MicroFranchising Opportunities MFO Project

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• MicroFranchising Opportunities (MFO) Project

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MFO Project

• Who is involved
• Joint effort between CESR, The Academy, and Yehu
  
• Microfinance.
• What is MicroFranchising
• MicroFranchising is the scaling down of the
  franchise business model in order to provide the
  poor with sound business opportunities.
• The birth of MicroFranchising
• Stephen W. Gibson at last years conference

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MFO Thesis

• MicroFranchising solves the following three
• core problems, thus should be pursued as a
• method to increase economic self-reliance

• (1) Not all entrepreneurs have the tools needed
  for
• success.
• (2) Not all people have an entrepreneurial
  spirit and
• would be better suited as employees.
• MicroFranchising is an efficient method for the
  
• delivery of services to the poor.

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MFO Objectives

• Primary objective thus far has been research

- What is being done in the scope of
MicroFranchising (NGOs, Businesses,
Academics) - Developing these relationships
- Development of Generic operations manual -
Produce Vol. 4 of Where There Are No Jobs
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Where there are No Jobs

• 38 brief summaries of both
• functioning and potential
• MFOs
• 9 detailed case studies
• Students in field study class
• performed much of the
• research.

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Grameen Village Phones

• Grameen Bank provides microloans to women in
  rural Bangladesh to purchase a Village Phone
• Grameen Telecom administrates the village phones

• Village Phone is available to anyone in the
  village who wishes to make or receive a call
• Currently, more than 55,000 phones are in
  operation
• Impacts (1) franchisees earn a sustainable
  income, (2) rural India is connected to rest of
  world

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Grameen Financials

• Franchisee is given the phone and equipment
  (US220) must be repaid to Grameen through
  weekly installments

• Franchisee pays minimum monthly charge (US3) and
  then a per-minute rate
• Users are charged variable per- minute rates
  depending on time location
• Average net income for franchisee is
  US50-100/month

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Grameen One Womans Story

• Received first loan from Grameen Bank to start
  rice husking

• Later heard of the Village Phone and was able
  to receive the loan because of her good record
• Was able to pay of the loan for the phone in just
  over a year
• Now earns US6-12 a day
• To take breaks during the day, she gets help from
  her husband and live-in mother in law

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Solar Panels The Sun Shines for All

• Remote Brazilian communities have access to power
  through solar panels
• Panel package leased to customers for US10/month
  (less than the cost of non-renewable resources)

• Leasing avoids high sales tax, also meant to
  follow established procedures of electric
  companies
• Package includes panel, battery, lighting,
  outlets
• The Sun Shines for All projects to break even
  after year four with a total of 6,000 customers

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Solar Panels The Sun Shines for All
Financials

• An installer (the franchisee) earns 35 per
  installation
• Each installation takes 2-3 hours
• Additional income from periodic maintenance

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ApproTEC

• Appropriate Technologies

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History
Began in the early 1990s in Kenya Mission
Develop and promote technologies that can be used
by dynamic entrepreneurs to establish
and run profitable small scale enterprises.
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How They Do It
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Water Pump
Impacts of ApproTEC MoneyMaker Pumps

• 33,000 pumps in use by poor farmers
• 16,000 new waged jobs create
• 35 million\yr in new profits and wages generated
  by the pumps
• 200 retailers selling pumps in Kenya and Tanzania
  (using the established supply chain)
• The MoneyMaker-Plus retails in Kenya for about
  38.
• Farmerpreneurs" are increasing their incomes by
  as much as ten-fold and making as much as
  5400\yr.

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Success Story
Janet Ondiek- widow Kajulu, Kisumu, Kenya

• Pre-ApproTEC water pump her bucket irrigation
• seasonal profit was 93.

• In 1999, her profits topped 3200, and she now
  employs 5 workers.
• "Im making enough money now to support my family
  fully without begging from relatives since my
  husband died!"

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Brick Press

• Can produce 400 to 800
• blocks\day with 5-8 workers.
• A 50 kg bag of cement yields between over 90
  blocks.
• Blocks are up to 50 cheaper
• than other conventional walling materials.
• Retails for 375.

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Oil Press

• 3 manufacturers making oilseed presses
• Over 1,000 presses sold
• Over 700 oilseed pressing businesses created or
  expanded
• Over 1,500 new jobs in oil pressing businesses

• Over 8,000 new jobs in related activities
• Increased sunflower cultivation in Kenya
• Improved nutrition for people and livestock

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Success Story

• Jane Mathendu - Single Mother

• In 1998, Jane Mathendu saved up all her money
  and
• bought an ApproTEC oil press.

• Currently, over 10\day profit- (10x the national
  average).
• Her success allows her to contract 20 local
  farmers to grow seeds and to employ 2 full time
  workers.

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Micro-Sun-Bakeries Program
Villager Sun Oven
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How it Works
Villager Sun Oven
Rural Entrepreneur

• Employment for 13-18 people
• Food for 250 families
• Reduction of 25 in bread prices

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Franchise Business Model
Financing Cost 25,000/each Units in Operation
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Success Story
San Antonio, Honduras
On Sunday afternoons the tables are filled with
families stopping in for a refreshment of some
kind.
Ramona now has much more confidence and ability
in assuming the necessary decisions that need to
be made day-to-day.
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Rural Phone Shops
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How it Works
Renovated Shipping Container
Rural Entrepreneur

• 5 new jobs
• 38,500 per year in gross revenue
• Connectivity for rural villages

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Franchise Business Model
Financing Cost 7,400 Units in Operation 5,000
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Success Story

• Khayelitsha, South Africa

Khayelitsha husband and wife team Mtetlelei and
Gloria Ntunzi have quickly become a success
story.
Up to 200 customers make use of the service
daily, pushing turnover as high as R6 000 over a
two-week period.
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Future of the MFO Project

• Where the MFO Project is going
• Research
• We need to test our theory
• Does MicroFranchising solve the core problems?
• Piloting
• Assisting NGOs in starting up pilot MFOs

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Longer-Term Future

• MicroFranchising Learning Lab
• Tool Kit with necessary tools to start-up and
  develop MFOs
• Still in early development stages
• MicroFranchising Class
• Research and assist NGOs with MFO pilots
• Multiple MFOs for practitioners to choose from
• Thus continued research on potential MFOs

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• For Further Information please contact
• Jason Fairbourne MicroFranchise Project
  Director BYU Center for Economic Self-Reliance
  Brigham Young University, Marriott School 712
  TNRB Provo, UT 84602 Work 801-422-9009 Cell
  801-362-9264
• jfairbourne_at_aol.com