Building a Nest in Africa: Microbartering to Grow Women Crafts Cooperatives

Building a Nest in Africa: Microbartering to Grow Women Crafts Cooperatives

Swaziland
Organization type: 
nonprofit/ngo/citizen sector
Budget: 
$250,000 - $500,000
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

I want to see a world where women microentrepreneurs have access to capital and a global marketplace allowing them to grow their businesses, support their families and communities. Too often, microcredit is the only means available to developing entrepreneurs. Yet microcredit is limited in its impact due to high interest rates and lack of an assured marketplace. Women – particularly those in Muslim countries – have not reaped the full benefits of microcredit due to lack of financial education and religious beliefs. In response to this, Nest pioneered a microbartering model offering artisans loans for materials and production which can be re-paid in the form of product rather than cash. Nest has allowed women around the world to grow local businesses and achieve economic independence.

About Project

Problem: What problem is this project trying to address?

In Kenya, Nest works with the Maisha cooperative to empower refugee girls and young women. Many of these young women were unable to finish school and are single mothers. Living in the refugee camps, with poor living standards, no doctors, and refugees dying of preventable diseases on a regular basis, they had little hope for their futures. Nest’s loan to the Maisha cooperative has resulted in a thriving business making a unique line of tie and dye scarves and a brighter future for the women. They are now able to pursue their dreams of going to school, supporting their families, and raising their children to be healthy and educated. In Togo, Nest provides expanded opportunities in Kpalime, a region that suffers from a weak economy and struggles with unemployment, corruption, and poverty. In addition, there is a large population of orphans. In collaboration with the Peace Corps, Nest provided Chantal Dovinde with an interest-free microbarter loan and increased market access. Her batik business, Aklala Batik, is one of our many success stories. Now Aklala wishes to grow the business, allocating a portion of sales revenue to finance housing and training for orphans and underprivileged persons, while at the same time offering free training to aid in their independence and development. Nest now has an opportunity to expand its work to Swaziland. There, Nest will be working with an environmentally and socially conscious cooperative called Quazi. Quazi employs women artisans who transform waste magazines into original accessories and interiors. In addition to providing a monthly fair wage salary, Quazi provides a supportive environment in which women are nurtured to become decision makers within and outside of work. Nest support means the cooperative can expand, providing more women with full-time employment.

Solution: What is the proposed solution? Please be specific!

The innovation of the "microbartering" model can be seen both through its approach to microfinance as well as its lasting affect on the women it serves. First, Nest's loans are interest-free. By offering non interest-bearing loans, women are freed from cycles of debt. Women in developing countries face barriers to obtaining reasonably-priced loans to start or grow their businesses. Where loans are available, they often come with high interest rates that make it difficult to repay if a household member falls ill, an ecological calamity strikes, or an economic downturn occurs. By requiring cash repayment, recipients can get locked in a devastating spiral of borrowing. Second, our curriculum and education is specific to each cooperative to which we lend. The Nest curriculum is unique in that it imparts business skills while preserving artistic integrity and environmentally-sound production methods. Third, and what makes the model most unique, is our ability to simultaneously offer both access to financing and a guaranteed market. Most non-profit financing models or microcredit do not provide support beyond the initial loan or business education. The Nest model, and its implementation in Togo and Kenya, has offered comprehensive and complete support for women artisan entrepreneurs – from financing to marketing. Fourth, women who have undergone trauma such as trafficking or rape, often have fear, difficulty with trust and a lack of self-confidence that deters them from traditional lending models.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

Nest currently works in 7 countries – Guatemala, Dominican Republic, Togo, India, USA, Morocco and Kenya. Due to our success in Africa and the potential to have a greater social impact, we started the project Building a Nest in Africa to expand our work in Togo and Kenya, and begin working with women’s cooperatives in Swaziland. This grant from eBay Changemakers would give us the start-up capital needed to reach new communities and enhance work in existing projects bringing providing more women in Africa with this life-altering opportunity. The three-part Nest microbartering process works with women artisan entrepreneurs through 1) a microbarter loan, 2) customized business education and 3) guaranteed access to a global marketplace. **Microbarter Loan We work with our partner artisans to assess the costs of their production – including supplies, raw materials and production facilities. We then provide a microbarter loan to produce a marketable collection of fashion accessories. **Business Education We then provide proprietary and customized financial education through a 12-week business curriculum – From Creativity to Self-Sufficiency. The curriculum teaches basic accounting, management skills, product development and costing. **Marketplace The final step of the microbartering process is providing a guaranteed market by accepting re-payment of the interest-free microbarter loan through product rather than cash. Through its website, events, an ethical sourcing program and high-profile partnerships with retail partners throughout the US, Nest completes the microbartering model by ensuring long-term growth for women artisan entrepreneurs.
About You
Organization:
Nest
About You
First Name

Rebecca

Last Name

Kousky

About Your Organization
Organization Name

Nest

Organization Country

, NY, New York County

Country where this project is creating social impact

, XX

How long has your organization been operating?

