Microfranchising in  Latin America and the        CaribbeanElena Heredero| Senior SpecialistMULTILATERAL INVESTMENT FUND -...
CONTENT   1. WHY             MICROFRANCHISING             IN LATIN AMERICA             AND THE CARIBBEAN?          2. WHAT...
Why Microfranchising in LAC?                      Microfranchising can…                      Become a tool for economic em...
What works? Successful experiences in LACGRUPO ZAIOM - Brazil• Home-based microfranchise created in  2008• 7 microfranchis...
What works? Successful experiences in LAC                        PAÑALERAS POTOTIN - Ecuador                        • Comp...
MIF Approach to Microfranchising                        Move                  microfranchising                  from the m...
MIF Approach to MicrofranchisingHow we will measures success• 50 companies, NGOs, MFIs mobilized to  adopt the microfranch...
MIF Demonstration Project - Paraguay                         • Partner institution - Fundación                           P...
MIF Demonstration Project - Mexico                        • Partner institution - FUNDES Mexico                        • 2...
MIF Demonstration Project - Jamaica                         • Partner institution – The Private Sector                    ...
THANK YOU
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Microfranchising in Latin America and the Caribbean

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Microfranchising in Latin America and the Caribbean

  1. 1. Microfranchising in Latin America and the CaribbeanElena Heredero| Senior SpecialistMULTILATERAL INVESTMENT FUND - IDB
  2. 2. CONTENT 1. WHY MICROFRANCHISING IN LATIN AMERICA AND THE CARIBBEAN? 2. WHAT WORKS? SUCCESSFUL EXPERIENCES 3. MIF APPROACH TO MICROFRANCHISING
  3. 3. Why Microfranchising in LAC? Microfranchising can… Become a tool for economic empowerment – increase income, create jobs. There are 130 million people living with less than US$2 a day and 83 million at the verge of poverty. Be a platform to maximize the impact of microfinance. There are over 10 million microfinance clients in LAC. Though still in its infancy stage, with 44 Microfranchises, LAC has a microfranchising participation of 36% worldwide (Source: Baseline conducted by MIF, Jun 2011)
  4. 4. What works? Successful experiences in LACGRUPO ZAIOM - Brazil• Home-based microfranchise created in 2008• 7 microfranchise networks• 528 active microfranchisees (230% increase from 2009)• US$ 2,000 - US$15,000: start-up cost to become a microfranchisee• Challenge ahead: Enhanced synergy between microfranchise & microfinance
  5. 5. What works? Successful experiences in LAC PAÑALERAS POTOTIN - Ecuador • Company created in 1998, distributes diapers and other care products • Started microfranchising in 2003 • 150 microfranchised stores in 75 cities/17 states (300 employees) • US$8,500 - US$ 10,000: start-up cost to become a microfranchisee • Approx. 6 months to break even • US$ 8,000: average monthly sale per microfranchised store
  6. 6. MIF Approach to Microfranchising Move microfranchising from the margins to the mainstream Demonstration Communicating Projects and Catalyzing Knowledge Creation
  7. 7. MIF Approach to MicrofranchisingHow we will measures success• 50 companies, NGOs, MFIs mobilized to adopt the microfranchise concept• 20 new microfranchises created• 1,000 low-income people running sustainable microfranchises• 50% average increase in income for microfranchisees versus their average baseline income• 70% of microfranchisees make it to the 3rd year of operations
  8. 8. MIF Demonstration Project - Paraguay • Partner institution - Fundación Paraguaya • 31,000 low-income women clients in village banks • Financing - MIF US$ 1.38 MM (Total US$2.26MM) • Expected results – 5 microfranchise networks to involve 600 microfranchisees – Increase family income, overcoming poverty – Microcredit products specifically tailored for microfranchisees – Increase in savings – Impact evaluation
  9. 9. MIF Demonstration Project - Mexico • Partner institution - FUNDES Mexico • 26 years in MSME development • Financing - MIF US$ 1.2MM (Total US$ 2.3MM) • Expected results – Test three models: large / medium companies, existing franchisors and social enterprises / NGOs – 3 microfranchise networks and 150 microfranchisees – Increase in income and jobs – Financing mechanism to fund 150 microfranchisees – Parnerships with public and other NGOs working with the BoP
  10. 10. MIF Demonstration Project - Jamaica • Partner institution – The Private Sector Organisation of Jamaica (PSOJ) • Youth Upliftment through Employment (YUTE) Program • Create entrepreneurship opportunities for youth at risk living in 8 poor inner- city communities in Kingston. Financing - MIF US$ 150K (Total US$ 215K) • Expected results – 2 to 3 large companies implement microfranchises with youth at risk – 100 microfranchises run by youth at risk – 50% average increase in income
  11. 11. THANK YOU

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