franchises

[Guest]

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[rebecca]

Hi, So many of the entrepreneurs have the same businesses.  I understand that a loan can completely change their lives.  Still, it seems like so many of the businesses have a limited upside—selling soda, used clothes, etc.  I wonder if there was some way there could be sort of a “box” business they could buy…almost like a little franchise…that might have more upside.  So, you have this standard “box” say of solar panels.  The entrepreneur spends $1000 to get the box.  They rent them, sell them, or sell the electricity and slowly pay back.  Or, any sort of out of the box business which might have more upside…say a place to watch movies, or rental of phone time, etc.  I wonder if this could be a project that works. 

In some ways, I know it’s better probably to let the entrepreneur figure out what’s needed in their community, but I picture myself in that situation and it seems so daunting.  A “package” or “formula” for a business model might be great.  Maybe Kiva could hook up with one of the companies that is trying to launch solar panels in the developing world….

What do you think? 
In Mexico, for instance, I see a lot of people doing cosmetics. I sort of think that this is an out of the box business model like Avon products.  The businesses seem so similar and formulaic.  And, they seem successful; people seem to pay back quickly.

Wouldn’t it be interesting if there were say 5 alternative out of the box businesses that could be set up?
Maybe a home theatre, a solar panel set up, a water delivery model (like hippo water rollers), a kids library.....something with more upside for the person borrowing and a gain to the community. 

[ulrike]

Hi Rebecca,

I like your idea, though there is a problem to make people taking credits and risks for a businessmodel that we / kiva is not able to see if it is reasonable. It could  nevertheless be a sort of joint venture between a "franchise" company (like Avon), a MFI and KIVA.
For example, if  your "solar box" company has a business model (creates enough income) viable in Mexico  it could create a package with a local MFI and KIVA to get people to start  to be "solar box" enterpreneur. How could we find "solar box" companies? Send Kivafellows to find business models? Ask students of economical universities in developping countries ?

Ulrike

[rebecca]

I finally got around to doing some web research and I found the idea of franchises, ie business in a box is far from a new idea.  One really exciting agency called living goods operates in Uganda.  They have an Avon like business in a box that provides a small business for $250 or so to distribute medical products; their goal being to reduce mortality.  It is brilliant.  I wonder if such models could work well for Kiva.  Maybe a partnership?  I think this article is fascinating, and exactly on the line I was considering.  The village phone is another great idea that could be "boxed up" into a business, likely to be successful and in the end benefit the whole community.   

http://www.iftf.org/node/2156
http://www.grameenfoundation.org/what_we_do/technology_programs/village_phone/

[ulrike]

Hi Rebecca,

 Yes living goods is really a great idea! 
And did you see that they have a partnership with BRAC Uganda?
In Uganda BRAC recruits Living Goods Community Health Promoters from its existing VOs. The advantages of this are potent. The members of the VOs are essentially pre-screened by local officials and BRAC. The VO can also provide both a natural customer base for the CHP as well as an imprimatur in the community. Living Goods field agents work out of existing BRAC branch offices to train, support and monitor the mobile Community Health Promoters. Existing branch offices are leveraged as supply depots as well.
KIVA could help spreading projects like Living Goods  in other african countries in helping them to get contact to other micro finance institutions.

Ulrike