Field Report fall quarter 2014
In this issue: Developing Local Leaders; Reflections from our CEO; Why Grants? Founder in the Field; Meet John Bosco; New Web Map Features Business Mentors; Geoffrey Kajuma Makes His Rounds; Cynthia & Bruce Sewell on Why We Care
Developing Local Leaders
WINNIE AUMA Village Enterprise’s commitment to empowering our in-country staff and promoting from within is recognized throughout the East African NGO community and was highlighted in the spring 2013 Stanford Social Innovation Review. Ugandan country director Winnie Auma could be the poster child for the effectiveness of this model. Since joining Village Enterprise as a business mentor in 2011, Winnie has been promoted four times.
A passionate young woman with a dazzling smile and charismatic personality, Winnie grew up in the Ugandan community where she first mentored our entrepreneurs. Her knowledge of local ways, her intelligence and her commitment to give back make her an exceptionally effective leader and eloquent speaker on behalf of her VE team. Winnie’s success was far from assured. The last born of 15 children,
she was sent to live in a mission when she was just seven years old. When Winnie was ten, her older brother took custody of her and made sure that she was able to attend school. Tragically, Winnie’s brother passed way when she was still a teenager. Her brother’s close friend (“Auntie”) saw greatness in Winnie and helped her stay focused on her studies. Upon completion of secondary school, Winnie earned a full scholarship from the prestigious Female Scholarship Initiative of the Carnegie Foundation. After she received her BA in Education from Makerere University in Kampala in 2008, she worked at Alliance High School as a teacher and then at Erimu College as an administrator. Reflecting on her work with Village Enterprise, Winnie comments: “We are writing a new chapter in the lives of those we serve. You can see and feel the improvements we make… there is nothing more exciting than helping make change happen.”
Village Enterprise Field Report Fall 2014
WHO WE ARE. WHAT WE DO. WHY IT MATTERS.
reflections from our ceo dianne calvi Dynamic African women entrepreneurs are increasingly transforming their communities and driving economic growth. Some 63 percent of women in the non-agricultural labor force are self-employed, more than twice the worldwide rate, according to the World Bank. And Africa now has the highest growth rate of female-run enterprises in the world. What we find equally encouraging at Village Enterprise is this rising trend: a previously unimagined number of African women are not only are lifting themselves and their families out of extreme poverty, but are doing much of the heavy financial lifting to help fuel growth in their entire communities. We’re inspired by our entrepreneurial business owners like Ugandan tailor Angela Adeke, who escaped extreme poverty in the wake of conflict-stricken Uganda, and are part of this unstoppable force for economic growth. Schools turned away Angela’s children because she couldn’t afford fabric to sew their uniforms; but after receiving a small grant and graduating from our business training program, she became a successful tailor. Today, this
extraordinary woman who once couldn’t pay for her own children’s uniforms now produces uniforms for 4,000 students. Collective, humanitarian efforts to ease poverty in the world are gaining unprecedented momentum. We are grateful for your continued support as we continue to fuel women’s economic empowerment across Africa. Village Enterprise has helped start more than 30,000 small businesses. About 70 percent are run by women, and are in the agriculture, retail or service sectors. Philanthropist Bill Gates predicted that in the next 20 years desperately poor countries will become the exception rather than the rule. “Billions of people will have been lifted out of extreme poverty. The idea that this will happen within my lifetime is simply amazing to me,” Gates said. Whether kale farmers, bee keepers, food vendors, or tailors like Angela, these women are indeed writing that new chapter in Africa.
Village Enterprise’s mission is to equip the rural ultrapoor with the resources to create sustainable businesses. Village Enterprise operates like an angel investor, providing business and financial skills training, mentoring and small grants to first-time entrepreneurs living on less than $1.25 a day. Business savings groups allow access to growth capital. In bringing Silicon-Valley innovation to East-African entrepreneurship, Village Enterprise is leading a game-changing effort to help entire families extract themselves from grinding poverty. Guided by top technological and business acumen, Village Enterprise’s model is both scalable and locally adaptable. Since its inception, Village Enterprise has started more than 30,000 businesses, trained more than 128,000 business owners and improved the lives of more than 650,000 women, children and men.
