What does Resilience have to do with economic development?
Put yourself in the shoes of a young small business owner in one of the most difficult places in the world to do business.
After solving the difficult problem of how to fund the launch of your business, your startup can survive only if you have two tools available to you:
1. a way to securely save up money for the predictable expenses in the future
2. a way to weather the hard times ahead that no one could predict.
You don’t have access to a bank account and you only meet the needs of your family by the cash in your pocket day to day. Now find a way to survive.
Enough cash on hand is an important part of building the resilience of micro-enterprise and small business. But it is only a part. Implementing a plan for both predictable expense saving and emergency expense saving is how a small business owner can become…
resilient.
Resilience means that your business can experience a shock, and continue to operate afterwards, perhaps even stronger than before. Resilience is the goal of every startup entrepreneur in the world. It’s when you take a hit and keep on moving.
Running a business, when you live on anywhere from one to five dollars a day, can be terrifying. There is so much to stay on top of inside the business:
inventory purchases
rent payments coming up
payday for the employees
save up to replace that old machine
make sure there is enough for that loan payment…
(maybe I can pay myself this month?).
A misstep of any kind on any of these issues can make for a very bad month.
But small enterprise entrepreneurs face an issue that few of us in the Western world have to worry over: external shocks and demands that they have no control of, and usually cannot be prepared for.
You can’t even find insurance to replace your building when the storm surge from that cyclone comes through.
That thief who broke in and took all of the machines likely won’t be caught and the stolen property won’t be returned.
If you don’t give the right size of gift to the neighbor’s daughter getting married nearby you’ll be a social outcast.
No one could foresee that Auntie was going to catch malaria and pass away suddenly, but you’re the one in the community with a business, so the village thinks you can definitely afford to pay for a chunk of the funeral costs.
These are the types of situations that happen everyday in Myanmar, and they sink businesses without steady footing everyday.
ONOW is in the business of preparing businesses to weather these times. We provide the startup capital to launch, but our support cannot end there, as it so often does with many micro-finance providers and other financial institutions.
We help our entrepreneurs prepare for the storms ahead: we talk entrepreneurs through when they should expect that they will be low on cash, and how to save up to be ready for it. We make plans with them for large expenses in the future, so that money is secured and ready, rather than easily available to be spent by every other need calling out for cash. We develop financial technology tools to strengthen their understanding of their business activities.
This brings so many of the importance issues of development today to the fore. Without a doubt,
Resilience in economic development showcases the essentiality of combining “access to finance” with “financial literacy”.
One without the other isn’t enough.
Business owners need access to financial services because it helps them meet the need of one of the tools necessary to survive. But without the understanding of how money works, no amount of new finance will get them out of trouble if they don’t understand how to manage those finances well through the difficult times.
Young businesses that find a way to endure the rough times have a chance to become something special:
Resilient Businesses growing into positive contributors in their communities–providing a stable supply of beneficial services, building strong relationships with neighbors, providing employment to others in the village.
All part of a thriving economy that provides increasing employment opportunities for all.
