Ethiopia with ATF: Alleviating Poverty through Entrepreneurship

Teach a Man to Fish

Empowering a Community through Entrepreneurship

Written by Cody Huisken

“If anyone has material possessions and sees a brother or sister in need, but has no pity on them, how can the love of God be in that person? Dear children, let us not love with words or speech, but with actions and in truth.”

– 1 John 3:17-18.

Self-Help Groups exist to bring forth holistic change so that they are empowered economically, socially, spiritually, politically, etc. Self-Help Groups, or SHGs, are small groups of community members who work together to form an entrepreneurial team. While the SHG training focuses largely on economic empowerment through entrepreneurship, training also includes life skills. The goal is to bring about holistic change in more than just the financial realm as life training is provided in the areas of sanitation and hygiene, childcare and reproductive health, social development, spiritual growth, and more. SHGs are equipped with a well-rounded arsenal of tools to empower themselves to live a balanced, fulfilled life.

As last reported in 2014 by the World Bank, Ethiopia’s Gross Domestic Product per capita was $316 (USD). While the cost of goods (not including housing or labor) being roughly the same as it is stateside, the average person in Ethiopia makes less than $1 per day! This number is significantly lower in the regions where Adams Thermal Foundation (ATF) is operating. With ATF targeting the poorest of the poor, it is not uncommon for a family of five or six to be making $1 per month. Let it sink in for a moment: the families served at ATF make less money on an annual basis than an American teenager makes in two hours bagging groceries! There are multiple factors that contribute to this extreme economic poverty: disease, government corruption, the inability to acquire land, illiteracy, and a lack of profitable skills, just to name a few. While ATF has programs in place to alleviate all of those issues, some, like disease or government problems, are long-term efforts, which require partnerships with multiple organizations and/or the training and education of a new generation of leaders. While ATF has not abandoned those efforts, current efforts are being made to change the aspects in which measurable results can be achieved in the short-term or mid-term, aspects such as education and skill training. ATF believes that alleviating poverty cannot truly be achieved by dropping a pile of cash into an impoverished community. “Give a man a fish, feed him for a day. Teach a man to fish, feed him for a lifetime.” Sustainability is of utmost importance in changing a community. Sustainability is at the very core of ATF’s programs, integrated into every facet of the operation. This is especially true in ATF’s Self-Help Group program.

A SHG is comprised of 10-20 struggling community members. These community members are most often widowed women who lack the basic skills required to sufficiently earn enough income to provide for their family. ATF provides skills training to the women, teaching them to sow, weave, cook, or otherwise create a marketable product. The group also receives financial and business training on how to run a business, how much profit to keep, how much to reinvest, how much to save, etc. ATF then provides the group with a small loan of, on average, $200, which acts as seed money to get the SHG’s business up and running. The group uses the loan to act on the training they’ve received by making products and selling them to the community for profit. While the profit may seem miniscule, it truly has a great impact on the lives of the group members. A profit of just a few dollars per week significantly improves the quality of living for these members, who were previously making a few dollars per month, or less. The extra money is enough to pay rent on a mud hut, buy a uniform and basic supplies, so their children can attend school, put two or three meals on the table each day, or provide other essential needs.

While the business model varies slightly, as it is tailored to each individual SHG’s needs, the underlying concept remains the same. Each individual member of the SHG has their own small business, which they run independently. Many members were attempting entrepreneurship on their own prior to joining a SHG, but could not grow the business due to an inability to access a line of credit at a reasonable cost. Credit is unreasonably high in many areas, making it impossible for a small business to expand considering the gross profit doesn’t even cover daily meals for the family or housing costs. This is where the SHG comes in, operating similarly to a community bank. Once a week, the members forego their individual businesses and meet together as a group. All of the SHG’s business is transacted on this day, excluding selling the product. Products are made, loans are dispersed or repaid, and meetings are conducted. The profits from the SHG products go back to the SHG bank account, which either is paying off their initial start-up loan, or accumulating a savings fund. This bank account then provides a line of credit to each individual business at minimal interest rates. Individual members can apply for a small loan from the SHG account. The SHG group then reviews the application and issues the loan accordingly. As the SHG account moves from red to black and continues to grow, the individual businesses reap the benefits of having access to a larger line of credit, enabling them to expand their own businesses and better provide for their families. This model does not take families from rags to riches overnight, but is a sustainable model that will continue to run long after ATF’s involvement. ATF has an administrative staff to oversee the SHGs monitor the finances, help with business decisions, and have a system of accountability, but the goal of the program is to empower the members to be completely self-sustainable for decades and centuries to come.

Right now, there are 162 SHG members, comprising 11 Self-Help Groups. These numbers will inevitably grow as the community sees the positive impact the SHG program is implementing. While some of the members have a child or family member at an Adams Thermal Academy, the majority have no such tie. The project has connections to the Academy, but is a completely separate project, aimed at impacting a more extensive community demographic. The groups consist of a variety of faiths and beliefs, which provides a wonderful opportunity for the group leaders to share their faith and share Christ’s love to their friends and business partners. Despite the variations of faith, the groups work in harmony, having a common business goal, and working together to make quality products. The products made by these groups vary widely, from food products to clothing to small furniture. Currently, the products of both the SHGs and the individual businesses are being sold 100% locally. Because of the goal of sustainability, ATF believes that the local market is the best solution for long-term success. That said, efforts are being made to expand product sales to the U.S. without sacrificing the business model or flooding the business with massively fluctuating cash flow. International expansion would be a minimal part of the overall business operation, but would accomplish two things: 1) marginal growth and expansion, and 2) raising awareness and compassion for the project. It cannot be stressed enough that sustainability cannot be sacrificed in the effort to expand, so the process of implementing an international market is being evaluated slowly and carefully.

When asked about their future vision for the business and how ATF can come alongside them to assist them in achieving that vision, there were two common themes amongst the groups. First, every group asked for continued training in a variety of areas. They were interested in escalating their money management knowledge and learning more about how to make their everyday lives more efficient with life skills training. Every group requested more business training to learn new skills, equipping them to diversify their products, expand their business, and capture a larger market share. Secondly, SHGs were interested in collaborating with other SHGs with hopes of combining a portion of their capital so that they could have a permanent market space to sell their goods. Because the program is still relatively new, most products are sold out of a residence and not in a commercial market setting. The SHGs have aspirations to continue to grow individually, as a group, and as a program, all while hoping to gain enough momentum and capitol to be able to afford permanent commercial space at the local market. The project is still in the infancy stages and it isn’t financially feasible to do so in the current state, but the SHGs have demonstrated that they are maturing at a fast rate and having a permanent commercial space is attainable in the not-so-distant future.

These SHGs have a very good foundation, coupled with the production and financial skills to mature as a business and lift themselves out of poverty. They understand the value of SMART goals and put great effort into achieving their goals. The individual risk and rewards of each member having their own small business, coupled with the collectiveness of a group working together towards a common goal, provides stability and empowerment for a better future. As the program continues to demonstrate success and impact the community, there is little doubt that more struggling yet ambitious citizens of the community will have interest in joining or starting a group of their own. As the program expands, so does the ministry opportunity. Empowering the community with economic development is not the final goal. Bringing financial stability is the vehicle used to bring spiritual enrichment. SHG leaders are Christian witnesses, introducing the Gospel of Jesus Christ to those within their business world and showing Christ’s love not only “with words or speech, but in actions and in truth.” Amen.