Written by: Dorothy Tindi Sitati – Program Officer, USAID/EMIRGE Kenya Program “Growth of workers co-operatives in Kenya could provide a viable solution to some of its current economic problems.” - Mark Matabi, USAID/EMIRGE Kenya Country Lead In the Nairobi’s Eastland’s area houses, there is a neighborhood called Babadogo. It’s an informal settlement that was previously affected by post-election violence, and faces various constraints such as unemployment, poverty, and crime. In the midst of this unfortunate circumstance for this neighborhood, a group of resilient, skilled, motivated and qualified artisans came together, and formed a construction service co-operative called FundiTech – the first of its kind after over 25 years in Kenya – whose primary goal is to provide improved access to employment for professional builders and technicians. ‘FundiTech’, which emanates from the word ‘fundi’ – Swahili for artisan – is first and foremost a co-operative for certified builders and construction trade workers. Supported by USAID through the Enabling Market Integration through Rural Group Empowerment (EMIRGE) program, it redefines the way reliable fundis are integrated in the building and construction industry to provide quality service delivery, while upholding the spirit of the democratic business entity that they are. In Kenya today, quality and reliable fundis are scarce; this poses a challenge for most contractors in the industry, and deepens the lack of trust they have towards the work that can be performed by eventually capable and trained artisans. With its ability to bring together skilled artisans with various specialties and expertise along the construction value chain, this creates an opportunity for Funditech to fill a gap both socially and economically. For Funditech however, market access is one of their major challenges. As FundiTech’s Secretary Jane Muriithi, explains: “The biggest problem for us now, is gaining grounds in the market”. The Challenge Facing Artisans Kenyan fundis have consistently struggled with poor reputations and are often subjected to exploitation by developers. Imbalanced power structures, lack of ability to unionize to negotiate for better pay, and the increasing supply of low wage migrant workers from neighboring countries have challenged licensed fundis’ abilities to advocate for themselves. Rather than offering short term contracts, contractors often hire fundis as day laborers who do not represent a brand, specialty service or service provider; this situation has led to increased incidences of poor workmanship among the artisans. Developers or contractors who want greater profit margins opt for unskilled or unlicensed artisans who are likely to quote lower rates to do the job, undercutting skilled labor. As a result, the fundis have borne the brunt of the reputational damage and driven wages lower. Getting Solutions – FundiTech Business Model The FundiTech model differs from a traditional single owner or limited liability business model in that every member is also a part owner of the business and they participate in the oversight, often the management, and the profits of the organization, all of which is determined using democratic practices. Just like many cooperatives or inclusive business models, members own the majority of the equity in the business, guaranteeing them job security. The model produces an array of economic benefits for various social classes, including low-income communities by ensuring that income is distributed fairly and equitably among members, and not simply heavily concentrated at the top (administrative managers, directors, etc.) like in traditional businesses. Registered in December 2017 as a Service Co-operative in Nairobi, FundiTech has come a long way. Six months before, they lacked internal systems and operational mechanisms to facilitate their budgetary and business operations. With the support received from the USAID/EMIRGE Kenya program, on capacity building and market linkages, and their will to thrive as a functioning inclusive business, they were able to successfully hire a qualified General Manager and turnaround some of their internal processes. A year later, they have scooped contracts with contractors and developers in Nairobi worth over USD $90,000 using their own labor and financial resources, and are proud of how far they have come. The Impact In the wake of unemployment that has left many individuals and families unable to meet their most basic needs, FundiTech has filled this gap by providing longer-term jobs, skills training, and better wages than similar jobs in conventional companies. Members of FundiTech, who mainly come from the little town of Babadogo, are transforming the way fundis are perceived, and are serving as examples to follow for youth through their sense of resilience, despite social shocks plaguing their community. Members are linked to jobs in line with their specialty and expertise, and are regularly encouraged to develop new business opportunities for the co-operative, which are rewarded through commissions. FundiTech’s business model also contributes tremendously to the “Big Four” plan from the Government of Kenya, particularly around the challenges faced by the housing sector, which revolve around the cost of building quality and affordable housing units for low-to-middle-wage Kenyans. Workers-oriented cooperatives such as FundiTech are a useful tool to achieve broader goals in the workforce system. Skilled unemployed individuals in many other sectors operating in the informal economy can learn from this successful exploit by FundiTech, and apply some of those lessons to start similar cooperative businesses.
1 Comment
6/20/2023 02:57:25 am
ANNA has always been at the forefront of using AI to help our customers. We recently won “Best Application of AI or ML in Financial Services” at the 2023 Card and Payments Awards, and that highlights how we’re always trying to use AI, machine learning and Large Language Models (LLMs) to make things simpler and easier for small businesses across the UK. We’ve never been afraid to use technology to make life easier for our customers.
Reply
Leave a Reply. |
AboutThis blog is authored by professionals working in various parts of the developing world to strengthen co-operatives. Archives
December 2017
Categories |