Posts tagged ‘Anti-Poverty Focus’
The Blue Sweater
The founder of non-profit venture capital fund, Jacqueline Novogratz, is the author of “The Blue Sweater: Bridging the Gap Between Rich and Poor in an Interconnected World.” In the book, she describes a blue sweater, donning “zebras in the foreground and Mt. Kilimanjaro right across the chest,” that she wore often as a child. Like many of our own childhood artifacts, the sweater was donated to good will once she started high school.
That exact moment is where the story goes global…
“Fast forward 10 years, about 5000 miles. I had left my career on Wall Street and was working in Kigali, Rwanda with a small group of women to start the countries first micro-finance bank to make small loans to poor women. When I was jogging through the streets, and low and behold 10 yards in front of me I see a little boy, pip squeak, knobby knees, wearing my sweater. So, I run up to the child, grab him by the color, turn it over and there is my name,” said Novogratz.
Novagratz’s sweater is one article of clothing among millions that are circulating the globe as part of the second hand clothing trade (SHCT). Although the SHCT accounts for approximately 0.5% of global trade in clothing, more than 30% of those imports went to Sub-Saharan Africa (SSA) as early as 2005. Figures provided by an Oxfam report indicate that used garments, initially collected and sold by western charities, account for nearly 50% of the clothing sector in SSA.
The SHCT is a billion dollar industry that spans the globe. According to a CNN report, “whilst exact continent-wide figures are hard to come by, global used clothing exports from OECD countries stood at $1.9 billion in 2009, according to 2011 U.N. Comtrade data.” An estimate in the same article approximates import activity to be worth $3 billion, and the subsequent retail transactions to be worth two-times that amount.
In Kenya the second hand clothing trade is known as mitumba.
Used clothing was first imported as duty free charity in response to regional conflicts during the 70s and 80s. The trade evolved into a commercialized business sector in the early 90s, when market liberalization policies were introduced into the Kenyan economy. Those policies allowed for the importation of goods, like mass shipments of used clothing, at reduced costs.
Indigenous textile industries across many African economies could not compete with the lower cost and higher quality of used clothing from abroad. In Kenya specifically, the resulting competition coupled with other factors like the collapse of the Kenyan cotton board, a drought from 1995-1997, lack of locally produced synthetic material and newly arriving cheap Asian imports, led to the closing of Kisumu Cotton Mills, Allied Industries Limited and Heritage Woolen Mills.
However, before you mourn the loss of local textile production, you should know that this is not entirely a sob story. From the ashes of one industry, another one has emerged quite triumphantly. Mitumba is a bustling business sector in Kenya. It has created thousands of jobs where the government and private sector have failed to do so. Furthermore, the state cashes in on import revenues and so do local city-municipal councils that require all vendors to purchase trading licenses regularly.
Mitumba is popular across the entire spectrum of Kenyan society. The poor could not afford to clothe themselves otherwise, while middle class and affluent Kenyans turn to Mitumba for designer labels and high quality, unique clothing intended for western markets.
- Western Charities: First, western charities sort through donations to add to their local thrift stock. Next, they sell the surplus to SHC dealers in order to generate funds for their programs and operations. About 80% of donated clothing is usually sold to merchants.
- Exporters/Importer: The second hand clothing merchants sort the clothing by condition and category; good/poor quality, women’s/men’s/children’s, shirts/pants, etc. Then, they’re bundled in plastic packaging called bales and shipped to the major East African port city of Mombasa in large containers. The bales are purchased by the ton. When they arrive in Kenya, they are stored in warehouses, mostly around the port of entry.
- Wholesalers: Major wholesalers purchase bales in Mombasa and transport them by truck to Gikomba market in Nairobi, ground zero for the wholesale mitumba trade in Kenya. Next, medium wholesalers purchase the bales and sell the clothing to retail vendors who travel to Gikomba from all over the country to purchase stock for their businesses.
- Retailers: Toi market, an offshoot of Kibera slums, is the largest retail market for used items in Nairobi. Other vendors fan out to cities and towns across the country.
