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Partnership Agreement

FINCA should incorporate recommendations for partnership establishment and implementation described in the following sections depending upon the partner and technology selected for implementation. Because a test pilot project has many elements, FINCA must also develop a partnership agreement that clearly delineates partner responsibilities, establishes terms for partner monitoring and evaluation, and enables each partner to take predetermined protective measures in the event that partnership responsibilities are not being fulfilled.

Monitoring and Evaluation

Monitoring and evaluation is a crucial component to measure the success of the test pilot project. Both FINCA and the potential partner organizations have established organization-specific monitoring and evaluation schemes that should be leveraged for the test pilot project. In general however, FINCA and the chosen partnership organization must set up a monitoring and evaluation system at both client and staff levels based upon responsibilities and indicators established in the partnership agreement. Details of the recommended partnership specific to the partner organizations are provided in the following sections.

Recommendations for Future Partnership based on Grameen Village Phone Results


FINCA staff indicated that donor funding for the Village Phone Program expired after one year although the costs of program management have risen because of growth in the size of the program. As a result, the Capstone Team recommends that FINCA consider the impact of program expansion on those costs that are not inherently sustainable and may require ongoing funding support.

Loan Structure

FINCA should limit changes it makes to the basic village banking loan system to those that are essential to making successful loan repayment feasible given the type of product offering.

Understanding Markets

Market conditions have changed dramatically through much of Uganda since the Village Phone program was introduced. When FINCA conducts its preliminary market research to determine initial market demand, it should also consider how existing and future competition are likely to change the market once FINCA clients enter the market with their new product. This research should also help FINCA to set realistic income goals for clients who participate in a test pilot project at the outset and as local markets evolve.

Additionally, FINCA’s level of involvement in market assessment may vary depending upon the role that the partner plays in marketing. For example, MTN is responsible for marketing MTN service to the Ugandan market, which will presumably enhance demand for the purchase of airtime from VPOs. Similarly, Honey Care is responsible for marketing the honey products at both the wholesale and retail level. In contrast, KickStart does not provide any marketing support for either the blocks produced by the block press or the oil produced by the oil press. As a result, more careful market assessment by FINCA will be necessary with these products to ensure that an adequate retail market exists or can be created before FINCA begins to sell the presses to its clients. Additional support of clients after presses are sold may also be recommended to help clients establish and maintain their markets.
(Note: Market evaluation should also include both the evolution of the market for the technology that FINCA is offering to clients in the program and the retail market for the product that FINCA clients are producing with that technology.)
Setting Limits on Client Entry into a Market

Both FINCA staff and MTN staff agreed that trying to limit the number of VPOs within a certain geographic area was a failure. Both existing and new operators benefited when FINCA suspended this program. As a result, FINCA should tread carefully when considering this option for any of the business opportunities that the Capstone Team has analyzed or any other opportunities. However, conditions are likely to be different for these products, so some measures to discourage FINCA clients from saturating local markets should be considered. Most importantly, the Capstone Team recommends that FINCA build into the assessment of each prospective client’s creditworthiness an assessment of the client’s preparedness for current and future market conditions, especially in the event that it conducts a test pilot project with one or both of the presses. This could include asking questions about the size of the market, where it exists and how the client plans to distribute its products, what barriers exist to entering the market and how the client plans to overcome them, and how he or she expects the market to shift over time.

Additionally, preliminary and ongoing market research by FINCA might help educate prospective buyers about market conditions to prepare them better before they consider becoming MicroFranchisees. In the long term, FINCA could also choose to support clients in their efforts to remove barriers to market. For example, it could help clients establish a distribution chain to help locally produced oil reach urban markets by developing communication networks among clients. Or, it could encourage successful clients to establish an oil packaging business and develop a brand for FINCA oil producers.

It appears from questioning of FINCA staff, who do and do not have GVP responsibilities that existing employees can potentially absorb the additional responsibilities of a new program. However, some additional training and new staff hiring may be necessary if the partnership requires FINCA staff to take on more responsibilities beyond what they currently possess in the GVP program.

Creating Incentives to Maximize Potential

Given the importance of ensuring that Account Relationship Officers were invested in the GVP Program and the success of the incentive program for Officers who sold airtime to VPOs, the Capstone Team believes it is essential to institute an incentive program for Account Relationship Officers in the event that it sets up a test pilot project using any of the opportunities under consideration. Such an incentive program should balance FINCA’s desire to maximize client participation in the program with efforts to ensure that clients can achieve income benchmarks established at the program’s outset. In other words, an incentive system based solely on product sales will be inadequate, since it is likely to result in market saturation. A second incentive based upon repayment rates on loans obtained for the product or even income earned by clients would be an important addition.

Monitoring and Evaluation

Both the quantitative data that MTN and FINCA collect from VPOs to measure performance and the qualitative data FINCA obtains to measure client satisfaction with the program and social impact appeared to provide FINCA staff with a solid picture of the program’s impact. Similar quantitative and qualitative indicators should be established for a prospective test pilot project, with regular monitoring of adequate samples provided to ensure that FINCA staff at all levels have an accurate picture of client satisfaction and impact. Similar monitoring should be undertaken at the local staff level to obtain information about staff successes and challenges so that improvements can be made to the program. It will also be important to the development of a future test pilot project to determine how each partner’s monitoring and evaluation program should be integrated, streamlined and upgraded to maximize its usefulness to the project.

