An assets based approach for promotion and empowerment of local entrepreneurship

An assets based approach for promotion and empowerment of local entrepreneurship

7 cities in the region of Yoro, HondurasTegucigalpa, Honduras
Organization type: 
nonprofit/ngo/citizen sector
Project Stage:
Scaling
Budget: 
$10,000 - $50,000
Project Summary
Elevator Pitch

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

We are a not for profit dutch organisation. Our vision is to develop and promote sustainable economic models for a world full of development opportunities, high quality of life, cultural and environmental diversity, based on sustainable production and consumption, through implementation of alternative and innovative models for sustainable local economic development

About Project

Problem: What problem is this project trying to address?

We address the problem to solve through four dimensions in the realm of institutional interventions for development: 1.Strong barriers for entry to local entrepreneurship growth for underserved communities (especially women), for generation of endogenous and resilient local economic development. 2. Weak local money flows that affect demand and supply dynamics that translate into revitalization of the local economy. 3. Paternalism schemes from target groups and insufficient funds from implementing institutions to grant cash start ups for small businesses. 4. Lack of commercial visibility and therefore links to local chains of production and commerce of local SME’s.

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

Our solution is twofold: a local campaign for revitalization of local money flows and promotion of local entrepreneurship based on already existing assets, and, internalization of outward money flows through administration of remittances via mobile phone into a local business network. This is achieved through awareness generation community workshops on how each individual is an agent for change if most of his expenses and investments take place within the community, enhancing local money flows (the more times money changes hands within the community, the more income each person has), also promoting an entrepreneurial attitude towards local unfulfilled market niches, through “coaching for regeneration” services for potential entrepreneurs who wish to establish a business idea. This comes into operation by having remittances senders buy products directly to local shops via sms, to be delivered to their families back home, strengthening local money flows and preventing monetary leaks.
Impact: How does it Work

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

A mother of two is trying to thrive in her “quesadillas” business. She has tried to sell them to local markets but they have refused due to her low production capacity. She has also tried to raise funds through a small loan but has been declined by financial institutions due to her inability to produce collateral. Her husband sends from the US a monthly remittance that she collects in town,20km away from her community, which supposes a security threat on public transportation where assaults frequently occur. After attending an awareness generation community workshop, she finds more clients willing to buy her products, including local stores, who are paid from abroad with remittances money via mobile phone services. She has also found support to upgrade her business through the coaching for regeneration sessions, making and selling her own cheese for the quesadillas having her teenage daughter help her on the weekend and becoming in charge of one cow her father has agreed to lend her. Her husband now pays directly to local stores a monthly fixed amount to provide groceries, thus, she travels less often and carries less cash with her.
Sustainability

Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?

We have no competence regarding our approach to local economic development, since our project does not grant money or technical assistance to our target groups, but spaces for joint analysis of local money flows and how they can benefit the local economy through behavioral changes and new business start ups, using already existing assets and networks. Regarding remittances, our competence are corporate agencies such as western union, which do not reach the local level that this proposal pursues regarding a local business network. Both instances therefore complement already existing efforts for strengthening local entrepreneurship
Team

Founding Story

Through the first pilot implementation of the proposed methodology, we had several “aha” moments. One of them, in the words of the regional director of an implementing institution, was: “If I had known of this approach before, we would have streamlined it and used it in our programs for development a long time ago, given the sustainability it implies and assures”.A very valuable asset to us and indicator of the program`s potential is the opinion of our own clients, who have repeatedly expressed satisfaction regarding solidarity values, self esteem and use of already existing assets for new businesses proposed by the methodology. In the words of three APLN clients: “Every person has to find an activity to use what is already available” (Celia Cardenas, 26 years old)."I was scared, but I got the courage I needed,with my own effort I have moved one step further towards my goals”(Guillermo Martinez, 18 years old), "This is my vision and illusion, my enterprise."(Iris Muñoz, 37 years old)
About You
Organization:
Social Trade Organisation
About You
First Name

carolina

Last Name

carias

About Your Organization
Organization Name

Social Trade Organisation

Organization Country

, FM, Tegucigalpa

Country where this project is creating social impact

, YO, 7 cities in the region of Yoro

Age of Innovator

Over 34

Gender of Innovator

Female

How long has your organization been operating?

