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Female entrepreneurs in AfghanistanIt is no secret that women’s rights in Afghanistan have been suffering due to decades of war and Taliban rule in the country. Afghan women have been denied employment, education, healthcare and basic freedoms for years and were punished violently by the Taliban for attempting to find work or go to school. Years after Taliban rule, women are picking up the pieces of a broken society that drove them and many other Afghans into severe poverty. Organizations such as the Women’s Economic Empowerment Rural Development Project (WEERDP) and the Afghanistan Reconstruction Trust Fund (ARTF), both funded and backed by the World Bank, set up savings and loan associations in different communities to allow Afghan women to start their own business. Female entrepreneurs in Afghanistan have the potential to help the economy and poverty within the country.

Women’s Empowerment Projects of the World Bank

International Aid to Afghanistan is essential for empowering its women and bringing communities out of poverty. The World Bank has a variety of programs dedicated to poverty eradication. It implemented the Afghanistan Rural Enterprise Development Project to support Village Savings and Loan Associations (VSLA). VLSAs operate as a community bank that gives out micro-loans to women to create employment opportunities to sustain economic growth. Examples of businesses that have been started are hair salons, tailor shops and bakeries.

While the Afghanistan Rural Enterprise Development Program closed down in 2018, it was replaced by the WEERDP and continues to be backed by the World Bank and the International Development Association (IDA) to ensure steady funding.

VSLA’s are funded by the World Bank and the IDA to ensure sustainable financial institutions are available in Afghanistan, with the hope that they will partner with larger commercial banks in the future.

Benefits of Female Entrepreneurs in Afghanistan

There are roughly 275,684 Afghan women beneficiaries of the WEERDP.  Many of them have had access to financial services for the first time with the program. Many others have taken loans, learned how to repay them and have begun saving for the future. These are valuable life skills for women who were not able to enter the workforce or gain an education in the past.

With the increase of women-run businesses in Afghanistan’s rural communities, VSLA’s can begin to partner with larger banks to begin serving bigger loans to women after seeing the success of the businesses that started with micro-loans. The support of financial institutions is important to give women the confidence to become entrepreneurs, especially in a country where the percentage of women in the workforce has been statistically low. Skills like leadership, management and problem-solving are derived from starting a business and they can be spread throughout communities to strengthen the role of women in the economy.

Skills can even be passed down through generations. Building a structure with programs like the WEERDP is vital for long-term economic growth and success because it can open doors for creativity and innovation for an economy that would benefit.

The Future of Female Entrepreneurs in Afghanistan

Increasing the number of women entrepreneurs with savvy financial skills can benefit the communities of Afghanistan in many ways. Successful women can begin to venture out into local politics and healthcare fields to build on their skills while sharing their talents with the community. Women have important input on what types of businesses are needed for their community and can reduce poverty in specialized ways.

Afghan women make up roughly half of the nation’s population, so their representation is needed to drive economic and societal progress. Having women be visible in the business sector can allow for gender equality to improve in Afghanistan over time, improving the development of the nation as a whole.

– Julia Ditmar
Photo: Flickr

Essential Financial Tools for Small and Medium Scale Businesses
Businesses drive the economic and overall growth of a country, and strong and thriving businesses generate income, employment opportunities and support families. In fact, these groups constitute the core of a nation’s socio-economic development.

In a developing country, this valuable contribution is made predominantly by small and medium scale businesses. Experts agree there are two essential financial tools for small and medium scale businesses in a developing economy:

  1. Micro-loans
  2. Insurance

Together these two financial tools can bolster the steady growth of a business and insulate it against unforeseen circumstances such as bad weather and unfavorable market conditions.

Micro-Loans

Micro-loans are a fundamental tool for small and medium scale businesses. Micro-loans are small amounts of money borrowed from a bank or a financial institution which can be returned in minuscule monthly installments over a few years. Depending upon the borrower’s income, the installments can be as low as a few cents a month.

Often, there are no additional charges involved. “I’ve worked in microfinance long enough to know that late fees create a cycle of debt,” says Matt Flannery, founder and CEO of Branch, a mobile lending platform that remotely transfers money ranging from $2 to $500 to bank accounts of poor small-scale entrepreneurs in Kenya. Like Branch, many other startups in the developed world are contributing to the success of mushrooming small and medium scale enterprises in developing nations around the world.

The significance of these financial tools for small and medium scale businesses has been reinforced through various initiatives of the World Bank as well. In Turkey, a World Bank project helped expand the export capacity of small and medium scale businesses through micro-loans worth $1.7 billion in Export Finance Intermediation Loans. The project report showed that participating companies introduced new products, increased exports and benefitted sales and employment significantly.

