federation level. Apart from the group’s internal records and
member passbooks, the animatrice is responsible for maintaining monthly records
related to the membership and financial performance (credit and savings) of each
of the Credit Associations she supervises, with data she collects in the groups and
cross-checks at the cooperative. She transmits the monthly paper records to her
coordinatrice, who enters each animatrice’s data into an Excel model developed
by Freedom from Hunger. This regional data is compiled at the national level,
where it is tracked by the CEE Program Manager.
2. RCPB’s loan tracking system, designed by DID, records information related to
Credit Association’s account. Since loan repayments from the group to the
institution are made once, at the end of the loan cycle, this system is less useful
for close monitoring of financial performance.
29
6. Results
6.1. Method of measuring results

6.1.1. Type of data
Effectiveness
RCPB, through its monitoring and reporting system, regularly collects the following data
on the CEE product:
• Number of groups
• Number of clients (number of savers; number of borrowers; drop-outs)
• Loan portfolio information (number of loans; amount outstanding; late loans)
• Savings and group fund information
Education delivery is not monitored routinely.
Efficiency
The above data is examined for efficiency using in a number of ratios (per member, per
group or per animatrice).
Client feedback
While animatrices are expected to continuously obtain feedback from clients on an on-
going basis, and particularly at the end of loan cycles, the monitoring and system does
not make specific provisions for this information. Rather, it is the subject of field staff
meetings, and may rise to the network level during meetings focusing on CEE.
Impact
Impact data is not collected regularly. A number of external impact studies have been
conducted – see Section 6.2.
6.1.2. Data analysis and use
At the field level, data is examined on a monthly basis and serves mainly to monitor
animatrice performance and focus supervisory attention on certain areas or staff.
The data is compiled for the entire organization on a quarterly basis, and serves to track
overall performance against annual targets. The data may also direct market research
activities from the Federation level to better understand client issues.
The aggregate data is also used during annual planning and review meetings, typically
held in January.
6.2. Impact
6.2.1. Poverty Impact
30
Testing the model
Several external studies have examined the impact of RCPB’s CEE product. Presented in
this section are the findings of two studies focusing solely on CEE clients. With respect
to the model presented in Section 5.4.1.2, the two studies address outcomes (income,
knowledge and practices, self-confidence and status), but do not speak to impacts in
terms of household food security.
1) In 1996, Michael Kevane conducted qualitative research to document the effects of

CEE on RCPB clients and program communities, in particular to test service design
hypotheses regarding the following outcomes: increased income, improved health and
nutrition knowledge, and heightened solidarity and community action among women
group participants.33 Three Credit Associations were selected at random from the nine
CAs that had finished at least six loan cycles (more than two years in existence). In-
depth interviews and focus group discussions with clients and key community informants
yielded the following.
Economic Impact
• Increase in the scale of client income-generating activities
• Higher client profit margins, through bulk input purchases. Clients obtained
inputs through use of credit, rather than relying on existing assets
• Acquisition of productive fixed assets
• Increased expenditure conformed to program expectations: more and better food;
school expenses; productive assets
• Positive economic impacts were observed for the majority of clients, however
some women experienced little change. The variable willingness to invest in
enterprises can reflect prudence by clients, on the recognition of their range of
entrepreneurial attitudes and skills. Finally, only a portion of the loan funds was
invested in enterprises.
Health and Nutrition Impact

• Greater awareness of effective caregiving practices for newborns and infants – in
particular, more systematic utilization of colostrum
• More systematic timely introduction of complementary foods
• Greater knowledge of proper diarrhea management practices
• However, some health and nutrition messages were not remembered correctly by
clients, and some recommended practices were not adopted, particularly those
related to family planning
Impact on Women’s Solidarity and Community Action

• Funding and implementation of village projects
• Diverse group membership (different ethnicities, marginal groups)
• Self-confidence (which is part of the model) was not expressly examined
33
Kevane, “Qualitative Impact Study of Credit with Education in Burkina Faso”, 1996.
31
2) Over the period 2003-2005, Burkinabè consultancy firm Sud-Consult conducted a
longitudinal study of 302 clients, randomly selected from 24 Credit Associations
belonging to 12 cooperatives from three different regions. The study established a
baseline in 2003, when clients had formed Credit Associations but preceding the first
loan disbursement, and conducted a follow-up in 2005. The following trends were
observed:
Economic Impact
• Increased economic activity and profitability
• Extra income directed to food and clothing expenditures (to a lesser extent health
and education expenditures)
• Improved knowledge of business practices (price setting)
Health and Nutrition Impact

