Helping Rural Blind Build a Business

ED-NC-MAR10-0001

Two blind associations from rural settlements in the Northern Cape and the Free State have identified an opportunity to create an income by manufacturing detergents.

NEED

There are over 724,000 visually impaired people in South Africa. Due to historical inequalities, many of these people did not receive adequate schooling or training. The rural settlements of Groenwater in the Northern Cape and Qwa-Qwa in the Free State, where these projects will take place, are characterised by high levels of poverty and low levels of education. This lack of education means that blindness carries with it a stigma, and blind people living here often face discrimination and marginalisation.

One of the biggest problems faced by the community as a whole, and blind people in particular, is poverty. More than 40% of the total population lives on less than R5057 a year. Throughout the country, the rate of employment for blind South Africans is less than five percent, and it is no different in these communities.

OVERVIEW

The 14 members of the Kgatelopele Blind Association in Groenwater and the 29 members of the Reikamohetse Blind Association in Qwa-Qwa have identified the need for locally made, affordable household detergent products in their communities. By establishing cooperatives to manufacture these detergents, they believe they can meet this demand and create a sustainable source of income for themselves.

Both associations include members who have basic financial management skills as well as experience in the manufacturing and selling of detergents. In establishing their businesses, the two associations will continue to receive support from the South African National Council for the Blind. The Council is experienced in assisting blind associations with setting up similar businesses. These businesses have mostly been successful at creating a sustainable source of income for its members.

Through its SASIX listing, the Council will provide the necessary start-up capital for these micro-enterprises, which will provide a sustainable source of income for the 43 members of these associations.

WHAT WE LIKE ABOUT THIS PROJECT

  • The support of the Council means that the blind associations have access to outreach and support whenever they need it.
  • The associations have put together well-researched business plans.
  • By giving members ownership of their own micro-enterprise, the project not only provides a sustainable source of income its member-owners, but will also be a boost to self-esteem.

IMPACT HIGHLIGHTS

On average, the Council has found that similar businesses can pay about R600 per month to each member. This will provide the 43 beneficiaries of this project with a valuable income to supplement their disability grants. This will help association members become more independent, and feel like less of a burden on their loved ones. This will have an invaluable effect on their self-esteem. Finally, the project will provide these largely poor, rural communities with locally made and affordable detergents.

ORGANISATIONAL CAPACITY

The SANCB is a well established national organisation, which incorporates 92 member organisations throughout the country. The purpose of the SANCB is to empower people with visual impairments towards independence. This is widely documented and understood within the organisation.

The governance structures of the SANCB are deeply democratic, with individuals from their member organisations nominating and voting for leaders who represent them on the National Executive Committee (NEC), which acts as the organisation’s board.

The SANCB is affiliated to a number of national, regional and international organisations, through which it is able to access research and review its own programmes to align with best practice. Beneficiaries of the SANCB have access to various decision-making bodies, which allow it to be responsive to particular needs and issues that are raised by their beneficiaries.

The SANCB has many sources of income, and relies heavily on individual donations. It has a formal, documented fundraising strategy in place to meet its future needs.

RISK PROFILE

Key Strengths

  • Concept: The project seeks to provide a sustainable source of income that will make the members of the two blind associations more independent.
  • Design: The members of the association themselves will own their own businesses. This will help to ensure their buy-in and be a boost to their self-esteem.
  • Capability: The Council has previous experience in setting up similar businesses.
  • Sustainability: Research has established the demand for their products and a detailed business plan will guide their strategy to maintain a sustainable source of income.

Key Risks - Low

  • Control: The blind associations will take full ownership of their businesses. While the Council will provide support when it is required, these associations will ultimately be responsible for their own success or failure.
  • Capability: Members who will be running the micro-enterprises have limited business experience. This is somewhat mitigated by the training and support that is provided by the Council.
  • External: As with any new business, there are risks that the cost of production might increase (for example, the cost of any of the chemicals used to manufacture detergents might suddenly increase). Working in an impoverished area also means that demand for can fluctuate, though the demand for detergents, which are not luxury items, should remain fairly consistent.

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Project Profile

SASIX ID:

ED-NC-MAR10-0001

ORGANISATION:

South African National Council for the Blind

PROVINCE:

Northern Cape

SECTOR:

Enterprise Development

PROJECT DURATION:

12 months

PROJECT BUDGET:

ZAR 113 400

SHARES ISSUED:

2268

SHARES AVAILABLE:

1867

Project Location

Project Risk

Organisation Rating

Project Budget

ItemCost
Dishwashing liquid7 200
All purpose cleaner9 600
Fabric softener4 800
Bleach2 400
Containers and lids14 400
Administration Expenses
Monitoring and Evaluation6 000
Administration6 000
Sub total per group50 400
Total Budget for 2 groups100 800
Administration, Monitoring and Evaluation Fee12 600
TOTAL113 400

Enterprise Development

With South Africa's unemployment rate as high as 40 percent in terms of a broad definition, the accelerated creation of sustainable small and micro enterprises is essential both to economic growth and to future socio-political stability. Township and rural-based enterprises, in particular, have the potential to create jobs and alleviate poverty by channelling resources into disadvantaged communities.

Research shows that our country has a low rate of entrepreneurial activity compared with other developing countries, with entrepreneurs contributing only 35% of GDP, compared with 60% in countries like India and Brazil. In addition, only 80% of all new SA businesses survive past the first two years - a low rate when compared with other developing countries. According to the annual Global Entrepreneurship Monitor study, the key factor influencing entrepreneurial activity in South Africa is the lack of effective education and training in entrepreneurial skills and basic financial literacy.

The large majority of new small businesses are operated out of necessity - people eeking out a living through informal trading and service provision because there is no alternative. These necessity entrepreneurs frequently have little or no access to computers, telephones, transport, banks and government services, and lack the financial literacy and business administration skills to sustain and expand their businesses.

Opportunities exist to invest in educating informal traders and community members in business administration and financial literacy, and in supporting the expansion of entrepreneurship education in schools and colleges. There is a need to invest in the extension of services that advise and support start-up businesses to previously marginalised areas, and to support initiatives to create community investment trusts and co-operatives that undertake productive activity. There are also exciting opportunities to help dynamic entrepreneurs in poor communities to purchase new equipment or set up business premises, creating employment in their communities.

 

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Trades in this project

  • ConVista Consulting SA (401 shares)

Understanding risk

We use a comprehensive selection and evaluation process to assess SASIX projects. When evaluating an organisation's overall risk profile we look at:

Concept - the project's approach to addressing the need.

Design - the use of effective and proven methods.

Capability - the organisation's leadership depth and expertise.

Control - transparency, governance and financial management.

Sustainability - lasting impact.

External - factors outside of the organisation's control.