Rural Entrepreneurship
The Model: CE Solutions MicroConsignment Model
(Please use the links below)

The Problem: Low Standards of Living Due to a Lack of Access to Compelling Products, Services and Opportunities    
Our Innovative Solution: The "MicroConsignment" Model        
The Initiatives: Products and Services to Improve Standards of Living       
The Social Enterprise: "Soluciones Comunitarias"

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The Problem:
Low standards of living due to a lack of access to compelling products, services and opportunities

CE Solutions is a living, organically growing example that true development is best achieved by working side-by-side with constituents to design intelligent, double and triple bottom line, beneficiary outcomes-based opportunities. Roughly six years ago CE Solutions leadership realized that the profound challenge of sustained poverty in rural Guatemala was in many regards not being addressed and thus required innovative new solutions. Understanding that poverty is a symptom, analysis and observation showed us that one of the primary problems causing this symptom is that in a majority of Guatemalan villages (as well as other developing country villages) there is an extreme lack of basic access to both high and low intervention healthcare products/services that can effectively address pulmonary illnesses, gastrointestinal illnesses, vision loss, malnutrition and the like. And what we also learned first hand from working with constituents was that this is not only a health issue but as well this lack of access causes a profound direct and indirect negative economic impact on families. Coupled with very limited new income earning opportunities for capable individuals, it became quite obvious why the cycle of poverty was perpetuating itself.

Upon further analysis we came to realize that there were essential products in existence. There were and continue to be no lack of appropriate technology stoves, water filters, reading glasses, seeds and the like. The problem was that these basic products simply were not being market tested for appropriateness, for pricing or for transport and thus were only reaching villagers through unsustainable and unrealistic relief project infrastructures (i.e. donations hand delivered by an NGO). Product innovation was not necessarily the primary obstacle.  In addition, we realized that there was both local and foreign latent human capital looking for solutions as well as providers of financial resources looking for a way to solve these  same issues.  And that finally, there did and do exist local transportation networks to reach vulnerable communities.

We concluded that with all of these pieces already in place (innovative products, existing funds, local HR) the real problem was that a holistic product vetting, entrepreneur identification, financing, training, marketing and logistical model was needed. Micro credit alone wasn’t the solution because it only solved one piece of the puzzle; access to financing. Micro credit is primarily a solution for existing businesses with a known supplier whereby beneficiaries use credit to buy in bulk in order to lower cost of goods sold. What was needed was a new solution that created access to essential products and services through new jobs where none were previously in existence.  What was needed was a low cost, sustainable solution that was appropriate for the challenging environment and could be scaled in a variable cost manner.  Our search for an innovative solution that addressed these all of these needs was the genesis for our creation of the MicroConsignment Model.

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Our Innovative Solution:
The "MicroConsignment" Model

The MicroConsignment Model is a powerful solution that creates a way to get the “what” to the “who” through a “how” that creates village-level access to essential products/services whilst generating a compelling and profitable entrepreneurial opportunity.  The MicroConsignment Model, with the recent augmentation of Social Entrepreneur Corps, is a proven method that is intelligently addressing the problem of access on a daily basis. CE Solutions continuous development and implementation of this model  has helped tens of thousands of villagers gain access to needed products and services and is continually creating new, compelling income generating opportunities.  This “Last Mile Solution” is a proven, social entrepreneurship model which is being implemented in the most inaccessible communities of rural Guatemala and we believe is replicable in any developing country in the world.

To briefly explain, CE Solutions leadership and Social Entrepreneur Corps interns execute the MicroConsignment Model  to establish profitable income generating opportunities (and the infrastructure and network for a national, local social enterprise) for primarily women that to date are selling products such as wood burning stoves, reading glasses, water filters, seeds and gardening techniques and energy efficient light bulbs to villagers at an appropriate price, in the appropriate manner and at the appropriate place.  Through the MicroConsignment Model local individuals with entrepreneurial qualities can start their own business through “sweat equity” and realize profits from inception. As well, we collaborate with local strategic partner organizations to adapt local solutions and train and support local entrepreneurs who serve rural communities within designated territories. What drives the model is that is an interdisciplinary, intuitive and non-linear approach whereby all stakeholders add value. The model utilizes a rotating capital mechanism with exceedingly low start- up costs that are continually reinvested. In essence, the MicroConsignment Model intervenes at all levels by creating an “ecosystem” whereby problems are diagnosed and products are encountered/designed which are then inserted into the distribution model via the locally trained and supported entrepreneurs.