• Increased practice of giving colustrum to newborns
• Knowledge of family planning techniques, but low adoption
Impact on Women’s Status

• Women reported more autonomy in decision-making over taking loans, and the
use of loan funds
• Increased participation in public fora (in particular, first-time participation)
Looking for poverty reduction evidence

Hard data on poverty reduction among RCPB’s CEE clients is more difficult to establish.
The design of the HMQ study, that measures at a given point in time the poverty levels of
a cross-section of CEE clients in different loan cycles, does not incorporate longitudinal
measurements, nor does it yield statistically-significant correlation between longevity in
the program and poverty reduction.
The Sud-Consult study as well as the Kevane study found increases in client income, but
the total household income and income-per-capita were not clearly established.
Promising Approach Note: Impact

The causal model of inputs-to-outcomes that underpins the Credit with Education
strategy has been tested and corroborated in a number of settings. However, the high cost
and difficulty of designing and carrying out impact studies with an acceptable level of
rigor make definitive claims about impact more elusive.
One notable exception is a longitudinal study conducted with the Lower Pra Rural Bank
in Ghana (baseline in 1993; follow-up in 1996)34, that used randomly-selected control
communities to test the impacts of Credit with Education for women clients and for their
families, especially their young children, compared with non-participants in program
34
MkNelly and Dunford, “Impact of Credit with Education on Mothers and Their Young Children’s
Nutrition: Lower Pra Rural Bank Credit with Education Program in Ghana”, 1998.
32
communities and with residents in control communities.35 The study found statistically
significant improvements in client incomes, health and nutrition practices, and self-
confidence compared to both control groups. Furthermore, the study found that
participant households experienced a shorter “hungry season” and significant
improvements in the nutritional status of one-year-old children (measured in weight-for-
age and height-for-age) – the ultimate impacts sought by the Credit with Education
design.
The study found that credit association members in Lower Pra exhibited the same
characteristics as the overall community, including very high incidence of food
insecurity. The conclusion is that many very poor (food insecure) people resided in these
communities, and they joined the Lower Pra Rural Bank’s credit associations in the same
proportion as in the general local population. The status of very poor participants was
substantially improved, for many to the point of leaving the category of “very poor.”
[END OF PROMISING APPROACH NOTE]
6.2.2. Client satisfaction and feedback

RCPB Clients are generally satisfied with service provision. Feedback regarding the
interest rate, loan installment frequency and the solidarity guarantee mechanism is typical
of group lending products. The education topics are generally well-received, with
veteran clients demanding more flexibility in education delivery, as well as a wider range
of topics, in particular training on income-generating activity skills.
6.3. Cost Effectiveness and Sustainability

6.3.1. Scale and replicability
6.3.1.1. Strategy for scale?
RCPB aims to reach 76,000 CEE clients by 2010 (87,000 total Credit with Education
clients when including ACI and CFMU). This will represent under 10% of total outreach
(since target membership of 783,000 includes groups).
Liquidity is available within the network to fund the CEE portfolio, but support will be
sought to launch the product in the new cooperatives (equipment; operating deficit in
initial period). The growth strategy will be a combination of understanding and
mitigating drop-outs, and forming new groups, in existing areas; and investigating new
areas.
6.3.1.2. Replicability of program or service
Freedom from Hunger has introduced the Credit with Education service to locally-
owned and –managed institutions in West Africa, East Africa, Madagascar, the
Andean region, Central America, and South-East Asia. At the end of 2006, more that
500,000 women participated in Credit with Education programs. As noted earlier, the
35
Ghanaian Rural Banks, while not cooperative institutions, are locally owned and serve a cross-section of
the population. Comparisons with RCPB are therefore instructive.
33
financial component of Credit with Education can look different in each of these
institutions.
In West Africa in particular, RCPB has served as a model for other financial
cooperative federations to adopt the product, by demonstrating the value of adding a
new line of service that contributed to the institution’s poverty outreach while using a
business approach. The RCPB General Manager at the time was instrumental in
diffusing the product throughout the Desjardins network in Francophone West Africa.
Essential factors to replication in a financial cooperative include:

• Committed leadership with a strong vision for poverty outreach
• Institutional mandate to serve the entire community
• Base of existing infrastructure and systems, and available liquidity to allow
faster take-up of new product
6.3.2. Financial and operational self-sufficiency (if applicable)
The data in this section relates to the totality of RCPB’s products, including CEE, ACI
and CFMU, and is drawn from the MixMarket as well as RCPB’s own financial
statements. Product line analysis is not routinely done by RCPB, and not all the requisite
data was not available at the time of writing to conduct analysis on Credit with Education
products only.
When available, some ratios are given for CEE, and/or for the three Credit with
Education products (CEE, ACI, CFMU).considered as a whole (case study author’s
calculations).
Flow data is taken for 2006, while stock data is as of 31 December 2006.
6.3.2.1. Financial expense ratio

0.15%. It should be noted that in 2006 RCPB did not borrow to finance lending, and
does not remunerate its ordinary savings accounts.
6.3.2.2. Operational expense ratio

10.08%
6.3.2.1. Cost per client

5,547 CFA (US$11.09 at the commercial exchange rate) for 2006.
6.3.2.1. Clients per staff member

Overall: 1,347 clients per staff
Credit with Education: 627 clients per staff36
6.3.2.1. Average loan balance per borrower

36
Animatrices, coordinatrices and the Program Manager are responsible for CEE, ACI and CFMU.
34
291,952 CFA (US$ 1,590) per borrowing member37
47,788 CFA (US$260).per borrowing CWE client
6.3.2.1. Average savings balance per saver

76,544 CFA (US$198) per saving member38
4,193 CFA (US$23) per CWE client
6.3.2.1. Portfolio at risk

Overall 30-day portfolio at risk 6.55%
Credit with Education 30-day portfolio at risk 1.28%
6.3.2.1. Tailoring of product/service

Not applicable.
6.3.2.1. Other?
Overall operating self-sufficiency 115.46%
6.3.3. Cost-effectiveness of non-financial services?
The non-financial component of CEE consists of thirty-minute education sessions

delivered by the animatrice during regular group meetings. Supervision and monitoring
is undertaken by the coordinatrice as part of her regular field work.
RCPB clients are charged a single fee structure to receive CEE, and indeed the service is
presented to them as a “total package” (see Section 5.1).
Relying on the same field staffperson to deliver both components is the most cost-
effective way of adding education services to decentralized group lending. The marginal
cost of adding an education session to a scheduled group meeting is low; other costs
include development or local adaptation of the modules, staff training on education topics
and on facilitation methods39, and the cost of physical materials used during the trainings
(reminder cards; pictures; demonstration supplies). Research conducted by Freedom from
Hunger in 1997 estimated the cost to an implementing institution of adding education
services to village banking between 4.7% and 10.0% of total operating costs (including
some external technical assistance for on-site training of partner staff).40
6.3.4. Strategies to cover/reduce costs?

37
This refers to the average outstanding loan to cooperative members (some of which are groups)
38
Analogous to the preceding footnote.
39
The facilitation methods used during education sessions are used by animatrices when training the groups
on financial and group management. In particular, ORPA principles developed during education sessions
have broad applicability in and beyond the group context.
40
Vor der Bruegge, Dickey and Dunford, “Cost of Education in the Freedom from Hunger version of
Credit with Education implementation”, 1999.
35
A key driver in cost-recovery is the total portfolio managed by each animatrice, which
must generate enough income to cover her direct costs and the indirect institutional costs.
Two strategies to achieve this are increasing loan size and managing more groups. The
latter implies a decreasing meeting frequency (and lower costs per group). Both
strategies respond to the demands of mature groups, but can be at odds with adequate
group monitoring, and potentially lead to over-indebtedness.
While it has not conducted formal costing studies, RCPB is satisfied that CEE fully
covers its costs; indeed it estimates that offering CEE has shortened the time to reach the
break-even point for new cooperatives, by investing member savings in high-performing
loans to newly-formed caisses villageoises, who take four-month loans at the same
nominal interest rate as individual members take annual loans.
36
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<http://www.fao.org/ag/AGP/AGPC/doc/Counprof/BurkinaFaso/BurkinaFeng.htm> (August 9,
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(April 30, 2000).
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2006. <http://ffhtechnical.org/resources/service-delivery-models/microfinance-and-health-
protection/burkina-faso-health-economy-profile/?searchterm=Burkina%20Faso
%20Health%20Economy%20Profile> (September 24, 2007).
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Their Young Children’s Nutrition: Lower Pra Rural Bank Credit with Education Program in
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resources/research-and-evaluation/impact-studies/Ghana%20Nutrition%20Impact
%20Study/Ghana%20Nutrition%20Impact%20Study%203-98-eng.pdf/download> (September
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asp?token=&ett=1038> (August 9, 2007).
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38