Grants vs. Loans Grants Key To Securing A Rung On The Economic Ladder A frequently asked question is, “Why does Village Enterprise give grants and not loans?” Our mission is to end extreme poverty through the creation of sustainable businesses. We serve people living on $1.25 per day or less in rural Kenya and Uganda. We believe that by generating income, people are able to address the deficits in nutrition, health, education, housing and so on that constitute the roots of poverty. After 27 years in the povertyalleviation sector—including forays in both microfinance and unconditional cash transfers— we have honed a multi-faceted, integrated and highly costeffective method that works best in rural East Africa where few, if any, banks exist. Here are three reasons Village Enterprise provides grants rather than loans:
loan effectively. The heart of the Village Enterprise model is our nine-month training program that imparts business and financial information and provides mentoring to often illiterate but hardworking participants. We believe in the proverbial “teaching to fish” method rather than just providing money to buy fish. • A small seed grant gives business owners an immediate kick-start in improving their family’s standard of living. Profits generated from their new enterprise can be used to address critical family needs (food, medicine and school fees) and build capital and savings for their fledgling business rather than to repay high-interest loans. Completing the picture, Business Savings Groups (BSGs) act as a safety net and provide access
Village Enterprise Field Report Fall 2014
to growth capital (and serve as our exit strategy). Borrowing and lending to and from one another through self-governed and selffunded BSGs protects our new business owners from the shocks of illness or natural disaster that can otherwise lead to debt and despair. BSGs give participants a way to pay for unanticipated essentials like medicine or funeral expenses without using (or putting at risk) productive business assets such as seeds, tools, and livestock. The BSG also provides access to capital when a business opportunity presents itself. Our results speak for themselves. On average, people begin the program living on the equivalent of $1.18 a day and graduate one year later with resources equal to $2.07 a day, an increase of 75%. This impact is long-lasting: 75% of our businesses are still operating four years later and over 30% of our recipients start a second or third business. Village Enterprise give the rural ultra-poor an opportunity to secure a rung on the economic ladder in their communities. Later on, a loan from their BSG (or from a micro-finance institution) can make good business sense, once an individual has a reliable income stream and business experience.
• We work with people who don’t already have a business. A $150 micro-grant serves as a spark to light the fire of entrepreneurship and awaken the capacities of potential entrepreneurs who are willing to invest time and energy into improving their lives. Loan repayments must typically start immediately and don’t provide the critical “breathing space” to nurture a new business to success. • The rural ultra-poor seldom have the knowledge to use a
Kenyan business owner proudly displays her produce with business mentor Eunice Chebet Kiombe.
Village Enterprise Field Report Fall 2014
Okello John Bosco Business Owner
Katakwi is a hard 50 kilometer drive northeast from our Soroti, Uganda office. The area has experienced significant suffering in the past 20 years: much of the population was displaced by Lords’ Resistance Army aggression led by Joseph Kony in the late 1990’s; raids by members of the Karamojong tribe came next; cycles of floods and droughts followed. Subsistence farming and animal husbandry are the principal sources of income for 90 percent of the community. Poverty levels are very high in this region.
Okello John Bosco recently completed the Village Enterprise program, starting a barbershop. Here is his story: Life for my family before I joined Village Enterprise was very hard. We had one meal a day and ate meat once a month if we were lucky. Providing clothes for my wife and younger brother was difficult—we each had only one shirt to wear! I worked agricultural jobs and ran errands. I couldn’t pay school fees so my brother had to stay home. VE enabled my group to start a small business where we could save and borrow money to expand. I initially set up a chair under a tree in the trading center. Now I have a barber shop in the center of the village!
Katakwi Soroti
Kampala
UGANDA
The profits from my business let me take care of my family. I can now send my brother to school, and we are meeting our basic needs. We eat three meals a day and have started raising goats. My wife just had a baby boy and I am confident I can put him through school. I thank God for the opportunity provided by VE.
Village Enterprise Field Report Fall 2014
Joan Hestenes Founder in the Field
From the beginning, Village Enterprise cofounders Joan Hestenes and Brian Lehnen envisioned a flexible and low-cost model that would allow the ultra-poor to transform their lives through entrepreneurship. Little did she imagine that Village Enterprise would go on to help start 27,000 micro-businesses and lift over a half a million East Africans out of the grip of extreme poverty. Remarkably, though Joan and then-husband Brian initiated Village Enterprise over 27 years ago—Joan served as volunteer executive director for its first 10 years—this summer marked her first trip to the field. In the early years, while board members and volunteers traveled to work overseas to launch the program, Joan was raising three children and running Village Enterprise from the garage of their San Carlos home. Later, when Brian took the helm, Joan established her career in the life sciences to become the primary breadwinner for the family. On this summer’s Vision Trip, Joan witnessed firsthand the widespread progress out of poverty so well-documented in our program. In
talking with our business owners, she observed how the perils of micro-finance—feared by those she spoke with for their aggressive collections— makes our Village Enterprise model of a grant and training model more appropriate for the population we serve. When asked about the factors she believes have been the most pivotal to Village Enterprise’s success, she cites the laser focus of the board on the mission, a healthy dose of persistence, and a culture of innovation that is “ruthlessly courageous about fine-tuning and eliminating what isn’t working.” “Village Enterprise is a well-run organization with brains, heart and a big impact… board members, volunteers, Bay Area and indigenous staff, donors, churches, foundations, interns, fellows and visitors are working together to end extreme poverty.” Reflecting on her transformative journey, Joan reflects: “I’m so gratified to see how our dream of a low-cost incentive-based grant program that reaches the rural ultra-poor has been realized.”
