Attach_16-Access_to_Markets_Report_-Pakistan.pdf

BEHIND THE VEIL:

ACCESS TO MARKETS FOR

HOMEBOUND WOMEN

EMBROIDERERS IN

PAKISTAN

Final Report

January 15, 2008

Prepared for United States Agency for International Development

Tax ID No: 23-7398678 DUNS No: 826255648 LOC Number: HHS-2940P

Prepared by Mennonite Economic Development Associates

International Operations T: (519) 725-1633 F: (519) 725-9083 E: pml@meda.org

ACCESS TO MARKETS FOR HOMEBOUND WOMEN EMBROIDERERS

IN PAKISTAN

TABLE OF CONTENTS

EXECUTIVE SUMMARY

1.0 SUMMARY OF PROJECT ACTIVITIES

1.1 Skills Enhancement of Sales Agents

1.2 Input Supply Linkages

1.3 Introduction of New Designs

1.4 Marketing Activities

1.5 Other Linkages

1.6 Exit Strategy

1.7 Programming Gaps

2.0 PARTICIPATION OF TARGET CLIENTS

3.0 PROGRESS ON PERFORMANCE TARGETS

3.1 Performance Indicators from Table One

3.2 Remaining Performance Indicators

4.0 VALUE CHAIN IMPACT

4.1 Value Chain Linkages

4.2 Future Benefits for the Embroidered Garment Sector

5.0 ORGANIZATIONAL IMPACT

6.0 IMPLEMENTATION ISSUES

7.0 LESSONS LEARNED & RECOMMENDATIONS FOR FUTURE PROGRAMS

SUPPORT TO MICROENTERPRISES

8.0 CONCLUSION

ATTACHMENTS

Attachment 1 - Abbreviations

ACCESS TO MARKETS FOR HOMEBOUND WOMEN EMBROIDERERS

IN PAKISTAN

USAID Final Narrative Report

EXECUTIVE SUMMARY

MEDA and ECDI recently completed implementing the Behind the Veil Project in Pakistan.

Started in 2004, the project’s objective was to integrate rural women into more profitable value chains, to increase their economic participation, and enable greater contribution to household income. As a result of meeting and exceeding performance targets, substantial economic and social empowerment has been achieved for rural women involved in this value chain project.

The implementation involved the training and deployment of women mobile sales agents who, unlike traditional middlemen, could conduct face-to-face transactions with sequestered embroiderers. Female sales agents purchased finished fabrics from embroiderers for sale into higher value urban markets. As part of these transactions, the sales agents embedded product information, quality control and contemporary designs into their services for embroiderers. The project also stimulated the supply and demand of commercial design services into the value chain by connecting Sales Agents to skilled designers. Through these activities, the project was able to address the critical constraints that prevented the growth of the embroidered garment subsector.

After three years of implementation, MEDA and ECDI’s Behind the Veil Project has successfully reached 213 Sales Agents (SAs). 174 of these SAs receive orders on a monthly basis and regularly engage 6,746 Rural Embroiderers (REs), well surpassing project targets. An additional 2,679 REs are engaged on an as-needed basis with total project reach of 9,425 REs. On average, Rural Embroiderers have increased their income by close to 300% as a result of project participation. In addition to these economic benefits, participating producers and sales agents have also experienced advances in their social conditions, for example through greater participation in household decisions. Program benefits are expected to continue through a number of initiatives aimed at enhancing the sustainability of services provided via the project, namely a sales agent network association, buying houses, and business development services centers. Each of these initiatives stems from program interventions; however, commercially viable solutions have been developed to ensure their long-term availability for value chain actors.

The Behind the Veil Project has generated substantial interest within the microenterprise development industry. It has been included in development publications and profiled on industry websites. The project has also won a number of awards, including the Gender Equality Award from Canadian Manufacturers and Exporters and Canadian International Development Agency (CIDA) and was a main part of the submission for the Alcan Prize for Sustainability 2006 for which it was shortlisted as a finalist. An important part of the Implementation Grant Program (IGP) is the learning network. Lessons from Behind the Veil have been an important contribution from MEDA and ECDI to this network.

Based on the project’s substantial success, CIDA recently signed an agreement with MEDA to scale and replicate the Behind the Veil model to other areas of Pakistan in various value chains.

In addition to integrating sequestered women into new value chains, the new project will build the capacity of local Pakistani NGOs to deliver state-of-the-art value chain development programs.

USAID IGP Pakistan - Behind the Veil Final Report – January 2008 page 2

1.0 SUMMARY OF PROJECT ACTIVITIES

MEDA and ECDI recently completed implementing the Behind the Veil Project (BTV) in Pakistan. Started in 2004, the project’s objective was to integrate rural women into more profitable value chains, to increase their economic participation, and enable greater contribution to household income.

A market assessment, conducted by ECDI and MEDA, revealed that the quality of the embroidery of rural women in Pakistan was excellent, but that products were generally sold into low value traditional markets through monopolistic buying channels. Transactions had to take place through a male family member, and sequestered women therefore did not have the knowledge or opportunity to develop products for alternative markets. At the same time, there was a growing middle class of Pakistani women in urban centers willing to pay a premium for quality hand-embroidered garments in contemporary styles.

