Business-In-A-Box: ICM Generating Resilient Livelihoods for the World’s Ultrapoor

Article by Christine Joyce Ajoc, ICM Director of Livelihood

The changes in the world’s political and economic systems have resulted in certain imbalances among populations, often leaving those in the developing economies in a position of vulnerability. For the poorest of the poor, this means having to live below subsistence, with little to no resources at all even for basic needs. Come weather and economic shocks, and the ultrapoor are left homeless and hopeless.

Even for those with some resources, vulnerability is a real issue. Virginia, 46, has more than half a hectare of land in Banga, South Cotabato in Mindanao.   She and her husband, Carmelito, have planted about 800 banana trees on their property. With arable land like this and with only one child to feed, one could assume that they are able to more than get by, living comfortable lives. However, this does not seem to be the case. Virginia and Carmelito cannot compete with market prices, as they are controlled by big plantation owners, the largest of which is located only 300 meters away from their farm. “When we bring our bananas to the vendors in the market, they offer us a cheap price,” said Carmelito.  “We are forced to sell or else we’ll have to bring the bananas home again, which is a long walk from the market.” Overall, the family earns an average net income of PhP4, 000 (US$91) per month or US$1/person/day, barely enough to meet their daily expenses.

VHL and Business-In-A-Box

In February 2013, Virginia participated in ICM’s 16-week Values, Health, and Livelihood (VHL) program, where she learned how to cook banana chips as part of the Business-in-a-Box (BiB) livelihood strategy. BiB provides low-cost and very simple business solutions such as snack making and cleaning product manufacturing, coupled with microloans in the form of raw materials ranging from PhP20 (US$0.45) to PhP150 (US$3.45). Virginia saw this as an opportunity to earn more income from her banana plantation.  She invested an initial PhP300 (US$7) in the business to purchase 3 kilograms of sugar and 3 liters of cooking oil to make banana chips.  After a few months of testing recipes and business strategies, Virginia now consumes a total of 1.5 sacks of sugar and 51 liters of oil every week.  Her average weekly net income is now PhP5,000 (US$114)! She and Carmelito no longer sell their bananas in the market. At times, they have even had to buy bananas to keep up with production, making sure to purchase them from other small local entrepreneurs. Virginia’s small business now provides livelihoods for two other people who she employs in peeling the bananas and packing the finished product.

Virginia and Carmelito had to persevere to achieve this success. Virginia recalls how some people discouraged her, saying that the rising cost of sugar and oil made it a “waste of time and effort.” Virginia also thought of this, but realized that the key to earning more income was to increase production.  So they did a study of different production methods, making more than 350 kg of banana chips in the process.  They discovered that using charcoal for fuel added more cost, and found that coconut husks made the business more profitable.

The next challenge that they had to hurdle was the market. The couple went from store to store to ask for their product to be consigned, with very little success. Some of the stores, however, allowed about 5 packs to be displayed, and when customers started buying the banana chips, the stores ordered more, this time no longer in consignment but in cash. The same thing happened with the other stores, and now Virginia and Carmelito supply banana chips in about 20 mini-groceries in as far as Surallah, with their biggest client ordering around 100 packs every 3-4 days.

“We used to have problem with the market, now we can’t keep up with production”, says Carmelito. They now plan to expand their production area. “We could have used our earnings to add more manpower, but we decided to spend the money to have a decent space for production because people are asking, where is your factory? They could not believe that I was the one who cooked the banana chips,” added Virginia.

From Vulnerability to Resilience

Virginia also could not believe how the simple demonstration of ICM’s livelihood trainer has turned things around for her and her family. “Before, our income is not enough for our living expenses. We used to be buried in debt because of the expenses we have to incur over farm inputs. Now we have money,” said Virginia shyly, almost surprised by the idea. “We really thank God for this blessing, and we won’t forget that it is He who gave us this opportunity and so we remain faithful to Him. We stop production during Sundays and we make sure that 10% of our income go to tithes,” Virginia added, while showing her sales logbook.

Virginia and Carmelito represent the 10 million Filipino people living in ultrapoverty today, subsisting on less than PhP27 (US$0.50) a day. With an average of 20 typhoons that hit the country every year, the need to have resilient livelihoods has become more apparent, making it a crucial point in the country’s disaster risk reduction framework. For the ultrapoor, however, living in vulnerability and uncertainty is an everyday experience, and with the lack of access to opportunities, their potential for growth is limited.

With ICM’s Business-in-a-Box strategy, people like Virginia are presented with options that break the barriers to success, such as lack of capital, information, and business skills. Their attendance in the VHL sessions has shifted their experience from vulnerability to one of resilience.  They now have a defiant dignity in the face of economic uncertainties. In the last four months, 1,339 ICM participants reported having reached their target income from these small businesses, generating more than PhP100,000 (US$2,400) in net profit after implementing their BiBs at least once during the first week.

In the fiscal year 2012-2013, the BiB strategy got even more exciting with the generous funding from the David Weekley Family Foundation based in the United States. The Weekley Project expanded ICM’s BiB portfolio from 13 to 33 options, as well as developed tools to match these options with the needs of the participants. The Project has also allowed ICM to innovative new management tools and processes to build the capacity of the Livelihood Trainers to maximize program impact. We are very excited about the new Livelihood Training Video Series, which is proving very popular among ICM staff.

ICM is optimistic that real transformation, one that encourages the poor to embrace the change and want it for themselves, is possible. As Dan Owens, ICM Co-CEO and CAO, puts it, “this has always been ICM’s goal — to see that hope, change that injustice, and transform peoples’ lives.”

Virginia used these three stones as her first makeshift stove when she started her Banana Chips business. “I don’t want to take them out from the kitchen. They remind me of where and how I started,” she said.
Carmelito is now even more inspired to take care of his farm now that their banana chips business is booming.
Melgie’s is Carmelito and Viriginia combined. Their daughter is also named Grace Melgie.
Virginia uses a simple cash-in cash-out ledger to monitor income and expenditures.
Virginia excitedly retells the story of how she got into the Banana Chips business. “At present, my goal is to supply banana chips to the whole of South Cotabato”, she says.


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