Sustainable Businesses & Human Capital: The New Aid Model?

Reuter's Africa Blog recently posted a story discussing what is labeled as a "new" aid model: a project in Ethiopia that pays young women to work. The pay is quite small, but women involved in this project actually do something of value, learn some skills, and earn enough to pay for a few things they desire (such as classes in night school).

The blog entry points out: "the whole point isn’t to hand out money for free: but to help women who would be on the street get a job, an education - and a future."

I readily admit that I'm dismayed that this seems like a new insight. Encouraging and supporting opportunities for people in the developing world to create sustainable businesses and strengthen their human capital should be at the heart of development efforts. This is the strategy Indego Africa adopts. Cooperative members are partners who co-create greater prosperity together with Indego staff and volunteers, and US consumers.

This is also the approach taken by the US African Development Foundation, a small US aid agency that focuses on supporting poor and marginalized communities in sub-Saharan Africa (SSA). Created in 1980, USADF provides relatively small-scale grants (no more than $25o,000) directly to Africans who are creating and running businesses or solving social problems in their countries. The agency focuses on "support[ing] African-designed and African-driven solutions that address grassroots economic and social problems." Here is a recent brochure describing the agency's mission, its priorities (which include increasing efficiency, working directly with local people in a participatory manner, tracking outcomes, and operating transparently), and the scope of its involvement in SSA.

In some interesting ways USADF's priorities mirror Indego's: empower local people by supporting the creation of financial and socially sustainable businesses. And while the USADF model is not new it surely is not the norm among official development agencies - but maybe it should be!

- Karol

The women in the photo are sorting coffee beans in Kigali -- I took this photo back in 2007.

Confidence & Computer Exams

Sometimes it's the simple things. Consider last week's Computer Training exam at Cocoki and Covanya:

1. Plug in the computer and switch it on.

2. Open Microsoft Word.

3. Write the following sentence: "Students are going to school"

4. Put the above sentence in:
a) Font size: 26
b) Bold
c) Italic
d) Underline
e) Font color: yellow
5. Save your work in "My Documents" and call it your name.

For avid computer users, these are simple tasks. But to a woman who has heard about computers, but only recently seen and touched one in person, these are empowering steps to independence and self-confidence.

The women particularly love their newfound ability to save documents. With a more reliable way to record their thoughts (in addition to the new literacy training programs) a number of the women have apparently taken to writing short stories. Hopefully we'll get one up on Social Enterprising soon!

- Ben

Photo is Mediatrice Mukarugamba, 43, of Covanya in Nyamata, Rwanda.

Notes from the Field: A Defining Moment of Independence

Until recently, Indego Africa’s cooperative partners, Cocoki and Covanya, had never sold their handicrafts publically in the local market. Instead, orders have always been picked up at the cooperatives by Indego Africa and shipped to the United States. But this Friday, at the U.S. Embassy Holiday Craft Fair here in Rwanda, everything changed.

The cooperatives were in full preparation mode in the weeks leading up the fair. Cocoki’s foot-powered sewing machines whirred as they raced to produce the right balance of products. Rows of women lined the floor at Covanya weaving and individually signing their brightly colored baskets. The women also requested that, in addition to the scheduled classes, Indego Africa lead extra Hand Up training sessions on business English, product pricing and accounting.

When the day finally came to go to the crafts fair, the women were ready and anxious to start selling. Even though they were armed with new business knowledge, they were still somewhat unsure of themselves with their limited use of the English language and not knowing if their products would sell.

Not surprisingly, the customers responded! While our competitors struggled, Covanya nearly cleared out their entire inventory of baskets, and Cocoki's biggest sellers were their yoga bags, coffee bags and laptop sleeves (also available on our SHOP). It was amazing to watch their confidence grow as the day went on. Their English improved rapidly as they answered questions about pricing and styles. They handled the money, wrote out receipts, and even balanced their receipt books against their cash drawer to make sure they matched at the end of the day.

This was a defining moment for these women and for Indego Africa. They were learning by doing and believing in their capabilities as independent businesswomen. As the number of products dwindled, Daphrose, a master weaver at Covanya, said through a huge smile, "This gives us courage!"

- Sarah

Photo (Amity, Jadot, Sarah, Daphrose, & Emelienne) is from an article about the craft fair in Rwanda's New Times.

Carrying Social Entrepreneurship to the Roof

Yup, Carol Schillios, a social entrepreneur in Edmonds, Washington, is living on top of her store, in a tent, and accompanied by her 22-year-old cat, until she gets 1 million folks involved in her cause: helping young girls in Mali's capital city, Bamako, to stop begging and to become businesswomen. She does this by providing the girls with an incentive to do something different.

Here's the story.

Ms. Schillios runs a shop in Edmonds called "Fabric of Life" that sells products made in Mali by young women. The store is part of an effort by the Schillios Development Foundation to connect the girls to overseas markets and, in the process, provide education, health training and a stable stipend/wage the women can rely upon. So far, 20 girls have graduated from the program.

This is a picture of bead work the girls produce -- from the SDF website.

- Karol

Aid Watch Interviews Paul Romer about Charter Cities

Aid Watch recently interviewed economist Paul Romer (pictured here) on his Charter Cities concept -- worth a read. Romer's idea is reminiscent of Hanseatic League cities . Or, for a contemporary example, it's something like the free zones of Dubai/United Arab Emirates.

So imagine a country like Malawi cedes or leases some land -- and some sovereignty -- and allows for the creation of a charter city run according to the laws and regulations of Singapore, or Brazil, or South Africa. These latter countries would have the legal authority to enforce the law in the city. Romer sees the experiment as potentially democracy building, again, one is reminded of medieveal charter cities in which citizens gradually gained both economic and political rights vis-a-vis feudal lords.

