MicroBusiness for Health
Project Street Address
Project City
Project Province/State
Project Postal/Zip Code
Project Country
Focus of activity
Service/process
Year the initiative began (yyyy)
2006
Which of these barriers is the primary focus of your work?
Health care not consumer friendly
Which of the principles is the primary focus of your work?
Center consumers in business model
If you believe some other barrier or principle should be included in the mosaic, please describe it and how it would affect the positioning of your initiative in the mosaic:
This field has not been completed
Name Your Project
MicroBusiness for Health
Describe Your Idea
Define the innovation
MicroBusiness for Health (MBH) primarily targets rural and underserved communities where access to basic health services and products is inadequate or non-existent. The initiative launches women in rural villages in a microenterprise that promotes and protects health as well as provides an income for the woman herself. Not unlike the Avon ladies who have become American institutions, MBH will be operated by a “Mamasante,” a woman who directly sells health-promoting products and provides health counseling—in the customers’ home. Mamasante’s products include a mix of high-impact, reliably priced health-promoting products as well as selected personal-care items that are in demand and can contribute to the sustained profitability of the business. The strategy employs a proven microfranchise system in which entrepreneurial women, supported by a sustainable distribution system, bring quality affordable products and consumer information to rural villages on a reliable basis.
Context for Disruption:
Diseases of poverty, such as malaria and diarrhea, remain a major public health problem in places where inadequate health care resources and facilities are exacerbated by lack of individual knowledge about how to prevent and manage basic health problems. Malaria and diarrhea alone account for the major portion of health care-seeking and expenditures by families in many developing countries.
Yet, these conditions are preventable and/or treatable. In rural areas throughout the world, people living in poverty lack access to powerful, simple and inexpensive health-promoting products. Even when they have the money to buy products such as insecticide-treated nets, ORS, home water-treatment tablets, antibiotic ointments, contraceptives, or even soap, they are often difficult to find on a reliable basis.
MBH will primarily target rural and underserved communities where access to basic health services and products is inadequate or non-existent. Inadequate access means physical distance from the nearest source. Impediments to access can also result from poor quality or higher prices, which are common in many rural markets. Even where public dispensaries are near, limited supplies or “stock-outs” can effectively deny access to critical health-protection products. Lack of consumer education on health products is another important impediment to access, as demand for products is often hampered by ignorance of their value or even of their existence.
The multiple benefits of MBH will affect families and communities in several sustainable ways; it will reduce disease and death by significantly improving access to proven disease prevention and health-promoting interventions at the same time as educating families in their use and will explore making health products affordable by offering layaway or installment purchase plans for higher-cost items. Finally, MBH will also significantly improve livelihoods in the following ways:
1) Providing a reliable source of income as a Mamasante for thousands of women.
2) Keeping families healthy and enabling income-earners to work.
3) Reducing costs for medical treatments by reducing the incidence of illness.
Delivery Model
MicroBusiness for Health will be operated by a “Mamasante,” a woman who directly sells health-promoting products—often right from a bag she will carry to identify her in the community. The strategy employs a proven microfranchise system in which entrepreneurial women, supported by a sustainable distribution system, bring quality products and consumer information to rural villages in their areas on a reliable basis. Each Mamasante receives training on her health products so that she can counsel her customers on topics such as how to hang an insecticide-treated net; how to treat her home water supply to make it safe for drinking; how to use contraceptives; how to recognize that a child is dehydrated and how Oral Rehydration Solution with zinc can help; how to use feminine hygiene products especially for women’s reproductive issues; how to coach children to wash their hands to protect from diarrhea; and even which shampoos are effective against head lice. Mamasantes will be equipped with referral cards that their clients can take to the nearest clinic for preferred service. They will be enabled to register people for a national health insurance plan by collecting the annual premiums. The Mamasante serves not only as a distributor for products, but also as a linkage to other health care systems and providers.
MicroBusiness for Health could clearly function well in urban and peri-urban areas. However, the initiative is being especially tailored to work in rural areas in order to reach a major portion of this underserved population. MicroBusiness for Health and its Mamasante entrepreneurs is initially being piloted in Ghana. Upon successful completion of this phase with a small group of Mamasantes, MBH will roll out in a phased approach to the entire country with a goal of reaching 80 percent of the rural communities within ten years.
Key Operational Partnerships
Freedom from Hunger is working with the Ministry of Health and the Ghana Health Service, with local training institutions, with a growing network of rural banks and credit unions providing Credit with Education services, and with a wide variety of community-based organizations. As an example of one partnership, Freedom from Hunger is the sole distributor in Scojo Foundation reading (aka “working”) glasses in Ghana. The pilot group of Mamasantes has received training and product from the Scojo Foundation to provide vision tests, vision referrals and/or purchase of working glasses. Partnerships such as this will be invaluable to the viability and sustainability of the project; new partners are being evaluated and added as the project evolves. Adding tremendous input to the shape and formation of the initiative on the ground is an advisory group based in Ghana that is comprised of leading businesspersons in the fields of franchising, training, quality assurance, financial accounting, social marketing, and procurement and logistics.
