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From Guadalajara to Oxford

Macarena Hernandez de Obeso is passionate about the economic opportunity for Mexico’s deprived communities. She is also our 2016-17 Skoll Scholar and Oxford MBA student. Her journey from Guadalajara started with a simple Skype call. Macarena shares the story.

Two years ago I had the luck to have a conversation by Skype with Pamela Hartigan. At that moment I had no idea this call will change my life to the point that today I’m writing this blog from Saïd Business School, at the University of Oxford, 5,605 miles away from the place I was born and raised, Guadalajara, Mexico.

Macerena

Macerena joined Prospera in 2011, the first social enterprise in Guadalajara, Mexico.

 

One would think that it is almost impossible to build a social enterprise in a conservative region, in a country that has not been growing strongly for the past 30 years. But, in spite of all this I have not allowed the circumstances to define what I can or cannot achieve. To the point that in 2014, Prospera, the social enterprise I was leading, was recognised as one of the top 10 favourite social enterprises in Mexico, according to Forbes, and the best social enterprise in Mexico according to the Suzie Bank UBS.

Prospera became my passion. But, passion alone gets you nowhere.

My unconformity and the pursuit of challenge and intellectual growth led me to join the team of Gabriela Enrigue to build Prospera, the first social enterprise in Guadalajara. At that moment, I did not know anything about entrepreneurship or social enterprises. But a hunch and a desire to learn made me spend all my time building Prospera from the beginning. At Prospera, our mission is to serve single moms in poor communities who start small businesses from home. Our vision is to disrupt the entrenched male-dominated social structures that have been in place for the past 500 years in Mexico. We have trained more than 7,500 women and increased their incomes eight times. Prospera became my passion. But, passion alone gets you nowhere.

Generating opportunities for women is a profound reason that deserves my time and work. But if I fail to better combine the social mission with a sustainable business model, I will be designing solutions that nobody will pay for and the impact will never scale. I came to this awareness after I led a Prospera project as part of a Fund developed by Alsea Foundation and Starbucks Mexico. This project changed the way I see the world.

Startbuck Project - Prospera

Alsea Foundation and Starbucks Mexico Project at Prospera [Photo source: Prospera]

The project’s goal was to add a productivity component to Alsea Foundation. It was the first project of this kind done in Latin America and we expected it to be scaled to six more countries. We trained 33 poor, single moms from one marginalised slum around Mexico City. They were recipients of philanthropic aid and the purpose of the project I designed was aimed at transforming them into small vendors at Starbucks. The women produced 3,300 customized notebooks that were then sold in 80 Starbucks. These women improved their income by 700%. Despite that the notebooks were sold to Starbucks consumers in less than a month, Starbucks only made this one purchase. Why? Neither the notebooks sales nor the productivity of these women were related the Starbucks core business model and the Foundation could not drive the corporate goals.

I decided to start looking for MBA programmes that would help me design business to solve the most challenging social problems that we face today.

As a result of this project I have been studying start-up business methodologies and working on the development of Prospera’s business model. I want to generate benefit for both the community and enterprises. If an enterprise increases income while solving social problems, they are willing to pay for this solution. That’s why two years ago I decided to start looking for MBA programmes that would help me design business to solve the most challenging social problems that we face today.

Talking with Pamela Hartigan not only helped me to understand how the Skoll Centre supports social entrepreneurs inside Saïd Business School, but she also made me believe that one day I could become an Oxford MBA student. The day has come I am grateful and ready for the challenge.

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What one solar business means to three Kenyan women

Yeoh

After finishing his Oxford MBA, Energy, Environment & Resources OBN Chair, Neil Yeoh, took a trip to Kenya where he spent time with a for-profit social venture, M-KOPA Solar.

Co-Founded by Skoll Scholar, Jesse Moore and London Business School graduate, Nick Hughes in 2009 with Oxford Saïd alumnus, Chad Larson joining in 2010, M-KOPA has gone from strength to strength; winning awards and rising to be one of the leading solar-power providers in East Africa. 