Market research uncovered a fledgling business model for replication which could help producers sell to this new and growing market. Under the model, female sales agents were able to purchase products from homebound women embroiderers for sale to retailers. Male family members would generally not object to women from within their community coming to their homes to conduct business with the women in their families. The model also addressed isolation constraints by providing producers with a link to the market, through which critical support services, such as information, modern designs, and inputs, could be channelled.

Behind the Veil focused on developing the embroidered garment value chain by identifying mobile women to become sales agents and replicating this sales agent model. Women sales agents purchased finished fabrics from embroiderers for sale into higher value urban markets.

As part of these transactions, the sales agents embedded product information, quality control and contemporary designs into their services. The project also stimulated the supply and demand of commercial design services into the value chain by connecting Sales Agents (SAs) to skilled designers. Awareness of this crucial market information ensures that homebound embroiderers are better equipped to respond to current fashion trends and the demands of middle-class consumers. Through these activities, the project was able to address the critical constraints that prevented the growth of the embroidered garment subsector.

The section below describes the key project interventions to facilitate the project growth. The summary includes activities outlined in the initial program design as well as additional efforts that responded to changing market signals and conditions to ensure effective integration of rural embroiderers into high-value market channels.

1.1 Skills Enhancement of Sales Agents

Recruitment of Sales Agents for the program was one of the first tasks carried out by the Rural & Urban Facilitators. Groups of potential sales agents were identified and invited to attend a workshop, facilitated by the Pakistani Project Manager (PPM), which included a program overview as well as training on basic business management. Based on this series of workshops, female participants were selected as sales agents for the program. These women were then provided with an orientation and additional training on technical topics such as cutting and marketing. As new SAs joined the project, these modules were repeated.

USAID IGP Pakistan - Behind the Veil Final Report – January 2008 page 3

Under the original project model, it was envisioned that 60 Sales Agents would each work with 100 rural embroiderers, reaching a total of 6,000 homebound women.

After project launch, it became apparent that some SAs could not directly reach or communicate with the embroiderers as levels of mobility varied among the SAs and connection to homebound embroiderers in certain rural communities was not possible. Additionally, the unfamiliarity of some of the SAs with these isolated communities left the embroiderers at risk of being exploited by the sales agent, who did not live in and therefore had no stake in the community. The model was therefore adapted with two tiers of sales agents created:

• Local SAs (LSAs) based in urban and peri-urban areas with home boutiques

• Community SAs (CSAs) based in rural areas working directly with embroiderers.

The REs sell their product to the CSAs, who in turn sell either to the LSAs or direct to wholesalers and retailers. The number of REs working with each CSA varied according to location and community but typically ranged between 25 to 75 embroiderers. Overtime, the CSAs experienced increased mobility and often began competing with the LSAs which further enhanced and enriched the value chain.

Over the life of the project, 213 SAs have participated in a range of training modules. The following is a list of these modules:

Local and Community Sales Agents

• Design Needs Assessment

• Design Training

• Quality and Innovation

• Group Formation, Mobilization and Group Dynamics

• Market Survey and Research

• Exhibition Techniques

• Time Management

• Unity Organization and Conflict Resolution

• New Cluster Development

• Product Development

• Entrepreneurial Skill Development

Urban Sales Agents

• Cutting and Stitching

• Packaging

• Time Management

• Entrepreneurial Competencies

• Design Needs Assessment

• Design Training

• Group Formation, Mobilization and Group Dynamics

• Market Survey and Research

• Exhibition Techniques

• Conflict Resolution

• Cluster Development

• Quality and Innovation

• Dress Designing

USAID IGP Pakistan - Behind the Veil Final Report – January 2008 page 4

Some needs-based training was also designed and delivered for the more advanced SAs who wanted greater skill-enhancement in certain key areas. Individual counselling and mentoring sessions were undertaken to ensure that SAs clearly understood and were fully committed to their roles.

Early on in the project, it was realized that the knowledge and information from SA training sessions was not necessarily effectively passed on to Rural Embroiderers (REs) and Urban Garment Makers (UGMs). New training modules were therefore developed to enhance the ability of SAs to deliver product and design information to producers.

REs also participated in training on network and group development to facilitate the formation of producer groups or “joint ventures.” The establishment of these groups has been an important measure to prevent SA monopolies and promote greater choice for producers. In addition to increased bargaining power, working in groups provides producers with the opportunity to share family matters and receive support in household issues. Project staff also helped REs to become skilled at practical negotiation and bargaining techniques such that they are now empowered to formulate beneficial long-term business relationships with SAs that operate on a win-win basis. Where possible, some REs were given exposure to formal instruction that helped them understand how to keep basic household accounts. The sessions also highlighted the importance of saving and sending children to school.

