Ian Christoplos

The Pisces Project: The Tricicleros of Santo Domingo, Dominican Republic

Homepage Manual Contents

unpublished, April, 1984
Excerpt from: Bicycle Reference Manual for Developing Countries. Edited by Barbara Gruehl Kipke, April 1991.

The goal of the Pisces demonstration projcts is to assist urban microenterprises ranging from chewing gum hawkers to small shop owners. These projects approach the broad goal of assisting a multifarious group of beneficiaries primarily via one objective: to provide credit, and thus establish a less usurious option to the local moneylenders. These proiects should therefore be analyzed keeping in mind the beneficiaries' preexisting alternative, moneylenders whose entire "institutional baggage" consists of a roll of cash in one pocket and perhaps a calculator in the other.

The loans Pisces distributes, are intended to assist the microenterprises to hire more employees, purchase their means of production, expand inventory or frequently just to pay off old debts to the local moneylenders so as to gain a fresh start. This last function is often cited by the beneficiaries as their most pressing need. Such loans also have the most temporary effect. If further credit is not available, the microentrepreneurs almost invariably find that, in time, they must return to the moneylenders. Whereas loans intended for capital expansion may contribute to "take-off" when applied on a one shot basis, the release from indebtedness has required the creation of financially viable, ongoing institutions.

It is hoped that the end result of all Pisces demonstration projects will be growth in output. As Judith Tendler points out (Tendler pp.9 and 12), this is a goal which is unique among urban basic needs projects which tend to be "based on strong implicit equity justifications" (ibid. pp.8). Most urban projects manifest this predilection by concentrating on improving services rather than increasing or enriching employment opportunities. Pisces differs by assisting the poor where they work rather than where they live.

In keeping with this output orientation, Pisces originally hoped the projects would achieve eventual financial self sufficiency. Though the projects are failing in this respect, they still fare favorably when viewed from the equity and basic needs stance of most urban projects.

As an example of the sort of project Pisces is implementing I shall concentrate on the tricicleros component in Santo Domingo. This is not a model of what the other projects are doing, as Pisces is employing a variety of implementation schemes.

The tricicleros component accounts for 83% of the loans distributed by the Pisces solidarity group project in the Dominican Republic. The remainder of the solidarity group credit goes to hawkers and seamstresses, referred to as the working capital group.

The tricicleros component supplies loans to groups of tricycle cart drivers to be used for the purchase of their tricycles and to supply a small amount of working capital. Before Plsces the tricicleros had rented their vehicles from agencies which charged them a daily rate, slightly higher than what they could now pay towards the purchase of their tricycles. These men (there are no women tricicleros) earn their living peddling (and of course pedaling) or collecting scrap for resale.

An indigenous private voluntary organization is responsible for project implementation in all the Pisces demonstration projects. In Santo Domingo the Fundacion Dominicana de Desarollo (FDD) is the organization used. Established in 1965, Pisces is the FDD's first urban project. They have set up a closely monitored suboffice called Programa pare el Desarollo de Micro-Empresas (PRODEME) as their implementing bureaucracy. This implementation unit within the implementation unit handles the actual delivery of credit to the tricicleros. The director and credit analyst of PRODEME stay in close contact with their supervisors in FDD. PRODEME's five field workers (coordinators) work with the solidarity groups organlzing, arranging the loans and collecting payments. As the project has progressed, PRODEME has gained somewhat more autonomy in order to accellerate and simplify loan approval.

The most striking feature of the tricicleros component in Santo Domingo has been the vigorous impetus from the beneficiaries. During the feasibility study stage, AITEC sent Stephen Cross to provide technical assistance to the FDD. Mr. Gross started by putting out feelers in the community among various microentrepreneurs. He talked to these microentrepreneurs about his ideas for the project, outlining the solidarity group format whereby four to seven entrepreneurs would band together to guarantee each other's loans and provide mutual support.

One triciclero, named Juan Ortega, recognized great potential in what he heard. Mr. Ortega started calling Mr. Cross repeatedly and when he received a go ahead to form an experimental solidarity group the tricicleros were quick to mobilize.

Juan Ortega did more than organize one solidarity group for himself. He rented a garage, and in it set up a public address system on the back of an old flatbed truck (A metaphor for the tricicleros' empowerment through their appropriate technology). He spread the word and within a few months 45 prospective solidarity groups were meeting in the garage each week to discuss the program. To formalize these meetings the tricicleros formed the Asociacion de Tricicleros "San Jose Obrero".

