Federation Income Generation Programme (FIGP)
FIGP is a formalisation of the loans that FEDUP members access at individual savings scheme level. While this practice will continue, the FIGP is an initiative to expand the scope of these loans to support FEDUP members in income generation activities of their choice. Registered with the relevant financial bodies (via uTshani Fund), FEDUP has started up a legal and formalised microfinance institution through which members can access group loans from their own Urban Poor Fund, instead of external financial institutions. The criteria for accessing a loan is:
- Formal FEDUP membership (complete UPF payment)
- Active member of a FEDUP savings scheme
- Experience as small business entrepreneur for at least 6 months
- Be part of a group of 5 to access a loan
These criteria ensure that members continue saving and support one another in the development of their respective businesses because individuals can only receive loans when they are in a group of five. The whole group must also make repayments as one overall sum. Therefore individual success depends on group success.
You can learn more about the impact of the FIGP on peoples’ lives here:
South African FEDUP Funeral Scheme (SAFFS)
SAFFS grew out of a desire expressed by FEDUP to bury its members with dignity and honour. SAFFS started its full operations in March 2014, with members selling the funeral scheme to own members as well as the public, and are compensated per policy sold. SAFFS currently works in association with IBS to learn how to administer a funeral scheme with the intention of going solo. FEDUP members sell the funeral scheme to own members as well as the public and have sold over 600 schemes to date. Sellers are compensated per policy sold.
As of March 2019, there are 1028 registered members of SAFFS, however just a little bit over half of them pay their premiums. The development of a database management software programme for SAFFS has been finalised and scheduled to be launched before end of 2019. Support is to be provided by the developer for the next three months to ensure that the programme addresses all problems experienced by the scheme. This will also bring FIGP very close to qualifying for a licence to administer the scheme internally.
Solid Waste Network
The Solid Waste Network (SWN) is an Informal Settlement Network (ISN) initiative in Cape Town that provides access to markets for informal waste pickers. It employs five full time staff, and services more than 350 pickers throughout the Cape Town metropolitan area. The goal of the Cape Town recycling social enterprise model is to upscale to a national footprint, and has the real potential to achieve sustained impact as a livelihood programme.
In 2005, ISN established links with recycling groups in Nairobi and Cairo through the SDI network and attended horizontal learning exchanges between the three cities. Back in South Africa, the first phase implementation focused mainly on building the network. By October 2005, the network sold its first plastic, cardboard and glass recyclables to an intermediary to the recycling industry. Recycling must be done at scale to make it financially viable, and adequate transport was required to achieve scale. Moreover, cutting out the intermediary and gaining direct access to the end market meant that pickers could earn more.
In January 2006 the programme acquired a truck and a trailer with a net capacity of 3-ton load. This made it possible to expand and support more community groups. The programme has since expanded to support 30 groups in the Cape Metropolitan region, serving more than 350 pickers. CORC provided reliable transport, access to markets, learning experiences, and storage facilities. The network maintains a working relationship with the City of Cape Town’s Solid Waste Department, and works towards waste minimisation and greening of informal settlements. Presently the City experiences crises in solid waste management and reaching critical levels in its existing landfill sites. The growth of the SWN continues to service more organised ISN groups, enabling them to take control of the programme, while CORC subsidies the transport and provide oversight.
Putting people first
Despite the emphasis on finding new solutions to waste management, little institutional and organisational capacity has been developed to take informal waste management to scale. Research and experience has suggested that it can be highly counterproductive to establish new formal waste management and recycling systems without recognising the role of the informal sector. Due to this marginalisation, and no pro-poor framework to encourage job creation and livelihood opportunities in solid waste management and recycling, the poor often do not benefit from this core municipal function.
The SWN has two components: 1.) the SWN as a community-based network of communities of informal waste pickers, and 2.) the support system comprising of the collection and management team. The SWMN promotes as socio-institutional approach to integrating informal waste pickers in the formal recycling industry. By creating organisational capacity to advance pro-poor and inclusive measures to integrating the poor, the SWN enables market mechanisms to work for the poor.
The collection team responds to the demands of the network, i.e. when someone is in need of cash, they make amendments to their collection plan. The SWN meets monthly as a learning platform on recycling industry and policy developments, as well as operational aspects to develop the income component. A community waste collection and sorting point is in convenient proximity for waste pickers, and acts as a learning process to replicate such Buy-in model in other parts of the city. In Cape Town, the SWN has developed a working relationship with a number of industries: Paper (Nampak and Mondi); Plastic (Extrupek, New Heights and Proplus) and Glass (SAB-Miller, Distell, Mega Metals, Consol and Macro). The SWN is recognized as a stakeholder in the industry, and has national working relationships with The Glass Recycling Company (TGRC) and the Plastic Federation (also known as PETCO).
Targeting vulnerability, impact and sustainability
The focus of our programme has been women, who have come together in community savings groups to support each other. The recycling groups work in teams of 3 to 10 members. The majority recycling membership are involved in voluntary community upliftment initiatives, i.e. food security for vulnerable people, orphans, health programmers, gender base violence and HIV/Aids. Organized pickers’ collectives will decrease the vulnerability of these communities, and make them more visible. This will create a platform for addressing basic health issues, education and child care needs of children, alcohol / drug abuse, shelter needs, etc.
Today, the SWN continues to operate on a meagre budget, and has limitations in its capacity to reach more pickers. However, in terms of social development, the SWN benchmark is unmatched. The tonnage capacity of groups determines their monthly income, which ranges from R800 – R2,000 pm per individual. The average tonnage capacity for glass and returnable bottles reaches 40 – 60 tons per month depending on supply of Network Pickers. Income is thus dependent on commitment, access to recyclables, storage capacity, and market prices which vary dependent on supply and demand.
