Visa’s project to fight poverty through job creation boosts small business owners’ profits by 45 percentage points
A project in Kenya that tackles poverty by supporting people to set up and run their own businesses has delivered unprecedented results – with businesses enrolled in the ‘acceleration’ component of the scheme typically increasing profits by 45 percentage points.
The three-year project, Kenya Micro-Enterprise Success Programme (KMES), delivered by Hand in Hand and funded by Visa Inc., is reaching 10,200 people, mainly women, in some of the world’s most deprived areas. When women can earn their own incomes and decide how to spend it, whole communities flourish – with more children in school and more families with access to healthcare.
During the life of the project, Hand in Hand is providing provide mentoring, specialist support and training to 8,600 people in Kwangware, Kiambu, Kitengala and Kasarani to start their own micro-enterprises from scratch – as part of the ‘start up’ cohort.
A further 1,600 existing small businesses owners are taking part in the ‘acceleration’ component of the programme – helping people scale up their businesses to reach larger markets. This creates more strong, resilient, local businesses, with the potential to create jobs within the community.
But, just months after the project began, Kenya was hit by its first wave of coronavirus cases, and the country locked down. For Kenyans, the pandemic wasn’t just a health crisis, it was an economic crisis as well – devastating livelihoods and plunging millions below the poverty line.
Despite this – the project has already achieved remarkable success, particularly for the ‘accelerator’ cohort of the scheme.
During the Covid-19 crisis, most of the small business owners’ takings fell. However, thanks to the business and financial efficiency training they’d received from Hand in Hand, programme members were able to act quickly to reduce their operating costs during lockdown. These cost-saving initiatives proved to be sustainable over the longer term as well. On average, members in this group saw their profits increase by an incredible 45 percentage points in just six months.
Programme members in both groups also learned how to use social media and e-commerce – selling goods and services on Facebook and online marketplaces like Jumia. They were supported to access new value chains.
For businesses to expand, loans are crucial. However, it can be difficult for people to obtain credit from traditional financial institutions, such as banks, if they don’t have any credit history or have never held a bank account. To overcome these barriers, Hand in Hand is working closely with local banks to help project members gain access to loans and credit, so they can invest in staff, equipment and stock.
Corine Mbiaketcham, Visa’s Vice President and General Manager for East Africa said, “At Visa, we are committed to empowering and supporting women entrepreneurs, because it impacts our community as a whole. We partner to create a brighter future for generations to come. Our partnership with Hand in Hand is one of the crucial ones for us to achieve this. We are pleased with the impact that the program has had on the women-owned business in Kawangware, Kiambu, Kitengela and Kasarani.”
Dorothea Arndt, CEO at Hand in Hand International, said: “When Covid hit, no one knew what to expect – our hope was simply that members didn’t lose money. Instead, the ‘survival tactics’ people employed to reduce their overheads during the long months of lockdown led to long-term, sustainable reductions in business costs – and, in the case of the more established businesses, an incredible 45 percentage points average rise in profits.
“During the pandemic many small entrepreneurs in East Africa experienced a credit crunch – thanks to our partnership with Visa, many of our members were able to expand their access to credit instead.”
Learn more about acceleratorsHand in Hand Afghanistan appoints new Executive Director
After 10 years as Executive Director of Hand in Hand Afghanistan, Abdul Rahim Nasry will be stepping down from the role, with Dr. Kamran Hekmati being appointed as his successor.
Dr Kamran Hekmati has served as Programme Manager, Program Director and, since January, as Deputy Executive Director of Hand in Hand Afghanistan. Abdul Rahim Nasry will continue to work closely with Hand in Hand Afghanistan in an advisory role.
Abdul Rahim Nasry said: “It’s been an enormous privilege to serve as Executive Director at Hand in Hand Afghanistan and play my part in supporting so many people to lift themselves and their families above the poverty line through entrepreneurship and hard work.