Most development management scholars have stressed the slowness of developing and utilizing participation. Francis Korten asks "Should they [the bureaucracy] take the time to have the community develop a plan of action or should they make it themselves to get the task done as quickly as possible?" (Korten pp.186) The tricicleros reversed this situation by organizing before the bureaucracy had a chance to develop its own plans. As time went on, the FDD fell further behind. The Association developed plans which included many more needs than the FDD was willing and/or able to handle.

The tricicleros believe their association is in great need of technical assistance. They want to learn bookkeeping, marketing, etc. and they feel that the FDD should be responsible for providing this training. The FDD does not recognize their requests as valid and they have either ignored the tricicleros' appeals or referred them to other institutions. If the FDD had been active in the formation of the Association they would probably feel more accountable. Just as beneficiary participation in implementation unit activities is important, so it is with the inverse. Francis Korten recognized this as a precondition for participatory development (Korten pp.190-1). The major concern about such participation is the potential of generating beneficiary dependency (Ibid.). The tricicleros' dynamism has shown them not very susceptible to this danger.

Though the tricicleros were envisioned as a beneficiary of the project from the early stages, neither AITEC nor FDD planned that they would be the dominant credit recipients. Susan Sawyer has criticized the project for failing to develop upon the interest expressed by women microentrpreneurs. She observed that the women of the working capital solidarity groups felt marginalized in Juan Ortega's garage (Sawyer pp.14-5). She saw PRODEME's male coordinators as further discouraging their participation. Rather than chauvinism, this was more likely an attempt to limit the responsibilities and tasks of the bureaucracy. The FDD was happy to stay with a single beneficiary, single problem project. They did not want to expand to a more integrated project which would meet either all the needs of the tricicleros or one need (credit) of all the microentrepreneurs. This "coping technique" (Bryant and White pp.182) often used by lower officials, has here been applied by the upper FDD administration in order to shepherd their resources.

One study (Reichmann pp.63) attributes FDD's rigidity to its "traditional Hispanic organizational system" of vertical power relationships. Ickis (Korten pp.4-8) describes similar problems stemming from similar structures among rural development instltutlons in Central America. Ickis however also saw these problems existing because "Responsive strategies were viewed by some as attractive, but were recognized as idealiatic and impractical for widespread application" (Ibid. pp.8). FDD's inflexibility may stem from their background in rural development, where participation was logistically difficult to handle. In Santo Domingo, when they encountered a single organized group of beneficiaries they continued to follow their rural institutional structures. Jon Morls states: "Unless otherwise provided for, field staff will perform in the customary ways of the larger administrative system" (Moris pp.23).

One of the ways the FDD has limitted their focus is by concentrating on an activity -providing loans to purchase tricycles- rather than on the desired result -freedom from debt. Francis Korten, in discussing a similar example wrote, "The set of systems in which the social worker worked emphasized only her accomplishment of the activity" (Korten pp.187). This short sightedness has enabled the FDD to ignore the tricicleros' desire and need for followup working capital loans.

Despite the small working capital loan included with each tricycle loan, most of the tricicleros must go back to the moneylenders, often to pay their weekly note to FDD. For that reason, one of the Association's main desires has been an expansion of the project to include second loans of working capital. During the early days of the project the expectation of second loans was a major incentive for the prompt repayment of the original loans. As hopes for further credit have faded so has the importance of the solidarity groups' credit ratings. The tricicleros have reacted to the removal of this incentive with increasing late payment and default.

In their monitoring of the project, AITEC has been concerned about this problem from the start. They have recommended the establishment of a working capital loan system several times. The PRODEME staff seems to have concurred on this, but the rural oriented upper administration has reacted to project difficulties by shifting their attention (and funds) back to their traditional rural projects. In this reversal of the often cited urban/central bias (Bryant and White pp. 158-9, Tendler, et al.), the FDD is retreating from a problematic central urban project to their easier to handle rural base.

Ironically, one of Pisces greatest examples of organizational learning has occurred because of FDD's refusal to change. Since their contract to provide technical assistance to the FDD ran out, AITEC has made fewer attempts to convince them to be more responsive (the last report on the project was not even translated into Spanish). AITEC came to realize that, "there are situations where the establishment of totally new institutions is required and an incremental approach is foreclosed" (AID, Institutional Development pp. 10).