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Cooperatives Learning to Move Down and Out

the Case of the Réseau des Caisses Populaires du Burkina

Cooperatives Learning to Move Down and Out.................................................................1

the Case of the Réseau des Caisses Populaires du Burkina

Crédit Épargne avec Éducation

SEEP Network’s Poverty Outreach Working Group’s MF/MED Approaches Targeting

The author wishes to particularly acknowledge the thoughtful contributions and

the Case of the Réseau des Caisses Populaires du Burkina

As a network of open-membership financial cooperatives, RCPB was seeking ways to

Cost effectiveness and sustainability

Weaknesses or challenges internal to an organization, that it must mitigate or overcome

Opportunities – external conditions that make it easier for an organization to

ACI Association de Crédit Intermédiaire

Table 1.1. Burkina Faso Country Statistics

1.1.1. National Currency CFA Franc

1.2.1. Briefly describe local socioeconomic conditions

Map 1.1: Map of Burkina Faso

Source: CIA World Factbook

1.2.1.2. Local population characteristics:

1.2.1.2.1. Ethnic groups

Map 1.2: Map of main Burkinabè ethnic groups

1.2.1.2.2. Most important economic activities

In 2005, the primary sector contributes 30.6% to the Burkinabè GDP,

1.2.1.2.3. Cultural and religious background

1.2.1.5. Occurrence of droughts, floods, natural disasters or conflicts

1.2.2. Describe government policies aimed at the very poor

1.2.2.3. Property and land rights.

1.2.3. Brief profile of microfinance environment.

• Many savings and credit cooperatives and cooperative federations including :

• Lending institutions including:

• A number of other development projects include microcredit components

1.2.3.2. Describe dominant microfinance models and services.

1.2.3.3. Demand versus supply of microfinance services.

Table 1.2: Burkina Faso Poverty Data

Source: 2004 PRSP Update.

The following information applies to the country as a whole:13

1.2.4.4. Main determinants of poverty.

Freedom from Hunger is an international non-governmental organization based in Davis,

2.1.2. Organizational background

Freedom from Hunger’s Vision is a world free from hunger.

2.1.2.2. Brief history

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

Freedom from Hunger’s relationship to independent organizations that implement Credit

2.1.3. Development intervention approach

2.1.3.2. Specialized in MF/MED or multisectoral

2.1.3.3. MF/MED model

Freedom from Hunger’s Credit with Education methodology originally combined a

These products offered by a wide variety of institutions (NGOs, non-bank financial

2.1.3.4. Other sectors

Table 2.1. Institutional Background (all data as of 31 December 2006)

2.2.2. Organizational development (S)

RCPB Mission statement:

2.2.2.2. Brief history

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

2.2.2.5. Organizational structure, roles and responsibilities

The RCPB network consists of 103 Cooperatives (Caisses Populaires), 4 Regional

URCPC URCPN URCPO

Graph 2.1: Structure of the RCPB network

The structure of individual cooperatives varies considerably, from single-employee

Regional Unions provide technical services to their constituent cooperatives, such as

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

RCPB traditionally provides centralized financial services to its members: transactions

The animatrice reports administratively to the cooperative’s Manager or Credit Officer,

2.2.2.8. Incentives for poverty outreach (S, M)