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When entrepreneurs need a boost

Afghanistan, December 2, 2010

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  <span class="field-credit">
    Julie Denesha for Mercy Corps  </span>
    Najila (from left) Rahima, Sunita, and Fahima are working in Roshan's tailoring and seamstress shop and learning how to master the craft. Photo: Julie Denesha for Mercy Corps
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  <span class="field-credit">
    Julie Denesha for Mercy Corps  </span>
    Roshan is a seamstress who runs a tailor and embroidery service, as well as an apprenticeship and training for young women in Kabul, Afghanistan. She is also a client of Mercy Corps-supported Ariana Financial Services. Photo: Julie Denesha for Mercy Corps
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  <span class="field-credit">
    Julie Denesha for Mercy Corps  </span>
    Nadia models a dress she embroidered for Roshan. Photo: Julie Denesha for Mercy Corps

Roshan sat on the floor encircled by about more than a dozen young women peering at their visitors with curiosity. As the conversation warmed up, our novelty wore off. The women worked at sewing machines and showed me the dresses, curtains, and beaded baskets, boxes, lamps they spend their days making.

Roshan, a 43-year-old mother of eight children, is in charge. She runs this Kabul tailoring shop and apprentice-style training program for young women who want to be seamstresses or experts in beading or embroidery. Roshan’s husband is retired so the $2400 she makes each year is the family’s only source of income.

Like many entrepreneurs, Roshan is smart, headstrong and a born marketer. But she knows she didn’t make it alone.

Roshan has been the recipient of several rounds of credit from a Mercy Corps-founded microfinance organization that focuses on providing women with loans to help them establish or expand small businesses. It was started in 2002 and now has a loan portfolio of $3.5 million and 7,500 clients.

Each of Roshan’s loans marked a milestone in the evolution of her business. Her first purchased a set of sewing machines, and her second bought significant supplies of fabric and other materials. After her third loan, she was able to buy the workshop where we recently met, and with her latest loan, she obtained a specialized machine for decorative stitching. Each loan increased her business’ inventory, efficiency and product diversity.

Now an established business, Roshan contracts with a range of vendors and hosts customers in her workshop. Fancy beaded dresses for weddings are the most popular item — Kabul is obsessed with weddings — but items to redecorate homes for Eid were all the rage when I visited. The workshop was bustling.

In addition to expanding her products and profits, Roshan focuses on job creation. Her apprenticeship program consists of two months of training and a six-month practicum. Women — ranging in age from 14 to 40 — participate in the apprenticeship for free and contribute to the workshop’s output.

“Most of these women will never go to school,” Roshan said. “They need marketable skills.” A former teacher, Roshan hopes to incorporate basic math and literacy into the program.

There’s some backlash against microcredit these days, and a lot of the concerns are valid: Interest rates and service fees shouldn’t take advantage of the poor. Clients need a basic business plan and some degree of financial literacy so they don’t get trapped in cycles of debt. Microcredit’s not a silver bullet for ending poverty, and it shouldn’t be a substitute for what many impoverished people really crave: meaningful, permanent jobs.

In a place like Afghanistan, microcredit still has a long way to go. Insecurity makes it difficult for microfinance institutions to operate in many areas of the country and most Afghans don’t have a high level of financial literacy. But when I look at someone like Roshan — a savvy, born entrepreneur trying to make a profit and help her community — I’m hopeful.