Entrepreneurship, Education, Empowerment: A 3-Step Solution to Extreme Poverty

Entrepreneurship, Education, Empowerment: A 3-Step Solution to Extreme Poverty

Extreme poverty rates have declined dramatically over the past 25 years. Nearly 1.1 billion people have moved out of extreme poverty since 1990, but around 10.7 percent of the global population still earn less than US$1.90 a day, according to the most recent World Bank estimates, released in 2013.

Global development agendas, such as the United Nations Sustainable Development Goals, call on governments, businesses and NGOs to come together to end extreme poverty by 2030. While many anti-poverty programs continue to focus on foreign aid as a catalyst for economic development in historically low-income countries, a clarion call is rising for another tool to lift millions out of poverty—entrepreneurship.

In Uganda, the nonprofit Street Business School is on a mission to lift 1 million people from poverty through small business ownership over the next decade. Its entrepreneurial trainings are tailor-made to help women living in extreme poverty build locally-based businesses and change their families’ lives for the better.

“The truth is, there will not be enough jobs in Africa to allow people to lift themselves from poverty,” says Devin Hibbard, co-founder and CEO of Street Business School. “Particularly for women who have not gone through school and don’t have an education, there are just no jobs available.”

Hibbard pointed to a recent study from McKinsey & Co.—which estimates that although Africa will create 54 million new, stable wage-paying jobs by 2022, it will not be enough to absorb the 122 million new entrants to the labor force over the same period. The consultancy recommended a strategy to increase the number of new jobs to 72 million, but an enormous discrepancy remains. “There’s a huge gap there,” Hibbard explains, “and entrepreneurship is what has to fill that gap.”

Street Business School’s team crafted a three-pronged approach to help women in Africa leave poverty behind: They introduce the concept of entrepreneurship, give women the knowledge and business skills to succeed, and empower them to believe success is possible.

After reaching thousands of women across Uganda, SBS is looking to scale this proven model to other developing nations around the world. Their methods can serve as a roadmap not only for other nonprofits, but for any organization looking to help the global community achieve our goal of ending extreme poverty by 2030. Let’s take a closer look.

Entrepreneurship: Fighting extreme poverty with small business ownership

Street Business School’s programming has already reached 54,000 Ugandan women—and the results clearly show that small business ownership has the potential to change lives. The average Ugandan graduate earned 211 percent more after completing Street Business School—going from $1.35 a day, on average, to $4.19 two years later. Those previously living on less than 65 cents a day earned a remarkable 15 times more.

Beyond earning more money, business ownership can help women break the mental shackles that often come with a life of poverty, Hibbard says. “When you’re an entrepreneur, you are in charge of your own destiny,” she explains. “Particularly for women in Africa, that flexibility is tremendously important—both because of the social constraints facing women here and also because that sense of being in control is something that many of them haven’t had a lot.”

Education: Meet people where they are

Street Business School’s curriculum is designed specifically for women who earn less than $3.10 a day and have little or no formal education. Of course, it’s one thing to cite entrepreneurship as a way for these women to succeed, but how can organizations actually train underserved women to overcome lifetimes of economic struggle and low education and emerge as business owners?

In the case of SBS, coaches focus on simple, practical solutions that are shaped by the needs of local communities. “We learned very quickly that we had to take the training to the women,” Hibbard says of Street Business School’s early days. “We had to make it work for local women, rather than making them conform to the training.”

SBS trades formal conference halls for mobile classrooms that meet students where they are—both literally and figuratively. “Our trainings are held in the local community, because it makes it more accessible,” Hibbard explains. “Local women can walk down the street and into a church or a school where they’re familiar—and that’s where the training is held.”

SBS gives its trainings in the local language and leans on relevant metaphors to teach basic business concepts like market research and customer care. As an example, Hibbard explains an exercise SBS coaches use to teach students about bookkeeping: “One of our coaches will say, ‘I’m taking the bus to the village. I have a backpack with me, and I want to show you what I’m taking.’” The coach proceeds to hold up items like a water bottle, toothbrush or handkerchief, and put them in the backpack one by one. After about 20 items, students are asked to recall what’s inside the backpack.

“Inevitably, all of us can only recall a limited number of those items,” Hibbard explains. “Then, we talk about how this applies to record-keeping: Even if we think we can remember everything that happens in our business, the truth is it’s hard to remember from one minute to the next—much less a week later. Lessons like these are practical and hands-on, and they uses example that local women can understand. They know what it’s like to pack for a trip to the village.”

Though it may sound obvious to speak to underserved women in the language and context they actually use, far too many business trainings fail to tweak their curricula for local needs—leaving students feeling overwhelmed and incompetent as fancy MBA graduates describe scenarios that don’t feel relevant to their lives.

“There are very mixed reviews about business training programs—some have had results and others had very little,” Hibbard says. “We are currently conducting a randomized controlled trial of our program, and we’re excited to actually quantify the importance of coaching and how it supports the traditional knowledge transfer.”

If preliminary data are any indication, opting for a tailored education strategy—rather than reproducing business courses found in the U.S. or elsewhere—proved beneficial for SBS students in Uganda: Nearly 90 percent of them were still running a business two years after graduation, and more than 40 percent had opened a second, third or fourth business.

Empowerment: Confidence-building opens doors

SBS focuses on breaking down basic business skills—from opportunity identification and marketing to bookkeeping and finance—into actionable steps that are accessible to women living in extreme poverty. But the nuts and bolts aren’t enough to ensure the desired outcome, Hibbard says.

“The belief in oneself is the biggest barrier to women becoming entrepreneurs, in Africa particularly,” she explains. “If Street Business School just went out and taught women the eight modules of our business training, we would not see the same transformative results. Women tripling their income, as our graduates do, has to do with confidence.”

Along with one-on-one mentoring from coaches, every SBS training features former graduates sharing success stories. Students listen intently as women who they can relate to describe how their trepidation was replaced with a resolve to put the tools they learned into action—and the successful businesses they launched as a result.

“There are a lot of people who do what they call mentoring,” Hibbard says. “The thing that I think is unique and better about our mentoring is we mentor the whole woman. We are not just mentoring around business. We don’t bring in other businesswomen who are fancy, accomplished and rich to tell women how to do things differently with their businesses. We are, in some ways, kind of like life coaches. We’re there to support her journey and help her believe in herself.”

Hibbard describes confidence-building as the secret sauce that allows people to move from a life of extreme poverty to running successful businesses—and she encourages other organizations not to overlook this crucial element in their own trainings. “The knowledge is out there. Loans are out there. What is really missing is women believing in themselves and seeing other women like them succeed.”

The bottom line

At its core, entrepreneurship is about self sufficiency—and, as programs like SBS prove, helping people make real change in their own lives through business ownership can have a much more lasting impact than the one-time handouts employed by many other well-meaning organizations.

“So many programs come in and feel sorry for people. We don’t do that,” Hibbard concludes. “We see women who are full of possibility, and we treat them as such. If you expect a lot of people and you give them the support to achieve, they will absolutely do it.”

After more than a decade in the field, SBS is training other organizations how to implement its proven entrepreneurial training program with the people they serve. Its Train-the-Trainer Immersion Workshops unite change-makers in fight against poverty. Click here to learn more.