“I’d like to thank my colleagues at Hand in Hand and our generous donors and funders – together we have transformed thousands of lives for the better. I am delighted that our own Dr Kamran Hekmati has been appointed to lead Hand in Hand Afghanistan as Executive Director and am confident that under his leadership the organisation will continue to go from strength-to-strength.”
Dr Kamran Hekmati said: “Since its inception Hand in Hand Afghanistan has supported over 50,000 people to set up sustainable, profitable microenterprises – changing 390,000 lives in the process. I’m excited to lead Hand in Hand Afghanistan in this next stage of its journey, and, working with our donors and stakeholders, look forward to reaching more communities, creating more jobs and helping to build better futures for even more families.”
Dorothea Arndt, Hand in Hand International CEO, said: “Hand in Hand Afghanistan’s success is testament to Nasry’s skillful leadership and his commitment to helping people beat the odds and find their own route out of poverty. We wish him all the best for the future. I’d also like to congratulate Dr Kamran Hekmati on his new role – to which he will bring many years of expertise.”
Increasing resilience in the face of skyrocketing costs
In the last few years Kenya has seen a 70 percent drop in crop production, with an estimated 3.1m people in acute hunger, now in need of aid. As a result of the conflict in Ukraine, the situation has worsened, with disruption to global supply chains causing the price of grains, oil, gas, and fertiliser to skyrocket.
Hand in Hand Eastern Africa CEO, Albert Wambugu, explains how the country’s poorest are bearing the brunt of the crisis – and how Hand in Hand is supporting its members on the ground.
Poor yields and food insecurity
“There are a number of reasons why crop production is falling overall in Kenya,” Albert explains. “Growing conditions here are extremely variable. You might have pockets where the land is fertile – and then areas where the soil quality is degraded, and rainfall is low.”
Maize is the country’s staple crop – but soil degradation and drought is affecting the ‘breadbasket’ regions where it is grown. Some of the commercial fertilisers used here are extremely acidic, and have damaged the soil. Albert says: “When the crops fail, people become reliant on food aid. Some families survive on as little as 2kg of maize a week,” Albert says.
Ukraine war causes price rises for staple goods
Because of the crisis in Ukraine, Kenyans are seeing price rises across the board. “The increasing price of fuel is very noticeable,” says Albert. “There’s been a 30% increase in less than one year.”
People in poverty spend a greater percentage of their income on food. For the very poorest, food price increases will result in adults skipping meals, or subsisting only on staples. “Cooking oil has doubled in price. When costs go up like this, the only thing people can focus on is putting food on the table. You would not be able to afford a balanced diet,” says Albert. “Protein from fish, for example, would be inconceivable.”
Cost of living increases can impact members’ enterprises too. Albert explains it’s almost impossible for people to prioritize saving when times are tough, or to spare the funds to invest money back into their businesses.
Strengthening resilience
To combat the hunger crisis, Albert’s team provide training on a range of sustainable farming techniques that improve soil quality as well as increasing yields.
“We tell our members there will always be things outside your sphere of influence, like supply chain volatility and weather changes. But there are things you can do to offset these – like crop diversification, or by using fertiliser that improves the soil instead of harming it. When you don’t know when the next rainfall will be, even something as simple as a water storage butt makes a difference. We teach people to adapt to their environment. Root crops like arrowroot contain more starch than maize and are easier to grow, so it might be a question of changing your dietary habits.”
They also focus on improving members’ financial resilience.
“We train people to set aside some of their income where possible, because savings are an important way of mitigating the impact of financial shocks. As we’ve seen during the pandemic, and now with the Ukraine crisis, this is vital. More recently, we have introduced our members to insurance. Only 3% of Kenyans have insurance,” Albert explains. “So we are working with providers to create new financial products that meet our members’ specific needs”
The team also encourage people to save in self-help groups. “When self-help groups are strong they can lend when things aren’t going well and, unlike some banks, don’t charge exorbitant rates of interest.”
Despite the challenging circumstances, Albert believes that the team at Hand in Hand Eastern Africa will continue to make a difference to the women they work with – and alleviate food insecurity.
