The adjective “unskilled,” like many words favored by economists, can be highly misleading. Trying to survive on the streets in a Kenyan slum, for example, takes a lot of skills — just not ones that are easy for the market to value and reward.
Take Alex Govinda, for example: as a homeless youth in Kwangware, on the outskirts of Nairobi, he had to hustle every day just make enough money to eat, collecting and selling scraps — and sometimes stealing shoes or mobile phones, too. Now he is an expert salesperson, using his skills to hawk high-quality goods to his neighbors and earning a decent living in the process, thanks to a unique arrangement set up by an American NGO called LivelyHoods.
Govinda’s situation — and the solution LivelyHoods came up with to solve it — are a perfect illustration of the institutional forces holding millions of poor people around the world back to from reaching their true potential.
LivelyHoods designed its program by talking to hundreds of young people in the Nairobi slums. They soon discovered that while many of the kids living on the streets possessed a talent for sales, there was little interest in microcredit schemes because they were perceived as too risky. Fail to sell your goods, and you may need to take out another loan to pay off the first, entering into an endless spiral of debt.
At the same time, they noticed another problem in the poor areas of Nairobi: a lack of quality goods for sale. Like people everywhere, customers here were willing to pay a little more for higher-quality products that last longer and work better. But such goods simply weren’t available — most market vendors were also poor, and didn’t want to tie up their meager incomes in expensive inventory.
So LivelyHoods decided on a consignment model. After receiving training and other support, their salespeople would use their deep social connections to sell products like efficient, long-lasting cookstoves and solar battery chargers to their neighbors. Any unsold goods left at the end of the day are returned to LivelyHoods storerooms. So far, nearly 200 youths have gone through the program, and sold more than $100,000 worth of goods.
This NGO success story neatly illustrates what many call the “entrepreneurship ecosystem” — the interlocking network of institutions and supports that make entrepreneurship possible for people like Govinda. In countries where this ecosystem is thriving, young people like him can succeed and find good jobs or start their own businesses. When it doesn’t work, they end up living on the streets, their talents wasted.
If the LivelyHoods program is able to succeed in the long term, that means Kenya’s private sector has missed a major market opportunity in Kwangware and other poor areas. It’s worth asking why.
Jon Custer is the Social Media / Communications Coordinator at CIPE.