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Project Focus Area – Small Business/Social Enterprise Development
Business-as-usual cannot get us to sustainability or secure economic and social prosperity; these can be achieved only through radical change, starting now. To play its role, business will still need to do what business does best: innovate, adapt, collaborate and execute. These activities will change along with the partnerships that we form with other businesses, governments, academia and non-governmental organizations in order to get it right for all. And we must get it right.
-World Business Council for Sustainable Development, 2010
All businesses need access to financial services. Such access is a particular challenge for poor families who need loans, credit, and savings to build and sustain small businesses & microenterprises. However, these same small business ventures and microfinance projects hold vast promise to generate income and expand employment for people in rural and urban communities (McKee, USAID 2004). Experts acknowledge that credit alone is not sufficient for sustainable increases in productivity and income (Kapila, Mead 2002). A community development approach promotes entrepreneurship as a means to create more employment opportunities. People must be armed with knowledge through training, access to equipment and credit, and additional business support services to help them initiate their own enterprises (WBCSD 2010). These endeavors can function in the informal economy as micro-enterprises or in the formal economy as established businesses (ILO 2003). The upcoming decade will be a ripe environment for nascent small businesses as opportunities multiply to meet the global challenges of growth, urbanization, and environmental change. FCDE will work with local organizations and businesses to build capacity, financial literacy, and bridge relationships with larger financial and corporate institutions.
Further, in poor and rural communities, investing in smallholder agriculture can be an opportunity for communities to work and/or trade their way out of poverty and establish small businesses. The 2008 World Development Report states that smallholder agriculture is a driver of economic growth, instrumental in poverty reduction, and it will lead to greater political stability. Studies show that business development in the agricultural sector is up to four times more effective in reducing poverty than growth in other areas (OXFAM). Additionally, a number of nations are advocating for the setting up of cooperatives to help communities work their way out of poverty. Cooperatives are both enterprises and associations that work to alleviate poverty by empowering people to take action at a grassroots level by creating job opportunities for those with technical skills but a dearth of capital (ILO 2003). FCDE will support local initiatives and, with the help of interns and volunteers, will provide expertise and resources so that our partners can cultivate their own smallholder agriculture enterprises and operational community cooperatives.