To ensure ongoing skills enhancement, the project has supported Association of Women Entrepreneurs in Small and Micro Enterprise (AWESOME), a membership-based association for SAs, with chapters in Quetta, Multan, Hyderabad, and Karachi. AWESOME is an important component of the project’s exit strategy as it supports ongoing training and creates a venue for members to discuss common issues. The network provides a platform for SAs to engage in dialogue, exchange critical information and discuss ideas for future business interventions. In order to adequately prepare the SAs to function independently upon project phase-out, members of AWESOME were given comprehensive entrepreneurial competency development training. As the association grows, it is envisioned that the activities will broaden to include services such as bulk purchasing and business referrals and eventually will include entrepreneurs from industries beyond just the garment sector. This organisation has begun to interact with mainstream associations such as Chambers of Commerce and WEXNET (Women’s entrepreneurship network), among others further solidifying its future viability.

1.2 Input Supply Linkages

Access to quality input supplies is limited, forcing many SAs to travel significant distances to purchase the requisite raw materials. The project has developed a range of innovative strategies to address this issue, including training for existing input supply shops, support for SAs to act as mobile input suppliers and assistance for women opening small home-based supply shops.

Training activities for input suppliers in the project region focused on improving the ability of suppliers to serve their clients with topics including product development, pricing, marketing, and service delivery. Capacity building activities included formal training sessions, focus group discussions, as well as both individual and stakeholder meetings. The individual discussions proved particularly successful for capacity building. Through these training avenues, input suppliers were better able to understand the demands of SAs and enhance their client base.

Input suppliers were also introduced to embroidery products from other regions.

USAID IGP Pakistan - Behind the Veil Final Report – January 2008 page 5

The input supply issue was also partly resolved by sales agents recognizing the market opportunities and optimizing their resources by entering the input supply business. For example, some SAs formed a cooperative for production which allowed these SAs to buy in greater quantity. Other entrepreneurial SAs opened input supply shops, often in their homes. Additional SAs were also trained to act as mobile input suppliers, selling fabrics and thread from the towns to the rural areas.

1.3 Introduction of New Designs

The original program design envisioned enhanced linkages between the SAs and formal designers. Designers were invited to seminars, and their trainings to sales agents increased awareness on contemporary embroidery (less dense, more accent focus (borders) more tone on tone, new twists on old patterns, and improved quality). However, attempts to link SAs to these designers on a regular basis proved difficult given financial and cultural constraints. Designers were reluctant to travel to some of the peri-urban areas and to work with the clientele of the project. And sales agents were not able to afford the full-cost of these design services.

An alternative type of designer, tracer designer, was identified with design activities focused on improving the styles produced by this group. As discussed in greater detail below, the tracer designers were a more appropriate service provider for the project SAs given their low cost and location within the communities. At first, the project organized training sessions with groups of these informal designers off-site. Participation was low, however, as designers were reluctant to form groups and were worried that their competitors would copy their creations. A number of individual consulting sessions were therefore held with these designers. While time consuming, this strategy helped ensure the participation of significant number of tracer designers.

Some tracer designers have been amenable to group training through workshops. During these sessions, participants were introduced to products and designs demanded by the high-value markets. Samples were supplied and the demands of the market explained. These sessions not only improved the ability of designers to advise SAs on fabrics and colors, but also helped build the confidence of designers to develop new designs.

Contemporary designs have also been introduced to the sector by sales agents themselves, many of whom have proven to be excellent designers. Through their involvement with trainers, engagement with markets, and participation in exhibitions, they have been able to adapt and modernize their existing designs to deliver innovative products that meet the demands of the Pakistani contemporary consumer.

1.4 Marketing Activities

At the start of the project, staff conducted detailed market assessments. As part of this research, the staff visited retailers and boutiques to introduce the garments and embroidered designs, establish program links, and understand regional/international export mechanisms.

Throughout the life of the project, marketing efforts continued to focus on strengthening relationships with existing buyers while identifying and working with additional retailers and wholesalers. Buyers were regularly surveyed to ensure customer satisfaction and to assess quality and design improvements.

Exhibitions have proven to be another important activity under the project to help strengthen market opportunities for Sales Agents. Originally, the focus was on the project hosting and organizing its own exhibitions. One of the first events was the “Artisan’s Gala” which served as a three-day exhibit for twenty-five sales agents to display their products and make connections

USAID IGP Pakistan - Behind the Veil Final Report – January 2008 page 6 with potential buyers. Held at The Forum Shopping Mall in Clifton, an affluent suburb of Karachi, the event was a resounding success, attracting close to 2,500 visitors. Over time, as the quality of the product improved, these exhibitions were phased out. SAs were instead encouraged to attend larger exhibitions organized by external organizations. At the start of the project, SAs’ involvement was subsidized by the project budget and most SAs were unable to attend without accompaniment by a male family member. Over the life of the project, many SAs have demonstrated greater freedom to participate in these exhibitions by travelling independently without financial support from the project. Initially, the project also provided product development advice for SAs. This support has now been phased out.

Other successful exhibitions organized by the project include the “mix and match” exhibitions.