MicroBusiness for Health is an initiative of Freedom from Hunger, a recognized expert in microfinance; adult education for improved health, nutrition and personal finance; and for partnerships with organizations that build local capacity for sustainable implementation of quality programs. In addition to creating and distributing programs and services that are proven effective, Freedom from Hunger is also known for innovation, finding new ways to bring effective self-help programs to families living on the margin of survival. Freedom from Hunger has worked in Ghana since 1985.
Financial Model
The financial model is a social franchise network of wholesale to retail. Drawing from relationship sales models used by network sellers such as Shaklee or Avon, MBH is designed to have one level of retailer, the Mamasante, and to keep fixed costs low, support expansion and facilitate rapid scale-up through:
* Products and marketing strategies that are tested and proven prior to roll-out.
* Consistent branding for Mamasante.
* A profitable product mix.
* Regular monitoring and follow-up training.
* Sales incentives for high-impact, health-promoting products.
* Penalties, including loss of franchise, for violating the rules.
There are two levels of sustainable operations to consider:
1) A livable wage for the distributors (Mamasantes) who will make their profit from the margins charged on the products and services they sell; and
2) Sustainability of the franchise itself. Products and costs related to the distribution network will be completely covered by the small profit margin charged to the distributors for the goods they purchase from the franchise. The core operating costs will use ‘smart-subsidy’ to get the franchise up and running, but it is envisioned to be at 50% operational self-sufficiency within three years and, over time, self-supporting.
The direct-selling system has two other powerful benefits for potential entrepreneurs:
1) Low start-up costs. Unlike store-based franchise systems that can require significant capital, a Mamasante can get started with very little investment. Various start-up strategies are being considered to eliminate barriers to becoming a Mamasante entrepreneur and to assist in the business start-up, including special loans and savings plans provided by rural banks, subsidized sponsorship from donors and other financing strategies.
2) Flexible hours and lifestyle. Mamasante can work on her own schedule and in her own or nearby communities. This is particularly valuable because women must juggle the competing demands of family and household.
What is your annual operating budget?
US$500,000.00
What are your current sources of revenue? (please list any sources that are foundation grants)
As an initiative of Freedom from Hunger, the organization is currently financing the development of the MicroBusiness for Health initiative, for which it is seeking philanthropic support. To date, sixty-six percent of raised revenue for Freedom from Hunger’s overall operations derive from the philanthropic sector, 22 percent from corporate donors, and public sector grants comprise twelve percent.
Effectiveness
MicroBusiness for Health is currently being developed in Ghana and is in its initial pilot phase, starting with a trial group of eleven Mamasante distributors. To date, each Mamasante has sold products and provided health information to an average of 65 customers during the trial period. Assuming that each household has 5.5 members, this translates to nearly 4,000 people who have benefited so far during the pilot phase from this program that provides basic health protection services in the homes of community members.
Which element of the program proved itself most effective?
Thus far, the relationship sales method of the door-to-door sales of a product coupled with information shows great promise. For example, one Mamasante by the name of Sarah is particularly adept at capitalizing on timely events and linking them to relevant issues when she makes her home visits. After a particularly strong rainfall, Sarah made it a point to visit each of the families within her area, commenting on the dirt she noted in the drinking water, thereby introducing an affordable water treatment tablet. During the trial phase of this initiative, we are carefully evaluating successful sales strategies and characteristics being employed by the current Mamasantes, as well as incorporating technical guidance from others experienced in this arena.
Number of clients in the last year?
In its pilot phase, MicroBusiness for Health has started with a group of eleven Mamasante distributors. To date, each Mamasante has sold products and provided health information to an average of 65 customers.
What is the potential demand?
With a population of over 18 million, 70% of Ghanaians living in poverty reside in the rural areas. The overall goal of the initiative is to make large-scale distribution of life-saving health protection products, advice and service linkages available and affordable for underserved rural communities through a network of local caregivers and housewives. This will be achieved by the attainment of milestones throughout the project phases, including within three years the following:
* Recruiting, training and deploying 3,000+ entrepreneurs throughout Ghana.
* Reaching 6,000 rural communities in Ghana with services.