“By giving women the tools they need to lift themselves and their families out of extreme poverty, we are able to strengthen their resilience so they can weather this global crisis.”
“The farmers we train will also have an important role to play in safeguarding food security within their communities, as well as restoring the soil so it remains productive for future generations.”
Boeing to transform the lives of 1,620 entrepreneurs in Tanzania with Hand in Hand International
Boeing and Hand in Hand have been teaming up since 2018 to help communities in Tanzania work their way out of poverty and start businesses – transforming thousands of lives in the process.
By 2023, Boeing and Hand in Hand will have trained more than 3,400 women and young entrepreneurs, creating more than 3,000 jobs and delivering long term economic impact for families and communities.
Launched in January 2021, the latest Boeing – Hand in Hand project trains farmers in Kilimanjaro Region, Tanzania as agri-entrepreneurs, raising incomes and protecting the local environment in the fight against climate change. By extending the project for an additional 12-months, Boeing will support the training of a further 720 community members, reaching 1,620 entrepreneurs in total – 90 percent of them women.
Members of the project will become specialists in regenerative agriculture, an approach to farming that takes carbon out of the air and puts it back into the soil, improving both yields and the local environment.
By the time their training in areas such as composting, crop diversification and livestock management is complete, project members are expected to see an average 25 percent boost in income – money that will help fund education, healthcare and improved nutrition for more than 4,500 women, men and children.
Kuljit Ghata-Aura, President of Boeing Middle East, Turkey and Africa (META), said: “We feel privileged and committed to continue our partnership with Hand in Hand in Tanzania. Boeing’s sustained involvement and long-term investment in local communities represents one of the many steps we take together to connect the world and make it a better place for future generations.”
Jane Sabuni, Tanzania Country Manager for Hand in Hand Eastern Africa, said: “With Boeing’s help, farmers’ plots are transitioning from surviving to thriving. The regenerative agriculture techniques they adopt are increasing women’s incomes and the productivity of their farms. As a result, we are seeing greener lands, improved food security and brighter futures for their families.”
Dorothea Arndt, Hand in Hand International CEO, said: “Something special is happening in rural Tanzania: a revolution that will help some of the world’s poorest women climb their way out of poverty as agri-entrepreneurs, even while they fight back against climate change. Our sincere thanks to Boeing for making it possible.”
1,620 community members trained
1,134 small businesses launched
Average 25 percent increases in net enterprise income
Why Tanzania?
The World Bank 2019 Tanzania Mainland Poverty Assessment reports that 26.4 percent of people in Tanzania live in poverty, whereas eight percent live in extreme poverty. The situation today is worse, as communities globally were impacted by the coronavirus pandemic.
With so many people living in poverty, 79 percent of poor Tanzanians depend on agriculture. The majority of households rely on subsistence farming – which is rain-fed – for survival, growing a limited number of crops. Climate change aggravates the situation, threatening livelihoods and food security. It is estimated that approximately 60 percent of Tanzania is semi-arid or arid. Often, long dry spells occur during the growing season to the extent that crop and pasture production becomes poor.
Many practices viewed as mitigating climate change can actually harm local ecosystems, creating further problems. For example, sustainable intensification of agriculture – where farmers seek to maximise production in a condensed area – can involve an intense use of chemicals and synthetic fertilisers. This produces unequal yields and risks damaging community water sources. Monoculture approaches – that focus on the cultivation of a single crop at a time in a plot and emphasise the heavy use of fertilisers through short-term subsidies – similarly deplete land through the reuse of soil.
What’s next?
Based in the communities they serve, Hand in Hand trainers continue to recruit and train project members in subjects ranging from business to regenerative agriculture. Access to credit from external, pro-poor lenders and links to larger markets so members can sustainably sell their produce soon follow.
After project members complete their 12-month training – a timeframe which, for the first cohort of members, began in March 2021 – members will move from fortnightly sessions to monthly check-ins with trainers. These visits keep enterprises on track for sustainable growth and ensure external credit is being repaid. Members will also be encouraged to form larger producers’ groups to benefit from economies of scale and better market access.