SAs from different regions with different specializations in hand-work are ‘mixed’ into sub-groups that exhibit products together. The concept of ‘Mix and Match’ enables SAs to pool resources and products to fulfil large orders and provides a range of different design and technique combinations that appeal to the new-age, high-income consumer. This also helps counter any emerging monopolies and supports weaker SAs in developing their potential.

In order to facilitate relationships between SAs and buyers, the idea of a buying house had been debated. The buying house would link wholesalers and producers by providing a venue for SAs to display their products and help facilitate relationships between SAs and buyers by providing quality control, transportation, and sales services. Discussions focused on models or strategies to ensure that the house would be a sustainable and commercially viable entity. This issue was resolved when two entrepreneurial SAs in Karachi took over the premises to operate the buying house as an independent business. The success of the Karachi buying house has been replicated in other regions with entrepreneurial SAs opening their own operations and facilities.

1.5 Other Linkages

Significant ties were established with government promotion boards to further enhance the development of the embroidered garment subsector. As a result of these links, new exhibition opportunities have been created. For example, the Export Promotion Board (EPB) hosted an exhibition in Karachi. SAs were able to participate in this exhibition through subsidized stall fees from EPB with each region represented by at least one stall. The EPB regularly encourages project SAs to attend a range of exhibitions.

Towards the end of the project, efforts were also made to enhance linkages to existing Microfinance Institutions (MFIs) in the project regions. A recent market assessment revealed that there was much stated demand for credit from SAs yet few MFIs are effective reaching this target market. Discussions were held with UNDP, Akuhwat, Khushali Bank, and PRSP to gain a better understanding of their operations and create potential linkages to the project clients. Ten CSAs were successful in securing a loan from Akuhwat. Their first loan is an initial credit of Rs.

10, 000 but upon successful repayment they will be eligible to apply for Rs. 50, 000. Two CSAs were also successful in receiving credit from Khushali Bank. The women were required to organize members of their locality into a group of ten, eight male and two female. Each member contributed Rs. 1000 as a security deposit. One month later they each received Rs. 10, 000 in credit. Each member is required to pay Rs. 1000 per month with the security deposit of Rs.

1000 retained by the bank as service charges.

In the absence of an effective MFI scheme to cater to the needs of the REs in far-flung parts of rural Sindh, innovative local saving mechanisms are also being employed as substitute sources of small capital. In Rahib Amro, ten REs have initiated a traditional money saving kitty scheme

USAID IGP Pakistan - Behind the Veil Final Report – January 2008 page 7 known locally as a BC, with guidance from their Rural Facilitator (RF), Zaib-u-Nisa, to generate investment for their embroidery work. All ten deposit Rs. 200 with their RE leaders, Kulsoom and Rashida, on a monthly basis. They take turns in receiving the full amount of Rs. 2000 which they invest in their businesses.

1.6 Exit Strategy

MEDA and ECDI received approval for a five-month no-cost extension to the project bringing the completion date to November, 2007. Activities during this period focused on ensuring sustainability and long-term benefits for project clients by developing exit strategies. Three key factors will ensure that program benefits continue beyond the project to sustainably impact target producers and other value chain actors: 1) the transition of the Rural Facilitators into Business Develop Services Centers, 2) the commercialization of the buying houses, and 3) expansion of the AWESOME network.

The Rural Facilitators have played a key role over the life of the project. After much thought, it was decided to transform the Rural Facilitation Offices into a business unit (with revenue streams) to provide ongoing support, where needed, to SAs and REs. The project’s Rural Facilitation Centers have therefore transitioned into commercially viable Business Development Services (BDS) Centers run by the Rural Facilitators. This evolution is a significant means of ensuring the provision of long-term benefits to existing project stakeholders. It also ensures that an effective mechanism is created to support new entrants in the hand embroidery garment sector.

The approach necessitated the delivery of intensive one-on-one training and mentoring sessions for the RFs in Quetta, Multan and Thatta. These sessions covered the following topics:

• How to provide BDS services to microenterprises (MEs) on a commercially viable basis

• How to provide fee-based BDS services to project SAs and emerging leaders from the

RE groups

• How to sustain market linkages for the project SAs

• How to interact with RE groups and individual SAs in order to prepare them to pay for future BDS services

• How to prepare better monthly schedules and reports

• How to maintain more effective records and books

• How to solve certain problems of individual SAs and tackle various issues in the wider community (including business counselling on specific financial matters as well as other social issues stemming from SAs involvement in the sector).

To ensure that the fledging BDS Centers are not neglected during their early developmental stage, the RFs will remain affiliated to ECDI for one year after the project phases out. While advisory services will be provided free of cost until the RFs become fully reliant, financial support in the form of salaries from project funding will be withdrawn. This approach to project sustainability assumes that sufficient capacity has been created during the project period to enable the RFs to continue to provide BDS services to the Joint Venture (JV) groups of REs and individual SAs on a commercial basis. Continued mentoring by ECDI will help ensure the RFs have the requisite skills and expertise needed as their ventures expand. The independent BDS centers will ensure that benefits to communities are sustained long after project life has ended.