1‐5 years

The information you provide here will be used to fill in any parts of your profile that have been left blank, such as interests, organization information, and website. No contact information will be made public. Please uncheck here if you do not want this to happen..

Innovation
What stage is your project in?

Operating for 1‐5 years

Share the story of the founder and what inspired the founder to start this project

Founder Rebecca Kousky created Nest after graduating with a master’s degree in social work in 2006 as a way to break the cycle of poverty by providing greater economic opportunity to women. Roughly 1.4 billion people in the developing world live on less than USD $1.25 a day. Globally, the majority of people living below the international poverty line are women and children. Women in developing countries face hardships complicated by lower levels of education, lower social status and talents and abilities that do not always translate into productive employment. When women are poor or undernourished, children are also deprived, resulting in a cycle of poverty that becomes virtually impossible to break. As a social worker with a keen interest in expanding market access for women microentrepreneurs, Rebecca saw both the opportunities and limitations of the traditional microfinance model. Religious barriers, high interest rates, lack of a consistent marketplace and the need for training and mentoring in both business and craft development were all hindrances to the growth of microfinance and its success in reaching artisans around the world. Nest addresses these issues by acting as a hybrid—neither wholly business, strictly social enterprise, nor only microfinance. Rebecca was inspired by microfinance and used her perspectives as a young businesswoman and a social entrepreneur to create a model that overcomes the obstacles associated with traditional microfinance.

Social Impact
Please describe how your project has been successful and how that success is measured

Nest has operated in ten countries and made loans to over 700 women, either individually or as part of a cooperative. Prior to entering our program, most of the women earned less than $10 per day and a significant number earned less than $2 per day. Almost half of our participants reported experiencing reoccurring food insecurity. Despite this, loan repayment rate to date is 100%.
Nest has collected qualitative data from loan recipients from the inception of its programs. However, as part of a plan to make our evaluation more rigorous, Nest has designed a quantitative survey, using as its basis the Grameen Bank’s highly regarded “Progress out of Poverty” reporting metric. Beyond these important economic indicators, the survey consists of a series of questions to measure the impact of previous loans and debts and/or the inability to secure loan as needed. It also measures important qualitative data, including how receiving a Nest loan, business training, and access to markets have impacted women’s lives.

This survey instrument was pre-tested in our communities in 2010 and 2011. The first round of the final, pre-tested survey will be administered over the summer of 2011. At the same time, communities with similar characteristics to Nest’s client communities are being identified, and in some cases, pilot surveys have been done to collect control group information. This combination of a control group survey, the Progress Out of Poverty index, the review of loan recipient’s financial history, and the open-ended questions will provide us data to conduct a rigorous and well-rounded evaluation of the impact of Nest’s microbarter and our progress in meeting our defined measures of success.

How many people have been impacted by your project?

101-1,000

How many people could be impacted by your project in the next three years?

1,001-10,000

How will your project evolve over the next three years?

Nest has a range of marketing channels that allow our artisans to evolve through a step by step process which ultimately connects them to retailers with significant purchasing power. Many women we support start selling their merchandise through our online store. As they advance in quality, marketability and scalability, we connect them to small retailers. Our ultimate goal is to connect them to larger retailers (i.e. Lord & Taylor, REEF). As we expand our work, the project will evolve as our artisans develop in terms of their skills and capacity. Much of the grant will be used to ensure that the women artisans in Kenya, Togo and Swaziland develop their skills and product – through our 3 step process- such that Nest can successfully connect them to greater and more developed markets.

Sustainability
What barriers might hinder the success of your project and how do you plan to overcome them?

Based on our work in other regions of the world and our understanding of the specific situation in Africa, we have identified some potential barriers to success and proposed solutions.

1. Quality control
As with any product-based business, it is imperative that we maintain a standard level of quality to ensure consistent sales. This becomes a more pertinent issue when working with homeworkers. Over the past five years, Nest has developed a standardized protocol to ensure that all products produced by our partner artisans pass basic quality control standards. Each region in which we work has at least one dedicated project manager working exclusively on sourcing high quality raw materials, overseeing production and conducting a quality control check before goods are shipped to customers.

2. Logistics
The logistics of shipping from Africa to the US is costly and time-intensive. Yet through our work in Kenya and Togo, we have identified the most cost-effective way to ship orders both by air and sea. The cost of shipping is always passed on to the end customer so Nest does not bear this cost. Additionally, all production schedules are coordinated to allow more than adequate time for shipping.

3. Cultural Barriers
Finally, the cultural barriers of conducting business across borders are always present. By working with partner cooperatives on the ground that have already established and organized women entrepreneurs, Nest always ensures that it has on-the-ground partners who both understand and are a part of the region’s specific culture and unique ways of doing business.

Tell us about your partnerships

Nest has two different levels of partnership in our projects. We select projects through partnerships with safehouses for trafficked women, through the Peace Corps, or through other NGOs. By partnering with existing groups, we can provide more complete services to our clients while allowing each non-profit to focus on their specific missions. Nest firmly believes that nonprofits need to work synergistically not competitively.

