Alex Govinda, a short, spry 24-year old Kenyan dressed smartly in jeans and a blue zip-up, puts a clear glass plate face-down on the dirt road and, in his best imitation of the late sales icon Billy Mays, stands on top of it. I cringe, expecting the plate to shatter.
The only thing that cracks is a wide smile on Alex’s face as he yells, “I’m 70 kilos!”
His potential customer, an older woman selling beans and catching up with neighbors, is visibly impressed. She agrees to buy a set of five when she has the money.
It’s a gray, dreary Friday morning in Kawangware, one of Nairobi’s slums located a few miles southwest of the bustling city center. I’m shadowing Alex through a sprawling, congested vegetable market as he proudly makes his sales rounds, smile painted on his face as he greets people and sells his wares. Today, that include glass plates, solar lamps, and fuel-efficient cookstoves.
A few years ago, Alex would slink through the same market in dirty rags masquerading as clothes, getting mistrustful glares and wary glances instead of convivial sasas and habari yakos (Swahili for “Hey” and “How are you?”).
“I was in the street. I was collecting scraps and selling them. We were snatching peoples’ phones for us to survive,” he told me. “As we went to collect scraps, we collected peoples’ shoes… Sometimes you found that you were being beaten by mob justice, and many friends of mine died.”
Now, he rents a house and is an expert salesperson, recruiter, and trainer for Livelyhoods, a NGO founded in 2011 by two young American women, Maria Springer and Tania Laden. The organization, which is better known in Kenya as iSmart, hires and trains youth sales agents, then loans them goods to sell to community members.
The young organization is doing a remarkable job of simultaneously providing opportunities to the booming population of unskilled, uneducated youths in Nairobi, and solving the “Last Mile Problem” of distributing high-quality, affordable products to hard-to-reach populations.
“I Was Trying to Run From That Cocoon”
Springer initially started a microloan program for youth. It failed.
“We realized that young people didn’t want to take microloans,” Springer told me when we sat down at a bustling restaurant above the iSmart store in Kawangware. “So, we started looking at other ways to create employment opportunities for young people that were low risk.”
That’s how she met Alex. As he put it, he was “the street kid all of the other street kids listened to,” so when Springer got to know him, she recognized his potential and helped him find a stable home.
“I was trying to run from that cocoon we were living in in the street.” Alex told me. “I was able to rent my house and buy my dress, and I started living like other people. And from there I got the training for business.”
With Alex as her guide and assistant, Springer did what many well-meaning people and organizations forget to do: she asked groups of young people what they needed help with.
“We didn’t start with an idea, we started with a conversation,” Springer said. “Alex, do you remember, you guys interviewed hundreds of youths in the slums, asking ‘what are you good at, what do you do? And what came out of that is everyone was selling something to survive.”
Springer also recalled her time at the Unreasonable Institute, where she was “surrounded by a lot of social entrepreneurs that were developing these incredible technologies and goods.”
But having incredible technologies available and ensuring they get to the intended consumer are separate matters entirely. “It became clear that… the real problem was in distribution,” she said. “And so I thought, you know, what if we could actually create employment by solving one of the biggest problems of our time, which is creating access to high quality products and services?”
Livelyhoods chose to use micro-consignment, a lesser-known younger cousin of microcredit. After extensive sales and business skills training provided by the organization, sales agents are ready to sell. As Springer put it, “we’re teaching people how to fish the fish and we’re selling fishing rods at the same time.”
Micro-consignment at Livelyhoods works like this: each morning, sales agents decide what to borrow from 15 base products – things like solar lamps, fuel-efficient cookstoves, and reusable sanitary pads. Then, they stream out of the iSmart store and into their communities, keeping 15-20% of whatever they sell as commission.
Micro-consignment is a recent addition to the microfinance space, having been developed in the early 2000s by Greg Van Kirk, a Peace Corps Volunteer serving in Guatemala.
Brett Smith, Associate Professor of Entrepreneurship and Director of the Center for Social Entrepreneurship at Miami University, has studied the model extensively.
“I would look at micro-consignment as the first rung on the ladder, of sorts, for micro-entrepreneurs,” he told me in an interview. “You’re not really risking anything in many of the micro-consignment arrangements, besides time – and that is often something that people are able to risk.”
If Alex has a terrible sales day, he just returns the unsold goods to the storage room at the end of the day. In contrast, the downside risk of microcredit is acute for many borrowers: fail to succeed, and you may have to borrow more to pay off the initial loan.
“Micro-consignment says, ‘just try it!’ Just come out and in time we’ll help you train, we’ll help you figure out how to sort of do this,” adds Professor Smith. “That’s one of the real benefits of micro-consignment.”
The model seems to be working for Livelyhoods’ sales agents. More than two years after the organization’s official launch, 197 youths have been trained, selling a total of about $100,000 worth of goods.
In June alone, 18 sales people sold over 325,000 Kenyan shillings worth of goods (about $3,720), and earned, on average, income of 7,200 shillings ($82) –10% of which is automatically put in an individual savings account. Seven more sales agents were trained in July, and a second store is about to launch in Kangemi, just north of Kawangware.