A couple of questions come to mind: what would the appropriate role for local law be in such cities? In other words, maybe importing law is a good idea, but maybe building on local rules is good also. Romer suggests that cities could adopt any mix of legal rules and norms they like; different arrangements would compete against each other and some systems would win out, as least as far as investors are concerned. Introducing more vigorous legal competition has the potential to be a real boon for the poor.

Nations would, presumably, cede or lease territory because they expect to garner a variety of benefits by doing so (increased revenue for the treasury, increased access to desirable goods and services, less benignly, increased opportunities for corruption?) but would the charter rules be enforced if the surrounding sovereign comes to see the city as imposing costs instead of benefits and decides that outside enforcement is no longer desirable? Would that trigger a military response? International arbitration? etc. That's not clear, but more innovative thinking about how to increase investment and opportunity in the developing world clearly is a good thing.

- Karol

Indego Africa and 400 Brides

Another day at the office... Last Monday I attended the Great Bridal Expo in New York City, "the premier national consumer bridal marketing event in the US." Upon arrival I was slapped with a "VIG" sticker (Very Important Groom - "wait, I'm not...") and unceremoniously escorted into a packed conference center with probably 400+ brides . Walking around, the few men among us nodded in silent and knowing recognition. Mercifully I was not in attendance to sample wedding cake, recruit DJs, find out what's hot in Tahiti, or (heaven help me) gape at the bridal gown runway show. I needed to convince prospective brides that Indego Africa handicrafts are the socially-conscious answer to: "What do I give as guest or bridal party favors at my wedding?"

It was an uphill battle. I fought alongside insistent brides seeking free tote bags and competed against slick representatives from wedding venues across New York City. But I think the Indego Africa message got through:

Our products give couples the chance to show their concern for making a difference and improving the lives of others, just as they begin their own lives together. With our wine coasters, for example, guests sitting down for dinner will immediately have something to chat about. And Indego Africa provides beautiful table cards with a personalized message for guests and an explanation of how their gift or favor is having an impact in an African community. It's a no-brainer for the modern couple.

Are you looking for wedding gifts or favors (or know someone else who is)? Let Indego Africa be an integral part of your wedding. Click the links for wedding products and wedding donations (in lieu of favors). Questions? Contact us!

- Matt

PS - photo is from a traditional Rwandan wedding dowery ceremony (or "dote").

The Ibrahim Index and Good Governance

Here's an interesting interview with cell phone entrepreneur Mo Ibrahim. Ibrahim started the Mo Ibrahim Foundation which has two flagship projects: the Ibrahim Prize and the Ibrahim Index.

The Prize is a huge cash award given to a democratically elected African leader who follows constitutional guidelines regarding term limits and who exemplifies excellence in leadership.

The Ibrahim Index, the latest version of which was released a few days ago, ranks African governments in terms of how good a job they do governing their citizens. The best governed countries in Africa, according to this Index? Mauritius, Cape Verde, the Seychelles Islands, Botswana and South Africa. Mauritius is a real star in Africa -- it is also the only African nation in the top 20 group of countries that makes it easy to Do Business.

As the Doing Business group point out: "economic activity requires good rules." What kinds of rules? Countries need rules about how business is conducted as well as rules about how the broader society functions (part of the governance equation). Growth and prosperity depend upon creating incentives to change rules from bad (predatory, inefficient, ineffective) to good (prosperity-enhancing, efficient, and broadly empowering).

The Prize and the Index, in their own ways, try to create a few such incentives -- by identifying and rewarding good behavior but also by analyzing what contributes to poor governance. And because the project is African-driven, it may have additional credibility in the minds of Africans and others.

- Karol

Notes from the Field: A Competitor by Any Other Name

A major focus for the Indego Africa team here in Rwanda is our Hand Up training program in financial management and business planning. The program involves weekly sessions on topics ranging from market research to governance to inventory control. Usually our Orphans of Rwanda (ORI) student interns, who are studying business themselves, conduct the participatory trainings with curriculum support from Indego Africa staff. This past week, however, due to the pressure of university exam period (some things don’t change no matter where you are!), we were on our own to conduct the training.

This week’s topic was competitor analysis. Jadot and I began the training by asking for a definition of a competitor. This is where I discovered, to much laughter from the women, that there is no exact translation for "competitor" in Kinyarwanda. Instead, a term is used that is more akin to a rival—as in the jealousy that exists between a wife and her husband’s lover. After it was clarified that we were referring to those who sell similar products in the same market, we moved on to discuss the challenges and benefits of marketing products in the local and international market.

The women stressed quality and innovation to strengthen their market position. Our current volunteer, Sarah Dungian, then gave a presentation on local market competition complete with a slide show of available products and designs that we had photographed at curios in Kigali. This led to a great discussion of what patterns and colors the women could use to make their products stand out. Design is a tricky subject when it comes to baskets, as some customers want "traditional" patterns, while others desire a more modern feel.

Everything came full circle when, at the conclusion of the class, Sarah asked the women how they chose patterns that were not ordered by Indego. "Well," responded Daphrose Mukamugema, Covanya’s lively secretary (right), "we first go around to other basket cooperatives and examine their designs." She then smiled wide and exclaimed: "competitor analysis!" We all laughed at the simplicity of the situation. The women were already using the skills we were teaching, they just hadn’t realized that’s what it was. Access to information and training builds into existing savvy and confidence.

- Amity