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Assessing sustainability of faith-based enterprises in Kenya

Elijah Bitange Ndemo
University of Nairobi, Nairobi, Kenya
Abstract
Purpose This paper is concerned with sustainable development (supporting prot-making enterprises as alternatives to providing relief efforts in developing countries) of faith-based enterprises in Kenya focusing on the question of measuring social enterprises as a strategy for the developing the sector. The purpose of the paper is to review existing literature and policy experience on this topic, whilst also reporting some results from a pilot investigation, undertaken in Kenya in 2004. Design/methodology/approach The paper used ve theoretical foundations to advance discussions on sustainable social enterprises as a component of economic development in the country. Eleven social enterprise programs were selected using church networks and a series of qualitative interviews conducted to determine sustainability measures and motivations for commitment to developing such enterprises. A modied design of ethnography for listening and asking questions in the context of sociological and anthropological studies was applied. Findings Findings show that indeed there are other important measures of social enterprises and that the faith-based organizations (FBOs) embrace the idea of supporting prot-making enterprises as alternatives to providing relief. Incubating enterprises for older project beneciaries yields better outcomes as they tend to be more motivated to build their enterprises, while younger ones see the projects as a step to something else. Enterprises succeed in part because FBOs provide a support structure that includes marketing (local and international), micro-nance and training. The lack of monitoring and evaluation constrains the development of this emerging sector. Research limitations/implications In view of the qualitative, in-depth nature of this research, the author recognizes that the small sample size, and the regional focus of the study, mean that the ndings must be viewed in context. As a consequence, the study does not seek to generalize the ndings, but rather treat the cases as individual events from which evidence and themes can be drawn. Originality/value Whilst this is not a new topic, a number of recent trends suggest there may be greater scope for developing an understanding of social enterprises in the future than in the past. These include: a paradigm shift towards creating sustainable development programs, new sources of micro-nancing and social enterprises themselves, increasing signs of micro and small enterprises internationalizing their operations rather than simply exporting from their domestic base, emergence of creative marketing networks, as well as a continued increase in globalization. Keywords Sustainable development, Small enterprises, Kenya Paper type Research paper

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1. Introduction The concept of social entrepreneurship by faith-based organizations (FBOs) is taking root in Africa. Although not a necessarily new idea, it is changing the social and economic landscape in the developing world, combining:
International Journal of Social Economics Vol. 33 No. 5/6, 2006 pp. 446-462 q Emerald Group Publishing Limited 0306-8293 DOI 10.1108/03068290610660706

. . . the passion of a social mission with an image of business-like discipline, innovation, and determination commonly associated with, for instance, the high-tech pioneers. . . (Dees, 1998, p. 1).

Given the perception of social sector institutions as not-for-prot organizations, there is need for models for social change that incorporate for-prot programs.

The idea of social entrepreneurship thus adds a new dimension to consideration of issues regarding prots. Some researchers discuss the subject in terms of both social and economic value. Bird (1989, pp. 5-6) denes social entrepreneurship as:
. . . opportunistic, value-driven, value-adding, risk-accepting, creative activity where ideas take the form of organizational birth, growth, or transformation.

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Theobald (1987, pp. 42-3) says social entrepreneurs:

. . . have the skills and are willing to take the risks involved in bringing new ideas to individuals, groups, and institutions . . . being unafraid of the fact that very few things worth doing would be undertaken on a sober calculation of the odds.

This paper focuses on social enterprises established by FBOs. These represent a unique form of entrepreneurship with distinctive characteristics, some of which are captured in Dees (1998) denition as exhibiting the following set of behaviors: . adopting a mission to create and sustain social value; . recognizing and relentlessly pursuing new opportunities to serve that mission; . engaging in a process of continuous innovation, adaptation, and learning; . acting boldly without being limited to resources currently at hand; and . exhibiting a heightened sense of accountability to the constituencies served and for the outcomes created. Christian owner/managers of a small enterprise see participation in business as a special opportunity to incarnate Christian values into every aspect of the business. More importantly, they tend to think that theirs is a calling. As Stevens (1994, p. 3) argues:
Adam and Eve were called to be priests of creation, to work it and take care of it as trustees and stewards (Gen 2:15). Further, the command to ll the earth and subdue it (Gen 1:28) and rule over it (1:26) involves developing and enculturating the world (Gen 4:19-22). The world was not made for Adam and Eve (to use as they wish); they were made for the world. This means that Adam and Eve (and all of us who are restored to our human vocation through new life in Christ) had three full-time jobs: communion with God, community-building, and co-creativity with God.

Through centuries, western culture has evolved around Christian ethics to the extent that even non-Christian westerners have embraced them. When Dees et al. (2001) writes about heightened sense of accountability, he implies right morals and ethical conduct in business dealings. In the southern hemisphere, however, there are two distinctive cultures religious while in church and business while at work which may explain some of the failures in the south. This apparent shortcoming may have prompted Stevens (1994, p. 1) to observe:
The presence of a Christian in a business or running a business does not guarantee the business is Christian. The Christians may be keeping their faith and daily work in separate compartments on the assumption that religion and business do not mix. This is especially evident where Christians view business as merely a way of making money where their real interest (and ministry) is in church-work.

