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Ciudad Saludable: The video report!

July 25, 2009 | Comments Off | Enterprises, Videos

Ciudad Saludable (healty City) is a NGO that develops micro-enterprises focusing on waste management in Lima. Founded by Albina Ruiz, Ciudad Saludable encourages and helps “recicladores” to organize themselves and create their micro-organisation. It has created 150 new jobs and Albina Ruiz pays a special attention to the self-estime and the dignity of the workers. Beside the trainings they give to the micro-entrepreneurs, Ciudad Saludable offers a technical and legal support and they developed an innovative microfinance system to finance the creation of micro-enterprises. After a successful experience in Peru, Albina is currently thinking how she could replicate her model in other countries such as India.

For more info, read Ciudad Saludable’s profile


Fair Street - Ciudad Saludable from Angalio Productions on Vimeo.

Our Peruvian report takes place in Lima where we met Albina Ruiz, founder and manager of Ciudad Saludable. Throughout our interview with Albina, we were really impressed by her enthusiasm and by her optimistic vision of the future. After this meeting, we have headed towards “El Pino”, one of Lima’s poorest neighbourhoods. There, we observed the work of the microentrepreneurs who drive all over the area with their tricycles to collect waste. The impact of Ciudad Saludable’s work is striking: despite the obvious poverty and the improvised buildings, we visited a clean neighbourhood dotted with green areas where it feels nice to move around.

Problematic and context:

Waste management is a major issue in Peru. The funding that the different governments allocate to this matter are insufficient and are mostly concentrated on the richest neighbourhoods. The demographic explosion in the main cities has also worsened the situation. The Peruvian households alone produce 20.000 tons waste daily. Among this waste, only 60% are collected and 35% treated appropriately. In the poorest areas where private associations do not intervene, some streets look like open sky dumps, the air is unbreathable, and the waste negatively impacts the hygiene and the health of the communities.

The inefficiency of the public services in the destitute areas is mainly caused by the lack of integration of the poorest populations within the legal system and the lack of political will to tackle the problem head on. Often without declared address and valid ID documents, the state does not have the opportunity to control the destitute citizens. Also, many politicians believe that the poor are not able to pay for a collection service. Once in a situation of free rider, the municipalities do not have enough means to cover all the areas and the waste excess start accumulating quickly in different places of the area.

The materials accumulated in these dumps represent a source of revenue for the poorest people. Improvising themselves “recicladores” go around these open sky dumps looking for plastic or paper that they can resell for a small amount of money (+/- $2 per day) to an intermediary who sells these materials to a recycling centre. These “recicladores” work in really bad conditions, without gloves, protection masks and working pants. Moreover, the “recicladores” are regularly persecuted by the local police who do not accept their activity. Finally, as they work alone during the night, the “recicladores” are often victim of the violence of the local gangs.

The initiative:

Ciudad Saludable (Healthy City) is an NGO which favours the development of microenteprises that collect and recycle waste in Peru. Ciudad Saludable regroups “recicladores” formally by organising them within microenterprises. Practically, Ciudad Saludable helps them in the legal work needed in the creation of a company, provides them a logistic support and enables them to finance the tools needed for their activity by giving them access to microcredit at very attractive conditions. This relatively simple model has revolutionised waste management in Peru and has improved the living conditions of millions of destitute people.

The organisation of the “recicladores” has several advantages: firstly, by regrouping the output of their daily labour, the “recicladores” together a larger amount of waste that they can directly sell to a recycling centre at a much better price, not using any intermediary. This quantity effect is enhanced by the Ciudad Saludable’s financial support that enables them to acquire tools increasing their productivity such as trucks, motorised tricycles.

Secondly, by providing appropriate equipment (helmet, gloves, working pants…) to its “recicladores”, Ciudad Saludable allows them to collect waste in better hygiene and safety conditions and in greater dignity. Ciudad Saludable gives a great importance to the self-esteem and the dignity of its workers. Therefore, they have to buy their own equipment through a system of microcredit developed in collaboration with Scotia Bank. In this context, they are not assisted but buy themselves the tools that will improve their condition.

