By Sydney Hulebak
The founder of Sharana, a local nonprofit, gathers outside a local home, along with women from the village of Angalakuppam
Before enrolling at SAIS, I co-ran a social enterprise out of Uganda. The business was called Lion’s Thread and its goal was to economically empower women in the most rural reaches of the country by providing access to stable employment, business skills development and a community of peers to urge them on. Like most ventures launched to help women in developing countries, Lion’s Thread focused on the artisanal trades. The women we hired cultivated the necessary skills to become a seamstress, which were then used to create unique, bold bow ties that were sold in the States. This model has been effective in many different villages across a diverse range of countries. However, is it truly propelling women out of poverty? Or, is it stagnating economies by creating an oversaturated market of seamstresses?
This thought crossed my mind again as I ventured with SAIS Women Lead to India and Bangladesh this January. We visited micro financing institutions in both countries, exploring remote villages on the outskirts of Pondicherry and Chittagong. Throughout these travels, we met a woman who started an ironing business with her husband, fulfilling a gap in her community. We chatted with numerous women who were now the proud owners of a cow or goat, opening the door for them to sell milk or meat, respectively. The most successful woman we met had a whole herd of cattle, which expanded her business to neighboring towns.
However, despite their involvement in micro financing programs for many years, they all still lived in a poor village, their incomes were higher, but not comfortable, and their status within the community didn’t seem to be elevated much at all. I don’t recount this story because I want to diminish the work of committed individuals, who have undoubtedly moved mountains to accomplish what I have written about above. Rather, it is to ask whether this is the only or the right approach for every community.
A woman working for a Aval, a fashion social enterprise focusing on women’s economic empowerment, in Pondicherry, India
In my mind, the problem with microfinance that functions in this vein is that the “tried and true” businesses created in this model are not catered to the needs of the communities in which they operate. Sure, cows are essential to rural communities who need a source for milk. And yes, a seamstress to create and repair clothing is a critical profession when you are located far from urban centers. However, in a small village, three dairy farmers and five seamstresses is overkill and no longer productive nor useful. Not to mention that with more competition, the profit margins for those industries inevitably fall, crippling the business model of a company that already faces a customer base with less purchasing power than most. So, what is missing?
I think that a way to reorient microfinance so that it still finds relevance for women today is to bring the ingenuity of business back to the source. That is, to partner micro financing seminars with workshops on creative and critical thinking. Poverty often stifles creativity. When you don’t know where your next meal is coming from, you are going to start a business that you know will succeed because you have seen it done time and time again. However, just because a person is impoverished doesn’t mean that they don’t have ambitions and dreams. They just need the freedom to try them out, even if that means failing.
Therefore, micro financing needs a reboot that allows women the safety to fail. Innovation and growth in communities happens when people have the luxury of stability. Maybe micro financing in its current iteration was meant to be that first step: the foundation. However, that isn’t the move that is going to propel communities out of poverty. That step requires space to dream and create.
A beneficiary of Sharana’s microfinance program talks about how the loans allowed her to purchase cattle and a goat
For instance, when we were exploring Angalakuppam, one of the villages in Pondicherry, we heard the story of a woman who capitalized on the growing number of new cattle herders by opening a cattle feed store, the only one located within miles of the community. This type of fresh thinking is what builds robust economies, allowing towns to scale-up and become self-sustaining.
Lion’s Thread ultimately wasn’t sustainable. We could have carried on creating a product with a niche audience in the United States that brought in a more-or-less comfortable salary for the women on our team, inching them steadily, but slowly into the middle class. However, that didn’t seem fair or right. That wasn’t community-driven development. Therefore, we disbanded the U.S. arm of Lion’s Thread, took our remaining profits, and created a fund in Uganda with the intention of seeding local businesses. Not just local in location, but local in spirit, meeting local needs and stemming from local conversations.
Our reboot isn’t perfect and nothing ever will be. The myth of the silver bullet is just that, a myth. However, there is an interesting parallel between our story and the stories I witnessed in both India and Bangladesh: to tackle systemic issues like poverty and women’s inequality, ideas need iterations. Programs need to be built of living documents that are refreshed often and influenced by local feedback. And ultimately, they need to spur on dialogue and actions that can be metaphorical “silver bullets” for individual communities. That’s when true change happens.