Wednesday, June 10, 2009

The businesses of the poor

I'm back in Kampala for a few days, and that means I now have internet access again.

The last few days I've been working with an NGO in northern Uganda, AVSI, to explore the businesses in Acholiland. After 10 plus years of conflict, the people are beginning to return home from the IDP camps, many of them with very little (I have a working paper on the economic impact of the displacement of the people here, though it is still incomplete).

AVSI is starting a program, to be evaluated by Chris Blattman, where the most vulnerable individuals in the communities are given very small amounts of money, between $40 - $150, to begin small businesses.

The problem is there is not a lot of information on what businesses exist, how well they are doing, and what kind of business gives the best return. The government is supposed to have an idea, though when I spoke to some officials in Gulu they seemed unaware that someone could start a business with that little of money.

So I am here trying to figure out the state of what can only be called super-micro-enterprises. What are examples of SMEs? They're run by mostly women, and some start with as little as $10 in capital. The most popular are fish and vegetable sellers. Here's one of my ennumerators interviewing a woman in a market about 30 minutes outside of Gulu. This is her entire inventory. She makes enough in profit to cover some of her home expenses, and not much else.

The market is incredibly small, with maybe 20 businesses in total.

The markets though do get smaller. Here's Tesobar market, 40 minutes outside of Kitgum. In total, we found 6 businesses that cover about 4 villages, with around 100 people per village.

Obviously there's a lot of potential for expanding businesses, though most people don't have the money to buy from the sellers, and even more don't have the $10 to start a business. In many of the villages, if someone wants to buy some small vegetables, they have to walk 2-3 hours to the main sub-county market.

My work right now is to simply document the business prescence in some of Gulu and Kitgum districts. In the coming weeks I hope to get an idea of whats there, and what businesses are optimal for the very poor to begin.

For instance, this kind of small selling doesn't have as much profit as rearing goats, chickens or pigs, but it does have the benefit of a high turnover of cash. People can realize a modest return in a short time, and then have some extra cash to cover any needs their household may have.

Part of the shortage of businesses is that many people have only returned home in the last 3-6 months. While there is very little in the villages right now, there is a positive side: the place is beautiful. Here is one of the homesteads in Palwo parish, near Ogilii mountain.

I'll have a more detailed report in the next couple of days.

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