Honey Care Africa

Pilot Project Design

The proposed test pilot project is recommended to begin with at least 200 hives and therefore between 50 - 100 farmers based in at least one community. Honey Care recommends that a pilot project feature at least two communities to provide a source of comparison between different geographic locations, but all projections below are based on a single-community project. This beekeeping community should be centered around a community extraction center and managed by a community extension officer who is responsible for a locality. All farmers in the project should live within a 20 km radius of the community center and work in groups of 2 to 6 farmers in order to physically cluster their hives and assist each other with extraction and monitoring. Beekeepers will be required to come to the community center when they want to extract and sell their honey. This will enable extension officers to keep track of each beekeeper’s production, pay for the honey bought by Honey Care, and provide a consistent contact point between officer and beekeeper.

When beekeepers extract honey at the community center, the community extension worker will pay the beekeeper for half of the honey sold and directly deposit the other half to pay off the loan. The payment will be done through either the disbursement of cash or, preferably, through an electronic transfer to the individual’s account. Honey Care has recently developed an electronic payment system with other partners in order to decrease the risk of workers traveling with large amount of money. This could be extended to a partnership with FINCA. A Honey Care extension worker will visit the community center at regular intervals to pick up the honey and pay the community extension worker.
The entire project should be expected to take at least two years and more reasonably three years including set-up time and the colonization period before the first harvest.
Extraction Center

Honey Care has recently changed their recommended structure for beekeeper organization to a formation around a permanent community extraction center. Previously, mobile extraction units had been set up at various locations, but this strategy was found to be less useful to beekeepers due to the time sensitive nature of harvesting and extraction. Having a center that is available on a consistent basis increases the income potential of farmers by allowing them to harvest when the hive is ready, instead of waiting for extraction units to come by. Waiting too long for an organized collection of honey could result in the bees consuming the honey they produced and therefore a reduction in profits.

The center will not only serve as a permanent site for harvesting, but also a place where beekeepers can exchange ideas, share equipment, and, hence, strengthen community networks. Ideally, the center should contain a community information posting area so that beekeepers can share their experiences and even a reference area for beekeepers who want to review training materials or troubleshoot problems independently. The center should also be used for initial and follow-up trainings.
Preparation. Creation of the center should be in an existing structure and in an easily accessible location. Upgrading of a building to a useful community center is expected to take between 12 -18 weeks and can cost from $2,000 to $10,000 depending on the quality and level of modification required. The costs of setting up a center that will support up to 1,000 hives will include:

  • Physical Improvements – Repainting the center, Bee-proofing the walls to keep out bees;

  • Security Improvements to protect the stored equipment and possibly money;

  • Centrifuge, or extraction machine, that can cost between US$700 - $1,000. This machine can be shared between communities if there is reliable transportation available.

  • Equipment such as storage buckets, swapping frames, beekeepers suits, communal harvesting equipment (boots, gloves, smokers), quality testing equipment, and demo hiveslxviii.

Hours. This center will be managed by a community extension officer and maintain regular hours. The officer must be at the center collecting honey for extended hours during harvest season. Hours of operation will depend on community demand. Typically it will be necessary to keep the center open once or twice per week, with hours extending to daily during peak harvesting season. This will both maximize community output and enable the community extension office to focus on providing field support to beekeepers.
Ownership. The cost of the center can be covered in several ways. The simplest way is for FINCA to cover the cost of upgrading and then transfer management to the community. Rent and maintenance would be supported by small monthly fees collected from beekeepers. Alternatively, either the community or community extension worker could own the center. The community could purchase shares in the center as a form of investment and then benefit from a profit sharing system. The community extension worker could also take out a loan for the center and therefore invest in the center and the job as his own enterprise. The latter two options would be new arrangements and therefore contain higher risk of encountering problems.
Community Extension Worker

A key to ensuring success in any beekeeping initiative is reliable extension support and ample harvesting opportunities. Therefore, the pilot project should involve a community-based extension worker who will support beekeepers and manage the community center as a full-time responsibility and source of income. This will ensure that there is consistent knowledge within the community to support beekeepers and reinforce the community support structure of the beekeepers.

The community extension worker will be selected from within the community and trained by Honey Care to manage the extraction center and regularly visit beekeepers within the community to advise them on ways to improve harvests and assist with problem solving. The community supported by each community extension worker will have a maximum of:

  • 1000 hives

  • Geographic range of 20 km

  • One extraction center.

The community extension worker will be primarily accountable to the community and will accordingly receive income from fees paid by each farmer at harvest. Part of this income will go towards covering the cost of the center. Because the pilot project could start with fewer farmers than the center can support at capacity, the initial revenues could be less, but will correspond with a lower workload. The exact income of the worker will depend on the frequency of harvests and the number of hives in the community.

Below are example calculations to show the potential revenues for the community center, assuming four harvests per year.
Table 6: Potential Revenue for Community Center

Number of Beekeepers

Average hives per beekeeper

Payment per hive

Income each Harvest

Annual Income
















To supplement this income and provide additional incentives for the community worker, both FINCA and Honey Care will pay bonuses to the community extension worker. The bonus from FINCA will be based on achieving a targeted percentage increase of honey harvested per hive. This will encourage the worker to help existing beekeepers become more successful. The bonus paid by Honey Care will be based on achieving annual production targets, which will alternately promote reaching new beekeepers in addition to expanding existing hive production. This payment system will make the extension officer accountable to all parties and strengthen collaborative ties among them.