On the Ground in Gikomba Market
Hop on matatu #7 behind the National Archives in town for the short ride to Gikomba Market, Kenya’s hub for wholesale SHC sales. This is a thrift shop on steroids. Gikomba is a labyrinth of rickety wooden stalls, adorned with rows of garments hung like ornaments on a Christmas tree. Vendors, perched above colorful mounds of clothing, call out to customers, shouting prices from their stalls. Bales of clothing are hauled through its narrow, muddy corridors on sturdy backs and rickshaws, as customers bob and weave through the chaos looking for quality clothing at the lowest price.
The sound of “camera, camera” fills the air. Clothing, both retail and wholesale, are sold in rounds by grade. Each round is called a camera, first camera, second camera and finally, the third. Once the bales are opened and sorted, the best quality clothes will be the first to go. Vendors often build relationships with each other in order to get first dibs on “first camera” clothing.
Francis, from the Kingara section of Nairobi, supervises a store that sells bales of clothing in the market. Drivers for the business go back and forth to Mombasa at least twice a week, bringing back about 70 bales of clothing with them each time. The drive from Nairobi to Mombasa is about 8 hours one way. According to Francis, a bale of 1st grade clothing can range anywhere from KHS 9000 (about $100) to KHS 14000 (about $200).
Thomas Wahome, 24, and Samuel Mwangi, 28, have both worked in Gikomba market for 3 years. They rent a stall for KHS 1500 (about $20) a month to sell men’s and women’s jeans. At their stall, the cheapest pair costs 100 shillings (about $1.50).
Paula Bosire, an accounting student at Strathmore University, likes to mix and match her wardrobe. Some of her clothes are brand new from local chain stores and others are second hand. She is a frequent visitor to Gikomba, where she goes to find prices even cheaper than Toi’s. “I shop at Woolworth’s and Mr. Price for statement pieces and come to Gikomba for really good deals and things that are practically new. Sometimes the difference isn’t much,” she said. On this day, Paula left Gikomba with stylish scarves and a pair of slacks and jeans that cost KHS 40 (about $0.50) each.
Geoffrey Messo, 24, is a mitumba retailer at Umoja, an estate in Nairobi. He has been in business for 8 months and visits Gikomba twice a week to purchase new stock. He retains customers by building relationships with them, getting to know their styles and taking personal requests for items. According to Geoffrey, starting off as a mitumba retailer is not difficult because it requires very little capital upfront. However, like any business mitumba is not devoid of challenges. Sometimes Geoffrey is stuck with clothing that doesn’t sell.
Gikomba market generates tons of spinoff employment. It’s like a city within a city. Security guards are hired to protect stalls and stock. There are tailors on site to repair clothing and stalls set up exclusively for ironing. Shoe cleaners wait at the exit of the market with brushes, soap and water to wash off the mud accumulated from a busy day of shopping, and food vendors are on site to fuel the spending.
Naima, is known as ‘mathe’ in the market which means mother in shang, Kenyan slang. Originally from the coast province, she is the owner of ‘Real Madrid’ restaurant, located at the center of Gikomba’s hustle and bustle. She’s run her business in the market for 8 years. In addition to feeding hungry shoppers with typical Kenyan dishes like chapati, samosas and greengrams (lentils), she caters for parties and offices in the Westlands and Hurlingham sections of Nairobi. “People come from very far to pick clothes for their businesses. This is a meeting place for them. They sell, exchange, I let them do whatever they want [here]. They come in the morning, leave their things, I keep them safe while they go to buy. Then, they come to eat, talk with friends and return home, ”said Naima.
A portrait of Gikomba market would not be complete without mentioning that it is also Nairobi’s wholesale fish market. Hotels, restaurants, businesses and even individual shoppers flock here to purchase fresh and smoked fish from Lakes Victoria and Turkana.
Geoffrey Messo, the clothing vendor who I met shopping for stock, introduced me to his mother Helen. She has been selling fish in Gikomba for 10 years. She sells fresh fish from Lake Victoria. She receives shipments of fish everyday. Along with most vendors in the market, she rents a space in communal refrigerators to store her supply. Her customers, many of whom are restaurant owners, come straight to her in Gikomba. She also makes home deliveries.
