MicroFranchising: A Powerful Tool in the Fight Against Poverty

The Townships Project is deepening its approach to poverty alleviation in South Africa by forging partnerships with others involved in poverty alleviation. This lecture, given by Martha Deacon at UNISA (University of South Africa) on March 26, 2010, sets out the elements of this approach which, we believe, makes microlending more effective.  It starts with Asset-Based Community Development or ABCD, which maps community assets, rather than deficits. ABCD then builds on those assets, using what it has to get what it needs, resulting in a community-led economic development plan. Once a community identifies the businesses it needs to develop its wealth, there is community support for those businesses, increasing their likelihood of success. If the community also solicits Corporate Social Investment (CSI) funds, which are mandated by South African law, to support its economic plan, then this adds another dimension of support. Then, if a MicroFinance Institution (MFI) supports the individuals taking loans out to build the businesses identified in the community plan, it is harnessing much more power than an individual acting alone can bring. And finally, we believe that MicroFranchising can provide another powerful tool in poverty alleviation, by developing branded and systematized small businesses which can help a community get “better stuff cheaper”, the essence of the business system of franchising.

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