The extension worker will also be responsible for collecting payment from Honey Care when honey is purchased from the community center. Therefore, they will also be responsible for securing payments to the farmers when they harvest honey at the center and also for transferring to FINCA half of the income that is paid towards the farmers’ loan. The individual should manage the automatic transfer of payments to the beekeepers’ village bank accounts or, if this is not possible, direct cash payments.
The bulk of the community extension worker’s time will be spent visiting local beekeepers and providing on site support, most of which must occur at night. The officer will be available to inspect the hives and offer suggestions about improving apiary setup, help beekeepers solve problems, answer questions, and offer insights about the colonization and harvesting processes. As a result, the community extension worker will need some form of transportation to be effective. A major part of the job will require this individual to travel to farms that are difficult or time-consuming to reach by public transportation. Necessary vehicles will depend on the geography of the area, location of farms, and the effectiveness of public transportation.
Training and Support

It would be highly advantageous to implement a test pilot project in a community where there is existing beekeeping knowledge so that farmers can support each other. However, if the community does not have any beekeeping knowledge, the project is still feasible.

Honey Care will provide the initial training for new beekeepers in the test pilot project. The training recommended for the farmers who partake in the project should not deviate from the current training provided to other Honey Care beekeepers and should still be included in the price of the hive. Training for the farmers will be provided locally, last three days, and cover the following topics:

  • Bee behavior and biology;

  • Apiary site selection and construction;

  • Langstroth hive introduction;

  • Hive inspection;

  • Honey harvesting and storage;

  • Strategies for increasing production;

  • Troubleshooting of common problems and

  • Record keepinglxix.

As previously indicated, consideration should also be given to the provision of ongoing training or “refresher courses”. This was requested by beekeepers in Kenya and would be beneficial to help experienced beekeepers share issues and gain more detailed knowledge on advanced beekeeping and problem solving. Ongoing training will also decrease the time required by the community extension worker to support individual beekeepers with similar problems and allow for more efficient support of a greater number of beekeepers.

It is recommended that the test pilot project continue to pursue a strategy of training each beekeeper individually. “Train-the-trainer” approaches have been less successful because of the large amount of information required for successful beekeeping and the long-term disadvantages of incorrect or insufficient information.
Honey Care will also provide training and ongoing support as needed to the community extension worker. This worker will likely need to reference Honey Care staff to solve more difficult problems and will need updates in new technologies or methodologies.
Loan Structure

The loan for each hive will be approximately US$65 which will include the cost of the hive, initial training and the guaranteed purchase all honey by Honey Care at a fair price. Startup loans can range in price depending on the number of hives purchased by the individual. Farmers could begin operations with one hive, but are not recommended to start with more than five.

There are two ways that loans could be structured – a standard loan or a microlease. Both types of loans would have similar terms, but would be different in ownership and responsibility. These structures have been developed based on the input of FINCA Uganda staff and clients, as well as K-Rep, Honey Care’s microfinance partner in Kisumu and surrounding areas. The Capstone Team recommends that FINCA implement the microleasing scheme over the traditional structure in order to retain physical collateral for each loan.
Traditional Loan

The traditional loan will mirror FINCA’s tradition loan as discussed in Section VII with the following adjustments. Repayments will be based on the harvest schedule along with monthly interest payments. At each harvest, half of the revenue will automatically be deducted and applied towards the loan. However, the time prior to first harvest payment could be as long as 12 to 15 months. Throughout the life of the loan, clients will also pay the equivalent of the initial interest on their loan on a monthly basis. For example, if the initial monthly interest rate on a $65 loan is $1.65, this amount will be paid every month until the loan is completely paid off, even after the interest incurred decreases due to a declining principle. This will keep the beekeepers accustomed to a regular payment schedule in the waiting period before their first harvest and will also help to pay off part of the principle after harvesting begins. Beekeepers interviewed in Kenya expressed support for this regular payment to help them work off the loan. K-Rep loan officers similarly found it useful to keep a regular schedule with clients.

Due to the extended period before the initial harvest and potential wait times between subsequent harvests, the loan period for beekeepers could last up to three years. Loans for beekeeping should therefore come from a separate fund due to this slow return on the investment.
Microleasing Scheme

The loans for beekeeping could also be administered in the form of a microleasing scheme. This is the current format used by K-Rep and Honey Care in Kenya. While loan terms would be as described above, ownership transfer would differ. In the case of microleasing, FINCA Uganda would accept of ownership of the hive at the time of lease initiation with the transfer of ownership to the client once the loan on the asset is completely paid off. This would be advantageous to FINCA Uganda because it would allow them to repossess the assets and resell them to other beekeepers in the case of loan defaults. This situation would also present less risk for the client because they would be able to return the beehive if they are not able to pay. However, this method would require FINCA Uganda to take on the ownership of assets of up to $13,000 in value assuming 200 hives are sold.

Partnership Structure

Initial Market Research

FINCA should begin the process by selecting potential site locations for a test pilot project. FINCA’s initial research for potential sites must consider several factors:

FINCA Initial Research

  • Rural location. The beekeeping pilot project must take place in a rural location with sufficient vegetation, preferably including the plant life recommended above.

  • Existence of beekeeping activity. It is also recommended that FINCA select a location where some beekeeping activity already takes place. Local beekeeping knowledge is not necessary and does not have to be among FINCA clients, but would be helpful to increase self-reliance within the community. Moreover, a location that does not have any existing beekeeping expertise can be more useful than an area with many existing bad habits and misconceptions about beekeeping.