If you’re not in the mood for samosas or greengrams at Naima’s ‘Real Madrid,’ stop by the fish section of the market for freshly fried Nile perch, a side of sukuma wiki, kale, and the Kenyan staple ugali, corn flower cooked with water to a dough-like consistency.
On the Ground in Toi Market
Toi market is located at the outskirts of Kibera slums in Nairobi. According to Citizen TV Kenya, ”the market, which started in 1992 as a food center, where people could stop for a bite to eat, has become a vast emporium of second hand shoes, shirts, bags, pants and dresses. “ Toi market is the primary retail-shopping destination for the average Nairobean. It’s less hectic, more spacious and secure than Gikomba market, which is located near the city center.
Boniface started working in Toi in 2005. He has lived in the adjacent Kibera slums for 22 years. He was previously employed in the ‘jua kali’ sector making furniture, but left to go into business for himself. “ I wanted to be self-employed, to rely on myself and my own business, to live my own life, personally. The business is cheap to start,” said Boniface. Unlike most vendors in Toi who rent, Boniface owns his stall. He purchased it for KHS 25,000 (about $300).
Jackline Arunga, 18, is a newbie in Toi. She has only worked in the market for 1 year, selling children’s clothes exclusively. She rents her stall along the roadside for KHS 1500 ($20) a month. Once a month, she travels to Gikomba market to restock her supply of mitumba. Jackline’s long term goal is saving money to enroll in university.
Brisbane John Ndavi owns a stall in Toi market with his wife. They have worked here for a decade. Like for many Kenyans, it is difficult to survive on one income alone. So, Brisbane has more than one job. He is a full time security guard at an international embassy in Nairobi. Brisbane and his wife sell mitumba from a great location on the roadside. The price of owning or renting along paths, well worn from foot traffic, is double that of stalls off the roadside, deeper inside the market. Brisbane sited land ownership discrepancies as one challenge to feeling secure in this line of work. Neighboring Kibera and Toi market are both informal settlements, and who exactly owns the land has been a huge point of contention for decades. There are constantly rumors about developers seeking to gain ownership and wipe out the market. According to Brisbane, many vendors work with the fear that one-day, they’ll show up to work and find their structures ransacked and torn down.
Toi market is not just a hub for clothing. It is a central location for all kinds of used items. On any given day, it’s common to see customers, both affluent and poor, Kenyan and expatriate, combing through books, toys, electronics, utensils, accessories, furniture and other items. According to The Standard, Verah Aboga is one of the businesspersons who sells second-hand kitchenware. Aboga, who operates from Kitengela on the outskirts of Nairobi, sells the items on order to her customers in the city. Aboga noted that second-hand utensils are becoming popular because the market has been infiltrated by low-quality items. “Most of the sufurias (cooking pots) sold in the Kenyan market are very light and are not even made of stainless steel. This is what is making people switch to second-hand utensils, especially those who mind about quality,” she said.
Challenges to Mitumba
Market liberalization, coupled with the low purchasing power of the vast majority of Kenyans, has made the country fertile ground for the SHCT. It’s wildly popular across the entire societal spectrum. Nonetheless, there are several factors that could threaten the industry’s future in Kenya.
1) Cheap textiles from Asia are flooding the market. Although the competition from this onslaught is real, many Kenyans remain loyal to mitumba for its higher quality.
2) In 2012, the government raised import duties on SHC shipments. According to an article originally published in the Daily Nation, “While a container of mitumba used to attract duty of between Sh900,000 and Sh1.1 million before the new taxes were implemented early this year, the new rate is now Sh1.8 million, an increase of more than Sh800,000, they said.”
3) Local textile firms, that hope to stage a comeback, are lobbying the government to impose a levy on SHC shipments. They’d like the additional revenue to go towards a fund subsidizing cotton cultivation.
