By Rebecca Busse
In my quest for a new, innovative, scalable microfinance model that could also be coupled with environmental sustainability, I met Grant Hunter, the VP of Franchise Development and Marketing for Microfranchise Solutions, LLC. He assured me that he was anything but a grant hunter, despite his name, and that he was searching for a business-based approach to poverty alleviation. After having some less-than-ideal experiences in the non-profit world searching for a microfinance model that could be easily scaled up or down according to need, he abandoned the non-profit models and went to a for-profit model: microfranchising. Microfranchising is pretty much what it sounds like – exporting small franchises to developing countries in an effort to harness the power of business to help people help themselves.
The method is simple, and based in common-sense: identify existing micro-enterprises or concepts, establish working relationships with host-country financial institutions providing microfinance services, capture necessary business expertise, open a pilot program to optimize operations, and use the expertise to package best practices in an easily-exportable and scalable form. The environmental sustainability piece comes with the choice of business: their newly-launched natural-gas taxi franchises in Peru are much more efficient than their counterparts, and the company is looking into sustainable biodynamic aquaculture as an easily replicable business.
Microfinance is indeed coming into its own as a poverty alleviation tool, and many of the models presented at the 2009 Microfinance California Conference are viable for poverty alleviation, and they combine an impressive social and financial bottom line. For those who seek to alleviate poverty with the engine of for-profit business or within a non-profit context, there are plenty of different tools to put in the poverty-alleviation toolbox.
Rebecca Busse is an MBA student at the Presidio School of Management. She enjoys travel, playing Brazilian-style percussion, and exploring innovative methods of environmentally sustainable poverty alleviation. Rebecca.Busse@Presidiomba.org