Similarly, Nest believes that the for-profit sector and the charitable sector need to work hand in hand to create solutions to poverty. At Nest, we provide our artisans with a consistent marketplace over time. We sell their hand-crafted merchandise through retail outlets, trunk shows, fundraisers, our online marketplace, via wholesale accounts, and through our ethical sourcing program.

Once the loan is fully repaid, the cultivated businesses continue to need outside orders and demand for their products. To meet this ongoing need, Nest links artisan cooperatives directly with retailers or others with demand for their products, while ensuring sustainable wages and adequate conditions for artisans. These partners include established names like FEED and Lord and Taylor. We also connect our loan recipients with domestic designers and retailers, who, in addition to purchasing product, mentor our loan recipients, creating a community of artists supporting artists worldwide.

Explain your selections

Nest has a strong stateside network that includes a board of trustees, fourteen city chapters of volunteers, numerous full and part-time professional volunteers, retail outlets, both local and national, wholesale opportunities, a web-based marketplace, and partnerships with other nonprofits. We have a strong and growing customer, client, and donor base.

Nest relies on a combination of contributed support and funding from product sales. Contributed support includes financial support from 100% of our Board members and all City Chapter members. We also receive funding from private and family foundations. We hold fundraisers in cities around the country earning revenue and also sharing our mission with a larger audience. Our shoppers, online and at events, often donate side by side to purchasing loan recipient goods.

We also earn money by selling our loan recipient wares to companies from small boutiques to large partnerships with corporations. This includes a combination of selling direct to consumer, through wholesale accounts and also ethical sourcing and manufacturing. Our goal is to progressively increase the share of revenue from sales and diminish the need to rely on charitable contributions and/or direct those contributions specifically to expansion of new projects and direct programmatic work.

How do you plan to strengthen your project in the next three years?

The most significant way in which the project will strengthen is by expanding the market available for the artisans’ merchandise. When the market is increased, the amount of funds available for microbartering loans also increases.

As sales increase and Nest in Africa grows, we will invest the funds from sales into the following activities to further develop the project:

Product Development & Design Expertise
Producing high-quality products is the linchpin of a successfully growing microbartering project. Thus, we will continue to advance the quality of all products through design inputs, product development and partnerships with established designers.

Production Facilities & Materials
As the cooperatives grow, we will also ensure that production facilities grow so that capacity is able to keep pace with increased demand. Never will limited production ability be the reason for turning away women from Nest’s programs.

Increased Services and expansion to new projects
As the lives of our artisans change and their businesses grow, we will seek to address their new challenges by providing additional counseling, teaching a more advanced curriculum focused on business expansion, and actively seeking new partnerships with like minded NGOs touch other aspects of women’s lives.

Challenges
Which barriers to employment does your innovation address?
Please select up to three in order of relevancy to your project.

PRIMARY

Restricted access to new markets

SECONDARY

Lack of skills/training

TERTIARY

Lack of visibility and investment

Please describe how your innovation specifically tackles the barriers listed above.

The missing link in the current models of microcredit and economic development for women artisans is lack of significant and consistent access to global markets. Many entrepreneurs who receive microcredit loans live in rural areas that are disconnected from trade hubs and they lack market knowledge and expertise to successfully market their products globally. That’s where the Nest model comes in by combining microcredit and marketing to expand access to new markets. Nest programs give artisans access to consumers around the world, both through individual sales and partnerships with large-scale retailers. When coupled with business skills and training, we increase the visibility of the cooperatives we lend to and successfully integrate them to the global market.

Are you trying to scale your organization or initiative?
If yes, please check up to three potential pathways in order of relevancy to you.

PRIMARY

Grown geographic reach: Global

SECONDARY

TERTIARY

Influenced other organizations and institutions through the spread of best practices

Please describe which of your growth activities are current or planned for the immediate future.

While Nest has been growing steadily, resource constraints have prevented us from reaching as many women as we would like. Through an eBay Changemakers grant, we would significantly expand our work in Africa by launching a new project in Swaziland and also deepen our involvement in the communities in which we already work.

A significant investment would enable us to expand capacity quickly and successfully. Additional funding would enable us to undertake rigorous evaluation and would facilitate publication and dissemination of the curriculum. Additional funding would also allow us to make important investments in our organizational capacity, putting us on the firmest possible path to long-term sustainability. All of the above expansion will take place starting in 2012.

Do you collaborate with any of the following: (Check all that apply)

NGOs/Nonprofits, For profit companies.

If yes, how have these collaborations helped your innovation to succeed?

Two key factors of Nest’s innovative approach are offering interest-free loans and ensuring a marketplace. Thanks to Nest’s collaboration with nonprofits in developing countries and for-profit retail companies here in the States, Nest has been able to facilitate trade through its full-circle lending program. Collaboration from both sides is imperative in order to continue to offer our model. Additionally, Nest is in the process of publishing a step by step curriculum and business model guide for use by other NGOs, enabling organizations to use the Nest approach. Nest knows that it can never reach all the women in need on its own, and by giving other organizations the ability to handle implementation as well we stand a greater chance of winning the war against poverty world wide.