Ever since deciding to reconcile my interest in business with my passion for social impact I have asked myself the question: can for-profit businesses really do social good?NYeoh_M-Kopa_Blog_Pic1To help answer this question, I travelled east from Nairobi to Machakos, Kenya with M-KOPA Solar – the leading ‘pay-as-you-go’ energy provider to off grid homes. Along with Suraj Patel, MBA/MPH at UC Berkeley, Deenah Kawira, M-KOPA Solar Business Manager, and Felix Kyalo, M-KOPA Solar Field Sales Manager (pictured above from left to right), I got the opportunity to meet and hear the stories of three remarkable Kenyan women:

  1. Christine the shop-owner
  2. Eunice the side-hustler
  3. Jane the home-keeper

NYeoh_M-Kopa_Blog_Pic2

But firstly, what are customers buying from M-KOPA? M-KOPA customers make a deposit of $30 followed by 365 daily payments of $0.50, paid using their mobile money. The solar home system comes with three lights, mobile phone-charging and a solar powered radio. Customers who complete their payment plans on time can acquire additional lights, solar TVs, energy-efficient cooking stoves, internet-enabled smartphones and water storage tanks.

Christine the shop-owner

NYeoh_M-Kopa_Blog_ChristineChristine is a proud roadside shop-owner selling fruit and vegetables, among other products. She is a born businesswoman with a personality that could overflow a room. After hearing about M-KOPA over the radio, she waited eagerly and waved down an M-KOPA vehicle passing the area in order to buy one.

Before buying M-KOPA, Christine used two kerosene lamps to light up her store – a significant business expense. When her phone, used to order stock and make sales, ran out of battery, she would lock up shop for three hours to walk to her neighbour’s, hoping they were home to help charge her phone.   The kerosene lamps, which have now gathered dust in the corner of her store, have been replaced by M-KOPA. Her torch helps her to walk home safely at night, her radio blasting during the day attracts customers and her phone charger means she never has to leave her shop, giving her time to sell more. As a true businesswoman, she now charges customers’ phones for $0.10 per charge, helping people in the area and helping her pay off the device.

After six months with her M-KOPA Solar device, Christine has saved and made enough money to renovate and expand her store, as well as support her two children and their families. Although this was largely a result of Christine’s individual business savvy, M-KOPA provided her with the platform to grow her business and improve her livelihood.

Eunice the side-hustler

NYeoh_M-Kopa_Blog_EuniceEunice is a struggling single mother of three who is forced to run a series of side-businesses (aka “side-hustles” in Kenya) to make enough money for the basics of food, water, and shelter.

Living in the isolated eastern foothills of Machakos, where getting clean water means travelling 5km across mountainous terrain, Eunice does what she can from breaking quarry stones and making mud bricks for construction, to growing herbs and crops for sale.

Through a woman’s chama, an informal finance vehicle where individuals pull funds together, Eunice was able to buy an M-KOPA device.

For Eunice there was no electricity where she lives and providing lighting for her family was a costly luxury. When night comes her home would become “lifeless,” quiet and inactive waiting for the light of day.

M-KOPA’s home system gives her family the simple luxury of a common lit area where they eat, talk and laugh together. It also gives her children the confidence to go to the bathroom alone.

Despite the fact that Eunice does not have a stable income, she is committed to make her daily payments to keep the lights on in her home.  Far from ideal, this highlights the challenge M-KOPA faces as a social business managing the tension between profits and impact.

Jane the home-keeper

Jane is a wife and mother of four children. Her family lives in an isolated North-Eastern village in Kangundo – an hour from Machakos along a rocky dirt road. Her husband works at a local quarry and she tends to their two cows and chickens to supplement their livelihoods.NYeoh_M-Kopa_Blog_Jane

For Jane, M-KOPA initially meant a device for affordable solar power. But after paying off the solar device, she found another opportunity through the company to purchase a 1000L water tank.

The closest watering hole for Jane is 1.5km across rocky terrain. Providing water for her family normally requires her to make the trip every 2-3 days – back-breaking work that she is becoming too old to manage.

Now with the water tank from M-KOPA, which she is paying for using the same daily rate of $0.50, Jane only needs to make the trips to the watering hole once every two weeks or over the weekends when her children can help. She can rest her back, knowing that she has enough water to wash clothes, drink, cook and feed her cattle. The water tank has also given her the opportunity to help her neighbours when they are short of water, which she does regularly. She credits M-KOPA’s payment system for allowing her to afford a water tank like this and giving her the security of a sufficient water supply.

