Washington, D.C., April 30, 2002
—The International Finance Corporation (IFC)—the private sector lending arm of the World Bank Group—today announced the launch of a new initiative with one of India’s leading grassroots poverty-fighting organizations, the Self-Employed Women’s Association (SEWA) trade union. The joint effort seeks to raise the incomes of women artisans by tapping new export markets for their handmade goods. The sales it will generate are expected to provide income for 15,000 poor women in disaster-prone areas of Gujarat, site of a devastating earthquake in January 2001.
SEWA (www.sewa.org) is an independent trade union representing more than 420,000 women workers in India. Founded in 1972 by labor leader Ela Bhatt, SEWA is respected internationally for its multi-tiered approach to reducing women’s poverty, including projects providing access to microcredit, housing, job training, and legal services. Although a nonprofit, nongovernmental organization (NGO), SEWA is interested in adopting a greater business orientation as a way to increasing the staying power and impact of its efforts to raise the income levels of its members. In this context, SEWA approached IFC for financial and managerial assistance for its Trade Facilitation Center (TFC), a marketing vehicle for traditional handmade embroidery by SEWA members.
Over the last five years, SEWA has generated approximately US$100,000 in annual handicraft revenues, primarily through domestic sales of its handicrafts. However, it has been unable to meet the growing demand for these goods under the TFC’s original nonprofit format, and is now working with IFC to transform the operation into an export-oriented business owned by the women artisans themselves along with other private investors.
The new project will significantly expand and professionalize TFC’s activities, drawing in part on a sales and marketing strategy provided with pro bono assistance from McKinsey and Company consultants in New York under the auspices of the America India Foundation. This strategy covers six key areas: development of international sales channels; product development; internal/external supply-chain development and training of artisans; identification of a technical partner; creation of a website for internal and external communications; and identification of additional donors and investors to complete the later stages of the initiative. Boston Consulting Group has also provided pro bono advice on upgrading SEWA’s production process with the eventual goal of reaching ISO 9000 certification, a critical international standard of quality assurance.
These efforts are expected to allow TFC to triple the number of self-employed women with whom it works and help them develop textile-based handicraft products, such as hand-sewn tablecloths, shawls, cushion covers, and other soft home furnishing items, apparel and textile-based accessories. Most of the project’s earnings will flow back as direct income to these women, whose previous daily income before the project was no more than $1 a day.
The project has a $3.7 million, seven-year budget. IFC has contributed $400,000 in seed capital and technical assistance and is working with SEWA to mobilize the rest from other international sources. The overall goal is to strengthen the entry of SEWA’s handicrafts into the global markets by tightening its supply and distribution chains, adopting an e-business strategy, and linking production with demand forecasts.
“The SEWA Trade Facilitation Center is a unique bridge linking rural microenterprises with the national mainstream, global and virtual marketplaces,” said Reema Nanavaty, General Secretary of SEWA. “In an era of globalization, this novel concept could herald a new road towards poverty alleviation.”
“Outside of the microfinance sector, there are not many cases of grassroots NGOs that successfully transform their projects from a nonprofit to a commercial basis in order to make them more sustainable,” said Harold Rosen, director of the World Bank Group’s Small and Medium Enterprise Department. “Finding ways to help put some of their income-generating activities on a commercial footing could help vast numbers of people raise their living standards. There is a huge need for this kind of work, and we are delighted to partner with a pioneering group like SEWA on it.”
IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses. Since its founding in 1956 through the close of the last fiscal year on June 30, 2001, IFC committed more than $31 billion of its own funds and arranged $20 billion in syndications for 2,636 companies in 140 developing countries. IFC’s committed portfolio at the end of FY01 was $14.3 billion.
