People often ask me about how Spirit in Action chooses the groups who receive our $150 Small Business Fund (SBF) grants. Today, I’ll share just two of the factors that help us in our decisions.
Members from the newest cohort of SBF Businesses in Eldoret, Kenya. They all received their training together in October from SBF Local Coordinator, Dennis Kiprop.
Part of how we choose is determined by where our Small Business Fund Local Coordinators are located. Rather than choose one family in this rural village, and two groups in a different village, we give grants to a cohort of five new groups all in the same area, at the same time. This provides both peer support to each new business group group, and the support from the local coordinator who is relatively close to all the groups.
Over time, our sustained grant-giving in particular areas means that our efforts are more concentrated and the cohort of supportive group grows bigger and stronger. For example, there are now almost 100 SIA business groups in the Oruk Anam area of Nigeria! They all (or mostly all) still meet together at specific times to share their stories and encourage one another.
Harriet Mambo started her bakery business in 2006, after receiving a SBF grant. She had been recently widowed then. Now, she used profit from her bakery to build this house, which she rents out for $8 a month to a school teacher. (Malawi)
Once we know where we are giving the grants, each SBF Coordinator uses a Poverty and Opportunity Assessment rubric. This tool, which is designed specifically for their community, helps them discern which families (or groups of people) will be able to use the grant effectively.
The Assessment seeks to find a balance between the very poor in the community, and those who have an opportunity to leverage our small grant into a lasting business. The poverty part of the assessment might note whether people are living with a thatched roof, if they are eating only one meal per day, or if they have no other source of income (recently widowed, for example). These factors are different in Nairobi and rural Uganda, and they are reassessed regularly. At one point a cell phone might have been a sign of wealth in Malawi. Now, cellphones are everywhere!
Tanya and Boyd visiting a Small Business Fund family in Manyamula Village, Malawi.
Our Coordinators found that the very poorest of the poor families were not ready to start a business. They needed to take care of other basic needs first. And so, the Opportunity part of the assessment (added after our 2011 SBF Conference in Kenya), asks what unique position is this group in and how might that help them start a successful business?
For example (real examples from SBF), maybe the family already has a small peanut business and they can use the grant to expand their business and become wholesalers. Or, it could be a youth recently graduated from high school who wants to earn money to save for university. Or, suddenly there is more demand for someone’s baked goods because a new school building opened in the area.
The Coordinators use the Poverty and Opportunity Assessment before choosing the new groups for each new round of funding. And this tool helps them find those people who are ready to make the big investment of time, knowledge, and energy to start or expand their business and who are not so worried about basic needs that they won’t be able to focus on the new adventure.
I hope this helps illuminate part of Spirit in Action’s Small Business Fund program for you. If you have more questions about how we work, let me know!
See also: SBF FAQs