Closing remarks…

This weekend in Machakos was a remarkable and an eye-opening experience for me. It became evident that M-KOPA is an example of a social business that undoubtedly operates at the nexus of profit-making and impact-generating. However, operating at this nexus also generates its own set of challenges – even for these three women. For instance, Christine has since had to fend off people looking to steal her M-KOPA device jealous of her success. Eunice has had to deal with the shame from family and friends of owning a device that she occasionally cannot pay off and Jane has had to trust that her family can maintain payments to pay-off the water tank over the long run, whilst taking care of a large family.

However,  there is no doubt that this one solar business, established on an innovative for-profit business model, means a lot to these three women and has had a positive impact on their livelihoods overall. Now revisiting my initial question I have more confidence in knowing that despite the challenges that exist in social business, for-profit businesses can really do social good.

 

Follow Neil: @neil_yeoh

Read Neil’s Skoll World Forum session blog: Post-Paris Global Sustainability: how do we get there

 

EcoEnterprises Fund: Growth capital for sustainable businesses

There is no denying the prevalence and prominence of the impact investing discourse these days.  A hot topic? Absolutely.  A brand new conversation?  Not even close.

So, when you can hear from one of the early pioneers of the industry, it is always insightful.

This week we hosted Tammy Newmark and Michele Pena of EcoEnterprises Fund who joined us as part of the Skoll Centre Speakers Series.  They have been investing growth capital in sustainable businesses in Latin America for over a decade – and have the battle wounds to prove it.

Not that it’s been all setbacks and scars — but because they simply are open and transparent about the challenges they (and other risk-taking impact investors) have faced over the past 10 years.

Set up in 2000, EcoEnterprises Fund provides long-term investment capital and business advisory services – one without the other would be ineffectual and downright bad business, they say.   The Fund has invested in 23 companies from ecolodges to organics, sustainable forestry to aquaculture. Most of these investments have been wildly successful (20 companies still in operation, 11% p.a. return, and most importantly, measurable social and environmental impact) but of course, there have been challenges.

Which is no surprise, seeing that they are injecting risk capital into companies that are, well, risky.  They bet on the companies that are first-movers and market makers, whose products and services have yet to gain market acceptance.  As such, they are cultivating new demand and a vibrant marketplace that moves these eco-enterprises from the outskirt to the mainstream.

What’s next for EcoEnterprises Fund? Be on the look out for their book  this fall called “Portfolio for the Planet”, which is an open playbook to their tools, indicators and investment cases.  Also, they are currently raising $30 million for a new fund EcoE II, which will target 10-12 small and growing community-based businesses via mezzanine investment instruments.

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Pro Mujer: Making Development Work for Women

This post was written by Nereyda Esparza, a second year MPhil student in Latin American Studies at the University of Oxford, St. Cross College.

“There’s a growing recognition…that focusing on women and girls is the most effective way to fight global poverty and extremism…The world is awakening to a powerful truth: Women and girls aren’t the problem, they are the solution.”
–    Nicolas Kristoph & Sheryl WuDunn, The New York Times

Last week, I attended a Skoll Centre Speaker Series talk hosted Lynne Patterson of Pro Mujer.

Pro Mujer is an international women’s development organization that uses microfinance to give Latin America’s poor women tools to create livelihoods for themselves and their families through business training and healthcare support.    Started in 1990 in Bolivia by Lynne  Patterson, an American schoolteacher, and Carmen Velasco, a Bolivian professor, Pro Mujer today has fully operating programmes in Bolivia, Peru, Nicaragua, Argentina and Mexico. Over the past 20 years, the organization has disbursed over US$950 million in small loans averaging US$309.

Over the course of the talk, it became clear the power Pro Mujer has to transform women’s lives. The company gives small loans to women to start up profitable business and turn the most impoverished and marginalized of women in these communities into small-scale entrepreneurs.

Not only do these loans help women become financially independent, they remind women of their value and intelligence, they raise self-esteem and create confidence.  Pro Mujer shares stories about women being too shy to speak before their business training and by the end had taken up leadership positions and became advocates of the company.

Pro Mujer in Peru Client Ana Alicia Cruz de Flores. Courtesy of Pro Mujer

Pro Mujer also saw the link between healthcare and women’s vulnerablity towards poverty.  To address this, Pro Mujer also offers women access to health care and has saved the lives of thousands of women by providing essential care like pap smears for cervical cancer testing.