Some of the key features/benefits of the MicroConsignment Model are as follows:

• Local entrepreneurial opportunities are created and previously inexperienced individuals realize a profit within one month of start-up through their investment of “sweat equity”
• Individuals are able to “test drive” an entrepreneurial opportunity and do not suffer financially if he/she decides the business is not suitable or if leadership sees that the individual is not providing sufficient initiative and effort to develop the enterprise
• Local entrepreneurs are provided with the capital(consigned products), resources (marketing materials et al), training, strategic and tactical support on an ongoing basis with the goal that they gain greater and greater independence
• A rotating capital mechanism is utilized whereby the impact of capital/donations is “multiplied”. As villagers pay local entrepreneurs for products/services, the entrepreneurs receive a portion of revenues and the balance is reinvested in new products/services to restock inventory, to cover expenses and to realize a profit for the national company described below
• Community problems are addressed by new local businesses thus limiting the need for continuous relief work
• Local entrepreneurs gain respect in their communities through their activities and are therefore looked at to provide further beneficial products and services thus allowing them to expand their offering and “piggy back” new products and services
• A high- quality product/service is assured as the beneficiaries are paying clients who are “voting” for what they want with their scarce resources
• Individuals with very little education or with limited time can be very successful
• The MicroConsignment Model is quickly and inexpensively scalable using a hub and spoke system
• Local organizational (artisan groups, ngo’s, micro credit banks, Peace Corps volunteers, internet centers etc) are leveraged
• Impact is measurable on an ongoing basis as local entrepreneur activities and income is tracked and the delivery of products/services is easily accounted for on a person by person and village by village level
• An elegant mechanism for transferring knowledge is created as local entrepreneurs must be responsive to villager needs and CE Solutions must be responsive to subsequent  local  entrepreneur  needs or else the whole initiative fails

“I like working with the Ixil Stoves business model because I like to travel and work with the people in all of the tiny villages in the Ixil region. The stoves we build are of very high quality, affordable through the payment plan we offer and  really benefit every family that buys them. What’s more, I like working with my hands and overseeing the construction. My business has grown significantly and with the help of the CE Solutions I hope to expand it even more in the future.” Agustin Rivera Corio, Nebaj, Quiche

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The Initiatives:
Products and services to improve standards of living

In order to take full advantage of the potential distribution capacity that the MicroConsignment model creates when implemented correctly, CE Solutions is constantly studying, researching and vetting appropriate products and services that can easily be introduced into the network of rural entrepreneurs that we have already identified and trained in the filed, increasing their "basket of goods". While many organization dedicate their time to creating new appropriate technologies to be used in the filed, in our experience many of these products become less and less "appropriate" in terms of distribution, pricing and even functionality when placed in genuine supply chains and thus have limited potential for long term success.

As mentioned above, one of the strengths of the MicroConsignment model and one of the most stark differences between this "development" model when compared to a "donation/relief work" model is the constant feedback cycle from end user (rural villager) to the entrepreneur to us. When a product is donated from organization directly to end user, very little feedback is received from the field and if it is, it is often very positive while potentially not 100% correct. Not many recipients of donated goods feel that they have the right to complain about products and services that they receive for free and often would prefer to keep and not use a product that they have been donated but that is not up to standard for whatever reason (or not culturally appropriate for that matter) than to complain. Through the MicroConsignment model, our entrepreneurs have a constant interaction with their local constituency which allows them and in turn us the very unique insight into key product aspects, functionalities and even pricing points from an end user point of view. And since the products and services that we provide are on a transaction basis between the local entrepreneur and the client, end users are able to provide their final feedback be deciding to purchase a product or service or not.

For more information about the specific products and services that our entrepreneurs are currently working with, please use the links in the table below (located on the Entrepreneurial Initiatives page)...