Scaling up Strategy
MicroBusiness for Health is in its nascent development, with the trial phase starting in 2006. Implementation has been designed for three phases, in order to carefully evaluate and assess progress at each stage as the initiative advances. Each aspect of this initiative, from product selection and distribution mechanisms, to training and management systems, will be evaluated for effectiveness in reaching the primary goals of the initiative: to provide access to life-saving products and information to the rural poor, and to make a living doing so. Freedom from Hunger utilizes three metrics upon which to base the evaluation of all our initiatives: scale, sustainability and impact. With regard to the MicroBusiness for Health initiative, the following factors will be examined along each aspect:
* Scale, or total number of chronically hungry people reached. In the case of MicroBusiness for Health, outcomes along these lines will include the number of customers—as well as the number of female customers, and the numbers of people attending information sessions—reached by the Mamasantes;
* Sustainability, in terms of financial viability with regard to the profitability of the Mamasante herself and the long-term sustainability of the MicroBusiness for Health franchise;
* Impact, or the improvement of food security status of the communities in which the Mamasante operates.
Upon successful completion of design and implementation on a limited basis, the initiative will roll out to the country nationwide, in order to capitalize on economies of scale and impact.
Stage of the initiative:
0
Expansion plan:
An outline of some of the key activities during each of these phases includes:
* Trial Phase, from 2006 through August 2007: A Project Manager has been hired and is in the process of designing and implementing the full program. Twelve Mamasantes were recruited for the pilot group; eleven are operating in three districts in Ghana. The product selection process is well under way, with Mamasantes selling and distributing many key items in the areas of health care, personal care, and service and advice. Franchise operations systems are being developed and put into place.
* Phase One, from September 2007 through June 2008: The main emphasis during this phase will be to refine the training design and incentive systems, as well as to develop and implement systems to manage product inventory and distribution. Recruitment and training will be provided for 60 Mamasantes, to operate in six districts of Ghana.
* Phase Two, from July 2008 through June 2011: Full deployment of the initiative countrywide, with 3,000 Mamasantes operating throughout the country. As well, during this time MicroBusiness for Health will be replicated in at least one other country.
Origin of the Initiative
In malaria-endemic West Africa, a child dies from malaria every 30 seconds. Addressing this entirely preventable need, Freedom from Hunger undertook a malaria initiative in West Africa that provides dialogue-based education on prevention, early detection and treatment of malaria through our Credit with Education programs.
Rigorous evaluation of our Malaria Initiative demonstrated that the main barrier to use of interventions such as insecticide-treated bednets or home treatment medicines was not people’s unwillingness to buy or use them, but lack of access and affordability. In difficult-to-reach rural areas, such products have not been readily available and the affordability of items challenges household cash flow. The MicroBusiness for Health initiative began as an attempt to close the critical gaps in access to insecticide-treated bednets but has grown into a more comprehensive microenterprise strategy to bring not only bednets, but many other health protection products, right to the doorstep of poor rural families.
This Entry is about (Issues)
What are your two main challenges to finance the growth of your initiative
The largest challenges facing the MicroBusiness for Health initiative are of initial pilot investment, of the franchise and of the franchisees. Additional investment is needed to finance the costs to make the distribution network operational at the franchise level, which includes the development and testing of the operational systems, e.g. inventory and distribution management, business tracking and accounting systems, communications and marketing strategies, training in micro-business management, sales and products, amongst others. In addition, it will be necessary to design and implement an impact study, in order to fully assess the effectiveness, viability and replicability of the initiative. In addition, up-front investment is needed to support the Mamasante distributors, in order to remove any financial barriers of entry for a qualified and motivated entrepreneur. Different financing strategies are being examined, e.g. “sponsorship” by an individual investor to cover her start-up inventory and re-supply until her revenue stream allows her to manage a cash-and-carry sales strategy.
The operating budget of this initiative for FY08, which carries the initiative through its first phase, is $500,000. In order to reach operational scale, however, a budget at twice that amount would be needed for at least the first five years.
How did you hear about this contest and what is your main incentive to participate?
Our partner network informed us of this contest, which immediately caught our attention for reason of exposure. By sharing our ideas and experiences, we hope to enrich this initiative, and to trigger the actions and dreams of others, by sharing insight, thoughts, practical knowledge and vision.
Do you have an annual financial statement?
yes
Do you currently have an annual financial statement that tracks profit/loss?
yes
Please describe the amount (and/or type) of funding you need to implement your initiative, at year 1 and at year 5.
The operating budget of this initiative for FY08, which carries the initiative through its first phase, is $500,000. In order to reach operational scale by year 5, however, a budget of $1,000,000 is projected to be required, to support both the franchise operations and start-up costs of large numbers of distributors entering the market.
 | David Stoker said: I had the opportunity to do market research for this venture as a grad student. My feeling from the ground, based on focus groups and ... about this idea. - 961 days ago read more > |
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