Although government policies and the ever-shifting tide of international trade may ultimately have it in for mitumba, the view from the ground doesn’t hint at a demise any time soon. At an average of 90% off western retail prices, how can you go wrong? Shop on Kenya!
Alice Reeves – Timor-Leste
East Timor, Timor-Leste, Timor-Lorosaé…
Literal meaning is important here, and names are not chosen frivolously. Leste means ‘east’ in Portuguese. In the local language, Tetum, Lorosaé means ‘east’ – literally ‘sunrise’. For those of you familiar with Bahasa, the main language of Indonesia, the word Timor can be translated as, well, ‘east’.
Just keep heading towards the rising sun, one day you will eventually arrive at the shores of this rocky, dusty, mountainous island just off the northern coast of Australia, at the very tail end of the Indonesian archipelago. It’s definitely a long way east.
Diana Biggs | KF 18 | Burkina Faso
I’d like to think the title of this post sums up my experience in Burkina Faso – perhaps even both professional and personally. I’ll focus on the former here and try to take you through my journey.
Expectations: As a Kiva Fellow, it’s likely you’re a Type A (if on the quirky end), dedicated, well-traveled, highly educated young person, perhaps an experienced professional looking to Pivot (see Patrick’s post for more on that) or mid-studies in a Masters program. Whilst maintaining the flexible state of mind necessary for the field – many in our class were paired with new Field Partners, some in countries where Kiva staff had yet to visit – there are naturally certain expectations or goals set for this commitment. For me, having done research and proposals from a London office, I wanted to see how microfinance programs were actually implemented on the ground.
Olivia Hanrahan-Soar | KF18 | Johannesburg, South Africa
I recently ran a quick survey of my fellow Fellows to find out what we were all doing at the age of 17. We generally consider ourselves a pretty ambitious, well-travelled, well-read bunch; these days, at least. Responses I got spanned the following:
‘I was sneaking into bars in Costa Rica, where I was studying abroad. Upon my return, I was plotting my next escape from my boring hometown.’
‘Slowly slowly subbing all the liquor in my parents’ cabinet for water’
‘I was at Miss Porter’s School for Girls, sneaking off in day students’ cars to smoke cigarettes and ride with the top down in a convertible.’
‘I used to sneak out of school and go to London at weekends to smoke furiously and go clubbing at the Ministry of Sound, the Fridge or alarming Nigerian places’.
‘Bartending in a bar just in front of the beach’
‘Working as a pool boy and smoking BTs in Post Park, and driving around listening to Green Day and Weezer’s début albums’
‘I was the ultimate Canadian groupie and spent half the year on exchange in the South of France, where my host mom worked doggedly to transition me from skater chick to tight trousers and high heels. I never looked back’
‘Getting my first job as a dishwasher in the UK and then a bakery (Greggs!), and discovering how attractive I find Japanese girls’
‘I’d just moved to Amsterdam to start my undergrad, and was discovering the freedoms of passing out at strangers’ apartments, drinking beer from the pitcher and knowing no boundaries. I have never looked back.’
‘Pretending to be 20 so I could date South African bartenders’.
(You may be noticing a theme here)
Diana Biggs | KF 18 | Burkina Faso
The words of Arcade Fire’s song Lenin, “cause the money’s all been spent” took on a new meaning as I sat writing this blog. Savings has been on my mind a lot over the past two months of my fellowship — most prominently, in the context of the field and the role that microfinance plays in both teaching and facilitating savings for the poor.
This topic brings a lot of difficult questions: With such extremely small amounts of money available, how does one manage to put anything aside? And yet, without this, what happens when you child falls ill with malaria? How does one get together a sum large enough to pay their school fees? How do you put a roof over your head when your hut has been washed away in a flood? If the money stays in your pocket, the little costs of the day-to-day could quickly add up until “the money’s all been spent”…
With mixed emotions not knowing what to expect from the fellowship I headed to India… A sense of excitement for being a part of the launch, a sense of happiness for being able to be with my family after a long time and a disappointment for not having as much excitement as others who are traveling to new countries. But eight weeks in to the fellowship has completely changed this.