Buying Houses are another important initiative that will ensure continual benefits after project completion. Specialized training was provided to SAs who owned Buying Houses in all project regions. The sessions focused on how the SAs could ensure that the Buying Houses generate

USAID IGP Pakistan - Behind the Veil Final Report – January 2008 page 8 sustainable incomes and formulate lucrative linkages with markets in the future, not only for themselves but also for CSAs. The success of the Buying Houses, much like the Rural Facilitation Offices, is critical to the long-term local replication of project results. Training centred on enhancing the SAs’ capacity such that the Buying Houses would not only operate as market-based boutiques catering to high-income consumers but also display samples supplied by CSAs which would be used to generate orders from wholesalers and retailers as well as from other home-based boutiques for them. Essentially, the Buying Houses would operate at two levels:

firstly, as permanent establishments through which embroidery orders would be provided to SAs at the community level to ensure the continued income of the REs. Secondly, they would liaise with the BDS Centers, which would help generate new market links, trendy designs and new types of input supplies and provide access to high value markets and buyers.

The Association of Women Entrepreneurs in Small and Micro Enterprise (AWESOME) establishes a free space for the SAs to discuss views, share market information and pool resources to expand business concerns and will play an important role in assuring continuity of benefits. AWESOME provides the SAs with an opportunity to rally ideas and energies to effect change in their own lives and the lives of the REs they work with. AWESOME as a forum could have far-reaching impacts on the duplication and the ‘multiplier effect’ of the project’s success in rural Pakistan and further empower the SAs. AWESOME members from the various chapters met over the last few months to develop new strategies for their chapters.

The membership of AWESOME has continued to grow with project SAs signing on to participate. Women already running home-based boutiques, with access to wealthy buyers in the city were also invited to join the AWESOME network. These business women were linked with CSAs in all project regions to promote sustainable incomes at all levels. The idea was to generate a market for high-value garments produced by CSAs which do not sell so well in wholesale markets because of their high price. Home-based boutique owners were offered AWESOME membership and access to subsidized (frequently through linkages with government schemes for women-operated MEs) mainstream exhibition venues in return for assured orders for CSAs.

1.7 Programming Gaps

In order to assess the sustainability of the project, Linda Jones, previous Project Manager for Behind the Veil, visited the program in May of 2007. The report was used for internal purposes to provide an update on each actor receiving support through the project and to confirm sustainability of program impacts and identify any final programming gaps. The report identified four main gaps:

1. Monitoring and Evaluation - As outlined below, the figures reported may be underreported.

Efforts were therefore undertaken to ensure to understand the full impact of the program (as discussed in this report).

2. Microfinance - A number of women at the sales agent and buying house level have indicated that they could respond to more orders, participate in more exhibitions, and increase sales if they were able to access loans. As discussed in 1.4 above, program staff investigated potential links to help ensure financial access for project clients.

3. Funding Limitations - The program had an extremely small budget of $600,000 over three years. As a result, junior staff was hired as opposed to seasoned professionals. While it may have been more appropriate to hire more experienced personnel, full realization of expected

USAID IGP Pakistan - Behind the Veil Final Report – January 2008 page 9 program impact was largely achieved despite this apparent shortcoming. However, the hiring of younger staff helped the project as they often came from the communities in which the project operated and therefore were comfortable in the field and able to form a quick rapport with the SAs and REs.

4. Urban Garment Makers’ Income - The original intent of involving UGMs in the program was to utilize embroidered fabrics and to make outfits for the readymade market. Due to low capacity of stitchers in urban slums, the time it has taken to improve their skills, and the difficulty in maintaining their connection to the project due to high levels of transiency in urban centres, this has not been realized. It is important to note that the level of participation of UGMs has been achieved.

2.0 PARTICIPATION OF TARGET CLIENTS

The following table indicates the level of participation at the end of the project according to each type of participant, broken down by region. The project tracks involvement in the project at both an occasional (participation in training and intermittent sales) and regular (monthly sales) level.

Multan Quetta Karachi Thatta Total Project Goal

FY3

Number of Sales Agents participating in training sessions 73 54 20 66 213 90 Number of Sales Agents actively receiving and selling orders 55 34 20 65 174 N/A Number of Rural Embroiderers linked with Sales Agents 4820 2130 - 2475 9425 6000 Number of Rural Embroiderers working with Sales Agents (monthly average) 3615 1116 - 2015 6746 N/A Number of Urban Garment Makers linked with Sales Agents - - 200 - 200 180 Number of Urban Garment Makers working with Sales Agents (monthly average) - - 200 - 200 N/A

MEDA and ECDI have surpassed all of the expected targets for participation levels of target clients.

3.0 PROGRESS ON PERFORMANCE TARGETS

3.1 Performance Indicators from Table One

The following performance indicators are taken from Table One. These figures are captured in the monthly sales agent reports that are completed by the Urban and Rural Facilitators.

