JAKARTA, Indonesia - For many entrepreneurs in the developing world, businesses teeter on the edge of growth and collapse. Among the urban poor, micro-businesses provide a means for survival, but without business training or savings, bankruptcy is just one step away.
Selling vegetables in a slum may enable a mother to meet urgent daily needs, but it leaves little room to save or prepare for development. With nearly two billion poor unreached by banks, business security and sustainability are limited.
When business training and financial services meet survival businesses, however, the opportunity for sustainable development among the world's poor arises.
Consider the case of Rahaenah, a mother of three in the world's second largest mega-city. Rahaenah has struggled for years to provide food for her children and keep them in school. Her business selling sodas by the roadside produced minimal income and profits were consumed each evening. In an effort to maintain her business and meet emergency needs, Rahaenah succumbed to predatory lenders and struggled to keep pace with a growing debt.
Since joining a Five Talents savings group and undergoing basic business skills training, however, Rahaenah's business and financial status have changed dramatically.
Business training opened Rahaenah's eyes to local opportunities, provided guidance on savings and financial planning, and offered new management skills. The training in money management was especially helpful to her: "Now I know how to separate my wants from needs and I can manage cash flow to improve my business."
Through her small group, Rahaenah found support and encouragement along with the opportunity for secure community savings and no interest loans. Setting aside a small portion of her earnings each week, she accumulated savings to develop her business and cope with any emergencies. With a small loan from her group, she purchased a window display and expanded her inventory to begin offering new products.
"As times passes by, I see my business moving from where it was. I used the loan to add something new. . . With the rising income, I get to discuss more on money and income with my husband."
Today, Rahaenah has seen her gross revenue and net profits more than double. "With the increased income, I could pay off all my debt. Now my husband does not need to come home late at night and we can meet our children's school needs."
Now Rahaenah earns more than $10 per day and her family has moved out of extreme poverty. She looks forward to continuing to grow and expand her business and is planning for her children to be the first in the family to attend university.
About Five Talents
Five Talents is a Christian microfinance and microenterprise development organization that fights poverty, creates jobs, and transforms lives among the world's poorest communities. Our programs are faith-based, community oriented, and training and savings driven rather than credit-led. As a result, we mobilize local resources and talents for sustainable business development without introducing debt. Our model works even in the most difficult contexts of poverty and honors the dignity and creative potential of the poor while helping them build strong communities and step out of poverty.
Photos by Five Talents and Jonathan McIntosh CC 2.0.