Tell us about the social impact of your innovation. Please include both numbers and stories as evidence of this impact
This work began in rural Guatemala in 2003 when I sought to solve the problem of how to create sustainable and continuous access to improved cook stoves for rural villagers. Since then, because of the MCM and the Guatemalan-owned company formed to implement it, Soluciones Comunitarias, nearly 2,000 families now have stoves in their homes. Women and children are healthier and money and the environment are being saved. Over 51,000 products have been sold in over 2,000 village campaigns that have been implemented by approximately 200 MCM entrepreneurs who have earned over $70,000 in net profits. These entrepreneur earnings equal 11,000+ days of work generated. Over $410,000 in sales revenues have been generated that have all remained in the country. Over 20,000 villagers now have glasses. MCM entrepreneurs have added solutions to their basket over time and sold approximately 7,600 eye drops, 500 water purification buckets, 3,500 energy efficient light bulbs, 3,800 packets of vegetable seeds, and 900 solar lamps. After covering operating expenses all revenues are reinvested in additional product purchases. Five hubs are now being served in the country and inventory has been acquired for rapid growth to new regions. Over $1.3 million dollars in economic benefit has been created either through revenues generated, savings created or productivity enhanced. This equates to roughly 7,300 months of earnings at the local minimum wage. Soluciones Comunitarias, the self-sustainable Guatemalan company has been established which is owned by eight MCM entrepreneurs, most of whom had no previous business experience. For example, Yoly Garcia and Clara Montezuma were homemakers with limited opportunities in 2004. They are now Regional Coordinators training and leading other women like themselves and are shareholders with a stake and a say in their futures. An estimated 64,000 individuals have benefited from this work. All of this has been achieved from scratch with less than $400,000 in direct programmatic expenses. This has also provided the platform for over 200 college interns of our sister organization, Social Entrepreneur Corps, to make a significant contribution and learn how to be the changemakers of the future. The impact grows daily. This model is now being replicated in Ecuador and Nicaragua and is being launched to other parts of the world through the new Ashoka Globalizer initiative.
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Problem: Describe the primary problem(s) that your innovation is addressing
Poverty is not the problem. It is a symptom of the problem. The problem is lack of access to services and products. One solution to this problem of access - access to capital for developing world entrepreneurs - has been addressed through the micro credit revolution. Other innovative solutions have been designed and are being implemented to address the problems of access to education. Inventive models to address access to medicines for diseases such as AIDS and TB are being executed. However, an entrepreneurial model that confronts the lack of access to services and products that address chronic conditions such as pulmonary illnesses, gastrointestinal illnesses, visual problems, malnutrition, water scarcity, energy deficiencies, and the like has not been effectively implemented at scale to date. Access can only be created if the product, place, price, promotion and people are working in concert to serve the rural poor in an appropriate manner that takes into account local cultural, societal and geographic conditions. The lack of access not only affects problems such as poor health and malnutrition, but also results in a staggeringly high negative economic impact at myriad levels.
The pieces for solving this access problem already exist. Stoves, water filters, reading glasses, solar panels, and hundreds of other products abound. All that is needed is a way to get them to the rural communities that most need them. There is no lack of human capital or local entrepreneurial spirit. Local transportation networks already reach vulnerable communities. Infrastructures including those set up by micro credit organizations have been established by international and local organizations throughout the developing world. But what has been missing is a model that puts the pieces of the puzzle together, one that starts by asking what villagers need and then works to create an effective system to address those needs.
Actions: Describe the steps that you are taking to make your innovation a success. Include a description of the business model. What might prevent that success?
Soluciones Comunitarias is already successful. There are currently approximately 70 individual entrepreneurs and 10 organizations working as MCM entrepreneurs for SolCom conducting between 35 and 50 village service campaigns every month selling near-vision glasses, protective glasses, cases, cords, water purification buckets, improved cook stoves, energy efficient light bulbs, vegetable seeds packets, and solar chargers/lamps. One of the most compelling differences between credit and consignment is related to risk and uncertainty. Credit works in risky markets; the MCM works in uncertain markets. The MCM’s power lies in its ability to create first-time sustainable access for new products in new markets through new entrepreneurs. SolCom now earns revenues of approximately $6,200 per month and has 11 staff members, who earn a combined $2,400 per month. These numbers continue to grow as new product and services are added. The model utilizes a rotating capital mechanism with exceedingly low start- up costs.
Within the MCM the team of stakeholders is leveraged do what each does best, fill in the knowledge and competency gaps of the others, and contribute to implementation, expansion and improvements on an ongoing basis. All activities and performance are measurable on a daily, weekly or monthly basis. This holistic approach allows for in-time support, response, modification and impact measurement. One of the most profound impacts of the MCM is qualitative and less tangible. The MCM provides a mechanism whereby the villagers and entrepreneurs feel a sense of dignity and pride that cannot be easily measured but rather very simply observed. As entrepreneurs gain confidence in their business skills, they are better able to care for their families. The entrepreneurs, many of whom are initially timid and semi-literate, become recognized as community leaders and develop a sense of purpose. Additionally, villagers are able to “vote” for what they truly need and want through payment with their limited resources and feel a sense of dignity by purchasing solutions, which has much greater significance the simply receiving a donation.
The one main competition to the model is donations. However, these do not last. This was the very impetus for the model.
Results: Describe the expected results of these actions over the next three years. Please address each year separately, if possible
In 2008 SolCom entrepreneurs supported by SolCom sold roughly 12,300 products. In 2009, these entrepreneurs sold roughly 13,200 products. This was achieved with an average of 65 entrepreneurs adopting new products, services and marketing techniques. SolCom MCM entrepreneurs first began offering improved cookstoves (the genesis of the model). In 2004, near vision glasses were added. In 2005, sunglasses and protective glasses were added. This was followed by eye drops (2006), water purification buckets (2008), energy efficient light bulbs (2008) and vegetable seed packets (2008). This basket of solutions has now been fully integrated.
During the next year, SolCom expects to increase the number of entrepreuers to 100. We would expect sales to increase to approximately 17,000 products. In addition, solar chargers and lights were added in February. There are now over 2,000 in inventory in Guatemala. Based on incredible initial success SolCom expects to sell 100% of these within the next six months. Fortunately, given the history of sales, debt financing was acquired to purchase this inventory. This new product and new financing mechanism should create great leverage moving forward.
During the subsequent two years SolCom aims to add up to three new products to the mix and employ an additional 50 entrepreneurs. This will be dependent upon resources and opportunities. SolCom will also seek to establish a complementary retail distribution strategy.
The projected growth over the coming three years should put SolCom on very strong financial footing.
Additionally, CE Solutions is expanding the SolCom initiative to other countries in part through the Ashoka Globalizer initiative. SolCom is not expected to be a "stand alone" business per se in other countries but rather an add-on social enterprise business unit. We are currently working with Ashoka Fellows in Ecuador and Argentina in this form and have conducted a feasibility study in South Africa. However, creating a new entity is only one way to implement the MCM driven SolCom social enterprise model and grow it sustainably. Any organization in a developing country that focuses on serving rural constituents can start a venture. If an infrastructure already exists, the training and initial product purchases are the only up-front costs. From then on, costs are associated with revenues and are variable. An organization can identify, train, equip, and support five entrepreneurs or fifty. It can conduct village campaigns three times a month or once every three months. It spends money only when it offers activities.
Globally, CE Solutions is focused on model replication with local strategic partners, with the goal of completing up to four global pilot projects per year.
If your innovation seeks to impact public policy, how?
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