Project Announcement: Launching “Enterprise Scale-Up” in Rural East Africa
Helping to build a middle class in rural East Africa
Since 2017 the Hilti Foundation has been working with Hand in Hand International on fighting extreme poverty in rural East Africa by implementing a simple yet powerful educational program “Basic Entrepreneur Training” (BET) for micro-businesses. So far, more than 19’000 men and women have been trained to develop profitable agribusinesses in the region's most attractive value chains, generating sustainable incomes to build better and more self-determined lives. Based on the program’s success, the Hilti Foundation has decided to launch “Enterprise Scale-Up”, a project focusing on those microentrepreneurs who have already gone through the base program with ambitions to invest and profitably grow their enterprises. Until 2027, the project will reach 20,000 farmers, helping them to improve their livelihoods and to contribute to local rural economy and social development through scaling up their farming-based enterprises in Kenya and Tanzania.
A woman with a vision and strong leadership skills
The Scale-Up initiative addresses people like Hellen Mwangeli. She is 50 years old, married with three kids and lives in Kayole, Machakos County in Kenya. Before participating in the BET, she sold groceries, earning USD 1.80 a day. The program taught her how to run a business sustainably. Now, she knows how to keep books, to calculate profit and loss, and she has learned about farming techniques.
By applying her new skills in marketing, accounting and saving, Hellen’s records are perfect, and she knows exactly the profit for each of her products. She also joined the table banking group and took out a loan to rent a larger store in a better location. As her income increased, she started to expand her product line each month. Part of her savings she invested in a license for a telephone company to offer payment services for her customers, and she bought some chickens to start a poultry farm. As treasurer and leader of her self-help group, “Vision Women”, she visits its members regularly to check on how they are doing and to encourage them to keep working hard.
Hellen has accomplished so much in a short time: In nine months only, she has increased her daily income from USD 1.80 to USD 8.00 and the business continues to grow as she keeps reinvesting. Plus, her success is already helping someone else: She has hired a person to take care of her household and farming. “My vision is to become a wholesaler. I want to grow my business to create jobs and also help others have a better future.” Hellen has been empowered to lead an independent, successful future and give back to the community.
Business Development based on three pillars
The Enterprise Scale-Up program’s first aspect is training, business planning & coaching. Organized in business clubs of 20 members each, one 6-months-training in business skills, market awareness and best farming practices enables entrepreneurs to develop a business plan to generate higher income. Subsequent 24 months of ongoing coaching helps them realize their income growth potential. Building a group of peer trainers in the community, ensures long-term coaching and maintains knowledge in the community long after the project is completed.
With the second aspect of finance, all project members will be connected to selected Community Banks or Micro Finance Institutions and – supported by the project’s staff – introduced to formal, yet affordable credits. Since credit partners also will attend the project’s financial management training, business relationships can be established right there. The project’s third key aspect, working with active producer groups, will support members to leverage their market positions and generate higher and scalable incomes. The project will ensure that producer groups improve their leadership systems, strengthen the services they offer to members and increase their membership.
"Enterprise Scale-Up is like a small, very user-focused MBA-program. With our program, we enable small businesses in East Africa’s rural areas to grow into thriving enterprises, whose net income will lift their owners above 8.50 USD a day . The project will help to build a rural middle-class and create economic and social development for entire regions," said Werner Wallner, CEO of the Hilti Foundation.
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.
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, currently set at $1.90 a day, is the universal standard for measuring global extreme poverty. Household income below that poverty line is too low to afford minimum needs, such as food and shelter.
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 participants 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
Table Banking group in Gatundu North, Kenya.
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.