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LeadershipWhat types of institutions can implement the model?
What types of institutions can implement the model?
Although Community Enterprise Solutions has created the MCM entrepreneur-owned social enterprise, Soluciones Comunitarias, as the implementing mechanism in Guatemala, the creation of a new entity is only one way to employ the MCM efficiently and sustainably. Broadly speaking, any developing country organization focused on serving rural constituents can implement an MCM venture. If an infrastructure already exists, training and initial pilot product purchases are the two sole upfront costs. From then on, costs are associated with revenues and are variable. An organization can identify, train, equip, and support five entrepreneurs or 50 entrepreneurs. An organization can work as an entrepreneur and conduct campaigns three times a month or once every three months. The options are endless and can be tailored to each organization’s needs and goals. There are only costs when there is activity, and an organization can choose its desired level of activity based on its own available funding, human resources, and time limitations. There are a number of ways existing organizations can implement the MCM.
Firstly, national and regional infrastructures’ microcredit organizations can add the MCM as an initiative, creating incredible leverage. For example, microcredit organizations can effectively create new income opportunities for themselves as MCM implementation platforms, as well as for their strongest borrowers as MCM entrepreneurs. This is the case with Fundación Paraguaya, a microcredit institution which Greg Van Kirk and George Glickley trained to implement the MCM for VisionSpring’s reading glasses initiative. By employing the MCM, a group of Fundación Paragauaya microcredit borrowers with disparate businesses now generate additional income and serve their communities through the sales of reading glasses. As a result, Fundacion Paraguaya has created a new revenue source and an additional means to serve their clients.
As Community Enterprise Solutions has proven in Guatemala, this can also work on a local level. After working primarily with women entrepreneurs, in 2008, the Soluciones Comunitarias leadership team identified a new opportunity to increase scale efficiently. Whereas in the past they had worked almost exclusively with local organizations and associations to simply help identify potential women entrepreneurs in new regions, Soluciones Comunitarias soon designed a full service approach whereby organizations themselves could act as entrepreneurs and receive kiosks of products to place in their locales where foot traffic is highest. While the women MCM entrepreneurs are known as Asesoras Comunitarias (ACs -- Community Advisors), the organizations are known as Socios Comunitarios (SCs -- Community Partners). This structure creates incredible leverage since these organizations already have existing rural beneficiaries they work with who can purchase the MCM solutions. The local organizations benefit as they earn revenue and are seen as more positive contributors in their communities.
In many cases these organizations train their own MCM entrepreneurs. Soluciones Comunitarias, for example, has achieved great success working with a number of the rural libraries of the Reicken Foundation in Guatemala as MCM entrepreneurs. The libraries direct the income generated from the sale of products to pay for their internet connection. In addition, from June to September, the three main Reicken Foundation libraries acting as SCs sold a combined 174 pairs of glasses, 85 eye drops, 16 water filters, 105 energy efficient light bulbs, and 63 packets of vegetable seeds. Thus, these libraries not only further helped their constituents and enhanced their own reputation, but also earned a combined profit of $525 without any upfront monetary investment. Soluciones Comunitarias earned revenues of $2,100, which were used to pay for expenses and reinvest in new product purchases. This is the quintessential example of the win-win-win situation this model has the potential to produce.
Finally, the MCM can be implemented through microfranchisors, in one of two ways. Firstly, microfranchisors currently employing a credit scheme to enable their microfranchisees to purchase their products can offer new value-added products and services to their microfranchisees through the MCM. The microfranchisees can add products that are initially “uncertain” to complement their “risky” mix. In this way, the MCM is not a replacement for current microcredit-based strategies, but rather an effective add-on and alternative. Secondly, new product innovators and manufacturers show distributors how the MCM can help them get new technologies off the ground. Nick Swoden, an innovator in solar energy and lighting solutions at ToughStuffOnline, explains:
ToughStuff’s microfranchising effort, the Business-in-a-Box program, has partners that love the MicroConsignment Model. The partners prefer this model to microcredit because it greatly limits the risk an entrepreneur must bear. This is especially critical when launching new technology, like solar products. The other benefit we hear is that the MicroConsignment Model is much simpler and easier to manage and scale. Whereas microcredit, with its scheduled loan repayments, is actually quite a complicated model with high transaction costs, our partners who aren’t financial institutions are able to launch and scale a MicroConsignment Model program without taking years to learn this business.