USAID IGP Pakistan - Behind the Veil Final Report – January 2008 page 10

Performance Indicator From Table One Project-to-date Targeted Year 3

Number of Sales Agents participating in program 213 90 Number of Sales Agents actively receiving and selling orders

174 N/A

Number of Sales Agents purchasing design services 73 60 Annual sales of Sales Agents (USD) $2,275,933 $450,000 Profitability Ratio for Sales Agents 24.9% 15.4% Number of Rural Embroiderers linked with Sales Agents

9,425 6,000

Number of embroiderers receiving embedded services from sales agents (monthly average)

6,746 N/A

Annual revenues of embroiderers from program SAs $1,521,314 $450,000 Number of Urban Garment Makers linked with Sales Agents

200 180

Number of garment makers receiving embedded services from SAs (monthly average)

N/A

Annual revenues of garment makers from program SAs

$31,407 $337,500

Number of designers involved in program1 53 6 Annual revenue of designers from program SAs $26,323 $19,200

The only performance indicator that was not achieved was the annual revenues for UGMs.

While participation level of UGMs met expected levels, UGM sales have been below the expected targets over the life of the project. During the design of the program, it appeared that the UGMs had similar technical standards and skill levels as the REs; products incorporating the work of both actors were expected to sell in the same market. Unfortunately, it soon became apparent that there was a substantial skill difference and that the UGMs did not have the capacity to sell to higher-value markets. However, they have been able to improve their production techniques and marketing thereby still benefiting from the project. We have found that a significant number of entrepreneurial UGMs were able to benefit from program training and are now operating independently; these former clients are no longer included in the project’s monitoring and evaluation system as it would be highly problematic to track their commercial activities as they tend to relocate frequently.

It is important to note that income figures are likely conservative indications of the project’s performance. Some of these figures may be underreported as reporting is based on data collection from the Sales Agents. Rural Facilitators collect this data and verify results as much as possible. However, the RFs do not necessarily have the analytical skills to question the reports from SAs. The project’s Monitoring and Evaluation (M&E) Officer visits each project region, but due to time constraints is unable to devote significant time to each center.

Furthermore, sales captured by SAs who were trained in the program, but did not continue their involvement, are not included in the above figures.

During the initial market assessment, the following income breakdowns were developed for project clients. Through interventions, it was expected that the monthly income for REs would rise from Rs 360/month (USD6) to Rs. 780/month (USD13).

Note that these figures represent sales and numbers of both tracer designers and formal designers.

USAID IGP Pakistan - Behind the Veil Final Report – January 2008 page 11

Revenue Increases for Rural Embroiderers

High Value Markets and Pricing Low Value Markets Sale price of outfit (minimum): Rs 1800 Traditionally embroidered outfits on Cost of quality materials: Rs 750 lower quality fabrics sell in local Fee for stitching by garment makers: Rs 150 markets for Rs 300-400.

Markup of sales agent: Rs 200 Buying is carried out by middlemen Markup of retailers / other costs: Rs 500 and is generally monopolistic.

Embroiderers Earn: Rs 200 per unit Embroiderers Earn: Rs 40-70 Rs per unit 3 units @ 200 = 600 / 3 units @ 60 = Rs 180 6 units at 60 = Rs 360 Total Monthly Income = Rs 780 = USD13 Total Monthly Income = Rs 360 = USD6

The figures below are extracted from the latest Monthly SA Reports and reflect the average level of production and earnings in each region. As evident from these numbers, monthly income has substantially exceeded expectations in each region. Furthermore, REs are able to earn a greater return on less work (six suits compared to two suits per month) allowing them to engage in other income and household activities.

Multan SA Revenue/Suit Rps 790 Embroiderers earn per unit: Rps 519 Average 2.3 suits per month Total RE Monthly Income Rps 1180 or USD 19.66

Quetta SA Revenue/Suit Rps 1661 Embroiderers earn per unit: Rps 941 Average 1.1 suits per month Total RE Monthly Income Rps 1057 or USD 17.62

Thatta SA Revenue/Suit Rps 1195 Embroiderers earn per unit: Rps 958 Average 1.8 suits per month Total RE Monthly Income Rps 1735 or USD 28.92

Karachi SA Revenue/Suit Rps 90 Garment Makers earn per unit: Rps 57 Average 15 suits per month Total UGM Monthly Income Rps 858 or USD 14.30

There are also numerous instances where REs have successfully upgraded into the role of SA.

AWESOME, the association of SAs, will continue to play an important role in this process as more REs grow their business. The project has seen additional significant upward mobility amongst program clients. Rural embroiderers have evolved into sales agents and sales agents have opened input supply shops, boutiques, retail outlets and buying houses.

3.2 Remaining Performance Indicators

Throughout the project, the staff has conducted qualitative interviews with project clients to assess improvements in household status and quality of life. One hundred and seventeen REs were interviewed on a biannual basis and asked questions on a range of standard of living proxy indicators. Additionally, project staff selected a random sixty REs to interview using the

USAID IGP Pakistan - Behind the Veil Final Report – January 2008 page 12 same questionnaires. Figures for these indicators have continued to improve over the life of the project. While the project provides an economic opportunity for women, increased contributions to the household income has translated, for a significant part, into greater say in household decisions.