Before he left the Dominican Republic, Stephen Cross started working with interested parties in the Dominican private sector to establish a new institution which would learn from FDD's mistakes. This organization, called Asociacion pare el Desarollo de Microempresas, Inc. (ADEMI), is now providing small working capital loans to microentrepreneurs in Santo Domingo. Many of their clients are tricicleros purchasing their vehicles through FDD. ADEMI differs from FDD primarily by emphasizing follownp loans to entrepreneurs who maintain their credit ratings. ADEMI's repayment rate is over 99%, whereas FDD is around 65% and dropping. ADEMI is growing and receiving increasing support from AID, IAF, IDB and most significantly, from the Dominican Republic private sector.

Though the project is still functioning, a gradual removal of incentives has pushed the FDD's Pisces efforts into a downward spiral. As followup loans do not materialize loan payback suffers. This demoralizes the coordinators who, in turn, do not push their collection efforts or set up new solidarity groups. AID then switches their support to ADEMI which signals FDD to divert their efforts back to rural projects.

The triclcleros meeting in Juan Ortega's garage soon came to realize that their meetings were growing not only because of a desire for loans. They were coming together in class solidarity. Pisces was a catalyst for the flowering of a preexisting but undeveloped consciousness among the "companeros" of the Clase triciclero. Rebecca Reichmann, an anthropologist who studied the triclcleros' Association for AITEC, attributes "the spontaneous and unprecedented formation of the Association of Tricicleros" to:

"experienced and competent leaders working as tricicleros conditions calling for action a context for meeting -i.e., the FDD program requirement input of technical assistance at a level encouraging participation while non-coercive local support networks in place a history of "mutual aid" activity in the Dominican Republic" (Reichmann pp.62)

Among small independent businesses, it is often assumed that solidarity will be difficult to foster. In many cases this is true. By disaggregating the multifarious businesses within the "microenterprise sector" it becomes apparent that some types of businesses are generally less susceptible to this divisiveness.

Many elements of solidarity are inherent in the nature of the Tricicleros' business as a "rolling hustle". Whereas enterprises in fixed locations have no choice as to neighboring and competing businesses, the tricileros have the option of pedalling away from competition or social conflicts. In situations this can be a vital safety valve.

More important than being able to avoid each other, most of the tricicleros have an opnortunity to come together every morning, first to pick up their vehicles from the garages, and again at the market when purchasing their day's supply of produce. These assemblages create natural comraderie which may be universal to independent operator transport enterprises. A rickshaw-pullers cooperative (which functioned very much like the Pisces Dominican Republic project) in the Comilla Project was developed from the traditional gatherings at a local tea shop (M. Nurul Huq pp.9). I have experienced similar gatherings in three different jobs. As a truck driver, I would join the lines at warehouses before they would open in the morning to drop off or pick up freight. As a carriage driver I would see all the drivers during the stable rituals of grooming, shoeing and harnessing the mules. I spent one summer peddling shrimp from my pick up truck in Baton Rouge. Every morning the peddlers would gather at the fish market to wait for the seafood coming up from Bayou Lafourche.

After the previous day's conflicts, these daily gatherings to deal with a common adversary (the warehouse foreman, stable blacksmith or seafood supplier) provided a cathartic ritual which formed fraternal bonds among intensely competitive individuals. The meetings in Juan Ortega's garage to "hustle" loans from the FDD were a new experience for the tricicleros, but were in many ways similar to their dealings with the garage owners (usually the tricycle leasors) and suppliers. Transferring their earlier experience, many tricicleros thought of the project as "the North American's (Stephen Cross) business" and believed that the FDD was located in Juan Ortega's garage. (Reichmann pp.63)

Another way in which empowerment through solidarity comes naturally to transport operators is that a certain power is inherent in their role in society. Transport strikers, be they truckers, cabbies or rickshaw-pullers, can greatly slow down the production of all parts of society by restricting the distribution of inputs (materials or workers). Also, particularly in urban areas, vehicles can be used to block traffic causing highly visible disruption in specifically targetted locations. The tricicleros obviously have limitted power in these respects. Nonetheless, consciousness of their disruptive potential is reinforced whenever a car honks for them to get out of the way. The bumper sticker "I may be slow but I'm ahead of you" is an expression of the empowering attitude of many transport operators.