  • Convenience for Honey Care. The potential locations selected by FINCA must be geographically feasible to be supported by Honey Care. If the proposed site is too far from current Honey Care operations or inconveniently located, it will not be cost-effective to collect the honey and properly support beekeepers.

  • Capability of staff and interest of clients. Finally, it is essential to have a willing and capable local staff to administer the new project and strong client interest to make the investment. The local FINCA office must have sufficient staff resources or the means to bring on additional staff as required. FINCA clients must be educated on the details of the project and show interest in becoming beekeepers.

Based on the above criteria, FINCA should conduct an assessment of six different communities and then chose two locations in which to implement a pilot project. Information on the chosen locations should then be provided to Honey Care for a more detailed assessment. Based upon Honey Care’s analysis, a final project location will be selected jointly.

Honey Care Research

After FINCA’s selection of potential sites, Honey Care will perform a detailed assessment of the feasibility of beekeeping in two chosen locations. This is a customary step performed by Honey Care before any expansion to ensure the location’s viability. Included in this detailed research should be:

  • Complete fact-finding and information gathering about the region

  • Profiling of existing beekeepers in the target district and assessment of the quality of their production

  • Identification of candidates to train

  • Identification of gaps in knowledge and capacity within the community

  • Assessment of potential community extraction centers

Staff Responsibilities

Staff who are responsible for administering and managing the project should be integrated within both organizations and be represented at country, regional and local levels. It is likely that project oversight can be performed as a part of current staff responsibilities, therefore eliminating the need for additional hiring. The possible exception is with local staff due to the high potential workload in project administration.

The Honey Care staff involved in the partnership for the test pilot project would include:

1) Country-level Project Coordinator. This individual would manage the relationship with FINCA and monitor overall project performance.

2) Regional/District-level Supervisor. A regional administrator would manage the training of FINCA officers and support the local extension officer on the project.

  1. Local Extension Officer. The local Honey Care representative would provide the initial training to beekeepers, provide initial and ongoing training to community extension workers and collect honey at the community center at harvest times. This will be a time-intensive role during the initial stages of the test pilot project but a critical part of the success of the project. It will be primarily time-intensive during the period of initial training and again after the farmers begin to harvest. This could be up to one year until the hives mature. At this time, the extension support role will diminish and will be directed primarily to extraction and training of new beekeepers if FINCA and Honey Care agree to expand their partnership.

The FINCA staff required for this project will include:

1) Country-level Project Coordinator. This officer will manage the relationship with Honey Care and monitor performance of both loan provision and beekeeper support. He or she will also oversee project and systems design.
2) Regional/District-level Supervisor. The regional supervisor will oversee loan provision and project implementation on a local level and communicate back to the country level staff. This individual could play a key role in the future expansion of the pilot project to other areas within the region. He or she will also work closely with both country and local level staff on project and systems design.
3) Account Relationship Officer. The local administrator will take on several tasks in the implementation of the pilot project and also dedicate a significant number of hours to ensure its success. The officer will be responsible to perform the following: oversee loan provision and risk minimization, confirm the deposit of funds from sales of honey into village bank accounts, create product awareness and disseminate marketing materials to village banks, and publicize information about loan structure. He or she will also be available as a resource during project and systems design. To ensure buy-in from these local officers on the project, the team recommends implementing an incentive program for them as outlined in the Grameen Village Phone section above.
For a more detailed description of Honey Care’s current organizational structure see appendix 1.2.


The initial marketing efforts of the pilot project will be shared by Honey Care and FINCA. Once the project is more established, the community extension officer will assume a greater role in attracting new beekeepers. However in the initiation stages of the project, Honey Care will be responsible for conducting awareness demonstrations on the benefits of beekeeping in order to attract farmers to the project. It is beneficial to have Honey Care involved in the initial marketing of the project to promote the role of their organization. This will avoid the appearance of a project entirely administered by FINCA. Honey Care will also be responsible for designing and printing marketing materials used to inform and attract farmers and will additionally continue to be responsible for marketing and selling honey both nationally and internationally.

In terms of marketing, FINCA will be responsible for marketing the new opportunity to village banks and encouraging them to attend awareness demonstrations put on by Honey Care.
Monitoring and Evaluation

Monitoring and evaluation will be critical to the test pilot project and to the successful expansion of this initiative. Work in this area will be shared by both partners. Honey Care will collect information through sales of equipment and collection of honey. It will also continue the standard four-part monitoring techniques that it currently employs. The monitoring system will select a sample of people from the group and take measurements of demographics, information beekeepers have gained, strengths and weaknesses of extension services, and the socioeconomic impact on families. Some assessment and revisions of Honey Care’s current monitoring system may be necessary to ensure that it meets FINCA’s requirements.