On the field, the microenterprises collect the waste of the households that have accepted to subscribe to the services of Ciudad Saludable. The cost of the subscription is $1 per month. To encourage the people of the neighbourhood to contribute, Ciudad Saludale does a lot of sensibilisation stressing the interest of waste collection and the positive impact of a clean neighbourhood on children’s health. Ciudad Saludable also rewards the “good contributors” by creating green areas close to their houses. Today, the payment rate in the areas where Ciudad Saludable is working is over 60% and that rate is constantly increasing.

The creation and the assistance of micro-entreprises is Ciudad Saludable’s main program. However, Ciudad Saludable has other fields of activity: they offer consultancy services to different cities in Peru to help them improving their waste management. They have also created an innovative program enabling the production of gas using the excrements of pigs that feed themselves of organic waste.

Finally, Ciudad Saludable has developed a master in environmental management in collaboration with “l’Universidad Católica del Peru” in Lima. The goal of this master where Albina Ruiz and some of her collaborators teach different classes, is to generalise waste management solutions in Peru.

In the mid-term, Albina Ruiz’s objective is to replicate her model of micro-entreprises to all cities of Peru and to other countries in South-America. Deeply affected by a recent trip in India, Albina Ruiz also made a priority of adapting her model to that country.

The entrepreneur:

Albina Ruiz, the founder of Ciudad Saludable, grew in the Peruvian Jungle. Aged 18, she leaves to Lima where she is shocked by the amount of waste in the streets and by the air contamination. She quickly decides to fight this plague and launches several cleaning campaigns within her university.

Then, she will do her thesis on the management of micro-enterprises and the environmental management in the poor areas of Lima. This thesis will trigger a lot of interest among her teachers. This enthusiasm will encourage her to put her theories into practice and she decides shortly after to create Ciudad Saludable. Her model and her innovations have been awarded numerous times ; among others, Albina has been elected “Schwab Social Entrepreneur of the World Economic Forum”, she has received the “Skoll Award for Social Entrepreneurship” and she is an Ashoka fellow.

Social Impact:

The 13 micro-enterprises launched by Ciudad Saludable employ 150 people. Ciudad Saludable operates in 60 Peruvian municipalities, enabling the collection of 100% of the waste in the areas where it is active. By collecting waste and favouring the adoption of respectful behaviours, Ciudad Saludable’s different micro-enterprises have improved the living conditions of 4 million people.

Ciudad Saludable’s work has also had a huge influence on the Peruvian government. Recently, the company has been an important actor in the creation of the first General Law on solid waste in Peru.

Finally, through its master in environmental management, Ciudad Saludable has enabled more than 5,000 students to master in the field. Today, all these students have the skills to be the actors of the environmental change initiated by Albina Ruiz.

Financial impact:

The micro-enterprises are managed by destitute people living in the neighbourhoods where they operate. These people generally do not have access to the loans of “classic” banks and find it therefore very difficult to finance the purchase of additional material. To tackle this problem, Ciudad Saludable has developed a microcredit program with the Canadian Bank Scotia Bank. As Albina found the normal interest rates proposed by the microcredit institutions way to high, (between 30 and 40% annually) Albina created a special fund that Ciudad Saludable guarantees with a deposit of $30,000 at the Scotia Bank. With the guarantee to be reimbursed and not having to deal with the follow up of the loans, Scotia Bank offers credit at a much lower annual interest rate (12%).

In 2006, Ciudad Saludable has obtained a $615,000 grant from the Skoll Foundation after having received the “Skoll Award For Social Entrepreneurship” awarding the quality of the innovations. This grant enabled Ciudad Saludable to gain scale, to improve the quality of its support to the micro-enterprises and to accelerate the expansion process to other countries of South America.

Ciudad Saludable, by developing innovative solutions, has met the challenge to create “healthy cities”. Now surrounded by a skilled and optimist management team, Albina Ruiz wishes to extend her model to all the Peruvian cities and to export it abroad.