The 117 REs who have been interviewed regularly since the project began and form the basis of the RE reports have been steadily linked with SAs who receive regular orders. They have fairly fixed incomes and cater to a medium value market. However, there are a number of REs whose participation in the project is subject to greater fluctuation. Members from within this group are able to tap into short-term markets or make some quick sales (through exhibitions etc). This results in incomes fluctuating substantially in a particular month or quarter. As a result, the project has also selected a sampling of REs from this group to verify findings on standard of living increases.

Indicator Quetta Multan Karachi Thatta Total

Number of wholesalers / retailers interviewed who say quality and design of products have improved (Total 22 interviewed)

40% 100% 75% 100% 77%

Number of sales agents who say quality and design of products have improved (Total 177 interviewed)

100% 100% 100% 100% 100%

Number of sales agents who are satisfied with design services of Tracer/Designer (Total 73 interviewed)

- 100% - 100% 100%

Number of embroiderers/garment makers who report higher monthly income as a result of program participation (Total of 117 interviewed)

63% 31% 75% 93% 63%

Number of embroiderers/garment makers who say their quality of life has improved as a result of increased revenues related to the program (e.g., not working longer hours for more income, better food) (Total of 117 interviewed)

93% 94% 100% 100% 95%

Number of embroiderers/ garment makers who report that their status in the household has risen as a result of greater economic contribution (Total of 117 interviewed)

65% 85% 100% 77% 78%

Number of embroiderers/garment makers who report number of children going to school increased after project (Total of 117 interviewed)

46% 86% 50% 17% 30%

Number of embroiderers/garment makers who report increased mobility (mobile or semi-mobile) after project (Total of 117 interviewed)

77% 85% 91% 63% 76%

USAID IGP Pakistan - Behind the Veil Final Report – January 2008 page 13

Qualitative Results from Random Sample of REs

Target producers have experienced increased self-confidence as a result of their improved skills, and their changing attitudes have substantially contributed to the non-financial results.

While the primary goal of the project is economic empowerment, it is extremely encouraging to see the social empowerment improvement that stems from increased incomes.

Sales Agents and buying house operators have also benefited from enhanced empowerment as a result of their participation in the project. These women have greater mobility within their community and have travelled independently to urban centres to participate in exhibitions and to negotiate with buyers. Through their business, these women have developed their capacity to travel across Pakistan, to run enterprises, to engage with men in business, and to form support networks. The series of capacity building modules offered by the program has demonstrated benefits for SAs beyond improved incomes. SAs now keep business accounts and recognize the importance of their business as an enterprise. They also recognize the opportunity to improve household livelihoods and save money on a monthly basis for their families.

While the project focuses on integrating women into higher value markets, male members of the community have been involved in the program in various ways – supporting their wives, mothers or sisters, accompanying their womenfolk to difficult areas, becoming partners in the business, picking up things at the market, making deliveries, and so on. In general, men seem proud of women’s accomplishments, and respect the value that they contribute to the household. 2

4.0 VALUE CHAIN IMPACT

The following diagram illustrates the embroidered garment subsector at the start of MEDA and ECDI’s Behind the Veil project in Pakistan. As evidenced from the map, most rural embroiderers were unable to reach identified growth opportunities or interact with potential buyers as they relied on male family members to sell their products middlemen and shops, most of which catered to the traditional low-value markets, i.e. poor rural and urban consumers. The inability of these clients to interact with markets hindered both delivery of critical support services to clients, the creation of suitable products, and the development of stronger market links.

MEDA Internal Report - From Behind The Veil: Impact Analysis

Indicator Quetta Multan Karachi Thatta Total

Number of embroiderers/ garment makers who report that their status in the household has risen as a result of greater economic contribution (Total of 59 interviewed)

42% 69% 75% 89% 78%

Number of embroiderers/garment makers who report number of children going to school increased after project (Total of 59 interviewed)

29% 33% 0% 16% 25%

Number of embroiderers/garment makers who report increased mobility (mobile or semi-mobile) after project (Total of 59 interviewed)

43% 71% 50% 58% 69%

USAID IGP Pakistan - Behind the Veil Final Report – January 2008 page 14

Embroidered Garment Subsector Map – pre-project

The following graph depicts the various market channels which project REs sold to by the end of the project. Contrasting this picture with the graph above, the figure highlights the richness that has developed in the embroidered garments subsector as a result of the sales agent model.

Embroiderers no longer rely on their male family members for trading activities; through their interaction with sales agents, embroiderers are able to access critical support services, including design and product development, which facilitates a multitude of selling options to reach growing market opportunities. While the lower quality product continues to flow through to traditional market channels, REs are now able to reach urban contemporary consumers and export markets. Although the project did not focus strongly on export markets, as quality and designs improved, Sales Agents were able to engage with a greater diversity of export markets, including India, United Arab Emirates, United States, Canada, Kenya, Oman, Iran, Britain, and South Africa.