FINCA should assist with a baseline study for the impact assessment and then allow Honey Care project officers to perform follow-up work. FINCA will also be responsible for conducting standard loan repayment monitoring.
Potential Income for Business Owners

Income Scenarios

Harvest Frequency. Beekeepers have had initial harvests as early as just 2-3 months from the time the hive was setup to as long as 15 months. Honey Care advises beekeepers that they should plan for this initial colonization period to last 12 months. The regularity of harvests will depend on the location and should be similar for all beekeepers in a similar geographic range. Typically, harvests generally occur every 3 to 4 months, however some farmers in northern Kenya are able to harvest eight times each year. Others at a higher altitude are able to harvest only twice.
Amount of Honey. Beekeepers should expect to harvest an average of 10 kilograms of honey with each harvest. However, timing and colony strength complications can decrease honey output temporarily. Such problems can typically be resolved in a reasonable period of time. More successful beekeepers reported harvesting up to 12 to 14 kilograms of honey in one harvest.
Sales of Honey. Honey Care will pay a preestablished, fair price for the honey they purchase. Currently in Kenya, this price is approximately $1.40 per kilogram. This amount is not expected to vary significantly in the near future.
Costs. A hive will cost approximately US$65 and will come with a 1% administration fee of $0.65. In addition, each farmer will incur a monthly interest rate of between 2.5 – 3%. There should be no other significant costs for inputs for beekeeping.
Table 7: Potential Income for Beekeepers


Kilos Harvested

Income Per Harvest*

Harvests Per Year

Annual Gross Income

Annual Loan Payment



$ 13.50


$ 54.00

$ 27.00

More Successful


$ 16.30


$ 97.80

$ 48.90

Less Successful


$ 13.50


$ 27.00

$ 13.50

* Income per harvest assumes $1.40 paid per kilo minus $0.50 fee to the community center per hive.

** Annual loan payment is figured as exactly half of the annual gross income.

Local Market Sales

The above calculations are based on the assumption that the beekeepers are selling back to Honey Care for the predetermined price. However, all beekeepers are also free to sell honey on the local market where they get a better price. Beekeepers will not be encouraged to sell locally during the test pilot project.

Some beekeepers will be able to find higher prices on the local market, sometimes up to five times more than the price offered by Honey Care. However, they will incur additional costs associated with the packaging of honey, as well as spend additional hours to sell the honey. It must be noted that selling honey locally may turn out to be less profitable because the amount of honey demanded on the local market is drastically smaller than what is produced by the hundreds of hives in the area. Moreover, additional entrants to the local market will bring down the market price of honey.
Beyond the pilot project period, the Capstone Team recommends that FINCA clients be permitted to sell up to 50% of their harvests locally. This will enable them to get a better price if available, while also encouraging Honey Care to stay involved with all beekeepers and pay out bonuses to local extension officers. Since extraction will take place at extraction centers, local extension officers will be able to keep track of all honey harvested and collect loan repayments on all honey harvested regardless of where it is sold.

A majority of the costs incurred in a beekeeping pilot project will be determined by local administrators. The team felt it would be inaccurate to estimate exact costs because of the various local factors that will determine the final project cost. However, to assist in the planning and budgeting of the project, listed below are items FINCA should consider in its budget when preparing for a pilot project with Honey Care.


Preliminary market assessment (FINCA)

Loan provision and administration (FINCA)

Monitoring and evaluation of both loan repayment and client satisfaction (FINCA)

Training of staff for loan administration (FINCA)

Incentive program for Account Relationship Officers (FINCA)

Community Extraction Center*

Upgrading the physical structure (FINCA or private investment)

Provision of equipment (FINCA or private investment)

Community Extension Worker

Bonus payments (FINCA)

*The costs of the community extraction center can be covered in several ways as explained in the Pilot Project Design section above. However, one option is to have this cost fully covered by FINCA and therefore it is listed as a possible expense.
Timeline for Implementation of Pilot Project with Honey Care

A general timeline for the implementation of a pilot project is expected to be at least three years when accounting for the time to arrange the project and see consistent results from the honey harvests. As previously noted, there will be approximately a 12 month waiting period between the time that the beehives are set up and when they begin to produce honey.

A project plan and a detailed listing of the activities required in the setup of the project are shown in Appendix 4.1.
Necessary Next Steps

A dialog has already been initiated between Honey Care and FINCA International. This relationship should be continued to arrange a timeline and approval of the pilot project. If it is agreed to implement the pilot project together, the next step will be to begin preliminary research on project location. Honey Care and FINCA may refer to Appendix 4.2 for the Capstone Team’s recommended Timeline and Activity Description as a starting point for moving forward together.


Although KickStart is currently not actively marketing and supporting the oilseed press and block press technologies, it has expressed interest in establishing a partnership with FINCA in order to provide these opportunities to FINCA clients. While KickStart’s plan to expand to Uganda can facilitate a partnership with FINCA, the organization only has plans to promote the irrigation pump. As a result, in designing a test pilot project, FINCA will need to support KickStart in reviving its program in marketing and supporting the technologies. In addition, KickStart will need to revise the training provided in order to address some of the challenges that our field research found. The following section presents some recommendations in establishing a partnership with KickStart in order to provide opportunities in cooking oil production and/or construction block manufacturing through a test pilot project.

Training and Support

KickStart provides or arranges training for individuals and groups that purchase their technologies. Sales representatives provide training to retail store owners and attendants on how to use, maintain and fix the oilseed and block presses and techniques on how to produce good quality products. When individuals purchase the technologies they are given training by the retail store owners. Clients who have purchased the technologies can go to any retail store that sells the technologies to receive support. In addition, clients can be referred to KickStart staff to receive further training. KickStart sales representatives have also provided 1-2 hour trainings to groups who have purchased the technologies. Furthermore, detailed manuals are provided to all the buyers.

