Fighting Poverty Through Grassroot Entrepreneurship

Expanding the reach

Felista, a dairy and poultry farmer from Kiambu County in Kenya, only joined the Basic Entrepreneur Training (BET) program in 2020, but is yet impressed with the results: “The livestock training has already increased my milk production.”

Now she is able to sell 10 liters of milk every day, generating a net income of USD 36 (KES 4’000) a month, which allows her to meet the minimum needs of her family. “And the training has stabilized our group table banking, so members can now borrow and repay loans promptly,” she smiles.

The project-based cooperation between the Hilti Foundation and Hand in Hand International started in 2017, when they implemented this powerful educational program in rural East Africa. The training teaches basic entrepreneurial skills, financial literacy as well as best practice on livestock farming and emphasizes on women's decision-making power in the household and climate-resilient practices, such as topsoil regeneration, biodiversity, and rainwater harvesting. Its overarching goal is to enable members of self-help groups within 12 months to start a micro-business and generate sustainable income of more than USD 1.90 per day. Since the program’s initiation, around 16’000 women and men in Kenya & Tanzania have been able to escape extreme poverty.

Lifting more people above the extreme poverty line

The World Bank predicts that the Sustainable Development Goal (SDG1), eradicating extreme poverty by 2030, will not be achieved. While progress has been made, the COVID-19 pandemic will push an additional 100 million people into extreme poverty. By end of this decade, 600 million people will be living below the extreme poverty line and nine out of ten will be located in Africa.

"COVID-19 will leave behind a global economic crisis. As we move from saving lives to saving livelihoods, organizations like Hand in Hand will be critical to leading the recovery. Strategic partners like the Hilti Foundation, who are committed to empowering people to take control of their lives, will be more important than ever", says Dorothea Arndt, CEO of Hand in Hand International.

Vision Women Group, table banking group in Machako County, Kenya.

Based on the BET’s success, the Hilti Foundation has decided to accelerate the basic program and expand outreach to nine counties in Kenya and three districts in Tanzania. The project’s goal is to train a total number of 40’000 farmers on how to run a profitable micro-business in the region's most attractive value chains like dairy, poultry and other products. Earning sustainable income will not only help them to recover from the pandemic effects, but also remain successful for the years to come.

Werner Wallner, CEO of the Hilti Foundation, explains: "Already before the pandemic, we were eager to expand our partnership with Hand in Hand International. But now our program in East Africa has become even more important: It enables small businesses in rural areas to grow into thriving enterprises and creates economic and social development for entire regions.”

Creating resilience by accelerating economic development

Resilience is an ongoing topic, since day-jobbers or subsidence farmers are extremely vulnerable to any kind of economic crisis. Underinvestment in rural infrastructure as well as low productivity in rural industry and agriculture makes it difficult for jobseekers to find employment. Those, who choose to migrate to urban cities, will likely add to the growing number of urban poor. That’s why safe and solid business models, enabling people to stay in their home areas, are key for the program’s effectiveness.

Woman selling milk. — The BET teaches beneficiaries to increse their production and sell the milk and other products.

Werner Wallner is convinced that creating resilience by teaching basic entrepreneurial skills like buying and selling, making profit, saving and reinvesting, will help people to survive any shock until the business can be restarted again: “That's exactly what happened to our beneficiaries: Even if those businesses also suffered from lockdowns, they have been able to easily be ramped back up by applying the very same mechanisms, they once have been created with.”

Felista is able to generate a stable income through selling her products.

Felista’s living conditions have improved significantly: She leads a more self-determined life and has already diversified her micro-business to be even more resilient. “The BET program has left indelible fingerprints on my life,“ she knows.

International Poverty Line

The World Bank’s prediction shows, that due to the COVID-19 pandemic, 600 million people will still be living in extreme poverty by end of this decade – almost 90 percent of them in Sub-Saharan Africa.

The International Poverty Line is defined by USD 3.20 per day and the Extreme Poverty Line by USD 1.90 per day. That is needed to keep a person alive, with less amount of water and food, sustainable life is not possible.

Basic Entrepreneur Training Methods

Besides basic entrepreneurial skills and financial literacy, the curriculum also includes technical farming know how as well as training on group table banking, so individuals can borrow and repay loans promptly.

Many beneficiaries have never learned to read and write or do the math properly. That’s why the program’s training methods are rather interactive: Pictures, flip charts, posters, and role-playing are the appropriate tools for teaching simple entrepreneurial skills and accounting literacy. Besides marketing related topics – like what a product is, what a market looks like and how to define a price – the curriculum includes technical training, necessary to successfully breeding livestock or growing vegetables.

Table Banking

This group-based funding system works completely off-bank and is very common in developing countries. Each member contributes with weekly or monthly savings to create a fund, from which everybody can request a loan for business investments – being aware to pay it off with interests.