Insurance

The second among the financial tools for small and medium scale businesses is insurance. Insurance creates a safety net for a businesses, and in case a business isn’t as successful as initially perceived, insurance can be used to pay off debt. Insurance thus provides an opportunity for the entrepreneur to avoid the vicious cycle of poverty, and is also proven to encourage risk-taking and improve business competitiveness.

A recent report published by the World Economic Forum stated that one in three people in Latin America lives in an area threatened by frequent floods and climate change. In countries like Mexico, Puerto Rico, Peru and Guatemala, insurance is the most effective financial tool for small and medium scale businesses.

Success vs. Failure

Public-private partnerships in many Caribbean countries provide risk cover against earthquakes, hurricanes and other natural disasters. Recently the World Bank issued sustainable development bonds to Chile, Columbia, Mexico and Peru to provide comprehensive insurance covers worth $1.36 billion against earthquakes.

These two financial tools can mean the difference between success and failure for many businesses. Increasing access to micro-loans and insurance in developing countries can help businesses grow and expand, resulting in many more people being lifted out of poverty.

– Himja Sethi
Photo: Flickr

Micro-LoansFor many of the world’s poor, access to equipment, capital and necessities like basic healthcare are difficult to acquire. Kiva.org is a pioneer for online micro-lending that enables low-income entrepreneurs to do something they otherwise would not have been able to afford. Kiva facilitates connecting a lender to a borrower, who then helps fund a no-interest loan as low as $25 (USD). The borrowers are then held accountable to repay the loan. As of today, Kiva is working in 84 countries and has a 97 percent loan repayment rate. Essentially, micro-lending is working.

Recently, Kiva entered a new lending space: education. With its Student Micro-loans program, now anyone can lend as little as $25 to students. In 2010, Kiva launched in Paraguay, Bolivia and Ecuador by working closely with its field partners to find prospective students in the three countries and create a customized loan program that works within the countries’ educational systems. Kiva’s CEO Premal Shah stated that moving into short-term student loans was a natural transition for Kiva. Shah saw an opportunity for financing something that had a long-lasting effect, and education fit the bill because student micro-loans create an education option for students in poor nations.

Improving access to education should be a top priority globally. Investing in higher education is a must if a country wants to encourage economic development. Education shapes the next generation of innovators, inventors and experts. Kiva CEO Shah mentioned that a one-year certificate in accounting can mean a 200-300 percent income increase in the countries Kiva is serving. It is a practical method to break generational poverty, which is why many impoverished nations treat education as a necessity. International focus on higher education was prominent during the 1990s, when student enrollment in public education doubled in developing countries.

Another startup, Vittana.org, launched a micro-lending marketplace for students and has since partnered with Kiva to help students get into the workforce and marketplace after matriculation. In 2014, Vittana and Kiva hoped to help 20,000 students access micro-loans for their educations. As a practical matter, the organizations are focusing on countries where jobs are abundant, but most require some level of higher education, like a certificate or degree. The purpose of aiding the borrowers in getting jobs afterwards is to secure Kiva’s interest in repayment. The loan is a loan, not a donation. Once repaid, the lenders have the option to re-invest in another borrower, or in this case, another student.

In short, student micro-loans create an education option for students of poor nations. By enabling education, students around the world have the chance to pursue knowledge and skills, and they are more competitive in the workforce and have the opportunity to break the cycle of generational poverty. When even one person steps away from poverty, it benefits them, their family and their community at large. Facilitators like Kiva and Vittana make it easy for anyone with $25 to get involved. In sum, their strategy is to pursue solutions to the lack of access to school with a simple, working concept that student micro-loans create an education option for students in poor nations.

Taylor Elkins

Photo: Flickr

Combating Poverty in Haiti

When the 2010 Earthquake left 1 million Haitians homeless and more than 600,000 injured or killed, the international community responded en masse. That response has continued over the years, as the effects of the earthquake continue to compound the preexisting battle with combating poverty in Haiti.

As that response evolves, many aid sources are focusing on entrepreneurial aid which produces business. Micro-loans for mobilizing small-scale chicken farms are one example of the business-aid model in action that exists to combat poverty in Haiti.

KORE Foundation supports impoverished Haitians by doing just that. Their investments enable families to establish chicken farms, with the generated business often increasing their annual income by 400 percent or more.

When these families are then able to repay the initial loan, the funds are reinvested in other Haitian families. In keeping with the foundation’s mission of going “beyond relief,” this model is combating poverty in Haiti by funding self-sufficiency. In addition, it keeps relief funds at work by promoting a cycle of reinvesting dollars into the community.

Supporting small-scale chicken farmers does more than allow Haitians to provide for their families as entrepreneurs. In a country where two-thirds of children are malnourished, the increased availability of poultry and eggs represents an invaluable source of dietary protein.

