The Power of Hope

The Power of Hope

Finally! This week there was some great news about aid programs that really alleviate extreme poverty (less than $1.25/day). And – yay! – the programs with this long-term, positive impact are very similar to our Small Business Program. A recent multi-country study evaluated a program with range of interventions, including “cash to meet basic needs, training on how to earn a living, access to health services, and frequent check-ins from field workers.” In the same vein, our Small Business Fund provides business training, regular check-ins from our local coordinators, and start-up funds for a business of the group’s choosing.

Even a year after the program ended, the researchers found improvements in food security, women’s empowerment, and mental health. “But one of the most important effects of the approach,” the Christian Science Monitor article suggested, “could well be its tendency to spring participants from a mind-set that sees little or no hope of breaching the extreme-poverty ceiling.” The power of the program was that afterwards, people felt better about their future; they felt hopeful. And this, in turn, helps them continue to improve their lives.

"We began this work as if we were joking. Now it gives me joy." A Small Business Fund leader in Uganda makes clay pots and then sell them at nearby markets.

“We began this work as if we were joking. Now it gives me joy.” A Small Business Fund leader in Uganda makes clay pots and then sell them at nearby markets.

Del knew well the importance of self-esteem. It came across in our conversations and in the many letters he sent to me. “Within you is the power,” and “use what you already have and, step by step, uncover results that prove that we are greater than we realize,” he wrote. Perhaps we know from our own lives that money troubles can bring stress and make it even hard to get motivated to make a change. We can’t see beyond the immediate challenges or grasp the big picture.

On the other hand, as families in the Small Business Fund begin to see the great changes they have achieved through their own work, they get excited and hopeful. In part this hope comes from what Canaan Gondwe, Small Business Fund (SBF) Coordinator in Malawi, calls “mindset preparation.” He has on-going conversations with group members helping them mentally prepare to make these big changes in their lives, to seize their future, and to put in the many hours necessary to make their business successful. After three months in business, 84% of his groups report feeling better about their future.Our family has really moved from a minus to a plus,” one family proudly wrote.

When we were in Malawi, Theu, who had received a SBF grant to start a restaurant, testified that the business is growing and that he "has bought everything he needs." Other SBF Members in Malawi  cheer him on!

When we were in Malawi, Theu, who had received a SBF grant to start a restaurant, testified that the business was growing and that he “has bought everything he needs.” Other SBF Members cheer him on!

Even our Sharing the Gift initiative, where SBF families are encouraged to pay-it-forward to another family in need, is part of building self-esteem. I have written about how it gives the gift of giving. Groups that have gone through the program and have been successful get to help someone else. They see how far they have come and then there is the opportunity to bring others along with them.

Was I surprised that hope turned out to be a factor in alleviating poverty? Not for a second. Still, it is exciting to have confirmed what I already knew from our Small Business Fund – that encouraging people, meeting people with dignity, and helping them work to realize their own dreams is the way we’re going to make the world a better place for all.

Pre-school students celebrate Easter in Malawi

Pre-school students celebrate Easter in Malawi

A year ago, the first preschool in Manyamula village was started with a Small Business Fund grant. Nellie, newly divorced, moved to Manyamula to start a new life. Nellie and two assistants – Deliwe and Tamara – each already had teaching skills and they were eager to help the 30 new students learn and grow. With the Small Business Fund grant they were able to purchase some books, crayons, mats, and cups for snack time. Thus was born the First Steps Pre-School.

The pre-school has already grown to 50 students and has created a ripple of business activity in town. Mary Phiri, who owns one of the shops in the market, has enrolled her youngest daughter in the pre-school, allowing her to concentrate her efforts of building her grocery business. And Chimwemwe, another shop owner and knitter, received a commission from the school to knit sweater uniforms for some of the students.

Children from the local SBF-supported school told us what they wanted to be when they grew up: a nurse; teacher; poilot.

Children from the local SBF-supported school told us what they wanted to be when they grew up: a nurse; teacher; pilot.

Recently the students, ages 1-4, put together an Easter pageant for the community called “Time to Come Together.” Nellie said that, “it has been my passion to organize such an auspicious occasion for the school so that children can share their experiences together and enjoy the love of God.”

