CGI Session-Going Small for Big Results: Microfranchise and Entrepreneurial Growth
It’s been a full first day already at the Clinton Global Initiative in New York. This morning, CGI sessions have explored climate change with President Clinton and eight other world leaders, population issues with Clinton and New York Times columnist Nicholas Kristof, author of Half the Sky: Turning Oppression into Opportunity for Women Worldwide. Then, attendees learned about development in post-conflict zones at a keynote lunch featuring philanthropist and former “Lost Boy of Sudan,” Valentino Achak Deng, and author Dave Eggers. Follow live updates from all of the sessions at #CGI2011 on Twitter. Tomorrow, more great sessions and learnings, including a session entitled “Sustainable Consumption: Redefining Business As Usual” featuring President Barack Obama; Bob Diamond, Chief Executive of Barclays; Indra Nooyi, CEO of PepsiCo; and more, plus the world premiere of the Students of the World’s documentary video captured on a recent trip to see the life-changing work of Opportunity and USAID in Ghana. Watch live streaming video of sessions via CGI’s Facebook page.
In this afternoon panel, “Going Small for Big Results: Microfranchise and Entrepreneurial Growth,” participants discuss the impact of “microfranchise and microenterprise” business strategies to help create jobs and assist business owners in low-income, marginalized communities around the world where access to employment is the scarcest. Beyond employment, these small businesses can also deliver critical goods and services to more marginalized and underserved people, especially women. This panel focuses on communities where entrepreneurship is a key source of jobs, and other sources may not be available, and discuss those enterprise-development strategies.
Mary Ellen Iskenderian, President and CEO, Women’s World Banking
Manasseh Phiri, Executive Director, Society for Family Health
Seema Aziz, Partner and Executive Director, Sefam; Chairperson, CARE Foundation
Morgan R. Tsvangirai, Prime Minister of the Republic of Zimbabwe
Elaine L. Edgcomb, Director, FIELD, The Aspen Institute
Kebede Ayele, Country Director, Ethiopia, iDE
As the session launched, each participant introduced their organizations or backgrounds, and how these relate to microenterprise.
Kebede Ayele explained that iDE was an international NGO headquartered in the U.S. which operates in Asia, Latin America and Ethiopia, working with local farmers to transform from subsistence to small-scale commercial farming. He emphasized that the goal is to make their work scalable, allowing them access to affordable irrigation technologies, increasing their productivity, and then designing irrigation technologies via a private supply chain, building local private micro-enterprises. “Though we are an NGO,” Kebede says, “we are also a market-based organization, working to reach scale. Microfinance plays a key role, enabling farmers to borrow money and then pay it back. Within three to five years, we have a goal of reaching 50,000 households.”
Manasseh Phiri represented the Society for Family Health, which emphasizes the “social marketing” of health issues and microfranchising through clinics and through community health workers, offering family planning services, and counseling and testing for HIV and for TB. They train community health workers in social marketing, providing them with small health items such as water purification tools that they can sell for a small price, then they earn a little money, save it, buy more items to sell, and create a micro-enterprise.
Elaine Edgcomb operates FIELD at The Aspen Institute, which provides microfinance, training and technical assistance through organizations and small companies in the U.S, engaging in specific sectors to produce enterprises that produce jobs. Asked by Manasseh about their employment of “developing world techniques,” Elaine says, “Actually, microenterprise in the U.S. takes lessons from international microfinance…We have lots of grassroots organizations that employ peer-lending, peer-learning, individual lending, and technical support. We’re eager to trade both ways and learn from you as well.”
Seema Aziz has grown her Pakistan-based businesses in the last 26 years, utilizing local micro-entrepreneurs and creating jobs in their community. They were creating high-quality clothing with machines but began outsourcing hand-embellishing of garments to local entrepreneurs, providing all the materials they need. When the local vendors began picking up more and more materials, Seema realized that they had grown and hired more employees to do this work. In this way, her businesses were providing more jobs within the local community. They now have about 200 master vendors/workers who each employ between 20 and 70 people. “This is very scalable in other countries,” Seema says. The vendors have minimal risk and need little access to capital, offering them access to opportunities they would not otherwise have. “We’re training women to go into flood areas now,” Seema says, “creating a bigger and more sustainable solution.” She says, “We created our model out of a desire to use local vendors and entrepreneurs, and now thousands of people are growing and creating businesses on their own.” But most of all, she says that education and training are really critical.
“The difference between empowerment and helplessness is education." -Entrepreneur Seema Aziz
Morgan Tsvangirai, the prime minister of Zimbabwe, asked how does a government create jobs. “I think a government facilitates conditions to create jobs and to develop people’s skills to do so.” Zimbabwe has a high percentage of people in the informal sector. We’re aiming to have a generation of educated, young Africans who have job opportunities. In Africa, corporate investment is not the solution, it’s small enterprises that touch big enterprises, increasing employment of young people and encouraging small entrepreneurs. But he asks, “How can you loan without collateral?” Seema replied that in the microfinance model, especially that employing Trust Groups, there is no collateral because the group co-guarantees each others’ loans.
Moderator Mary Ellen Iskenderian asks, “How do you make training sustainable?” Kebede says that iDE’s own staff trains farmers and then they recruit from their own farmers as training agents.
For Opportunity International, this panel reinforces the impact that small-scale entrepreneurs in the U.S. and around the globe can have on their local communities. Not only is small, grass-roots entrepreneurship sustainable but it is a local source of jobs. With training, education and opportunities, local and previously underserved people, especially women, can create big and sustainable changes in their lives, providing for their families with businesses that can be a sustainable source of jobs for the next generation.