SOCIAL ENTREPRENEURSHIP IN GUATEMALA – BY MOLLY BERNSTEIN

 

It’s hard to spend time in Quetzaltenango, Guatemala and not come across a large clay pot with a spout at its base—some kept in white plastic buckets, others artfully ornamented or wrapped in colorful cloth, all somewhere brandishing the name “Ecofiltro.” This seemingly simple vessel takes the contaminated water that runs through most of the country and spits out pure, drinkable water. Throughout my time in Guatemala, I’ve relied exclusively on Ecofiltro for clean, safe water to drink.

The ingredients of the Ecofiltro are fairly simple—clay for the pot that filters out parasites and contaminants, colloidal silver to kill bacteria, and sawdust to absorb any remaining bad taste or smell—but its effects are tremendous. Over the past 20 years, Ecofiltro has provided clean water to hundreds of thousands of Guatemalans, including 440,640 children through its school program, with the goal of providing potable water to 1 million families living in rural Guatemala by 2020. To do this, Ecofiltro employs a hybrid model in which the sales of filters from urban consumers are used to finance the affordable prices for those in rural areas. Entrepreneurial companies like Ecofiltro, based in San Lorenzo El Cubo, Guatemala about 50 miles from where I am currently living in Quetzaltenango, are filling the gaps left by more traditional development infrastructure in the country with innovative products, services, and business models.

I drink water from the Ecofiltro at home every day.

I drink water from the Ecofiltro at home every day.

For the past five weeks, I have been interning at Alterna, an organization that works to cultivate entrepreneurial initiatives like those exemplified by Ecofiltro with the objective of improving development outcomes in Guatemala and Central America more broadly. The organization is based in the southwestern Guatematalan city of Quetzaltenango, often called Xela as an abbreviation for Xelajuj Noj’, the city’s name in the Mayan language of Ki’che´. Alterna, founded in 2010, uses a ground-up approach to support social ventures across a diversity of sectors and sizes. These ventures aim to solve local challenges like environmental degradation, safe cooking stoves, preservation of Mayan culture and communities, and safe drinking water among others. Through a carefully crafted methodology, Alterna offers trainings, skills workshops, and individual support to entrepreneurs at various phases of implementing their enterprises. Since its inception, Alterna has cultivated more than 700 entrepreneurs. Of those served by Alterna, 46% are female, 46% live in rural areas, and 28% are from indigenous communities.

The Parque Central of Xela is in the old city, just a few minutes’ walk from the Alterna office.

The Parque Central of Xela is in the old city, just a few minutes’ walk from the Alterna office.

A unique set of challenges in Guatemala make Alterna’s work critical and difficult. Widespread corruption, high levels of inequality, and lingering legacies of a decades-long civil war ending in 1996 create consistent barriers to the success of entrepreneurs throughout the country and similarly underlie challenges for the implementation of successful development projects throughout the country. According to 2015 World Bank data, the income share held by the poorest 20% of the population is just 4.4% and the country had a 2014 Gini coefficient of 48.7. Although some Guatemalans in rural areas benefit significantly from the access to credit provided by organizations like the Grameen Bank branch in the country, many lack the access to institutions and knowledge necessary to create and grow a business. The support and network Alterna provides social entrepreneurs helps to break down some of these barriers and increase the likelihood of success both for the business itself and its potential for development impact.

Alterna hosts trainings for entrepreneurs in the office nearly every week. In this one, entrepreneurs attend an online marketing training at the Alterna office.

Alterna hosts trainings for entrepreneurs in the office nearly every week. In this one, entrepreneurs attend an online marketing training at the Alterna office.

My role at Alterna during this ten-week internship is to design a market-centered training that will augment and strengthen Alterna’s existing methodology. This ‘market’ workshop is intended to give participating entrepreneurs concrete tools to better understand their clients and markets—client segmentation, differentiation, brand awareness and marketing, evaluation of success, and risk mitigation. At times, the training design can feel removed from the direct effects of Alterna’s work; however, designing an effective training has required a thorough investigation of Alterna’s approach as well as that of development mechanisms in Guatemala on a grander scale.

There are incredibly beautiful views of the Santa María volcano and farmland on the drive into Xela from the capital, Guatemala City.

There are incredibly beautiful views of the Santa María volcano and farmland on the drive into Xela from the capital, Guatemala City.

The human-centered design approach that I first explored during my first year of studies at GHD has been central to my efforts thus far at Alterna and will hopefully contribute to a training methodology that benefits Alterna, the entrepreneurs they work with, and the communities these entrepreneurs serve. Even during these past five short weeks, living in Xela has granted me insights into the specific challenges entrepreneurs face here. Just last night, a 6.9 magnitude earthquake struck Xela and the surrounding areas. While most businesses on my walk to work were up and running the next day, some business owners stood outside crumbled walls or collapsed structures (thankfully with no one inside), bringing a gravity and urgency to the risk mitigation elements of the market training design. Along with a team of coworkers, I am also working on a human-centered design approach to the issue of recruiting entrepreneurs for Alterna’s programming.

It’s rainy season in Xela for most of May to October, and most views of the city from above include many clouds.

It’s rainy season in Xela for most of May to October, and most views of the city from above include many clouds.

The benefits of the human-centered design methodology are also, I think, central to the success of social enterprises like Ecofiltro and others that Alterna supports. Local entrepreneurs understand the intricacies of on the ground contexts, community needs, and institutional challenges with a dexterity that most development organizations require significant time and resources to achieve, if at all. At a time when the current presidential administration has proposed cuts in the range of 40-50% in aid to Guatemala and its neighbors, Central American countries may need to count on the success of enterprises with significant development impacts more than ever.

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