The children sang, recited Bible verses, and danced together. Several community members gave speeches to encourage the children and thank them for putting together this new kind of event in Manyamula. Nellie was extremely happy to have the students appreciated by the community and was quick to say, “It is beautiful for our children of different churches to come together. This will strengthen their social structures and spiritual growth!”

Nellie, Canaan Gondwe, and Tanya with puzzles and toys from Tanya's nieces.

Nellie, Canaan Gondwe, and Tanya with puzzles and toys from Tanya’s nieces.

Success Story: “Darkness is cured”

Success Story: “Darkness is cured”

Back in October 2012 I shared the success story of Hastings and Ruth Fuvu in Malawi. They had received a $150 Small Business Fund grant in early 2012, ramping up their business of selling tomatoes and onions in the market. This expanded business increased the family income enough to buy school uniforms for their children and seek medical attention for their daughter Miness, who experiences periodic seizures. The 2012 post ended with Fuvu’s dream to build a house of their own, using burnt bricks.

Malawi, bricks

Hastings and Ruth with bricks for their house. (2012)

Well, in July, 2014, I got to visit that new house! We sat in their home, listening to their story of how their lives have improved since growing their business: “We have wealthy relatives,” Ruth told us, “and they have never given to us, but SIA has given to us.”

This week I received another exciting update from Canaan Gondwe, the SIA Small Business Fund Coordinator in Manyamula: Hastings and Ruth have been able to connect to the new electrical grid.

Canaan reports:

“After making enough savings, they molded bricks, built a house and now they have electrified the house. One part of the building they are using it as a barbershop where they get the additional income. With the same power, they are renting to someone who is welding at the premises. This is an income diversification for the family.

The Fuvu home with electricity! A welder pays to tap into the electricity. Welding has been only available with generators before the grid came to the village.

The Fuvu home with electricity! A welder pays to tap into the electricity. Welding has been only available with generators before the grid came to the village.

“The family was quick to tell me that very soon they are Sharing the Gift by assisting one person to begin as they began.

“Life is new because they no longer go for fuel to light up their house. Life is made easy as darkness is simply cured up with pressing the ‘on’ switch in the house.

Imagine such a difference in just three years! This $150 small grant is continuing to pay amazing dividends to the Fuvus and others in the community.

Malawi, house, home

Tanya in front of the guest room of the Fuvu family’s new home. They invited me to “take a sleep” at their house next time we visit!

The rental market in Manyamula

The rental market in Manyamula

I often mention that when families are successful in their Small Business Fund businesses they begin to invest in burned bricks for their home. In rural Malawi there is a lot of space and land is relatively inexpensive. That means that even poor families can access land where they might build a home.

Harriet in front of the house she built with business profits and a low-interest loan and now rents out to a school teacher.

Harriet in front of the house she built with business profits and a low-interest loan and now rents out to a school teacher.

When we visited Malawi I was fascinated to be in a place where most young families dreamed of (or were actually working towards) building their own home.

Most of the houses in Manyamula Village are made of brick. Adobe might be a more accurate word, since the bricks are made of earth, and they may or may not be fired. The fired bricks last much longer because the rain easily breaks down the bricks that are only sun-dried. And they are also much more expensive: 10 Kwacha (USD $0.02) per burnt brick, compared with just 3 Kwacha for a dried one.

The Manyamula Rental Market

Brick maker in the pit of red earth which will be used to make the adobe bricks.

Brick maker in the pit of red earth which will be used to make the adobe bricks.

Because almost everyone builds their own homes, there aren’t a lot of places available for rent. So a few of the successful Small Business Fund groups have invested in building secondary buildings on their land to rent out to visiting school teachers, doctors, and other government officials to the village. A widow, Harriet now lives with other family members so that she can rent out her home for additional income. A school teacher pays her 3500 Kwacha (~USD $7.50) per month.

Across the street and down a few hundred yards, Reverend Isaac bought a plot of land for under $200. He hopes to have the rental house built in seven months. We visited while they were in the process of forming the 15,000 bricks needed for the home.

Bricks drying in the sun

Bricks drying in the sun

Red dirt is mixed with water and then slopped into a wood frame. The brick maker makes sure the earth is settled and leveled in the frame and then carries it to the drying area. With a *th-wunk* sound the bricks are dropped out of the frame onto the ground. The lines of bricks are covered with straw and left to dry in the sun for three days (we were there in the dry season, with no chance of rain). Then they will be stacked into kiln-like structures for firing.