Embroidered Garment Subsector Map – post-project

USAID IGP Pakistan - Behind the Veil Final Report – January 2008 page 15

The graph below highlights the information flows that have allowed this substantial shift in market interaction for rural embroiderers.

4.1 Value Chain Linkages

One of the initial challenges was enabling the various value chain actors to see each other as collaborators, not just as competitors. A range of program activities, particularly training at the SA level, have helped ensure that the actors see how cooperation can lead to greater prosperity. As enhanced benefits were realised through the market system, value chain actors began to collaborate and develop win-win relationships which positively impacted the value chain.

Linda Jones’s internal analysis outlined some of the positive impacts on the value chain linkages. The key value chain linkages that have been strengthened as a result of project interventions and changing market conditions are highlighted below:

Vertical Linkages:

REs /UGs to CSAs: REs and CSAs by definition belong to the same community. CSAs are embroiderers themselves, and often began as a member of an RE group and then emerged as a leader. As such, the relationship tends to have strong social capital and relative levels of trust.

REs /UGs to LSAs: Initially, REs were connected directly to LSAs. This turned out to not always be a positive relationship since LSAs were often outside the community and therefore not always able to interact directly with REs. Generally, REs connect to LSAs through a CSA though as LSAs develop they typically start to take on the role of a CSA. Where the original model has been maintained, REs have continued the relationship with the LSA as it is beneficial to them and their group.

CSAs to LSAs: CSAs may be mobile or they may be homebound. Homebound CSAs connect to the market through other CSAs whereas mobile CSAs access markets on their own as well as buying houses and other buyers. LSAs are vested in the success of lead producers – in order to have a well-functioning group of producers, a lead producer needs to be competent, USAID IGP Pakistan - Behind the Veil Final Report – January 2008 page 16 skilled and able to manage an RE group or groups. As such, there is respect and sharing of information between these two groups.

CSAs to Buying House: CSAs often market their groups’ products through buying houses in Karachi, Multan, Quetta and Hyderabad. The buying houses offer orders, order management and quality control, as well as a showroom for interested buyers. For example, Shahida Bashir in Quetta runs a buying house that supports CSAs, providing market access mainly to wholesalers. On a side note, Shahida Bashir’s husband is otherwise unemployed, and he works with her to manage this market oriented business.

CSAs to Buyers: An unexpectedly and encouragingly high number of CSAs deal directly with buyers such as wholesalers and retailers. The interaction with wholesalers and exporters requires a level of sophistication, negotiating skill and the potential to deliver according to the buyers needs. Some CSAs have risen to this challenge and exceeded all expectations in terms of engagement with male buyers. As they developed, SAs began finding their own buyers, without project support, to provide increased work to her network of homebound REs.

LSAs to Buyers: As town women, often educated, running their own boutique or retail outlet, LSAs are reasonably well equipped to deal with buyers. Large orders may come through them to CSAs or RE groups. LSAs are able to negotiate with buyers, understand the price points in the market, and know what orders are reasonable. These relationships are sometimes subject to unfair practices, but LSAs are often able to find alternate buyers.

Input suppliers to CSAs and REs: Initially, some input suppliers took advantage of REs and CSAs and their need for embroidery supplies on credit. For example, they would be offered input supplies on credit through an arrangement with a buyer on whom they were dependent for an order. When the goods were completed and sold, payment for input supplies was withheld at a premium, considerably reducing the expected profit. With the opening of input supply shops in rural areas, the provision of inputs with large orders, and the stronger capacity of women to seek other suppliers, this relationship issue has evolved into a straightforward business transaction.

Horizontal Linkages:

Although not always easy and relaxed, positive horizontal linkages have been established. This is especially significant as women did not have the opportunity to connect with others outside their family.

RE / UGM Groups: Women in villages and urban slums have come together to work in groups, fulfil large orders, share resources (e.g. sewing machines), be trained, exhibit and participate however possible. For the most part, women report mutual support, sharing and a positive interaction with others. Frequently, this is the first time women have been involved in group activities outside of immediate family, and it has provided them with support, hope and energy.

LSAs / CSAs – AWESOME (Association of Women Entrepreneurs in Small or Micro Enterprises) - SAs are part of a network called AWESOME, as described in greater detail above. Members come together for training, exhibitions, mutual support, and so on. The groups are becoming more independent, and have started meeting regularly, advertising, planning exhibits, motivational support, social, and other activities for mutual benefit.

Chambers of Commerce – A number of SAs have been invited to participate as members in their local Chambers of Commerce in Karachi, Multan and Quetta. This brings women in the

USAID IGP Pakistan - Behind the Veil Final Report – January 2008 page 17 embroidered garment subsector into the mainstream. Benefits of being in the Chambers are prestige, recognition, networking, participation in marketing events, and lobbying of local government.

Community Level Support Services Services are being developed at the community level, providing previously unavailable support to homebound women. These included embedded services of CSAs such as market access, design, quality control, order management and input supplies (as part of orders). Concurrently, some standalone fee-for-service supports have also developed. These include: village level tracer designers, input supply and fabric shops.