Coronilla: The video report!

June 28, 2009 | Comments Off | Enterprises, Videos

Coronilla is a company based in Cochabamba, Bolivia, that produces gluten-free pastas and snacks. Coronilla’s objective is to have a positive impact on all the actors of its value chain. Therefore it buys its raw materials at a fair price to local suppliers, its workforce is composed of 75% of women with 10% with  of the employees that are disabled and it offers optimal working conditions. Discover the interview of Martha Wille, the entrepreneur that insufflated her social fibre to Coronilla.

For more information, read Coronilla’s profile

Fair Street - Coronilla from Angalio Productions on Vimeo.

After the fascinating discovery of the solar cookers, Fair Street made a second reporting in Cochabamba, Bolivia. We had indeed the chance to meet Martha Wille who manages Coronilla, a family business created more than 40 years ago. Through her actions, Martha made of Coronilla the perfect example of a company that beneficiates to all the actors of its value chain.

Problematic and context:

Coronilla addresses problematic that are directly linked to the political and social situation of Bolivia. Even if a progressive opening to market economy has improved the economic situation of the country, Bolivia remains today the poorest country in South America with strong inequalities between urban areas where 60% of the population is poor and rural areas where this figure rises to 80%.

The bad living conditions of the Amerindians (60% of the total population) is one of the main issues in Bolivia. Evo Morales’ accession to power triggered a lot of hope among this segment of the Bolivian population. Nevertheless, many still live in precarious conditions. As homeland for the majority of the Indian population, the Bolivian Altiplano, region of high plateau at heights of more than 3000 meters is particularly poor. There, people essentially live from agriculture, first sector of activity of the country, and earn unstable and little wages.

If it is the case of many poor countries, the situation of women in Bolivia is particularly worrying. In the 90s’, this problem was even considered as one of the plagues of the country. A study made in 1994 showed that close to 70% of the women endured domestic violence. Today, Bolivian women still suffer important discrimination compared to men. With their main task being house caring, they have a limited economic power and are therefore strongly depending on their husband. This isolation, combined to wife-beating prevents women from taking part to the development as they are too busy defending themselves.

At the root of the women marginalisation stands their low level of instruction that reduces their emancipation possibilities.

Fortunately, in the last 10 years, the situation of women has become a central preoccupation in Bolivia and many initiatives and laws that aim at improving their situation have appeared but a lot still needs to be made.

The company:

Founded in 1972 by Guillermo Wille, Coronilla has been a pasta producing company from its beginning. In the mid-90s’, the export market strongly contracted, putting the enterprise close to bankruptcy. Martha Wille, daughter of Guillermo Wille redynamised the company by diversifying the product range. If Guillermo Wille already paid attention to the well being of its employees, it is with Wartha that the second life of Coronilla as a social enterprise really started. Today, the company produces pastas and snacks mixing quinoa and a traditional andine cereal that makes them gluten-free.

Coronilla wants to fight poverty by having a positive impact throughout its value chain. As CSR (Corporate Social Responsability) is a relatively unknown concept in South America (even less in Bolivia), Coronilla wants to be a pioneer. In its buyings, the enterprise purchases its ingredients (quinoa, rice…) directly to destitute local producers, negotiates in their own language (Quechua or Aymara) and offers them price stability.

The employees also have a very important place in the company’s strategy. 75% of the employees are women and 10% are disabled. The working conditions are optimal in terms of hygiene and security and the enterprise provides its employees with the possibility to study or to follow complementary training. Finally, Coronilla offers support to the working families so they can put their children at school.

As there is very little demand for organic food in Bolivia, Coronilla only focuses on exportation. Today, the company exports to 11 countries in North America, Europe and Oceania.

The entrepreneur:

Daughter of Guillermo Wille, Coronilla’s founder, Martha Wille was influenced by the social convictions of his father and incorporated them to the family business. As manager of the family business and being extremely attentive to the well-being of its employees, Martha wants all the employees to feel part of the Coronilla family.