Pisces concentrates on credit because it is the only type of assistance generic to all microenterprises. There has been little or no effort to analyze how the needs of a dressmaker differ from that of a triciclero because they are both microentrepreneurs and they both need credit.

The corollary to this is that Pisces has hardly looked at ways to assist the microentrepreneurs through helping them to better serve their customers.

The mayor question now facing the Pisces group is whether direct assistance is the best way to help the microentrepreneurs. There is a feeling that concentrating on improving urban residential services and expanding the formal sector may help more than injecting credit into what may be "dead end jobs". It is also thought that pressure on governments to change repressive regulations may be the best way to reduce the marginalization of the informal sector. A limit in this viewpoint is that microenterprises are not only a way of providing income opportunities. They also provide important urban services and assist the formal economy. Their role as such, and the opportunities for stregnthening that service have been obscured by Pisces' view of the microentrepreneurs as just aid recipients.

For example, impure water is considered to be a health and sanitation problem. Those responsible for potable water are basically concerned with clean water for home use. When a street vendor is forced to use dirty water to make her lemonade it becomes a microenterprise problem. The result is people getting sick in either instance. If the lemonade vendor is able to pass the health inspection and become legal because she has clean water, the best way to assist both the hawker and the customers may be potable water.

Pisces lack of attention to the role of microenterprises in service delivery is an example of how bureaucracies "do not give adequate consideration to efforts to use the private sector, to work with citizens, or to develop a diversified system." (Bryan and White pp.262-3)

Rapid urbanizatlon in the Dominican Republic has increasingly marginalized the poor by pushing them farther from the central markets. Dry goods stores open quickly to serve the new barrios, but lack of refrigeration and slow turnover of goods restricts their ability to handle perishables. The tricicleros not only serve individuals, but also stock these shops on a daily basis with small quantities which would not warrant a tally trip to the central market. Thus the tricicleros' beneficiarles include both the formal sector shops and the poorest consumers.

I saw myself fulfilling a similar need when I peddled shrimp in the blighted slums of Baton Rouge. Host of my customers lacket the transportation to get to seafood markets (Shut-ins ant the elderly were particularly glad to hear my call). In a region world famous for seafood, they would tell me how long it had been since they had tasted fresh shrimp. I saw myself providing an important service, liberating these bayou folk from Mrs. Paul's Fish Sticks.

This transportation sectoral analysis would change the Pisces project's standards of evaluation because transport projects are rarely expected to entirely pay for themselves by vehicle generated revenues. This is because transport analysis perceives, not only the operators, but also the recpients of the goods the operators deliver as benaficiaries.

Pisces' credit does not appear to have significantly improved the triciclero's ability to serve their customers. Rebecca Reichmann mentions that Association members "do not travel significantly farther". (Reichmann pp.19) The way to assist the tricicleros in expanding their markets may be improved technology. More durable and easily pedalled tricycles would enable the tricicleros to reach more customers, thereby increasing their income and expanding their range of service. This is not to say that technology transfer should be a replacement for Pisces efforts, for without vehicle ownership "the terms of access provide strong disincentives for individual initiative and investment." (AID, Institutional Development pp.22)

Though the damonstration projects meet important needs, Pisces' sectoral tunnel vision obscures many spread effects and hides an important integrated outlook.

BIBLIOGRAPHY

AID, Institutional Davelopment: 1982
J.Ashe, Assisting the Survival Economy: The Microenterprise and Solidarity Group Projects of the Dominican Development Foundation, 1983, ACCION/AITEC
H. Farbman, ed., The Pisces Studies: Assisting the Smallest Economic Activities of the Urban Poor, 1981, AID
S. Fass and M. Patton, Evaluation of the Program for Investment in the Small Capital Investment (sic) Sector, 1983
H. Nurul Huq, Cooperation as a Remedv for Rural Poverty, 1963, East Pakistan Cooperative Union, Ltd.
P.J. Jimenez, Informe Mensual No. PJ-11, 1984, ADEMI
D. Korten and F. Alfonso, ed., Bureaucracy and the Poor, 1983, Kumarian
J.R. Horls, Managing Induced Rural Development, 1981, International Development Institute
R.L. Reichmann, The Dominican Association of Tricicleros "San Jose Obrero": A Case Study of Local Empowerment, 1984, ACCION/AITEC
S.M. Sawyer, Dominican Republic: Program for Development of Micro-enterprises, 1983, Harvard Institute for International Development