Organizations active in offering micro-loan aid in Haiti often provide business skills training as well, like the partnership between Love a Child and Open Hand. The duo provides micro-loans to other Haitian business owners interested in economic growth.

Through financial mentorship, the organization provides recipients management skills as they grow their businesses and repay their loans. These micro-loans support the average Haitian who would not otherwise qualify for bank loans, preventing them from having to turn to micro-loans that charge interest rates approaching 40 percent.

Combating poverty in Haiti represents no small task. As the poorest country in the Western Hemisphere, the need for investment in families’ ability to generate a stable income is dire. With 78 percent of the country’s inhabitants living on only $2 per day, generating sufficient income is an everyday difficulty. Two-thirds of the country’s labor force hold informal jobs, making stability an important goal for aspiring business owners.

In the six years following the earthquake in Haiti, many members of the international community have questioned how to offer effective humanitarian aid. Among the largest concerns are the well-meant actions (like rebuilding local schools and offering free health services) out-competing local laborers and unknowingly robbing these locals of an income.

Organizations offering micro-loans for sustainable business like chicken farming seek to circumvent these concerns. Investment in self-sufficiency enables local laborers and thus an entire community.

Charlotte Bellomy

Photo: Flickr

girls_mexico_En_Vía
En Vía, meaning “On The Path” in Spanish, is a very unique organization geared at empowering women to lead successful lives and create small businesses in the Oaxaca valley of Mexico. The owner of En Vía, Carlos Topete, founded the group when he heard about Muhammad Yunus, the Nobel Peace Prize winner in 2006. Yunus was the creator of the microloan idea, which makes it possible for people with little money to receive loans without interest.

From there, Topete’s organization blossomed. In 2008 he used his own money to form En Vía and was able to help 12 women living in poverty receive microloans; by 2011 Topete was able to reach out and help 260 other women from multiple areas of Oaxaca.

For many women, Topete’s strategy and way of running his organization are a blessing.

Guadalupe Lazo Hernandez is just one of the women En Vía has helped to get back on her feet. After her husband passed away she was struggling to stay afloat and feed her three sons with her weaving. She has received three microloans from En Vía so far, and her goal is to save up for a sewing machine so that her work is quicker, less costly and more efficient. She explains that the help from En Vía has far surpassed her expectations of just running her business, but instead she has been able to feed her children, supply them with school supplies and make their dreams possible along with hers.

Unlike other non-profits, En Vía does not just simply aim to supply women with money, clothing or food, but rather it allows them the chance to sell their products to Oaxaca travelers, gain an education and gain an understanding of how to expand their small businesses.

By charging a tour fee, Topete is able to generate more money for loans and give tourists the chance to see the advancement the women in the Oaxaca valley are making. The tourists are able to get first-hand encounters with the women and speak to them about their journeys. The tours also give visitors the opportunity to buy products to aid in the positive progression of the new lives of the En Vía women.

Topete wishes to extend and improve the entire community of Oaxaca. By involving tourists, connecting the different women involved in En Vía, and reaching out to other communities, he is laying down the foundation for a sustainable economy and giving the women resources for succeeding.

Oaxaca is a state dense with culture, history and traditions. With the help and push from En Vía, the women will be able to keep their cultures thriving by passing on what they have learned to their other family members and children. En Vía also allows the concept of micro-lending to expand outside of the Oaxaca community and reach other areas of the globe.

You can read more about Guadalupe’s experience and other women’s experiences on the En Vía blog, or watch a video from CNN of Guadalupe’s story.

– Becka Felcon

Sources: CNN, Wikispaces, En Vía, En Vía
Photo: Xica Cano

people
One of India’s leading do-good organizations is ASOMI, a micro-finance institution focused on transforming the lives of thousands of individuals.  ASOMI provides credit services to those in need of loans to improve their small businesses. Their focus on the disadvantaged section has paved the way for new opportunities for those in need by changing the attitudes of several impoverished communities. Moreover, ASOMI believes that micro-finance is the solution to current socio-political issues.

Some of the loans currently being offered range from individual loans to dairy and agricultural transportation loans, which have helped several families in both rural and urban areas of Assam. The rate of interest for most of these loans is 10%, requiring an initial deposit of 10% of the loan amount. These terms are feasible for many and as of today, ASOMI has made 17,503 loans, covering 26,456 families financially. Urban microcredits are also offered for small shopkeepers with daily payback collections instead of the larger monthly payments.

In these ways, ASOMI’s Microcredit Program has enabled several businesses to reach success, evident in the brand Sorbhog Marka Noodles. When a group of women hoped to manufacture noodles in Sorbhog they needed loans which ASOMI provided. They not only received money for their start-up but were also taught the rules and regulations for manufacturing in the Sorbhog area.

