SEC 2012 - Microconsignment in Action

Blog entry by Emily Anderson from the University of Connecticut.

There is no government-run water treatment plant in Guatemala, leaving the country without access to clean drinking water. Diarrhea, often caused by contaminated water, is the second most common cause of death in Guatemala. This is a shocking statistic, emphasizing the need for clean drinking water. Currently, many people purchase 5-gallon bottles of purified water called garrafones, or will boil water to kill bacteria. However, these methods are expensive and often inefficient. There is a great need for a cheaper and more accessible way to obtain clean water.

Another major concern in Guatemala, particularly in rural areas, is a need for proper ventilation when cooking. Many homes have a large fire pit in which wood is burned for cooking. However, there are no chimneys or other means of ventilation. The burning wood is also inefficient and a waste of energy because much of the heat is lost to the atmosphere. As more wood is needed, trees are cut down, which is expensive for families, and terribly un-environmental. Even worse, the smoke inhaled while cooking daily causes many respiratory illnesses.

Finally, there is a lack of access to affordable reading glasses. As people age, their eyesight often diminishes. This is particularly a problem for women weavers who without their sight can no longer practice their craft, and thus lose their source of income.

Ella Agapi and Rebecca King explain the benefits of drinking clean water through a skit they created, during a Water Day campaign in Tecpan.
In Guatemala, there are many problems facing the general population – particularly those in rural areas – such as access to clean water, appropriate cooking equipment, and reading glasses.

The organization that we are currently working with is called Soluciones Comunitarias. This Guatemalan-owned organization aims to address all of these issues and more. The organization sells water filters that remove 99.99 percent of bacteria; home ovens with ventilation that reduce the wood required by more than 60 percent; and glasses after receiving a free eye exam, all at affordable prices. Each of these products addresses a specific need, and provides access across the country. The company is able to reach even the most remote areas by following a micro-consignment model.

Micro-consignment is a way for local people to take on new business ventures without acquiring large amounts of debt. Soluciones Comunitarias loans local entrepreneurs called asesoras products to sell. Once the asesora sells the product, she will then repay the company for the original product and therefore never enter into financial debt. This allows the asesora to make a profit, while selling socially minded products that address large-scale problems in Guatemala with low risk. These asesoras travel to areas across Guatemala not only to sell the product, but also to educate people about the core problem.

This method of development allows the empowerment of entrepreneurs to make a living and provide for their families, while improving the lives of the general population in Guatemala. This is a really vital concept, because it allows for sustainable growth within the country by its own people.

It is exciting and challenging to be able to participate in such a new venture. During our time here, we will be able to go on campaigns with the asesoras to see how they sell the products, and ultimately see the effect these products have. We will also be responsible for new marketing campaigns for the water purifiers and solar lights. Over the next three weeks, we will come up with new ideas, test them in local markets, and hopefully design a better model for marketing and selling these products.