The Miracle of the Tyres and Fishes
Armenia — Who doesn’t admire a go-getter with an enterprising spirit? It’s easy to think that entrepreneurship is simply the result of hard work and a can-do attitude, but there are some far more important ingredients: funding and expertise.
For many around the world, however, the resources necessary to turn positive personal attributes into small businesses, employment, and self-sufficiency are very difficult or impossible to obtain.
Sargis Nazaryan is from the city of Abovian in central Armenia, founded as a centre for industry within the Soviet Union and mainly populated by ethnic Armenian migrants who came from Syria, Iran and Lebanon during the 1960s. After setting up a tyre-changing shop, he realized that he had a lot of unused space and therefore unused potential on the premises. He considered his options — the easiest of which would have been to simply rent out the extra space. But in the end, his decision was to expand his business to include a fish sale and delivery service. A seemingly odd decision. However, it was made after seeking outside advice, and would ultimately prove its worth.
Despite positive economic growth, Armenia’s unemployment rate among working-age individuals remains high – over 17 per cent at the end of 2015 – while almost 30 per cent of the population were classified as “poor” in 2016. Partly, this has been due to the difficulty transitioning to a market-based economy since the early 1990s.
On top of this, the effects of a massive 1988 earthquake as well as the Nagorno-Karabach conflict – both of which caused a great deal of internal displacement and migration – are still being economically felt today. This is especially true for the most economically vulnerable: migrants, returnees, and those living in border and formerly industrial regions – like Abovian. This lack of economic pathways often leads to emigration in search of better opportunities.
This is where the work of IOM comes in. A Micro-Enterprise Development Project (MED), first started in Armenia way back in 1997, is an effort spearheaded by IOM in conjunction with community organizations, local banks, and community-based NGOs. It is designed to provide micro-loans and career advise to create and sustain viable micro-businesses.
Sargis has been cooperating with the IOM’s MED project for almost eight years. This relationship began with small-business training and financial services to open his tyre-changing shop. Eventually, it led to advice from an MED economic advisor, based on his location near a busy bus station, to expand into the sale and delivery of roasted-fish. Going in this direction, according to the professional estimates, would allow for quite a bit more revenue than renting out the space. Thanks to MED support, Sargis’ hard work and enthusiasm, and a good location, the new side of the business has been a success and has even allowed him to bring on an extra employee. “Due to this support I can firmly stand on my own two feet and not even think about migrating,” he attests.
This is no isolated case, as Khachatur Kazazyan, IOM MED Project Coordinator, explained: “Throughout its implementation, the MED project has been delivering valuable support to the most vulnerable people in Armenia. Most importantly, the project has been able to contribute to poverty reduction efforts, especially in remote or border-regions of Armenia by enhancing self-employment and employment opportunities”.
Edmond Stepanyan who lives in Gyumri in Northern Armenia, the region with the highest poverty and unemployment rates in the country, is additional proof of this. “I strongly believe that it is better to have little than to have nothing”, he says.
Like many other people, Edmond had been trying to decide between setting up something locally and migrating. After setting up a small bakery, he registered with the IOM MED, seeking business advice and financial support. He received a loan sufficient to expand his business by installing additional baking ovens while also creating jobs for nine other people. “I would not say I earn much, but can definitely state I am quite happy with what I achieved for myself and others”.
So far, the MED project has led to 2,500 people completing training in micro-business management and business planning. In conjunction, an estimated 3,500 businesses have been supported with more than 9,000 loans having been released, amounting to over nine million USD.
Importantly, of the beneficiaries of this program, 55 per cent have been women and 90 per cent of all recipients have reported a positive change in quality of life resulting from increased income or assets.
This article was written by Jake Friedly, IOM Regional Office in Vienna.