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The Social Enterprise:
"Soluciones Comunitarias"
www.solucionescomunitarias.com

CE Solutions concluded several years ago that, whilst we play a critical role in incubating new ideas, training and growth, a separate, financially and administratively sustainable organization needed to be created to perpetuate the MicroConsignment Model over the long term.  As such, following our example of creating the locally owned and profitable tourism businesses in Nebaj, CE Solutions has established “Soluciones Comunitarias” (SolCom), a Guatemalan company, and is currently finalizing the local ownership structure. SolCom is a social enterprise that is supported by CE Solutions as a strategic partner. CE Solutions continues to be a source of capital, training and ideas but SolCom is owned and managed by the rural entrepreneurs who have “risen through the ranks” as leaders in the MicroConsingment enterprises.  Social enterprises, by definition, are social mission driven organizations which trade in goods or services for a social purpose. Their aim to accomplish targets that are social and environmental as well as financial is often referred to as having a triple bottom line (triple bottom line means a focus not only on profit but on “people” and “planet” as well). SolCom, with CE Solutions’ support, will continue to manage and grow the hub (regional coordinators) and spoke (entrepreneurs) system that has been highly effective in achieving social, economic, health and environmental impact to date.

SolCom  establishes a brand and brings all of the hard working entrepreneurs “under one roof". SolCom enables the owners/entrepreneurs to create multiple income streams, engage in effective cross-marketing and augment their offerings. They will continually increase income, train additional entrepreneurs and consequently deliver myriad necessary products/services to thousands of beneficiaries monthly. The profitability of SolCom will be primarily dependent on increased scale, an increasingly diversifying product mix as well as an appropriate amount of capitalization.  Company profitability is assured as, upon sale, each entrepreneur pays a premium to SolCom over their cost of goods sold. This is how the model currently works and greater scale (i.e. more rural entrepreneurs working in more villages) and integration will equate to greater profitability and impact.  No change in practices or pricing is necessary due to the formation of SolCom as CE Solutions previously used this “premium” to reinvest in work on the ground and no monies have ever nor will ever be repatriated to CE Solutions.

Presently, there are few, if any, competitors for the entrepreneurs and SolCom.  The products and services within the MicroConsignment initiatives address market failures and are all “first movers”. Unfortunately, the only current competition continues to be NGO donations; however this has not proven to be an obstacle to success. This is in no small part due to the fact that local people, speaking the local language offering “new” products and a high-quality service are more adept at serving local clients. As well, the barriers to entry for new competitors are high. It is extremely difficult to build a network such as the one that has been established by SolCom over the past few years and as the entrepreneurs continue to establish stronger community relationships and trust by providing more and more needed products/services in their territories, the barriers to entry will become higher. 

In conclusion, creating economic and social impact at all levels is imbedded in the DNA of the MicroConsignment Model and its implementation mechanism, the social enterprise SolCom. The primary short term challenges confronting our further development and growth of the MicroConsignment Model are the classic ones of limited time and financial resources.. Over the long term we see no significant challenges if the short term challenges can be overcome. Upon creating further success in Guatemala as well as in-house and third party success in a number of additional countries a critical mass will be reached for the model. This will allow this unique solution to be a powerful lever helping to release innumerable rural villagers from the cycle of poverty.

“Working with a non-profit organization like this one is different from working with other organizations or businesses. For example, you need to be responsible, take initiative and have good character. You need to have faith in yourself and trust the people you work with. During the years I have worked with CE Solutions, first as a waiter in El Descanso, the as an administrator and now as a leader of the MicroConsignment ventures, I have gained immeasurable experience. Learning to work effectively with people and manage human resources is probably the best thing I have learned." "The reason I continue to work with CE Solutions is because I feel satisfied with the work I do and with the help we provide for many people. I make enough money to take care of my family and cover my basic needs and wants. I like the work and I know that it is a well organized NGO with a strong vision unlike some others who lack vision and are poorly organized. For all these reasons I am extremely proud to work here.” Miguel Brito Ramírez, Nebaj, Quiche

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