Equipped with the skills and savings that Livelyhoods helped bring to Kawangware, “graduates” of the program have started up hotels and entertainment centers where kids can hang out and play videogames. Others hope to eventually use the skills they learned at iSmart to join larger companies in Kenya, like Safaricom and Coca Cola.
Employing the Unemployable
The large market is bustling, packed with vendors selling impeccably-stacked piles of tomatoes, carrots, and peas. Customers mill about, taking time to purchase the day’s food and chat with friends and neighbors. Dirt roads take us past electronic stores, sewing shops, and chapatti vendors.
I’m playing assistant for Alex, holding up items he’s discussing while attempting to keep up with his quick pace, walking from one potential customer to the next through tight alleys and pocked streets.
Alex is an intuitive, well-trained salesman. One group of elderly women looks confused as he’s discussing the Firefly solar lamp, so he hands me the solar panel as he demonstrates how it works.
In a pitch-perfect sales flourish, he asks one of the women for her mobile phone and connects it to the lamp. After waiting a few minutes – to build up suspense – he shows the women that the phone is charging. Their eyes light up as they imagine using the lamp in their daily lives.
In addition to possessing a unique ability to sell, Alex is also set apart from his peers by having a full-time job.
Unemployment is an issue that negatively affects all of Kenya, but young people are hit the hardest. Using the most recent data (from 2006, unfortunately), a recent report from the United Nations Development Programme estimated that “80 percent of Kenya’s 2.3 million unemployed are young people between 15 and 34.” The highest unemployment rates were found among poor, uneducated, urban youths.
Livelyhoods targets youths living in slums for this reason. “We don’t care if you’ve gone to university,” Alex said. “We need you the way you are, because we’re going to train you on that. Yeah, we are proud about that.”
This is one of the reasons that the organization is supported by the Segal Family Foundation, an organization that supports grassroots solutions affecting reproductive health, food security, and youth in Sub-Saharan Africa.
“Livelyhoods is an organization that invests in the power of young people to bring forth positive change,” Ash Rogers, the foundation’s Director of Operations, told me in an email interview. “[It’s] creating a model which harnesses that potential to build profits for the youth sales agents.”
Bringing High-Quality Supply to Where It’s Demanded
In Kawangware, it’s easy to find a cheap, simple cooking stove: roadside kiosks and hawkers sell them at nearly every block. They’re small clay stoves prone to cracking, but work well enough, and you’ll find one in almost every home.
Still, out of everything Alex was selling, customers were mostinterested in the Envirofit fuel-efficient cookstove he carried around; I took it out of the box nearly every time Alex stopped to make a pitch.
It’s the Viking Range of cookstoves. The sleek black finish just looks “smart,” as the Kenyans say – a vestige of their days as a British colony. The stove is something a family could show off in their home, Alex tells me.
It’s also more expensive than the average stove: 2,400 shillings, compared to 320 for a roadside stove ($27.50 and $3.65, respectively).
But, just like everywhere else, people in Kawangware are willing to pay more for nice things that will last, and when Alex explained that it would quickly pay for itself in reduced fuel costs and that it came with a warranty to boot, they were sold.
Customers probably wouldn’t know about this high-quality stove without Livelyhoods’s sales agents. Quality products are tough to find in urban slums.
Go to any bus station, market, or traffic jam in east Africa, and you’ll see dozens of hawkers, carrying their body weights in a seemingly-random assortment of products: gum, portable lights, earrings, bags, shoes – whatever may sell that day.
But quality isn’t typically among the wares they sell: the products are either second-hand or cheap, and buyers don’t expect them to last long. Quality items are expensive, and few hawkers can afford to tie up their meager income in inventory.
A store could keep quality items, but demand doesn’t always make it all of the way to the store; transportation is time-consuming and expensive, making shopping excursions a luxury for many living in slums.
Livelyhoods sales agents bring the supply of high-quality goods to where they’re demanded: at markets and in homes. A personal touch is critical when selling expensive goods, so sales agents get to know the community members extremely well. At one home, Alex spent an hour helping a woman with a problem she was having with her malfunctioning solar panel batteries, which he didn’t sell to her. While he kept saying “time is money!” as he tinkered with the wires, he didn’t leave until he fixed her problem.
“Let’s Say No, No, and Make Change”
“iSmart is like a stepping stone,” Alex tells me. “There are others who are now earning more than me. And I’m very happy, because I gave them that knowledge. I recruited them. I trained them.”
The sales day is over, and we’re having a late lunch at a small restaurant in Kawangware before I have to leave – as in many of Nairobi’s slums, foreigners almost always leave Kawangware before sunset.
Over ugali, chapatti, and beans, I ask Alex what he wants to do in the future. He says he’s thinking about school, but, really, he wants to make music. “I love music. I rap. I write music. I wrote when living in the streets.”
He jumps right into personal take on living in the streets that begins and ends with this repeating chorus:
Let us see this kind of life we are living.
Let’s say no, no, and make change