Rural Electrification

People like Harriet and Isaac are taking advantage of the new electrification that is coming to Manyamula. We saw a few shops that were already tapped into the new grid. Mostly people are setting up wiring and electric boxes and are eager for the day they will be able to connect. The general consensus in Manyamula is that the electrification will bring more people to the village. When it does, some savvy business people will have nice burnt-brick rental places ready to offer them.

One of the first electricity towers in Manyamula Village. July 2014.

One of the first electricity towers in Manyamula Village. July 2014.

 

[UPDATE: In the comments, Marsha Johnson asked about solar power use. Here is a blog post about one of the solar panel systems that I saw in Malawi.]

Helping Businesses Succeed

Helping Businesses Succeed

This group of women meet twice a week to weave mats together under the trees. "People laugh when you are going [to market with your mats], but not when you are returning [with money]."

This group of women meet twice a week to weave mats together under the trees. “People laugh when you are going [to market with your mats], but not when you are returning [with money].”

Like in the US, small businesses have a special place in the African economy. It was clear from my visits to Malawi, Kenya, and Uganda that in the rural areas there’s not much employment outside of farming. So I wasn’t at all surprised when I read a study that said that 42% of rural African households had some sort of non-farm enterprise in 2014 (52% in Nigeria; 42% in Uganda; 17% in Malawi). This study,* which used data complied by the World Bank in 2005-2013, included detailed data from three SIA partner countries (Nigeria, Malawi, and Uganda) as well as Ethiopia, Niger, and Tanzania.

Most of these rural non-farm enterprises are family businesses, running some form of trade business. Trade in household goods and foodstuffs are pretty low-risk and easy to start since they don’t require huge equipment costs. These families are still getting most of their income from farming and 91-100%(!) are informal, and operating during the times of the year when farming is less demanding.

Because these families still are focused on farming, if the crop is going well, families in Malawi and Nigeria are not as likely to start new business, using their labor hours in the field. On the other hand, if a recently-educated person returns to rural life, they will probably create their own business, since there are very few opportunities for more formal employment (except perhaps teaching).

The chalkboard menu at Malumbo Theu's  new restaurant. He had been working in South Africa as an undocumented worker and got deported. The SBF grant helped him establish a business (the first restaurant in Manyamula).

The chalkboard menu at Malumbo Theu’s new restaurant. He had been working in South Africa as an undocumented worker and got deported. The SBF grant helped him establish a business (the first restaurant in Manyamula).

Professional services, transportation, and bars and restaurants were the least common types of business activity in Malawi, each representing less than 1% of household enterprises. Though there is demand for these businesses, they require higher start-up costs. This is where SIA’s Small Business Fund (SBF) grants can help out. A few of the new SBF groups we visited in Malawi in July were in this category – including Malumbo Restaurant, Fikani Transportation Services, and FirstSteps Nursery and Day Care. Each owner saw the demand for these services, and SIA grants give them the money to help cover the larger up-front costs.

Importantly, rural non-farm businesses that are started out of opportunity, rather than necessity, are much more productive. Our SBF Needs and Opportunities Assessment, conducted by the local coordinator along with the family receiving the grant, helps foster this success by focusing on the skills of all household members (including women and older youth). They then consider how best to incorporate those opportunities into the new business.

One of the school teachers at the FirstSteps Nursery and Day Care.

One of the school teachers at the FirstSteps Nursery and Day Care.

Businesses tended to fold, according to the study, because of shocks (such as illness or death) or because of low profitability and lack of finance. While SIA isn’t directly addressing the first challenge, our local SBF local coordinators do provide mentoring to help with marketing products and improving profitability. And several of our SBF communities have savings groups and low-interest loans that help with longer term financing for the businesses.

It was great to read the article and understand the larger picture of rural non-farm enterprises in Africa. I got to see how SIA is integrated into this small family business reality and how we are helping families to have more productive and long-lasting businesses.

*Non-Farm Enterprises in Rural Africa: New Empirical Evidence. by Paula Nagler and Wim Naudé. Available at http://elibrary.worldbank.org/doi/pdf/10.1596/1813-9450-7066

Children at Nellie’s school recite colors and ABC drills for us. The school started in January with just 7 children and it has already grown to over 50 students!

Children at Nellie’s school recite colors and ABC drills for us. The school started in January with just 7 children and it has already grown to over 50 students!

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