More than 5 years

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Innovation
How long have you been in operation?

Operating for 1‐5 years

Social Impact
What solution(s) does your initiative address to help emerging entrepreneurs and small businesses grow and thrive in underserved communities? (select all applicable)

Access to financing, Access to supply chains, Access to technology, Access to economic opportunity.

What has been the impact of your solution to date?

In a rural region in Honduras, in a two-year period, 140 new business startups were initiated, of which, 80% started without financial support, using already existing assets different to money. Also, local money flows were enhanced by 16%, towards more spending patterns within the communities engaged. Regarding remittances, in a rural region in Nicaragua, remittances spent through a local business network, received via mobile phone, generated a 10% multiplier effect in the local economy, improving access to financial services for the underserved and a 15% cost reduction regarding sending costs of remittances.Our proporsal makes a difference regarding its “assets based” approach, which generates higher sustainability and depends less on funds granted by external institutions.

What is your projected impact over the next 1-3 years?

In the next three years we hope that some organizations that have already been trained in this approach to local economic development (or are currently in that process) and received advisory from STRO - such as World Vision Honduras, FAO Honduras, the NGO CDH and the NGO REDES- are able to streamline the methodology in other regions and areas of their organizations (with or without STRO’s support). Moreover, we expect to expand the method towards new organizations (at least 10-20) in the region. Consequently, STRO will develop new training basic packages and offer tailor-made advisory services that will allow to reduce the costs of implementation of the model,(initial costs of advisory and supervision from STRO) while increasing its adaptability to local contexts and target groups.

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

The innovative character of the methodology poses a challenge, given that project officers are merely facilitators of local community mobilization and “coachers” of entrepreneurs (in case they request it), not advisors or experts that provide solutions to local communities. This shift demands openness towards a behavioral change from the project officers and a break-down of assistentialist patterns from communities. To overcome this, STRO provides close advisory and includes additional methodological “reinforcement” sessions to the basic training program,adapted to specific conditions of the target group. Regarding remittances administration,some countries have intricate regulatory processes for approval of our procedures. To overcome this,we advance legal work before start of the project

Winning entries present a strong plan for how they will achieve and track growth. Identify your six-month milestone for growing your impact

Supervised practice of the LED methodology and tracking of businesses entering a local network for remittances administration.

Identify three major tasks you will have to complete to reach your six-month milestone
Task 1

Institutional teams trained in our approach to local economic development

Task 2

Business network for remittances administration organized and set

Task 3

Awareness on the importance of local money flows has been developed by local population

Now think bigger! Identify your 12-month impact milestone

Local staff certified in our LED approach, new local businesses, enhanced local money flows, appreciation of local assets

Identify three major tasks you will have to complete to reach your 12-month milestone
Task 1

Institutional teams are able to replicate our approach to LED

Task 2

Business network for remittances administration in full operation

Task 3

Behavioral changes in respect to spending and investing patterns have taken place; new local businesses have been set.

Sustainability
Tell us about your partnerships

The new economics foundation is our mentor in the proposed methodology, after undergoing an adaptation to the Latin American context. We maintain contact with NEF through monthly virtual meetings, along with different organizations who are implementing the methodology in Brazil, Israel, Mozambique and South Africa, to share lessons learned,techniques and ideas.
Implementing partner organizations have been: World Vision/ Honduras, the NGO REDES in El Salvador, FAO and the Human Development Center (CDH in Spanish, funded by NGO CESAL) in Honduras, and the cooperative “20 de abril” in Nicaragua

Please elaborate on any needs or offers you have mentioned above and/or suggest categories of support that aren't specified within the list

Needs: collaboration and networking are at the base of the proposed methodology, in order to generate alternatives for promotion of sustainable local economic development. Also, innovation and ideas to overcome difficult contexts are in high demand. Offers: STRO is strongly focused on innovation, which we share in collaborative schemes.We have a wide network that serves as a marketing strategy.