Village Enterprise Field Report Fall 2014
meet five of our business mentors Our 54 business mentors are at the core of the Village Enterprise model and each carries a portfolio of 30–45 businesses per year. They hold primary responsibility for the training and mentoring of our entrepreneurs as
well as guiding each group towards the selection of a viable and sustainable enterprise. To learn more about these local leaders, please check out our new map at villagenterprise.org
Village Enterprise shares my passion for helping the poor in a manner that does not create dependency… VE hires from within the areas we operate, using locals to solve the problems of the locals… VE really gets into the grassroots and Margaret Aluka, Ngora, targets the most-needy individuals. Uganda
Working with my people gives me satisfaction that I am part of the solution in my own community… I take joy in the breakthroughs… The field is the source of information Esther Apolot, that drives decisions about our Katakwi, program… we take a bottoms-up Uganda approach.
Savings is such an important thing … villagers think only the rich can save but that is not true… VE provides training in business skills and financial literacy… other NGOs Stellah Ikiring, just dump resources and do not Bukedia District, train on how to use them. Uganda
Felix Tiony, Matunda, Kenya
I have built an ant hill of hope and restored confidence among my villagers, but my target is to build a mountain… I want to kick poverty out of Kenya and put a smile on the faces of the people living in extreme poverty.
Fred Stingo Alala, Mobett, Kenya
I have yet to come across an organization that embraces technology like VE… Open Data Kit technology has made our work far more efficient.
Village Enterprise Field Report Fall 2014
a week in the life of a field coordinator
Geoffrey Kajuma
☼
MON
TUE
Participate in staff meeting
Visit business owners and verify plans are on track
Meet with village elders on opening new area
Spot check performance of business mentor
Develop next week’s work plan; participate in Uganda field coordinator’s call
Lead bi-weekly meeting with business mentors; review last week, plan for this week
Attend SMART Business planning training session; hold 1:1 with business mentor
Interview candidates for new business mentor position; meet with USAID/ FHI360 to review Community Connector program status
Attend Business Savings Group meeting; hold 1:1 with mentor
Meet with US Vision Trip; explain BSG formation process and business mentor role
☼
WED THU
Hoima, Uganda
Kiyogoma village
Karongo village
Masindi
Kyakaiteera village
Hoima office
FRI
Goeffrey studied environmental science at Kampala’s Makerere University prior to joining Village Enterprise as a business mentor in March 2012. He was promoted to his current position in January 2013. Geoffrey’s primary job—as well as that of our other field coordinators—is to oversee the work of five business mentors, organize Village Enterprise training programs, perform spot checks on businesses, and disburse and monitor grants. Due to the travel involved in this oversight function, Goeffrey is typically on the road three days a week.
Village Enterprise Field Report Fall 2014
Cynthia and Bruce Sewell LEADERSHIP PARTNERS SPEAK OUT
exist. It can be cured. Through Village Enterprise, deserving people receive the tools and training they need to create sustainable businesses—it empowers the people rather than giving them a handout. While at Intel, I led our corporate social responsibility program and helped supply rugged laptops to children in Africa, so I had experience with addressing development from an enterprise level. With Village Enterprise, I saw the opportunity to exercise true philanthropy. What do you hope for the future of the Village Enterprise?
Cynthia and Bruce Sewell have supported Village Enterprise for nearly ten years. In addition to serving on the development committee, Cynthia has traveled to East Africa with Village Enterprise four times. Bruce first visited Africa on holiday with a friend’s family when he was 14.
You are one of our leadership financial partners. Why support Village Enterprise so generously?
Bruce is general counsel and senior vice president of Legal and Government Affairs for Apple, Inc. Cynthia’s background is in international trade and business. She spent many years working for the Department of Commerce (International Trade Administration) analyzing unfair trading practices of foreign governments and companies.
BS: I give money to a solid team of good people who serve as a proxy for me not being able to be in the field and do the work myself.
CS: It works! I have seen the transformation we effect on lives first hand. Impact studies validate our experience. Our support of Village Enterprise is money well spent.
Why do you care about tackling extreme poverty through the creation of small businesses? BS: In this day and age, there are enough resources in the world so that extreme poverty shouldn’t
CS: I would like to see Village Enterprise continue to foster partnerships to allow us to scale, but not too fast or too thin to reduce our efficacy. BS: I hope we achieve our vision of ending intractable poverty, because it is absolutely possible to do so. How has your involvement with Village Enterprise impacted your lives? CS: Being exposed to extreme poverty has changed my perspective. I have learned that the hardworking people we work with are no different from the rest of us, but lack the opportunities and resources we have. BS: Our two girls have both been to Africa. It has been powerful for them to see Cynthia so committed to Village Enterprise and helping others.
Triple-Crown Of Charity Ratings Sound fiscal management practices and commitment to accountability, transparency, and quantifiable results have earned Village Enterprise a 4-star rating from Charity Navigator, America’s largest independent charity evaluator. Among the roughly 1.6 million charitable organizations in the US, Charity Navigator’s 4-star rating puts us in the top 0.1% of all these organizations. Village Enterprise was also recognized as a “Gold Nonprofit” by GuideStar and a “Top-Rated Nonprofit” by GreatNonprofits.