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Addressing Poverty through Business - Creative Handicrafts Industries
24/01/2014

CREATIVE HANDICRAFTS INDUSTRIES – Addressing Poverty through Business

This is a successful organisation established to help those in extreme poverty in the slums of Mumbai which has now been running for over 30 years. It was started in 1984 by a Spanish missionary – a nun who was nearly 60 at the time but who saw the misery of the women in the slums and wanted to act. She saw that they had no equality, no empowerment and were treated as second class objects. As  long as the husband was working, they could survive but as soon as he lost work, the women had few other options and their families struggled. The missionary wanted to help but in a sustainable way. She recognised that a first step towards empowerment was economic freedom – she acknowledged that when someone is economically insecure, money is of supreme importance – it buys food, shelter and education.

Her first step was to teach the women new skills and with these, they made and sold sewn handicraft products and started to share the income. This grew slowly over 10 years – after this point she registered Creative Handicrafts as an Indian charity, largely to take advantage of the tax benefits associated with it. She was a dynamic relatively well connected lady and won sales and contracts with companies in Europe and further afield. In 1999, she moved the business away from dolls, toys and small handicrafts to the manufacture of garments, recognising the need to produce goods which people bought every day. She used her connections in Spain and France to get financial and technical support and through a team of designers, developed their own collection of garments which are now widely sold to companies such as Traidcraft and Peopletree. From 2003, the business grew well, at times at 30% per annum – turnover last year was US$1.3m with a sales value of goods of US$7m, and the company has manufacturing contracts with many of the leading buyers from around the world.

The business now employs over 300 women organized in small groups and 12 co-operatives throughout the slums. Work is organized from the central factory – cutting and distribution of work is done from here as is all designing, checking, quality control, packing and despatch. As groups have availability, they are sent orders for garments to make up and bring them to the factory when they are done. Payment is either via a salary or per piece depending on which method the group prefers and adopts. Profits are shared with the women – any losses are born by the central organisation. Capacity grows through orders – Creative Handicrafts will always take on an order and contract work out if need be to ensure it is met and repeat orders obtained – this then gives time to train up more women if the opportunity is there. Order cycle is very long – from first enquiry about a design through to placing a final order for bulk numbers could be as long as 18 months and this is a cost which the central organisation bears. The groups are paid an agreed price for their stitching work. Each group has an elected leader who liaises with the main factory and decides how the order is divided up between members and how they are paid.

The groups are organized like other self-help groups – they save together small amounts into a central fund and can decide to lend each other money from this fund which keeps the members away from the money-lenders. New members of groups often come via social workers who will identify if a woman meets the key criteria – which is that she wants to change her life and is prepared to commit to the group and the training involved. Training is not limited to skills but includes issues such as health, nutrition, confidence building etc. The new skills mean that the women could find work in mainstream clothing manufacturers – however they said that the pay and conditions are better with Creative Handicrafts so if they leave, they usually come back.

 

Creative Handicrafts is now largely a sustainable, stand alone business. There are a few working capital issues related to the large time gap between initial enquiries and designs and receiving bulk orders but on the whole the business is able to support 50 staff at its main office and 300+ women out in the slums sewing the garments. This is a great achievement – the creation of an independent business which has also been and continues to be the means of lifting hundreds of women out of poverty. It is a model which could be followed in the UK – the key is winning enough contracts at the right price for the manufacture of the garments, but with the issue of transport costs and “Production miles” an ever growing one, it seems likely that now is a good moment to try this – not necessarily just with garments, but with other products or components. The role of an NGO equivalent to Creative Handicrafts could be as a training and marketing company which identifies opportunities through larger companies which could be met through a group manufacturing model such as this Indian one.

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