Yet, with so much focus on women in microfinance, and the presence of the widely popular conditional cash transfer (CCTs) programmes in Latin America whose claim to innovation is rooted in an integrated approach to poverty alleviation combining education, health and nutrition in a single intervention – what sets Pro Mujer apart?

I would argue that Pro Mujer is different in two ways.

1. Pro Mujer is truly an organization for women by women.

It not only gives women the tools necessary to become financially sustainable, it also encourages women to believe in their strengths and their abilities.  In other words, it helps “empower” women, as defined by Maxine Molyneux: empowerment is “the acquisition of capabilities which have the potential to assist women in achieving autonomy (legal and material), equality (social and personal) and voice and influence (over decisions that affect their lives).”  The women of Proj Mujer gains agency over decisions that affect their lives and even promote greater gender equality through generational changes (i.e. girls growing up in better homes and with positive role models).

CCTs, on the other hand, use women as “vehicles” for development using a traditional view of the household, where women are homemakers whose sole purpose is to provide for the family and children at home.  Women in CCT programmes have to meet “co-responsibilities” that take time away from their ability to find a job or focusing on other income generating opportunities.  In other words,  women end up working for development instead of development working for them.

2. Pro Mujer acknowledges that education is the greatest enabler in life, an essential tool for women to bring dignity and success to their lives. 

Lynne Paterson said it best in her talk: “Education is in everything that we do.  We are teachers and we wanted Pro Mujer to have education in mind in all its initiatives.” Not only does Pro Mujer teach women about financial literacy, it teaches women about the values of being a leader and the expertise that woman can bring to the table on all walks of life.

By focusing on women’s gains, health and education, Pro Mujer is setting a great example of how business has the ability to truly empower women in the developing world.
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Diving Deep, Crossing Boundaries: A SOCAP WrapUp

This post was written by SBS MBA Nikhil Neelakantan, who has just returned to Oxford after 3 days at SOCAP/Europe.

Courtesy of twentytwentystudios

Last night’s six-member panel brought SOCAP/Europe to an appropriate end.

The panel consisted of social entrepreneurs, volunteers and the founding members of SOCAP/Europe, Kevin Jones and Frank van Beuningen. This was typical of the conference: people from all backgrounds brought together by an interest and passion for impact investing.

This resulted in conversations that frequently needed translation (No, structured banking does not deal with the architecture of banks!) but it also meant that people were exposed to different points of view.

This also meant that there was space for a deep-dive into the details of impact investing as well as an opportunity to learn about innovative organizations using SMS technology in developing countries.

Another feature of the conference were the participant-driven Open Space sessions. I was able to attend two of these sessions, which were “held” in an Unconference format. The first described the work of the World Bank in creating the Development Marketplace. The World Bank Institute created the Development Marketplace over 12 years ago to provide grants to innovative social ventures. Now it is looking to help these social entrepreneurs get commercial investments.

The second Open Space session that I attended was built around the question of providing financing to SME’s trying to build businesses in rural India. We had participants who were eager to start asking questions of those who had already built these links in India. The consensus was that there was lots of opportunity but that one had to proceed by developing partnerships with Indians who were already working in this space (this includes government agencies such as IDBI).

The conference also brought some reflection on the future of SOCAP/Europe. Where is it going next? It seems logical that it will stay physically in Amsterdam (The Dutch have $7bn invested by retail investors in social enterprises through organizations like Triodos Bank and Oikocredit. They are surely the world’s epicenter in social investment).

However will the format remain the same? Will more policy makers and government entities get involved? Despite the lingering questions, we left the conference buoyed by the fact that we were setting the foundation for a larger group of people who were willing to venture forward into the brave new world of impact investing.

Holding up Half the Sky in South Korea: but how Equitable is this “Asian Miracle”?

This post was written by Skoll Centre Director, viagra Pamela Hartigan, physician en route from Korea.

Last week I was in Colombia, this week I am in Korea.  Quite a cultural leap – but the underlying theme for my continental hops is the same:  the quest for more equitable, sustainable development for people and the planet.

I was invited to South Korea by Dr. Kim Sun-Uk, President of EWHA University, the world’s largest women’s university founded by an American missionary in 1886.  When it opened, it had one student. Today, EWHA has 11 colleges, 15 graduate schools and 25,000 enrolled students.  Talk about a social venture achieving scale! EWHA is now responsible for many female firsts in Korean history, including the first female prime minister, first PhD, first medical doctor, and first attorney, plus has produced half of Korea’s female ministers.

