Alleviating poverty through economic independence
By earning their own living, poor people in developing countries can step out of the cycle of poverty. Running a business not only generates an income for the entrepreneur; it also increases employment rates. Hivos contributes through microfinance but also by encouraging fair trade. Economic sustainability is the number one priority in all of these activities.
Hivos would like to offer small businesses better access to financial services and quality markets. Issuing loans to poor entrepreneurs allows them to set up their own small businesses and escape poverty. Others, producing for international markets such as in the case of coffee, would be more successful their products meet internationally recognised standards. This enables poor entrepreneurs to sell their products more easily on the larger – Western – market. What’s more, the entrepreneurs can then sell their products at better prices.
Hivos cooperates with local business consultants, financial institutions and interest groups supporting small businesses. They know the local trade like no other. Some of these organisations are local banks providing financial services to small entrepreneurs. They arrange savings accounts, insurances and national and international money transfers.
The policy of Hivos has two advantages in terms of financial services and business development. Hivos supports local financial institutions through a relatively small capital investment and through sharing extensive knowledge, experience and networks. In turn, these local financial institutions assist small-scale entrepreneurs in setting up and developing their own businesses.
This approach ensures the professionalisation of new businesses and of the financial infrastructures of the countries in question.
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