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A hand up, not a handout: how entrepreneurs eradicate their own poverty

26 June 2012

A hand up, not a handout: how entrepreneurs eradicate their own poverty

Teaching a man to fish is all well and good until he moves to the city.

Some 180,000 people around the world up sticks and move to urban areas every day. And what cities need are not fishermen, but entrepreneurs.

Three quarters of the world’s poorest people live in cities. But how do you make entrepreneurs out of 750 million people?

Start with £170. Start with one person. You’ll get your money back.

In Rawalpindi in Pakistan, a third of the city lives below the internationally recognised US$1 a day poverty line. But an investment of £170 will enable one person to pull themselves, and likely their family too, above that line. So how do they do it?

Humaira Bano is one such person. She’s a single mother, with three girls and two boys. She makes hand fans out of wicker. For each fan, which is made in a few minutes, she can make 4 Rupees, about 2p.

In November last year she received a loan of £170, interest free, from an international charity. She pays back £17 per month. The loan means she can buy materials to make the fans. Without it she couldn’t even buy the wicker.

When she sells the fans, she makes a profit and because there’s no interest to pay, she has more left over. With her profit, she can use some to support her family and save some to buy more stock.

“Life is better,” Humaira begins. “My season this year is much better compared to last year. A woman like me, I’m not educated, but I did learn this skill from my mother-in-law, and with this I have educated my children. Women play a very vital role in our society. And if they are like me our country will be prosperous.”

It’s simple business but it works.

Another example of this kind of investment is Manzoor Elahi. The loan has enabled him, regardless of his physical disability, to run a mobile phone accessories shop. It’s tiny – the value of the whole stock of the shop is probably less that £50.

But before he wasn’t able to do this, because he wasn’t able to buy any stock, nor rent premises to set up his business.

“I felt so much relief when I received this fund,” Manzoor says. “With this fund I feel independent. This is my independent source of income now.

Entrepreneurs 1“I am supporting my family better than now than in the past. I am seeing so many things for my future. I can do more in future. I am seeing and thinking of more things.”

Now, investing in these two entrepreneurs is one thing, but what about scaling up? What if you want to invest in thousands of people?

To do that, you need people who are skilled project managers. And that’s exactly why Islamic Relief asked RedR to train 24 of their local aid workers recently. We trained them specifically in how to manage all types of development and disaster relief programmes.

Jasim Sheikh, who was trained by RedR manages their micro finance project, which supports 3,500 entrepreneurs in Rawalpindi, including Humaira and Manzoor.

“Before this course we were working a little bit on an ad hoc basis,” Jasim says. “We didn’t have an exact procedure or system of project management.

“We can deliver a certain amount of aid or services to our beneficiaries using an ad hoc basis, but by using a standardised, systematic way of project management we should be able to deliver a higher result, to more beneficiaries, with less cost.”

And this is something that can be calculated down to the pound: For every £170 that is gained in good project management, one more person can be given the means, and the dignity, to build their own future. That’s one less person from 750 million.

“The more efficient and effective we become, the better our services,” Jasmin says. “And the impact will be on the beneficiaries.”

And that’s why RedR trains and supports aid workers and aid organisations - so that their programmes have a much greater impact on the world’s most vulnerable communities.
 


Photos:

(Top) Humaira Bano making hand fans in her home, with her mother. © RedR/Usman Ghani

(Above) Manzoor Elahi running his mobile phone accessories shop. © RedR/Usman Ghani

 

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