I was invited to deliver the keynote at the 125th celebration of the University’s lecture series which this year focuses on social entrepreneurship.  It is early days still in this country for this field of practice, and the Korean government, in its haste to support what seems to be a good thing in the wake of the 1997 Asian financial crisis, passed the Social Enterprise Promotion Act in 2007 that defines social entrepreneurship as the practice of providing employment and services particularly to the disabled or otherwise marginalised. When I was in Korea last June, the organizers of my visit were enormously proud of this law.

However, on this trip, I listened to several of the more widely tapped-in Koreans talk about the unfortunate result of this well-intentioned law for the evolution of social entrepreneurship in the country.  As part of the law, the government offers to subsidize the salaries of the disadvantaged a venture employs for two years.

So you can imagine, anyone who wants to set up or who already has set up a business, will run out and employ such people just to qualify as a “social enterprise”.  But when the two-year subsidy is up, the business collapses.  Pressure is being brought to bear on the government to reconsider this law, given the rate of failure of these enterprises and the distortions it produces.

In this scenario, the concept of innovation and systems change has been stripped out of the South Korean definition of social entrepreneurship completely. As such,  it was a welcome surprise to learn that EWHA’s mission is to support its graduates to be “change makers” (and that was before Ashoka).

In preparing for my keynote, I spent time reading about the country, its history and society and about EWHA.

The data doesn't look promising for South Korean women. Image from the WEF 2010 Gender Gap Report

First of all, I was quite surprised to read that despite the fact that this country’s women are well-educated and blessed with optimal maternal health services, the Gender Gap Report of the World Economic Forum and the United Nations both rank South Korean gender empowerment among the lowest in the world, with the WEF report in 2010 ranking South Korea in 104th place among 134 countries.

All the more perplexing is the fact that the United Nations Fund for Population Activities (UNFPA) reports that in 2009, South Korea had the world’s second lowest birthrate, yet only about half of adult women were participating in economic activity.  So if Korean women are having fewer babies, and they are not working, my conclusion from afar was that either they are bored to death sitting at home, or they are elderly.

To add to this puzzle, the 2009 Global Innovation Index  ranks South Korea as the most innovative country in the world, with the USA coming in second.

What is going on here, I wondered? 

If, according to the WEF report, women are not participating fully in the labor force and are excluded from career development opportunities, does this mean that almost all innovation in South Korea is spearheaded by men?  I cannot imagine that to be true.  But if it is, then currently Korea is unwittingly denying itself a great deal of its potential for sustainable development.  And EWHA has assigned itself an ambitious goal in seeking to have all its women graduates be innovators.

A conversation during this visit with Professor Hae-Joang Cho, a well-regarded anthropologist at Yonsei University, was quite sobering (and I am in incurable optimist, so that is saying something).  No, she objected.  Korean women are not sitting at home bored to death.  They are working very hard – managing the lives of their children.  She described how many Korean women, upon university graduation, go into the workforce, foregoing marriage, but by the time they are 35 years of age, with little prospects for career advancement through the male-dominated bureaucratic ladder, they find themselves wondering why they pursued the career track when they might have been more fulfilled, and certainly less lonely, with a husband and children.

Those who do marry, she said, seek their own personal fulfilment through their children.  Every waking hour is spent orchestrating their children’s lives, tutoring them after school and over vacations to ensure they excel in their studies.

Professor Cho noted that a recent study of Korean children had found that few had friends.  Their best friend was their mother because she was omnipresent in every aspect of their lives.  Thus, even those children who have the potential to be “changemakers” – which entails bucking the status quo and embarking on seemingly unreasonable pursuits – are deterred from doing so because of the unbearable thought of having betrayed the one person who sacrificed her life so that they would excel in traditional, accepted roles.

So indeed, EWHA’s work to fulfil its mission is certainly daunting.  I also wondered whether in a male dominated society, an all-women’s university had to be rethought.  If gender barriers are going to be lifted, doesn’t it make more sense to integrate men and women on equal terms in the classroom, in the hopes that as they move into the workplace, they will appreciate the strength of diversity?

When I left Seoul today for the long trek back to London, I could not help wondering where the levers for gender-focused systems change lie in South Korea.