The Block Press manual currently addresses the following topics: What are stabilized soil blocks; Tools and Equipment; Soil Selection and Testing; The Action Block Press; Making Blocks; Basic Building Guidelines; Basic Costing Guide; and Problems and Solutions.
The Oilseed Press manual details the following: Seed Varieties; Drying and Storage; Seed Preparation; Oil Seed Press Operation; Maintenance; Bookkeeping; and Sales and Marketing.
KickStart has the capacity and knowledge to provide or arrange for training that would be needed for the test pilot project. Depending on the terms of the partnership, arrangements could be made for current KickStart sales representatives to provide training to groups of people that purchase the technologies or they could refer consultants to provide trainings. In the event that relationships are established in Uganda with retail stores, training could also be provided to retail attendants and then through them to clients. However, the Capstone Team recommends providing two training sessions for the participants in the test pilot project that will thoroughly cover essential topics to increase success in operating the businesses.
The first session, which could take place after individuals have applied for a loan but before the loan is approved, would provide training in: 1) bookkeeping and basic business procedures; 2) sourcing inputs (knowledge on types of good quality soil or seeds); and 3) marketing and sales.
The second session, which would take place after the technology has been delivered, would cover the following: Block Press -1) Soil selection and testing; 2) Mixing soil and cement; 3) Press operation; 4) Labor; 5) Curing, storing and testing blocks; 6) Press maintenance and repair; and 7) Potential problems and solutions. Oilseed Press-1) Seed selection and drying; 2) Press and filter operation; 3) Labor; 4) Packaging and storing oil and seedcake; 5) Press and filter maintenance and repair; and 6) Potential problems and solutions.
The manuals that are provided with each of the technologies should be revised to cover all of these subjects and thus will also be able to serve as guides for individuals to refer to. The team also recommends institutionalizing ongoing operations support to enable owners to refine techniques, enhance marketing efforts, identify new markets, and other offerings as owners show interest in them.
Loan Structure

The following are recommendations for the loan structure for individuals or groups who want to start a construction block manufacturing business or a cooking oil production business. They are primarily based on input from KickStart staff and FINCA Uganda staff and clients. While there are few minor differences based on the nature of the business, the structure is generally the same for both technologies.

We recommend that FINCA Uganda incorporate a microleasing scheme wherein it would retain ownership of the technology until the loan is completely paid off, after which ownership would be transferred to the client. If clients defaulted on the loan and the guarantors are not able to cover the payments, then FINCA Uganda could repossess the equipment and lease it to another interested client.
Borrower Requirements

In order to qualify for a loan, individuals would have to be current or former members of a village banking group. In addition, when taking an individual loan, the client would be required to have a guarantor and pay a deposit upfront. This initial deposit would be a percentage of the total loan and could range from 10-15%. Anything higher than this amount may be inhibiting to clients and thus discourage individuals from taking out a loan. In addition, in order to ensure the success of these businesses and to avoid market saturation, individuals should also be required to present information to FINCA about their input sourcing and customer base before they are granted the loan. This could include asking questions about the size of the market, where it exists and how the client plans to distribute its products, what barriers exist to entering the market and how the client plans to overcome them, and how he or she expects the market to shift over time. This will help to make sure that there is still a sufficient market for each new entrant.

Loan Amount

FINCA Uganda would provide a loan to cover the entire cost of the technology (Oilseed Press $420, Block Press $570) to the individual or group. This could either be done by providing cash or, as will be expanded on later, by establishing a relationship with retail stores whereby FINCA Uganda would transfer the amount directly and provide the loan recipient with a receipt to exchange for the technology. Because of the size of the loan amounts and in the interest of security, we strongly recommend taking the latter approach. In addition, FINCA Uganda could also buy the technologies directly from KickStart.

FINCA Uganda should also consider offering a loan that would include all or part of the start-up costs for the first month of operations (estimate Oilseed Press Business $790, Block Press $805) 2.
Table 8: Loan Amounts for KickStart MicroFranchise Opportunities



Oilseed Press


Oilseed Pres and first month’s costs


Block Press


Block Press and first month’s costs


Loan Terms

Terms of the loan would be identical to FINCA’s current structure as described in Section VII, with the following exceptions. Like the standard loan, for individuals or groups taking out a loan to purchase an Oilseed Press, the loan period would be four to six months. However, the loan period for those taking out a loan for the Block Press would be five to seven months. The loan payment period could be extended by 1 to 3 months for clients who borrow the first month’s operating expenses as well. Block press purchasers would receive a grace period of one month during which they would only be required to pay interest. This takes into consideration the fact that the curing process for the bricks can take up to 28 days and thus during the first months there may not be any sales. Additionally, a 10% deposit of the total loan amount would be required for borrowers.

Potential Income for Business Owners

The following calculations on the income generating potential from cooking oil production and construction block manufacturing businesses are based on estimates and averages provided by KickStart staff and current business owners in Kenya. As a result, these numbers will differ for new businesses started in Uganda depending on the cost of inputs (for example, using free soil; business owner growing the oil seeds), labor and product sale price. Business owners will need to determine the cost of production and the sale price depending on their location. As the cost of marketing the products and transportation can vary significantly, they have not been included in these calculations. In addition, the cost of packaging the oil has not been included as the costs can vary greatly depending on the business and choice of packaging materials. For example, cooking oil production businesses could encourage clients to bring their own containers to refill, which would keep the cost of packaging down. Therefore, the numbers provided should only be used as a general representation of the potential incomes these businesses can generate.