In terms of financial sustainability, the network covers more than 60% of its operational budget through revenue generated in sales. SWN has also launched a research agenda into value-added products such as note pads and gift cards, drinking glasses, firestarters / briquettes from recycled paper, bags, and many more. The production of new marketable recyclable products will increase the sustainability of the SWN Programme.
Plans for scaling up
Scaling up the SWN model is essential if we are to realize the goal of affecting policy change at City level. Moreover, the SWN has set its sights on expanding its model through ISN in the major cities of Gauteng, Eastern Cape and Kwa-Zulu Natal. We have facilitated national learning exchanges from these regions to the Cape Town Recycling Network. In all 3 Cities Pickers have commenced with recycling pilot initiatives requiring resource support through capital injection. The challenge for SWN is the national scale up of our community-based recycling model as a social enterprise, and reducing the carbon footprint in our ever growing metropolis. Our expansion plans are dependent on pending capital injection.
Since 2017, the SA SDI Alliance has been on a journey to promote clean cooking stoves using biomass fuels with the aim of improving access to clean, efficient, safe, and cost-effective energy technologies that address the wide-ranging manifestations of energy poverty amongst the urban poor. In this pursuit the SA SDI Alliance collaborated with a private sector social enterprise, Clean Cooking Revolution (CCR), with expertise in entrepreneurship and distribution. The SA SDI Alliance procured improved cook stoves and formulated a distribution model which aimed to blend the expertise and capability of the social entrepreneur with the strength of the organised communities. The project aimed to be sustainable in its broadest sense, delivering learnings and set precedence for community delivery and ideally demonstrate the ability to recover costs or generate income.
The main Objectives of the program are:
- To contribute to reduction of exposure to indoor air pollution: reduced indoor air pollution from paraffin, charcoal and wood to use clean energy source. The health effects associated with exposure to indoor air pollution also have economic implications due to huge expenditures in the health sector particularly for women and children.
- Reduced costs for access to energy: poor households use a subsistent amount of money on fuel for heating, cooking and lighting. The cook stoves serve a dual purpose; heating and cooking which can result to cost saving. The biomass pellets also provide a cheaper fuel solution.
- Promote safety to reduce shack fires – shack fires are amongst common vulnerabilities for the urban poor in South Africa. They normally destroy property and take lives. The cause of shack fires range from a number of reasons such as the use of paraffin stoves, open fires and illegal electricity connections . Gas is usually considered a cleaner source of energy but during focus group discussions with federation members their experience of gas is that during shack fires they explode and spread the fire much quicker.
Genesis of the project in Cape Town and distribution model
The program started after a group of FEDUP members at the Central Network (central network involves savings groups from Philipi and Gugulethu, Cape Town) decided to meet to understand their energy needs. Heating was regarded an essential element to the program as most shack fires happen during winter and poor people incur excessive costs in winter from heating their shacks because they are mostly not insulated from the harsh weather conditions. An energy committee was then formed to coordinate the project and formulate a distribution model. The energy committee consists of members of the SA SDI Alliance – the majority being ISN and FEDUP members.
The distribution model consisted of training 10 sales agents with an opportunity to make an income through the sales. The distribution of the stoves started on the 1 st of November 2017 in partnership with clean cooking revolution with a target of distributing 600 stoves. The distribution in Cape Town accelerated when the winter cold started, with sales agents selling in various settlements. The agents were supported by clean cooking revolution to make demonstrations in the settlements to potential buyers. The distribution was tested in various areas in the North West and Gauteng provinces. However, this meant that access to fuel and transportation needed to be considered because the density of the households was much lower than in cape town.
A number of learning exchanges happened at local and national level to support the project. Through the savings network meetings the sales agents shared their knowledge.The presentation of the clean energy stove in the other regions was done in the network meetings where a team from the energy justice committee in Cape Town presented the program. The federation members learnt more about the technology through demonstrations and they tested the stoves by cooking with them. The latter took shape in the form of community organised cook-a thons.
- Cook- a-thons in central network meeting, Oukasi network in North west and Long lands in Stellenbosch. The aim of the cooking demonstrations were to showcase the practical use of the stove and its efficiency. The members were given a time limit to cook food that is traditionally cooked in the south African context.
- Learning exchange between the Ghana, Zimbabwe and South Africa federations. These three countries very different contexts regarding the use of traditional cook stoves and fuels. Improvements in health can be a result of a reduction in indoor / outdoor air pollution, reduction in household fires, or reduced carcinogens in fish after being preserved by smoking.
The SA SDI Alliance together with Clean cooking revolution have distributed cook stoves in Cape Town and parts of North West and Gauteng. Additional there is a growing demand from other FEDUP regions to implement the project in their regions. This is because the project does not only contribute in reducing exposure to indoor air pollution, costs for access to energy, safety and reduced shack fires. But it also contributes to quick income opportunity for sales agents. SA SDI Alliance is currently in the process of setting up a memorandum of agreement with Clean cooking revolution with clear roles and responsibilities so that is can be easy to expand the project. Both partners are working on developing nation wide distribution model that will considered context specific challenges of other regions. This will also encompass a strategy on how people will access fuel because currently the federation is reliant on the available stock that was supplied by CCR. The challenge is that CCR keeps stock in Cape Town and it will cost a lot of money to transport fuel to other provinces.