Tackling rural poverty through entrepreneurship
Global Entrepreneurship Week
This week we are celebrating ‘Global Entrepreneurship Week’ (GEW). According to the Global Entrepreneur Network, “GEW is a chance to celebrate the self-starters that bring ideas to life, drive economic growth and improve human welfare.” In this blog we will be discussing the current situation in El Paredón, a rural village in Guatemala, and we will be telling the story of one such self-starter striving for a better future for themselves, their family and their community.
Although overall global poverty is declining, due to increasing migration from rural to urban areas the concentration and level of poverty in rural areas is actually on the rise. According to the World Bank, 52% of the population of Guatemala is living below the poverty line, but over 70% of people living in rural areas are living in poverty.
There is clear evidence that one way to lift people out of poverty in a sustainable way is through economic growth by encouraging entrepreneurship. This enables individuals to build their own livelihoods while increasing their personal and community resilience.
As Muhammed Yunus, winner of the 2006 Nobel Peace Prize and the ‘father’ of microfinance says, ‘taking a business approach to the alleviation of poverty has allowed millions of individuals to work their way out of poverty with dignity.’ (Banker to the Poor, 2003)
In developing countries many of those individuals are women, often forced into entrepreneurship in order to earn extra income to support their families. Here in El Paredon, as in many other rural communities in Guatemala there is a clear lack of opportunities for women to gain a good education or formal employment. Supporting female entrepreneurs is an effective way of ensuring families can earn an extra income and that extra income is spent on the most important things.
According to the International Fund for Agricultural Development, ‘Not only are women the overwhelming majority of poor people, but research has shown that women are also more likely to invest additional earnings in the health and nutritional status of the household and in children’s schooling. This means that the targeting of women has a greater positive impact on child and household poverty reduction, measured in terms of nutrition, consumption and well-being.’ – (Gender and Rural Micro-finance: Reaching and Empowering Women, 2015)
One such woman here in El Paredon is Janet Chacón. Janet, 35, arrived in El Paredon with her three children and husband four years ago. Previously she lived in the city of Escuintla, where she worked in a salon after studying to be a beauty therapist at a local academy. She was happy but she had bigger ambitions.
‘I liked my job, but I always wanted to do my own thing. It’s just I never had the money or equipment to go it alone.’
Little by little, with each paycheck, she began to purchase the equipment needed to start her own business. As the mother of three she says it was difficult to find the extra money to put aside for her dream. However, a pair of scissors here, a mirror there, and gradually she built up an array of equipment to begin her own small enterprise.
Four years later and the business is doing well. Janet says that the main demand is for haircuts. When she opened four years ago, she would do one haircut every two months. Now, however, she is doing 15 a week, which she puts down to word of mouth and the increasing tourism industry in the village.
‘There is very little competition in the village. It benefits the community because if they want to go somewhere out of the village they have to pay for a boat, tuk-tuk etc. It’s much more expensive for them. So I’m saving them money!’
Janet has big ambitions for the future. Her dream is to have her own fully-equipped salon, where she can offer massages, manicures, pedicures, and hair styling to locals and tourists alike.
‘I love running my own business. I’ve got to know so many people, all of them very friendly. Each time I gain more experience. I’ve learned a lot. Maybe one day my dream will come true…to have my own salon and spa…maybe some time in the distant future.’
Local people like Janet and Mildred, have the entrepreneurial drive and flare in abundance. They just lack the business knowledge and financial expertise to capitalise on the growing demand in the village and to turn their small informal businesses into thriving enterprises. El Paredón is very popular among tourists and surfers due to its idyllic black sand beach, beautiful mangroves and awesome waves. The tourism industry is growing year on year and with it will come lots of business opportunities that local people have the potential to benefit from.
In the new year La Choza Chula will be starting an entrepreneurship training programme to provide local budding entrepreneurs with the tools they need to start their own small businesses. We will be working with women and young people from the village to guide them through the long and arduous process, from needs assessment and market research to developing a business plan and financial planning. La Choza Chula’s goal is to ensure the local community is in a strong position to benefit from the growing tourism in a sustainable way.
Donate or volunteer to support La Choza Chula and help us to enable women like Janet turn their dreams into a reality!