After being elected social entrepreneur of the year 2005 by the Schwab foundation, Martha was invited to participate to the World Economic Forum in Davos where she met many other social entrepreneurs. As a follow-up to the exchange of ideas taking place there, Martha’s next challenge is to launch a foundation « the Guillermo Wille Foundation » that will work on the to replication of Coronilla’s model by giving advice to Bolivian companies and encouraging them to adopt CSR policies.

Social impact:

Buying its ingredients to local producers following Fair Trade principles, Coronilla provides a stable source of revenues to 1500 families allowing them to maintain a certain life standard.

As Martha told us during the interview, by providing a respectful and blossoming work environment, the company wants to have a positive impact on the lives of its 65 employees. After the production manager noticed that an employee had developed a skill at resolving the problems that occurred on the production chain, the company encouraged her to attend a two year engineering program. Today, this employee enjoys a much higher wage that allowed her to provide her children with higher quality education.

The economic autonomy aquired by women working at Coronilla facilitates their emancipation.

Financial impact:

Since 1997, two organisations have contributed to Coronilla’s development

The first, SEAF (Small Enterprise Assistance Fund), has invested $400 000 (mix of capital and debt) through its fund « fondo Capital Activo de Bolivia », to finance its needs in working capital. More than the supply of capital, SEAF support helped Coronilla in improving its accounting practices and in transforming into a stock corporation. SEAF essentially professionalised the company. Coronilla bought back SEAF’s shares in 2004.

After SEAF’s help, Coronilla still only used 20% of its production capacity in 2004 and the enterprise needed capital to keep growing. Back then, Coronilla obtained a loan of €350 000 from the Dutch organisation Cordaid. This loan allowed Coronilla to double its exports within the same year. Today, Coronilla’s exports are close to $1 000 000 using 50% of the productive capacity. If the company has met a high growth in the last 5 years, it still enjoys important growth potential that should enable it to spread its fixed costs better and increase its margins.

By continuing to create value for all its stakeholders (producers, employees, shareholders and clients) Martha Wille is convinced that Coronilla is meant to be a major company in Bolivia.

CEGIN: Healthcare for all

June 2, 2009 | Comments Off | Enterprises

After problems faced by cartoneros, education and water access, Fair Street’s third report puts forward a doctor who seeks to provide the poorest of people with access to healthcare.

Problem: healthcare

In our previous report, we focused on the essential role played by education in economic and social development. Health must be considered as a second fundamental factor in constructing a sustainable future. One cannot imagine a country adopting a development policy which does not seek to improve access to healthcare services. For rural populations, whose workforce is often the main production factor relied upon for agriculture, good health is an essential basis for any progress to be achieved. In far-off regions, particularly, women and children suffer from difficult living conditions; one of the UN Millennium Development Goals is to reduce by three quarters the maternal mortality ratio by 2015. The Juyjuy Province is especially affected by this problem, with a maternal mortality ratio ten times higher than in France.

Context:                                                                                                 

In Argentina, over half of the population does not have access to social security. But even those whose work status allows them to enjoy social security benefits often choose in addition to subscribe to a private health insurance. This is because of the inefficiency of the public healthcare system, and for this two main causes are identified. First, it is decentralized and managed at the level of provinces, which leads to strong differences between regions in Argentina. Moreover, as the State is unable to offer a complete set of solutions, workers unions tend to create their own obra social (social security), which also causes irregularities and many organizational problems. The Argentinean population thus has two options: either to resort to private healthcare systems, usually too expensive for the populations at the base of the pyramid; or to use available public services and consequently accept its inefficiencies and waiting lines that can last up to several days. But this time spent waiting prevents the patient from working, and providing for the needs of his family.

