Where does microfranchising fit in with other methods of poverty alleviation? Stephen W. Gibson, creator of the Academy for Creating Enterprise, has developed the ‘Spectrum of Economic Self-Reliance Development,’ which categorizes and identifies different means of poverty alleviation. This spectrum helps us answer the above question about microfranchising, and it is from this spectrum that the ideas presented below originate. Credit, therefore, must be given to Mr. Gibson.
The spectrum breaks down poverty alleviation activities into two major categories: those that build dependency, and those that build economic self reliance.
Poverty Alleviation Methods that Build Dependency
The three activities that build dependency are ‘taking services, goods, or people to the poor.’ This would include actions such as doctors and dentists going to bring medical services, organizations taking goods such as food or clothing, and summer excursions bringing people and students to work on things such as building orphanages or homes.
All of these means are important under the appropriate circumstances, such as disaster relief. If a natural disaster occurs, leaving thousands without shelter or food, then all of these activities are necessary to save lives. Food, water, and supplies must be brought, workers must come to help rebuild, and professionals must come to assist in providing needed medical attention.
On the other hand, these same activities can be less effective if they are not done under the appropriate circumstance. This is because, in many cases, these types of methods build dependency into people by giving them what they need rather than helping them learn to produce it for themselves. It’s reminiscent of the age old adage that if you give a man a fish, he eats for a day; if you teach a man to fish, he eats for a lifetime.
Not only can these methods be less effective, but they can also be subtly destructive to the alleviation they are meant to promote. Take for an example a small village, where a starting entrepreneur is trying to grow a business by selling clothing that she and her family have learned how to make. This entrepreneur may be on her way to economic self-sufficiency, being able to provide for her family by the work she is performing. But what happens when a ‘relief’ group comes in, bringing piles of old clothing that they have collected, to give away? With no more demand for her work because of the inundation of free clothing, this entrepreneur now has no way of making a living and is out of business. She, with the rest of the village, has become dependent upon the ‘relief’ group’s charity.
Poverty Alleviation Methods that Build Economic Self-Reliance
The activities that seek to build economic self-reliance among those living in poverty can be seen as a logical progression. The first activity is microcredit, which is the action of lending money to the poor. This is followed, reasonably, by microfinance, which is the activity of providing financial services to the poor. Both of these are more effective by including the third activity in the progression, microenterprise development, which seeks to train the poor to grow their own businesses.
The great benefits that have been seen as a result of these three methods can hardly be disputed; they have literally helped thousands of people out of poverty and placed them in a position to provide for their families. Yet, these methods have only just begun to solve the enormous problem of world poverty.
The next step in the progression, aimed at reaching more people stuck in poverty than has previously been possible, is microfranchising, or the activity of providing proven business models to the poor. In this way, they are able to take a model and process that has already been proven to work and use this to help them rise above poverty.
With the addition of microfranchising to these methods of poverty alleviation, it will be possible to reach a vastly larger number of those living under the constraints of poverty. What we need are companies and organizations to start thinking in this way so that this strategy can be fully implemented.