Cooking Oil Production Businesses

Based on information provided by KickStart staff, cooking oil production businesses, on average, can produce 15 liters of oil a day, using two individuals to operate the technology. According to KickStart, the cost of sunflower seeds in Kenya is $0.22 per kilogram. It takes four kilograms to produce one liter of oil and, three kilograms of seedcake. Labor for this production would cost a total of $3. Labor for crushing the maximum input capacity of 60 kilograms a day could be divided between individuals to enhance efficiency, resulting in a cost of $0.05 per crushed kilogram of seeds. On average, one liter of oil can be sold for $1.71 and the three kilograms of seedcake for $0.43. Thus, by producing and selling 15 liters of oil a day, a business owner could make a profit of about $16 a day equaling to $368 a month and about $4,400 a year.

If the owner were to solely operate the machine or to rely only on the help of family members the business income for the family could be as much as $442 a month.
In addition, these businesses could also encourage service processing, especially for farmers who grow and store their own seeds. When the farmer wants oil to use or sell, he or she brings it to the press owner for processing. As payment for processing, the press owner can keep a portion (maybe half) of the processed oil and seedcake to sell and give the rest back to the farmer. In this way, the press owner is not required to have a lot of working capital to buy seeds or a big storage area to keep them. Also the farmer would get more money by selling oil instead of unprocessed seeds.
Construction Block Manufacturing Businesses

According to KickStart staff, construction block manufacturing businesses, on average, can make 350 blocks a day by hiring four laborers to operate the technology. Using Kenyan prices, the cost of each block is estimated at $0.04, when taking into account labor expense of $12.00 ($3.00 for each worker), and the cost of cement and other equipment. Therefore, the total cost of producing 350 a blocks a day is $14. On average blocks can be sold for $0.07 each and thus at the estimated sale of 350 block a day, a business owner could make $25 a day. This would result in a profit of $11 a day equaling to $253 a month and just over $3,000 a year.

On the other hand, if the business owner were to operate the machine and only employ three laborers, the owner could actually earn $322 a month. If the business were to solely rely on the labor of family member, the monthly business income for the family could be as much as $529.
Partnership Structure

Preliminary Research

As mentioned previously, FINCA Uganda should conduct further market research in order to determine a target region for a test pilot project. The region must have favorable conditions such as demand for the technologies among FINCA clients; raw material availability (soil and oil seeds); and a market demand for cooking oil and construction blocks. In addition, it would be useful to assess product supply chains and barriers to getting the products to market.

Adapting the Current Business Model

The Capstone Team recommends that FINCA and KickStart collaborate to make certain adjustments to KickStart’s existing business model. In addition to the marketing component described below, the training program should be enhanced to incorporate additional information on how to source inputs, find a market, and package and sell the product. Ongoing support beyond additional training should also be built into the model.

To the extent that input sourcing and access to markets remain problematic even in the best of locations, the Team recommends that FINCA work with KickStart to help clients create the linkages necessary to maximize their chances for success. This effort may require some additional staffing resources beyond those which are described below in the event that this is necessary.
Establishing Relationships with Retail Stores

As mentioned before, KickStart is planning to expand to Uganda towards 2006 and will be establishing a local office. (See appendix 1.3 for KickStart’s current organizational structure). However, as the organization is currently not actively promoting the Oilseed Press and Block Press, they will need to specifically establish relationships with retail stores in Uganda to make these technologies available for the test pilot project. This would consist of KickStart supplying the technologies to the retail stores or establishing direct contacts between the manufactures and the retail stores. In addition, they would provide guarantees for the technologies, and would design, print and provide training manuals that accompany the technologies.

FINCA could either establish relationships with the retail outlets in the chosen region for the test pilot project in order to set up a system to transfer the loan amount for the purchase of the technology. FINCA could also purchase the technologies from KickStart and provide them directly to the clients who have taken out loans.
Staff Responsibilities

Our recommendation for the staff involved in the test pilot project does not depart from the current administrative structure of the partner organizations (See appendix 1.3 for KickStart’s current organizational structure). Instead, we believe that current staff at different levels within both organizations can take on the recommended responsibilities within the partnership.

The KickStart staff involved in the partnership for the test pilot project would include:

  1. Country-level Project Coordinator, who will manage the relationship with FINCA and will monitor performance;

  2. Regional-level Sales Manager, who will provide or arrange for the training of retail store attendants, FINCA staff and clients, who purchase the technologies, and will oversee the work of the sales representative; and

  3. Sales Representative, who will manage the relationships with retail stores, will market the technologies and provide troubleshooting assistance when and if needed.

The FINCA staff required for this project will include:

  1. Country-level Project Coordinator, who will manage the relationship with KickStart and will monitor performance;

  2. Regional/District-level Supervisor, who will oversee the loan provision and project implementation; and

  3. Account Relationship Officer, who will conduct the implementation and oversight of the loan provisions and risk minimization and will create product awareness and disseminate marketing materials to village banks. Account Relationship Officers may also obtain additional training to provide ongoing business support to clients in the event that KickStart does not take on this responsibility.


KickStart would be responsible for conducting technology awareness demonstrations at retail stores, market places and in village banking areas in the region of the test pilot project. This would consist of mounting the technologies on trucks and conducting demonstrations using the technologies. In addition, they would be responsible for designing and printing marketing materials. FINCA would be responsible for covering the cost of the technology awareness demonstrations and would share the cost of the marketing materials. In addition, as mentioned previously, FINCA Account Realtionship Officers would also assist in disseminating marketing materials to village banks.