The company:

CEGIN (Centro Ginecologico Integral) is a medical center founded in 1989 which specializes in the provision of medical services to poor women from rural areas. The CEGIN center manages to offer quality services at half of the market price! In order to achieve such results, their strategy is based on the use of the economies of scale. The medical industry is faced with very high fixed costs (equipment, infrastructure…), whereas the additional cost of a new client is actually relatively low. The CEGIN center therefore targets a very large number of patients in order to spread its fixed costs. By working many hours and treating a large volume of patients (40 000 total), the center can thus guarantee a quality service whilst achieving lower rates of consultations. Rather than offering free services, the CEGIN approach is to charge the patient a low — but fair — cost. They have come to realize that the patient feels more dignified that way, and in consequence is treated with greater respect by doctors.

Five years ago, Jorge Gronda launched the SER system within the CEGIN center. It is a membership card that patients can purchase for 10 pesos (€2) per year which gives them access to the 60 CEGIN medical practices. By presenting this SER card, patients enjoy preferential rates in CEGIN centers that charge less than half of the market price for medical services (for example, an ultrasound scanner costs 20 pesos in CEGIN centers, instead of 50 pesos normally). The main idea behind the SER card, beyond increasing access to healthcare, is to create a network that will later allow its members to enjoy various advantages. By creating this network, and taking advantage of its high amount of members, the SER system can have a considerable influence on shopkeepers in the Jujuy Province. Currently, card holders already enjoy discounts in some pharmacies, and in the long term, Jorge Gronda’s ambition is to develop a system of “social franchise”, and extend the SER card’s field of action to various fields such as food, construction and transports. His aim is that necessary fundamentals for a decent life be accessible at low cost for all the people living at the base of the social pyramid.

The entrepreneur:

Jorge Gronda is a doctor originally from the Jujuy Province. First active in the public sector, he left it over 25 years ago to found CEGIN. Tired of the public healthcare system’s many gaps, he launched the CEGIN initiative with two motivations: first, he wished to offer quality healthcare to those at the base of the economic and social pyramid; and second, he wished to reduce the distance between doctors and patients. Jorge Gronda’s has earned much recognition and gratitude for his work. He was first elected Entrepreneur of the Year by the Schwab Foundation in 2005, he then received the United Nations Development Prize, and he was finally invited to share his vision of the future at the Davos World Economic Forum in 2008.

Social impact:

The social impact of CEGIN and the SER system is obvious, and can be summarized as follows: to allow the people at the base of the pyramid (by definition, those who do not have access to social security) to have access to quality healthcare. Nowadays, over 40 000 people are followed by the CEGIN clinics (including 20 000 through the SER network). Over 10 000 biopsies are carried out each year in CEGIN clinics, which is estimated to have prevented the development of more than 300 cancers.

Nonetheless, Gronda does not limit himself to the provision of healthcare services. Instead, he takes an interest in acting out of consideration for the poorest of people. During his interview, Gronda insisted several times on the important role of the SER card. First, people pay in order to subscribe for this card, therefore valuing it more than if they received it for free. This requirement has a direct impact on the level of the care they receive, as they are more inclined to share information on their health that facilitates the work of their doctors. Second, belonging to the SER networks and enjoying quality healthcare services considerably increases the self-esteem of people suffering from social exclusion. Thanks to the satisfaction of SER clients, Gronda has never had to publicize his system. The pride they take in being part of this network encourages people to talk about it in a positive way, and this word of mouth has proved to be an essential contribution to the development of CEGIN.

Financial impact:

 Support from a fund: Gronda is currently attempting to finalize negotiations with a European fund. Because of a confidentiality clause, we are unfortunately unable to divulge its name. The financial contribution from this fund should allow the consolidation and extension of the SER network. The objective is to extend the number of members from 20 000 to 50 000 over the next five years. According to Gronda, such financial support from an external organization is necessary in order to achieve this objective.