I always wondered how far microcredit actually helped alleviate the lives of the poor especially after the SKS Microfinance crisis in Andhra Pradesh. There has been a lot of criticism that this industry was full of profit motivated rather than socially focused players. So, I always wanted to understand what would make micro finance perform stronger socially.The reason I say my fellowship was rewarding is because I had all these questions answered through my eyes and ears in the process of being Kiva’s Eyes and Ears on field.
Two weeks back I was juggling between profile posting, field visits, group photos, and field staff training. Amidst this time crunch phase, a visit to the local weekly market came as liberation. It was so colorful and vibrant may be because 40% of the vendors were women selling vegetables, bangles, local snacks, cooking utensils etc…
The aromas(including of stinking dry fish), haggling noises and people around did not irritate me somehow.Seemed like a perfect recipe for a break. Every 2 shops that we passed by, the branch manager would introduce me to some woman telling me that she is their client and started/grew their business with a financial support from them.
It is when I met people like Lalitha and Bijaya Lakshmi that I started wondering about their livelihood in the absence of microfinance. Would they have had help from traditional banks?
Could Lalitha have started a vegetable business without the intervention of Mahashakti; one of Kiva’s Indian partners with a strong social focus…? Lalitha was selling vegetables in the market. She started selling vegetables with the help of a micro loan to supplement her husband’s income who works as a daily labor in the paddy fields. The additional income has actually helped them move from a mud house to a concrete house. In the photo she holds some drumsticks(moringa) which she saved from her merchandise to cook for her daughter who loves the curry.
As I walked through the stretch of canvas of colors and aromas , I met several other women who were happy to have received a loan and felt empowered through their business.
Or would Bijayalakshmi and her husband have been able to sustain their livelihood without financial support in the form of microcredit..? I went to meet her as we were going to post her loan on Kiva. She spends almost 10hrs a day making local snacks and her husband sells them the next day. They are both in their fifties and have no sons to take care of them in their old age as any other parent who has crossed 50s would have been in India. When I asked her about being on internet, she answered with her infectious smile and energy “I am happy to let people know how hard we are working. This may motivate others to work hard and create opportunities for themselves”. I had nothing to say but be amazed.
But all microfinance clients do not have a success story to share. If it were so, we would not have had those suicides in Andhra Pradesh and MFI industry in India would not be in such a crisis today. So, I thought to myself may be all of microfinance is not good or all of it is not bad. I was reminded of the “half glass” paradox.
Back in my room in the evening I was wondering how MFIs should evolve their model to not let the critics undervalue microfinance by half its potential. It finally dawns on me that MFIs should look for holistic solutions to poverty and provide innovative services by understanding the needs of the customers like any other industry and not just focus on micro credit.
I learnt from my interactions here that more than 40% of a household annual income is spent for health and it plays a major role in repaying the loan. So, health should be one major area of focus for the MFIs. Some of the MFIs in India like one of Kiva’s Indian partners Mahashakti have now started providing health based initiatives like micro insurance, credit support for safe drinking water, water and sanitation loans etc… As one of Mahashakti’s management staff puts it “Providing basic needs first and then lending builds a stronger bond and trust between the MFIs and the borrowers.” I think this trusted relation is essential for any MFI’s sustained impact and survival in their strive for the creation of economic independence.
These client focused initiatives are implemented only by 5% of all MFIs in India and need to be more wide spread. It is very encouraging to see this shift in the MFI model in India though and hope to see many more moving in this direction.It is good to see Kiva also increase its focus beyond traditional microfinance and work with such partners.
By Muskan Chopra | KF18 | Kenya
Sitting in the Virgin Atlantic flight to London after 10 weeks in the field, I knew of one thing with absolute certainty – Kenya will rightfully own a piece of me forever.
Never have I found myself in a new country, expecting it to change me. But Kenya surpassed all unreasonable expectations. Seeing such diversity of nature, living in local communities, soaking in the culture, meeting small people with big dreams… I transformed myself.