Monitoring and Evaluation

KickStart currently has a monitoring and evaluation (M&E) system in place. However, KickStart has not conducted any monitoring or evaluation of these technologies over the last couple of years because the organization does not have the funding or resources to focus on the Oilseed Press and the Block Press, Nevertheless, they are willing and able to do so for the test pilot project if funding is provided. This would consist of collecting information on the sales of the technologies through the guarantee form that the buyer fills out when he or she purchases the technologies. Immediately after the technology is sold, KickStart would conduct a baseline assessment and random sample follow-up impact assessments. KickStart’s assessments evaluate the following indicators: income; health; education; and food security. For the purpose of this test pilot project FINCA would conduct standard loan repayment monitoring and perform an impact assessment of the program.


Due to the nature of this feasibility study and the preliminary level of commitment of each organization at this stage, the costs involved of designing and implementing this test pilot project have not been determined. As mentioned in the previous section, each organization will be responsible for certain activities and in some cases, costs will be shared. The following is a general list of budget items and activities that will require funding in whole or in part by FINCA.


Preliminary Market Assessment (FINCA)

Develop data collection and management system (FINCA)

Monitoring and Evaluation (Shared)



Clients (Shared)

Retail store attendants (Shared)

Marketing materials and Advertising

Brochures (Shared)

Manuals (Shared)

Demonstrations (Shared)

Billboards (Shared)
Timeline for Implementation of KickStart Test Pilot Project

The implementation of a test pilot project with KickStart is delineated by specific activities that will be carried out by either FINCA Uganda and KickStart, or both organizations. The chart in Appendix 4.1 illustrates the activities and the estimated timing for each of the activities. Due to the research, planning and training involved in this test pilot project, we estimate that it will take at least 7 months before the first loan should be provided and the technologies are delivered to the loan recipients.

A project plan and a detailed listing of the activities required in the setup of the project are shown in Appendix 4.1.

Necessary Next Steps

FINCA International should start communication with KickStart to confirm their interest in a partnership. Even if FINCA decides to begin the test pilot project with Honey Care, upon the successful implementation of a pilot project with Honey Care, FINCA could then start the process of establishing a formal partnership with KickStart in order to make one or both of their MicroFranchising opportunities available to FINCA clients.

Additionally, the Capstone Team recommends that preliminary research be done for KickStart products during the initial assessment and location evaluation even if KickStart is not the chosen partner. Again, this will be beneficial information later if FINCA want to add KickStart as a MicroFranchise opportunity provider in the future and will also serve as a backup in the case that a relationship with Honey Care does not come to fruition. KickStart and FINCA may refer to Appendix 4.2 for the Capstone Team’s recommended Timeline and Activity Description as a starting point for moving forward together.

The Capstone Team’s primary objective was to provide a framework under which FINCA International could undertake a test pilot project to integrate MicroFranchising with microfinance in Uganda, assuming that at least one of the three enterprises studied offered a viable opportunity for FINCA clients. However, a larger agenda simultaneously propelled this project forward from the time of the team’s initial conversation with John Hatch. This agenda was to help FINCA enter a new movement that will be every bit as earthshaking in its impact on global poverty and human underdevelopment as microfinance and village banking were when they emerged. Microfinance and MicroFranchising have the capacity to provide development professionals with a powerful integrative tool to combat poverty because they address the multidimensional problems that the world’s poorest people face in a symbiotic way. Poor people need access to credit and other basic financial services to enable them to invest in their own future. Additionally, most also need access to the kind of dynamic income-generating business ideas and models that will enable them to expand their businesses beyond subsistence enterprises. Joining these two concepts together enables FINCA and the partner organization to leverage its core competencies to maximize its impact potential.
The research the Capstone Team conducted and the results it obtained indicate that a viable opportunity exists for FINCA to test this integration in a country with a strong program and with partners that have proven records of success. The team has designed a partnership framework for both potential options with recommendations for key considerations in a test project location and for developing and implementing the project. It also developed a division of responsibilities between partners, expectations for staffing and resources required, loan structures that compliment each product, and proposed timelines for project implementation and completion. It has considered the contribution that underemployed youth can make to the project and their likelihood of participating. It has highlighted the challenges FINCA is likely to face and offered potential solutions to these challenges.
While consideration of such a project is an important next step for FINCA International and FINCA Uganda, the team is optimistic that it is just a small step toward a long future in which MicroFranchising plays a prominent role alongside microfinance in the lives of FINCA clients. As with any new projects, challenges will arise that FINCA will have to address to successfully navigate a new partnership and help a small subsection of FINCA clients become successful business owners. The team’s long-term vision is that these challenges and the successes that come with them will refine and improve this combined microfinance-MicroFranchising model. This will enable FINCA to form dozens of additional partnerships with MicroFranchise organizations around the world. With a menu of MicroFranchising opportunities available to every FINCA client – current and future – mere subsistence will no longer be acceptable because along with their own drive and determination, all will be empowered with the tools to escape poverty by forming an enterprise that best fits market conditions and their individual capabilities.

Al-Shaikh, Fuad. “Factors for Small Business Failure in Developing Countries.” Advances in

Competitive Research. 1998, p. 30.
CIA. The World Factbook: Uganda. Accessed February 17, 2006.

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