Business school for the poor

The struggles of the poor are compounded by a lack of knowledge of English and poor “educational achievements”. The lack of proficiency in English keeps a whole class of people down. It’s a recipe for social discontent and even expressions of violent dissent. Eleven years ago, three American women with no business training started BeadforLife, a fair trade organisation in Uganda that paid women living in poverty to make colourful earrings, necklaces and bracelets out of recycled paper

The title of this article might seem misleading at best if not strange. The background to it is a recent set utterance by the Governor of the Central Bank Dr. Indrajit Coomaraswamy. His comments were - “absolute poverty in Sri Lanka is at a low level of 3.3 percent, which is based on a poverty line of US $1.30 per day. However, when you increase the poverty line to the US $2.50, which is less than Rs.400, more than a quarter of the population in Sri Lanka falls below the poverty line with earnings just above the US $1.30 per day.”

“Entrepreneurship is critical to transforming the livelihood of people in the rural sector who at the moment are trapped in low-productive and low-income livelihoods.” He said rural entrepreneurship is key to get these masses beyond the income of US $2 per day while emphasising that the future of the economy is in the hands of the young entrepreneurs.

He noted that 60 percent of the population live in rural areas and 27 percent of the country’s population is employed in the agricultural sector, which only contributes to 7 percent of the economy.

Meanwhile, Dr. Coomaraswamy pointed out that despite various parties having numerous programmes to promote small and medium enterprise (SMEs), most of these programmes have not been successful as they remain fragmented while marketing remains the biggest challenge for SMEs, which has not been properly addressed in these programmes.

He noted that these programmes need to provide four types of support to SMEs, which includes; training with necessary skills, access to inputs and technology, access to finance and most importantly marketing in order to link up with rural, regional, national and international value chains.

In addition, he said these programmes need to provide continuous support for entrepreneurs, at least for two to three years to get their businesses off the ground.

Referring to Harvard research, he pointed out that Sri Lanka’s employment in the agriculture sector needs to decrease from the current 27 percent to 15 percent in order to reach the average of countries with economies on par with Sri Lanka.

When you look closely at his comments its clear we have a problem, with the bottom 25% of our population struggling. Several years back this writer sat as a Trustee of the Samurdhi Trust Fund which in theory is meant to help and uplift those affected by poverty.

The struggles of the poor are compounded by a lack of knowledge of English and poor “educational achievements”. The lack of proficiency in English keeps a whole class of people down. It’s a recipe for social discontent and even expressions of violent dissent.

Eleven years ago, three American women with no business training started BeadforLife, a fair trade organisation in Uganda that paid women living in poverty to make colourful earrings, necklaces and bracelets out of recycled paper.

Entrepreneurship is the path out of poverty

As soon as a woman enrolled in the bead-making programme, she started getting trained to create a business that would be sustainable in the local economy. The programme was called Beads to Business -- something the founders thought of as “transformational trade.”

Follow-up studies show that 81 percent of these businesses have remained open after two years, compared to an 80 percent failure rate for businesses in Uganda as a whole.

That’s great news, of course, but Beads to Business’ ability to scale was limited: The number of women who could be enrolled in its education programme was limited by the volume of beads the organisation could sell.

After struggling with this challenge, the school’s organizers realized that beads were merely a means to an end -- the physical manifestation of the work of empowering women and fighting against poverty. The school had gotten good at business training, and there was no reason that education had to be tied to beads alone.

Street Business School is born

This led to the birth of the Street Business School -- a mobile business school that delivers its powerful entrepreneurship curriculum to women who have never rolled a single bead for the organisation. The courses are delivered right in the communities where the women live and take place over a period of six months. In addition to classroom sessions, the new entrepreneurs get one-on-one coaching from BeadforLife’s trainers, who visit their businesses several times to make sure the lessons are being applied.

As happened with Beads for Life and Beads to Business, success followed yet again, with the founding of Street Business School. But, still dissatisfied with the number of women being served, organisers determined to start a global expansion of the school.

Bunker Roy and the Barefoot College

Roy’s vision was to educate the local people who would then be able to use the skills and knowledge to raise themselves from poverty. The only pre-requisite for admission to the Barefoot College is that there are no pre-requisites, not even to speak the language.

Lessons Learnt:

Lesson 1

Any middle-aged illiterate woman from any part of the world who has never left her village can be trained in six months in India to be a competent and confident solar engineer.

Lesson 2

Prepare the community first by involving them in taking major decisions on behalf of the whole community and only then bring in the technology in the village. This will reduce the dependency on urban skills from outside. It will also give a sense of ownership.

Lesson 3

Keep all urban-based paper qualified solar engineers away from the inaccessible non-electrified village because their top-down approach is doomed to fail. They have neither the vision nor the courage nor the faith to select and train illiterate women as engineers. They also do not have the communication tools to speak as equal to poor communities.

Lesson 4

What makes the barefoot approach fundamentally different is that NO certificates, diplomas or degrees are issued after training to the women. The certification is done by the community they serve. The issuing of certificates is one major reason why migration takes places from the villages to the cities.

Lesson 5

To reach the very poor only a Partnership Model will work. Where providing the hardware is the responsibility of governments/donors and the repair and maintenance is the responsibility of the poor rural communities.

The “barefoot” approach has worked in three continents, 17 countries and over 100 villages across the globe. Between 2005-2008, the total amount spent has been close to $ 2 million. Less than what is being wasted on ONE Millennium Village in one country in Africa.

The narrative of poverty reduction in Sri Lanka is a graveyard of not so successful efforts extending decades. The narrative and approaches have to change. This article has shown two examples of how to potentially address the issues. We quite simply cannot afford to leave people behind.