PovertyCure has historically encouraged individuals to move from asking, “what ends poverty?” to, “what creates wealth?” So, as a matter of course, our mission begs the question, “what does wealth look like?”
Last month I traveled to the beautiful country of Ghana, where I saw the answer to that question with my own eyes. I witnessed men and women put in hard work to build their own businesses. Those businesses, in turn, created jobs that release individuals to use their gifts and talents. The money that is earned is spread through the community as the employers and employed use their income for that most human of activities – taking care of their families’ needs and desires. Value is created, God is honored and wealth is understood.
My host on this economic tour was Fanny Atta-Peters, founder of The Hopeline Institute. Hopeline fosters more than 10,000 entrepreneurs and business leaders throughout the nation of Ghana. They receive training, mentorship and/or access to capital. It’s a fantastic program that is bearing fantastic fruit.
Small to Medium Enterprise – Demystified
In today’s global economic landscape the word, “business” conjures multiple, often contradictory mental images. One person imagines a lone entrepreneur building their humble native-crafts business through microfinance loans. Another envisions a large multinational conglomeration with their corporate fingers in everything from natural gas extraction to the sale of custom ordered socks.
Developing countries, like Ghana, often exhibit both extremes. The local people are incredibly driven, entrepreneurial and hard working. High numbers of individuals engage in commerce through very small businesses. This phenomenon is most visible in large cities where one can readily see thousands of entrepreneurs hustle to sell trinkets to tourist and small household goods to each other.
In those same environments it’s easy to spot the second extreme: a much smaller number of very large, dominant corporations. It may be the near ubiquitous presence of brands such Coca-Cola, the abundance of Western hotel chains and even financial institutions.
However, what you are unlikely to see is the middle ground – healthy “mom & pop shops” that act to boost locals into the middle class and serve as a means of handing down wealth from one generation to the next.
But, the reality is that successful economies thrive on what are known as small to medium enterprises (SMEs). These are businesses that grow and employ others, create value and spur broader economic growth. The PovertyCure Documentary Series broadly defines SMEs as businesses with 5-500 employees. In fact, the majority of developed economies are comprised of businesses in the middle. Many developing economies suffer from a lack of these economic powerhouses. Economist and development experts refer to this lack as “the missing middle.”
Increasing numbers of people accept that traditional forms or charity and/or aid do not solve the complex problems surround poverty. There is also growing buy-in of the notion that local economies need businesses to truly thrive. Still, the question remains, “how do we grow the missing middle?”
The Hopeline Institute is truly important because they provide a working answer to this great dilemma. And it’s not mere academics. They give an ongoing example.
As I mentioned above, Hopeline has partnered with more than 10,000 entrepreneurs and business leaders across Ghana. They are registered as a Financial Non Governmental Organization (FNGO). As such they offer both microfinance solutions for budding entrepreneurs and larger loans for functioning SMEs.
Mrs. Atta-Peters conceived of Hopeline during her graduate work. She officially formed Hopeline in 2007 with $4,900 as seed capital for loans. Hopeline’s goals were simple – to empower women and connect women entrepreneurs with the training and tools they needed in order to professionalize and grow their businesses. They wanted to share basic business principles in order to enhance the day-to-day work of these entrepreneurs. They provided training in areas such as bookkeeping, customer service, value of personal health, and the wellbeing of the family. However, they also added a Christian component, letting the Bible speak on business and our well-being. They started with 60+ women and graduated 43 women from their first four-week training program.
As if that isn’t impressive enough, Mrs. Atta-Peters gave birth to twins that same year!
The training required two hours each week for four weeks – valuable time to give up. However, there was an enticing incentive… access to capital. After successfully completing the four-week training program, graduates were then eligible to apply for financing to start or grow their businesses. This element is a key to their success in creating the missing middle. It’s easy to take for granted that training and relationships are as vital to long-term growth as access to capital. But, Hopeline prioritizes this truth in their four pillars:
Four Pillars of the Hopeline Institute:
- Access to capital
In 2012, they received a loan from Partners Worldwide, (also a PovertyCure partner), to help offer affordable loans to micro, small and medium businesses. And they’ve put those funds to tremendous use. After all, Hopeline knows there is no simple fix or “silver-bullet” to solve poverty or grow an economy. In the end, it takes relationships, constancy and integrity – qualities Hopeline possess in spades.
Hopeline’s approach demystifies the process of building the missing middle. As a result of Fanny Atta-Peters and her army of principled entrepreneurs and business leaders, communities in Ghana are beginning to thrive.
Jonathan A. Moody, Managing Director of PovertyCure with Awurabena Okrah, CEO of Winglow Clothes and Textiles Limited, and her team in Ghana.