CREATIVE. MARKETING. PROFESSIONAL.

From the Blog

As someone who believes strongly in the power entrepreneurship and business to break the cycle of poverty, the erosion of trust is sobering.

“The erosion of trust is a serious concem as it has allowed MNCS [Multi-National Corporations] to be painted into dark comers in the globalisation debate, Malaysia’s former prime minister. Tun Dr Mahathir Bin Mohamed, an active supporter of open trade and FDI in practice, illustrates the extent to which MNCs need to remain engaged if they are to preserve their ‘licence to operate’ in Asia:

The mega corporations and mega banks which are getting ever bigger through repeated mergers will move into every country as soon as the WTO forces open the markets. The small and the inefficient in these countries will be wiped out…When the mega corporations, already more wealthy and more influential than the developing countries move in to take over the economy of these countries, will they not control also the political governance of these countries?…The last time the foreigners wielded this kind of power they exploited the people and the countries. Will they not do it once again?…Probahly they will give us a better life. But what will happen to our independence, to our pride and honour?

We can be invaded by businessmen, by banks, by corporations, by ideas and values and moral codes, which are alien to us…Every aspect of our lives will be invaded. Our minds will be invaded. Even our religion will be invaded.”

From Maximising the Licence to Operate by John Zinkin

I’m sure many people are familiar with the Chinese proverb, “women hold up half the sky.” But, after meeting some of the dynamic and accomplished women from the African Women’s Entrepreneurship Program (AWEP) last week, I’m convinced that, in Africa, they probably hold up 60 or even 75 percent of the sky!

The best solutions solve many problems: empowering women apparently is good for business and national security too! Read this great article…

via Investing in Girls’ and Women’s Education: A Smart Strategy for Development in Africa | U.S. Department of State Blog.

Call it Conscious Capitalism, call it Social Entrepreneurship, but in this age of faceless multi-national corporations there is a movement to business that partners with communities rather than undermining them.

When New Mexico Tea Co. needed financial capital, they called on their extensive social capital:

Edwards owns New Mexico Tea Co. near Albuquerque’s Old Town. It sells a wide variety of bulk loose leaf teas. When his bank turned him down for a line of credit recently, he turned to the loyal customer base he has built over four years.

He sent an e-mail to the 3,800 people on his newsletter list in an effort to raise $5,000. Within about 48 hours, he had raised $10,000, made up of $4,500 in “microloans” and $5,500 in gift cards that can be redeemed starting in December for slightly more than their cost.

“You don’t really know how much the community cares about you until you ask for help,” Edwards said. “Most of them had never done anything like that. But most had never been asked.”

via Loyal customers infuse New Mexico Tea Co. with green – New Mexico Business Weekly.

In many underserved communities, however, neither the invisible hand of the government nor markets cater to even the most basic needs of their members, resulting in structural and behavioral barriers to the community's growth and development. These barriers are addressed by products and services engineered by social entrepreneurs.

Social Entrepreneurship is an emerging and evolving concept. This article from an Indian Summit called Sankalp 2010 provides a great snapshot. It talks about what Social Enterprise is, an example in Mumbai of the “Dabbawallas,” and the need it fills.

via Reporting from Sankalp 2010 | Blog | NextBillion.net | Development through Enterprise.

Mathare Valley Slum

Second hand clothing is a major industry in the developing world (for better or for worse). This amazing story reminds me of so many of the 1010 partners in Nairobi.

If your dream was to become a doctor and you ended up uneducated and living in a slum, would you just give up on life? Some of us might have, but not Jane Ngoiri. Jane dreamed of being a surgeon, but she was too poor to finish school or go to college. However, today Jane is a Mitumba queen from Nairobi’s Mathare Valley slum. Mitumba is the business of selling second hand clothing that arrives in Kenya from European and American regions in massive bales.

via AfriGadget » Blog Archive » Dreams can come true – Janes miraculous Mitumba story.

Observing partners of The 1010 Project in Kenya, as well as listening to our indigenous leaders, I’ve discerned three elements that must be present for a social innovation to succeed.

  • Aptitude: A social entrepreneur’s skill or competency which they are offering to their community and to the marketplace.
  • Business Acumen: Knowledge of basic business principles and strategies
  • Capital Investment: Resources for startup costs, including financial, intellectual, and human capital

In metaphor format, if the entrepreneur and their skill is a Computer, Capital is the hardware and Business acumen is the software.

Development at times has focused primarily on the third element, Capital Investment. And it is true that  hardworking, creative social entrepreneurs in impoverished countries have remarkable aptitude but often lack access to basic capital.

However, as Michael Nyangi of LOMORO reminded me in February, many of these community leaders have not received the kind of business knowledge we take for granted in the United States. The average American would have a primary understanding of concepts like budgeting, marketing, and finding your business “niche.” In my experience, the same assumptions cannot be made in the developing world.

United Prosperity

There are some amazing organizations working on the 2nd generation of microfinance. One is United Prosperity and their model of Microfinance Loan Guarantees.
The strengths from the article on UP at NextBillion.net

  • It doubles the impact of the money invested by socially conscious investors.
  • It builds self sufficiency in the local economy by creating formal relationships between MFIs and banks.
  • The foreign rate risk is mitigated with this social guarantee model.

Read more at Online Microfinance Loan Guarantees: The Model of United Prosperity | Blog | NextBillion.net | Development through Enterprise.

In our own society we struggle with “save for it” versus “borrow it.” This debate becomes much more precarious for the poor. Many Micro-Finance Institutions (MFI’s) are looking at adding and even integrating savings to their lending services.

It will take more than good intentions and a recognition that the poor want places to deposit the money they squirrel away to make microsavings work. Part of the problem with trying to mobilise deposits from poor people is simple economics. It is hard to make a profit from customers who make lots of tiny deposits without massively trimming transaction costs.

…Saving…is often “what didn’t happen”—the accumulation of decisions not to consume. Consumption, by contrast, is an active decision to buy something. One product he is testing in India involves collaborating with banking agents to sell “savings cards” in shops, so that saving becomes an active purchase and can compete with other impulse buys.

via Savings and the poor: A better mattress | The Economist.

The Wall Street Journal recently asked eight prominent philanthropists and NGO executives how they would spend $10 billion to achieve the biggest and longest-lasting impact on the world's problems. All eight came up with great ideas, but the clear winner in my opinion came from leading Swedish businessman and philanthropist Percy Barnevik, who said he would use the money to unleash the entrepreneurship of the world's poorest citizens.

I’m with you Percy Barnevik

via allAfrica.com: Africa: Create Jobs in Continent, and All Else Will Follow.