1. Empower the world’s poor with microloans (usually less than $100) so that they can start small businesses
(micro-enterprises) and pull themselves out of poverty; or
2. Create jobs for the poor by investing in large scale industrial development projects.
The benefits of the microcredit approach are:
1. Increased self-worth; especially among women
2. Increased quality of life
3. Promotion of money management and saving skills
4. Increased political and community involvement
The setbacks of the traditional microcredit approach are:
1. Lost productivity
2. Lack of economies of scale
3. Extremely high interest rates (25-45%)
4. Many micro-entrepreneurs, despite their access to micro-capital, earn less than $2 per day (UN defined poverty line)
The benefits of large scale industrial development projects are:
1. Exponentially increased productivity
2. Achievement of economies of scale
3. Documented success in raising families above the poverty line
4. Access to fairly priced capital and financial services
The setbacks of large scale industrial development are:
1. Ownership is often dominated by foreign firms; domestic workers do not own the means of production
2. Terrible track record of environmental degradation and workers’ rights abuses
3. Profits are exported to foreign countries and not reinvested in the local community
The SGS approach combines the benefits of these two approaches while eliminating the setbacks:
1. We empower women entrepreneurs with access to US and European markets in order to help them achieve an increased level of productivity, self-worth, and overall quality of life
2. Our non-profit partners provide financial training and help them improve their personal business management skills
3. We work with local women’s associations and other community leaders to invest the profits into community development projects including health clinics, schools, and vocational training centers
At the same time, we:
1. Achieve economies of scale by producing en masse
2. Help the women migrate from the informal sector of the economy to a highly productive industry in the formal sector
3. Provide access to an industry that has lifted millions of women out of poverty
4. Commit to the highest environmental standards and practices
5. Provide access to fairly priced capital from institutional and individual lenders
6. Commit to local worker ownership. Over time, each woman's share of her farm, mill, or factory becomes a substantial personal asset
© 2009 Sustainable Global Sourcing