To evolve beyond perpetual dependency on western aid, developing countries must be better empowered to help their own people. Thriive is a US-based NGO that believes everyday small businesses in developing countries are an untapped vehicle to deliver a potent combination of job creation and new economic opportunities for the most vulnerable.
Most of us are familiar with corporate social responsibility (CSR) as a tool for large, often multinational companies to provide charitable services in the regions they operate in. But the reality is that most people in developing countries work for very small “micro” businesses that generate the majority of economic output. These potential engines of growth are hamstrung by a chronic lack of access to capital from banks and investors. What if small businesses’ access to growth capital was tied to delivering social impact to the most disadvantaged in their communities? The result can be significant job creation, income growth, and increased economic opportunities for those most in need—all driven by local entrepreneurs.
Thriive’s core pay-it-forward loan program provides interest-free loans called ThriiveCapital for up to $10,000. These loans are repaid not in cash to Thriive as the lender, but instead paid forward through an equivalent amount of documented in-kind business donations of job training and income-enhancing products and services. This philanthropic financing has proven consistently effective in growing hundreds of small businesses who otherwise would have no access to growth capital. Thriive financing demonstrates a more compassionate kind of capitalism, one that is driven by local entrepreneurs transformed from someone in need to someone whose generosity lifts up challenged communities alongside themselves.
We started Thriive out of a belief that a sustainable future for humankind depends on developing more compassionate mechanisms that blend the energy of the free market with a greater degree of fairness and egalitarianism. Some will argue this is a quixotic quest, but Thriive shows that such an approach works, in countries and contexts ranging from Nicaragua to Vietnam to Kenya. In over 500 ThriiveCapital loans made to small business entrepreneurs since 2010 (half of whom are women), our entrepreneurs created over 2,500 jobs and donated poverty alleviating job training, products, and services to over 200,000 disadvantaged individuals. Equally important, the vast majority of Thriive entrepreneurs continue to provide some form of community charity even after their loan obligations to Thriive are fulfilled. This is local entrepreneur-driven “CSR by the little guy,” helping to build shared prosperity across a diversity of vulnerable global communities.
What if both big companies’ CSR programs and impact-first investors partnered with Thriive to extend the reach of pay-it-forward financing like ThriiveCapital to assist more small business entrepreneurs? The potential increases in small business expansion and job creation are tantalizing, potentially extending into corporate and large company supply chains, which should make such initiatives even more attractive. Adoption of such impact-first philanthropic financing initiatives may well reveal if there is a beating heart hidden deep in the free market. We believe there is.