Aside from offering loans, ASOMI also provides a certificate course in management development for each of their existing employees and new loan applicants. This course allows individuals to develop a range of skills including credit management, record keeping and corporate governance. Sorbhog Marka Noodles is, however, just one success story among thousands. By combining loan opportunities with business mentoring, both men and women are able to become micro-entrepreneurs.

ASOMI currently has over 53 branches, an amazing feat considering the organization only began 9 years ago. The organization has support from private Indian finance institutions and government organizations including the Central Bank of India and State Bank of India. This accredited organization hopes to foster sustainable employment opportunities and with over 200 employees working hard on this mission, there is no doubt that it will continue to have tremendous impact for those in Assam.

–  Maybelline Martez

Sources: ASOMI
Photo: Giphy.com

Largest Global Anti-Poverty Organization

BRAC assists “138 million of the poorest people in nine countries in Asia and Africa,” yet few people have ever heard of the global anti-poverty organization. BRAC began as the Bangladesh Rehabilitation Assistance Committee but has expanded to multiple countries.  Though BRAC is no longer an acronym, it has become a synonym for progress.

The organization works to alleviate poverty through empowerment. It is the largest global anti-poverty organization. BRAC provides opportunities for self-improvement, such as self-employment and financial aid. Its economic programs created 8.5 million self-employment opportunities, and BRAC has issued over $5 billion in micro-loans.

Education is key to mitigating poverty in future generations. The organization created over 66,000 schools to meet the needs of primary and pre-primary children. To date, the schools have graduated over 6.1 million students.

Furthermore, the organization itself employs over 125,000 people in Asia and Africa. Many of the employees are first time job holders, and BRAC teaches them necessary skills.  “As a job-creator and employer of scale and diversity, we teach people the basics of customer service, and how to be productive employees,” said Susan Davis, President and CEO, BRAC USA.

BRAC engages diasporas for economic and social development. The organization realizes the value of local people.  Instead of Americans instructing people on how to improve their communities, the organization starts by training people from the country in need.  After successfully completing the program, trainers return home with new skill sets.  These individuals communicate their success stories and encourage others to strive for better lives.

One of BRAC’s unique strengths involves creating new markets.  The organization trains 100,000 health and other promoters to achieve self-employment.  Promoters work with “legal services (property rights), poultry and livestock services, and energy services.”  The jobs vary based on the specific needs of the communities.  Each position interacts with people to teach vital subjects, such as agriculture, family planning, and disease prevention.

The organization “has remained relatively unknown in the West…because it developed on the local level in the poorest, most remote communities of Bangladesh.”  It originated in communities and developed gradually.  Fazle Hasan Abed created BRAC “when he was overwhelmed by the sight of death and extreme poverty among refugees returning to Bangladesh after the 1971 Liberation War of Bangladesh.” He fled the corporate life and employed all of his resources to launch BRAC.  Today, his vision has improved the lives of millions of people.  Talk about a visionary.

Whitney M. Wyszynski

Source: Fast Company

Women Entrepreneurs, Champions Against Poverty
In the rural Nicaraguan community of La Laguna, Ana Cecilia Acuña is joining the ranks of a growing group of women entrepreneurs worldwide and defying the traditional gender roles of her community while improving the lives of everyone around her. Ana grew up in poverty, often without enough food to eat and working when she was young to pay for school. As an adult, Ana opened up a store that feeds her community with items such as oil and rice funded by micro loans from the non-profit organization Opportunity International.

One problem that faced her community was obtaining potable water from a viable source. With encouragement from Opportunity International, she joined the La Laguna Community Cooperative and later became the first woman member of the board. The cooperative then received a loan for enough money to dig a well and create water pipes that serve many of the families in the community. Soon they plan to have potable water running to each of the 3,800 people in the area. Fresh water in their homes supplants the previous method of walking seven kilometers to fill up a bucket of water. Currently, Ana Cecilia Acuña is one of five employees of the cooperative and is proud to make enough money to move out of her mother’s house and pay for her son’s school fees.

According to Vicki Escarra of Opportunity International, “when a woman is given an opportunity to change her life, she invests 90% back into her family.” From there the women entrepreneurs will invest what they make into their community. It is with the belief in this principal that Opportunity International hopes to raise $50 million for their One Woman Initiative that will provide two million women worldwide, like Ana, with loans to start their own small business. Seventy percent of the people who live on $2 or less a day are women. It is easy to feel helpless to make real change when faced with the daunting statistics of poverty, but the growing popularity of organizations that fund entrepreneurs using micro loans make it more accessible than ever to make real change in someone’s life on a small budget.

– Sean Morales

Source: The Huffington Post
Photo: TechnoServe