Use of microfinance: 80% of health problems can be resolved with an SER card and the consultations at half price that it allows. However, some serious problems require much more expensive surgery. In these cases, CEGIN uses the benefits of micro-credit in order for its clients to afford these operations. The most common operations they have to carry out cost on average 3 000 pesos (€ 600 +/-). A micro-credit fund financed and managed by CEGIN allocates credits equivalent to the costs of the required operations. These credits are usually reimbursed in ten regular payments. Gronda is a pioneer in the use of micro-credit for health purposes; considering that health is a basis for development, he believes that it is essential for people to have access to capital in order to extend their access to healthcare. For the worst cases that micro-credit cannot finance, CEGIN is trying to set up a micro-insurance system. Statistically, these cases only represent one in a 100 000 patients, so Gronda is trying to take advantage of the “strength in numbers” effect of the SER network; the small contributions of all members of the network would finance the treatment of exceptional cases.

The SER system rests on a fundamental financial principle: diversification. Members of the network are at the base of its success and development. That is why, by extending the network, Gronda is consolidating it. With more members, the various risks are diversified and the global risk is reduced. This diversification that reduces the system’s profile of risk also plays an essential role in financing both the workings of micro-credit and the development of a micro-insurance system.

 

Sources:

 Interview with Jorge Gronda, founder CEGIN and SER System

Llobeta Robert, Recuperando la salud, Grupo Editorial Lumen, Buenos Aires, 2007

www.oms.org

www.undp.org

www.schwabfound.org

 

The second report takes place at Bariloche, in Northern Patagonia. After a meeting in Buenos Aires with the manager of Ashoka, a network that supports social entrepreneurs, we decide to change our itinerary and make a “small” 2000 km detour to Bariloche.

Problems:

Water: Water is a crucial concern, at the very heart of the environmental challenge confronting humanity. Management, supply and diminishing resources are all issues on which much progress still needs to be made. Water quality has a huge impact on the living conditions of the poorest populations. Better water quality improves both the food supply and the hygiene of those “at the Base of the Pyramid”. With improved hygiene they are better prepared to confront the challenges of their everyday life and they can shift their efforts from fighting for survival to their personal development.

Education : In developing countries, there are currently 75 million children who do not attend school, and 861 million illiterate adults. Access to education is universally recognized as a key factor for economic and social development. Education develops knowledge, and gives access to employment: by learning concepts and techniques, marginalized communities can benefit from growth and improve their situation. They are then able to take personal responsibility for themselves and for their families. In developing each individual’s potential,  Education makes a real difference to the dignity of the human condition. “To ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling” is one of the objectives of the United Nations’ program to eliminate poverty by 2015.

Context

Despite its status as an emerging country, Argentina is a country where poverty is still prevalent, be it in big cities like Buenos Aires or in far-off regions such as Bariloche. The economic crisis that hit the country at the start of the decade had a profoundly detrimental effect on the country’s economic and social situation (between 1998 and 2001, the GDP fell from 300 to 220 billion pesos!), and its consequences remain highly tangible today. In Argentina, over half the population lives below the poverty line, and one in five is in a state of complete destitution, with revenues insufficient to provide even the necessary minimum to maintain physical capacity. This situation is mainly the consequence of a high unemployment rate: in the region of Bariloche, a quarter of the active population is unemployed, and this figure reaches 75% in the most remote areas.

The direct consequence of this poverty is the marginalization and social exclusion of a substantial proportion of the population. People live in precarious conditions which are often difficult to escape.

The company:

ETV (Emprendimientos de Tecnologias para la Vida) was founded in 2006 and aims at developing, building and distributing technological solutions to improve the living conditions of the people at the base of the social pyramid. Currently, the main product developed by ETV is the Bomba de Soga, which pumps water. ETV’s objectives are threefold: to harness the potential of technological innovations for the poorest communities; to provide work to young people from the Fondation Gente Nueva; and finally, to use some of the revenues generated by the sales of their products to fund the foundation. However, at this stage, the profits generated do not yet allow significant progress towards the achievement this third objective.

Created 25 years ago, the Fondation Gente Nueva aims to promote education and access to employment to those excluded from the traditional educational system. Helped by a network of primary and secondary schools, and the development of workshops and regional education programs, Gente Nueva wants to give each individual a chance to realize his or her potential. The schools of the Gente Nueva network are free, and the salaries of teachers, who are selected by members of the foundation, are paid by the State.

