On Tackling Poverty – The Role of NDI
By Fairoz Ahmad from The Singapore Globalist
“If we stop thinking of the poor as victims or as a burden and start recognizing them as resilient and creative entrepreneurs and value conscious consumers, a whole new world of opportunity will open up.”
– C.K. Prahalad, The Fortune at the Bottom of the Pyramid
Laying the Foundations for Growth
Over the past one year, our group, Nusantara Development Initiative (NDI), has been working to bring clean energy in the form of solar-powered lamps to rural Indonesia. We are, however, not in the business of selling lamps. We are in the business of ending energy poverty. Ending energy poverty, in turn, leads towards one ultimate goal – to lay the foundations for growth. This is a point similarly argued in this Financial Times article.
With a clean and affordable source of light, villagers enjoy better health and economic savings – benefits robbed through the use of polluting and expensive kerosene lamps. This translates into higher productivity and greater purchasing power. But there is another aspect of growth that is less obvious, rarely felt but more personal. With sustainable energy, darkness no longer becomes an obstacle and the ability to move securely and safely becomes possible. It also expands the range of activities one can do at night. This “will” to move, to be mobile, and to be able “to do things” is growth at its most personal and intimate form and is arguably the very essence of human freedom.
In trying to lay the foundations for growth, I have come to realize that sometimes, the best people to achieve this are the villagers themselves. As such, we have recently trained rural women to become solar lamp entrepreneurs and promote the lamps in the surrounding islands. The training also emphasized how they can make a difference in the lives of other women. Underlying this idea are the principles articulated by Prahalad earlier. Hence, when we conduct our project, we treat the women as our customers, with our product being the training program. This shift in perspective results in three implications which would not have occurred had we followed the aid-driven model, a model which essentially views the poor as poor.
The Customer’s Experience
First, if we treat the women as our customers, we must also place an emphasis on the “customer’s experience”. While this was not very clear or systematically structured at first, we learnt over time that paying attention to small details, and putting in the extra work for things that are seemingly trivial, matter. For example, forms required for the selling and buying of lamps must be so simple that anyone with elementary education can decipher how to fill them up. Training materials must be written concisely and the font size should be large. At the end of the training program, the women were given beautiful business kits comprising bags printed with the program logo, well-designed name-cards and business posters. We put much effort in sourcing out the bags. Just because the women are economically poor does not mean they must carry bags that look cheap. Recently, we gave our women entrepreneurs dedicated access to NDI. If they face difficulty, they can send a mobile message and we will address their difficulties instantly.
We put in all these extra efforts for a good reason. It is intimidating for the women to start learning a new skill, travel to other islands, meet new people (some of whom are not always friendly), confront their fears, take the risk and suffer the disappointment in the process of marketing the lamps. It is our job to make their experience as smooth and as pleasant as possible, and make them feel proud to be part of the initiative.
The Anxiety of Debt
Second, it forces us to innovate to fit the needs of the women. A dominant financing model in development work is microcredit. When we put ourselves in the shoes of our women entrepreneurs, microcredit makes no sense. This is because the entrepreneur has to first borrow some money before buying a batch of lamps. She then hopes to be successful at making a sale before being able to repay the loan plus interest. This creates plenty of anxiety, since the lamps are expensive by rural standards.
We implemented instead an alternative model pioneered by Ashoka Fellow Greg van Kirk, calledmicro-consignment. In this model, a small batch of lamps is given to the women, who pay a symbolic deposit of only US$1 per lamp. The women pay us the full costs only after making a sale. This system allows them to focus on improving their sales and marketing skills without any worries of being in debt. The financing model has proven successful and our women entrepreneurs have so far sold almost 200 lamps in 2 months. It is fine if they make no sales. The ‘trick’ however, is to choose the more motivated women and invest the time and effort to develop their potential. This will minimize problems downstream.
“Without Passion, Any Rational Person Would Give Up”
Third, it is not easy and will consume your time. Since all our members are either studying or holding day jobs, it is important that the members we get are really passionate about the cause. Steve Jobs once remarked that “you need a lot of passion for what you’re doing because it is so hard. Without passion, any rational person would give up.” It is an excellent reminder, especially during moments when people ask you, ‘It’s great that you are doing this. But do you really need to put in all these work?”
In the preface to his book, Prahalad did not begin with a bang, but with a simple sentence, almost elegant in its solitude: “This book is a result of a long and lonely journey for me.” Tackling poverty can lead one towards that same journey. But we were lucky to be able to do it as a team, and to know that great organizations like Solar Sister and individuals like Greg van Kirk are out there, working on similar problems, in their own ways.
Fairoz Ahmad is a co-founder of and advisor to Nusantara Development Initiatives (NDI),a youth organization working on renewable energy projects in Indonesia. He holds a Masters of Social Sciences from the National University of Singapore.