Soap Hope – Funding Microfinance One Bar at a Time
February 8, 2010 § Leave a comment
Salah Boukadoum sent a comment regarding my post “More on Microfinance in the United States” bringing my attention his company Soap Hope. After taking a look at the web site, as well as reading his blog, I had to let you know about it too. I like how this guy does math, but more on that in a minute.
Founded in 2008 with partner Craig Tiritilli, Soap Hope represents a radically new way of doing business while doing good. As I’ve mentioned in previous posts, the issue of sustainability is a critical one, and one that likely will have creative solutions when addressed by enterprising Americans. Soap Hope is one of these solutions.
The company is based on Mr. Boukadoum’s and Mr. Tiritilli’s “Good Returns Model,” whereby small businesses lend their profits, interest-free, for one year to microfinance funds that specifically focus on women in poverty. “A broad capital pool will enable US MFIs to truly scale and reduce the ratio of operating cost to loan capital.” It is a brilliant concept. As Kristin Schutz notes in her article on OdeMagazine.com, “This paradigm engenders a system of mutual support between the for-profit and non-profit arenas. Through this model, Salah and Craig encourage companies to invest resources into systems that continually empower others, rather than giving a one-time donation. Reciprocally the businesses benefit through returns on investments, increased community visibility and enhanced reputation.”
Having just completed their first year in business, which included developing partnerships with three non-profit microfinance institutions, like The PLAN Fund in Dallas, the partners have set their sights on educating other small businesses on how best to implement Good Returns in their own companies, and also coaching non-profits on how best to utilize Good Returns-style investments to achieve sustainability.
Now, back to the math … Mr. Boukadom’s latest blog post explains how it’s possible to raise $1 billion to help end global poverty by teaching “1,000 small businesses the Good Returns Model and thereby rais[ing] one billion dollars for anti-poverty microloan initiatives.” He lays it out. He breaks it down. He makes it seem doable. You’ve got to start somewhere.
I love that.