ETV products are made in the workshops of Gente Nueva, which employs a workforce of young apprentices.

The entrepreneur:

Gustavo Gennuso is originally from Buenos Aires, but he has been living in Barichole for the last 30 years. He moved there when he started studying nuclear energy at the Balseiro Institute. He continued to work in this field until 2000, whilst developing his social innovations. After creating the Fondation Gente Nueva, Gustavo now wants to prove with ETV that a viable and lasting social impact is possible. Gustavo Gennuso’s ambition is to achieve profound social change. He wants to give the poorest members of society every opportunity to develop. By accomplishing social change, he wishes to transform not only the lives of the poor, but also society as a whole.

Social impact:

ETV aims at making significant improvements to the living conditions of the poorest people. Technology development is but a means to this end. The company’s social impact is threefold: first, it improves the living conditions of those at the Base of the Pyramid; second, it creates opportunities for those suffering from exclusion; and thirdly, it finances the Fondation Gente Nueva. In three years of existence, ETV has already succeeded in reaching out to 300 families. The long-term objective is to have a direct impact on the lives of 150 000 people.

Since its creation, the Fondation Gente Nueva has welcomed over 5000 young people into its classes. It has also trained  another 3000 young people through its regional education programs. Gustavo Gennuso’s initiatives have also had an influence on political decisions relating to education in the regions where he is active.

Financial impact:

In this case, the financial impact lies more in the role played by microfinance in extending the company’s social impact than in direct financing.

Microfinance : Micro-credit is an innovation that has allowed millions of people to extract themselves from poverty. If access to capital can allow poor people to create a micro-enterprise, why should it not also allow them to buy products that will significantly improve their living conditions? Such is ETV’s strategy. It is true that the targets of Gustavo’s social business can often not afford to buy his products. The “Bomba de Soga” costs 700 pesos (+/- €140). People who earn an average of €2 per day can hardly hope to find such an amount. So, in order to extend its social impact, ETV uses the micro-credit formula to make its products more accessible. Thus, ETV’s clients fund the purchase of a water pump with a micro-credit. This support from microfinance has a twofold impact: it extends ETV’s social impact, but it also increases the future benefits of the company — and, therefore, the financial resources available to Gente Nueva, who can in turn accelerate social change through increased access to education. As micro-credit is not one of ETV’s activities, they collaborate with different MFIs (Microfinance institutions) and NGOs from the regions where they are active (mainly Northern Patagonia and the Jujuy province). This collaboration with the microfinance sector is the only way to reach the targeted 150 000 people.

Financing: In parallel with its social vocation, ETV also aims to provide financial resources for the Fondation Gente Nueva. This type of model is fairly widespread among social enterprise initiatives: in order to avoid being dependent on donations, “business” solutions are preferred and “social businesses” are created with the aim of financing the non-profit side of their activity. The remainder of the profits are reinvested in the company in order to finance research for other new technologies.

ETV and Gente Nueva have received a financial contribution from the organization Ashoka — which we will present later — of which Gustavo is a member. The company also benefited from various funds, essentially from philanthropic investors, in particular a Swiss “business angel” who has provided a credit on very favorable terms (but about which we have not received any other details). Today, ETV is seeking financial backing amounting to $74 000 (€54 833) in order to finance investments necessary for them to achieve the objectives of their business plan — specifically, for the launch of new technologies.

The strength of Gustavo’s model resides in its capacity to tackle different problems simultaneously. The all-embracing nature of his organization is striking! His model features three essential elements in the fight against poverty: education, access to capital, and healthcare. By creating synergies between different organizations, he can considerably extend his social impact, and this allows him to implement lasting change.

Sources : Interview with Gustavo Gennuso, founder of ETV and of Fondation Gente Nueva

www.unesco.org

www.oms.org

www.schwabfound.org

www.changemakers.net