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Historically, social interventions by FBOs were largely directed towards humanitarian assistance rather than empowering communities to become self-sustaining. In terms of health and education projects, however, long-term benets have been and continue to be realized. Those projects in other sectors that failed largely lacked ownership and the resolve to sustain them. Social entrepreneurship brings a new paradigm. It comes at a time when donors (NCCK, 2002, p. 149) are questioning the benets and sustainability of relief programs. FBO ventures and enterprises are seen as providing the perfect environment for realizing sustainable economic growth. Studies show that entrepreneurial ventures are key to improving economically distressed areas (Cornwall, 1998; Porter, 1995). Evidence from Britain indicates that:
. . . enterprise formation and development have much broader outcomes for people living in disadvantaged areas than just business creation. . . It can also provide exible working patterns, reduce poverty, create increased self-condence and empowerment, build personal and business assets, and support the formation of community networks of people, businesses and institutions. In this way, support for enterprise also becomes support for promoting personal initiative and empowerment (Westall et al., 2000, p. 2).

Thus, social interventions by FBOs, especially in Kenya where more than 50 percent (UNDP, 2001) of the population live below the standard poverty line, have more benets than just prot. 2. Conceptual framework and literature review In spite of recent political changes, Kenya faces many challenges resulting from decades of economic decline, corruption and poor governance. To reverse these developments, we must look beyond simple statements of moral uprightness. This paper proposes ve theoretical foundations to advance discussions on sustainable social enterprises as a component of economic development in the country. 2.1 Social enterprise initiatives by FBOs are likely to be sustainable despite the great challenges of a developing economy like Kenya Looking back at the history of western economic development, one wonders whether social intervention by FBOs through enterprise is the beginning of development in the southern hemisphere. Could it be the missing link in development of the south and Kenya in particular? The Protestant ethic attributes much of western economic development to Protestantism in various puritan sects: Calvinism, Methodism, Pietism and Baptism. Giddens (1976, pp. 2-5) on Weberian theory attempted to explain this historically peculiar circumstance by arguing that:
. . . it derives from the relaxation of traditional moralities. This novel outlook is a distinctively moral one, demanding in fact unusual self-discipline. The entrepreneurs associated with the development of rational capitalism combine the impulse to accumulation with a positively frugal life-style focused through the concept of the calling introduced by the Reformation. It refers basically to the idea that the highest form of moral obligation of the individual is to fulll his duty in worldly affairs.

Protestantism, according to Weber, supplied the moral energy and drive of the capitalistic entrepreneur. In the Weberian system, Kilby (1971, pp. 6-7) wrote:

For the faithful these beliefs, both in their direct implications for practical conduct and in the entrained anxiety to generate signs of a favourable predestination, produce intensive exertion in occupational pursuits, the systematic ordering of means to ends, and the accumulation of productive assets. These are for Weber the critical characteristics of the successful entrepreneur; however, they will also be present in the supervisors and workmen who support and are led by the entrepreneur and in the larger community whose approval reinforces his behaviour.

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Strikingly, similar economic challenges were surrounding the west then as they confront the southern hemisphere today: wars, disease, illiteracy and underdevelopment. Faith-based development could possibly provide the moral energy and drive to propel entrepreneurship to greater heights of economic development. 2.2 Success/failure of faith-based enterprises should be measured not only in terms of business performance (prots, assets, growth rate, etc.), but also in terms of social stability and human capital How do we measure success? There are concrete criteria prots, growth rates of individual enterprises, etc. but they do not tell the whole story. More subjective, but equally important, is the extent to which enterprise empowers participants. As individuals learn business and money-management skills from their experience, they take these skills with them in life. The poor, especially women, often suffer from a sense of helplessness and lack of self-esteem. Through peer support and by experiencing small successes, they gain the condence to achieve ever-greater goals. Financial success in micro enterprises not only provides the means to meet physiological needs, it can, in time, provide working capital to continue and expand a business (Kilgour, 1998). Setting up a successful enterprise anywhere is difcult, but trying it in a slum area infested with crime and without infrastructure is generally a sure route to failure. Social enterprises and specically FBO enterprises are managing to stay a oat even in such adversity. Studies have shown that:
. . . the hardest challenge is to encourage entrepreneurship in areas and for people who have borne the brunt of severe deprivation and unemployment. However, there is often great enterprise potential in disadvantaged areas. Unfortunately it is often unfullled or outside the main economy. The real issues are therefore to support the formation and development of such businesses and to harness this enterprise activity so that it contributes to sustainable regeneration (Westall et al., 2000, p. 1).

2.3 Owner/managers of faith-based enterprises will feel obliged to live up to the expectations of their sponsors, will treasure the enterprise that benets them and will have the inclination to sustain the venture Traditionally, social intervention by FBOs has been in the form of direct assistance to individuals, such as providing for basic needs or employment and in most cases beneciaries remain faithful or attached to their sponsors for a long time. This model of assistance arguably promotes dependency. Thus, some FBOs nd it easier (NCCK, 2002) to focus on skills development to enable beneciaries to become independent by either getting employed or starting up their own enterprise. More than anything such a model if successful provides a sense of independence. Further, participants feel a

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sense of ownership (Kilgour, 1998) in what they have accomplished, both in the individual micro enterprises they create and in the FBO programs. Individual entrepreneurs and especially those who may take the Christian ethic seriously have a different perspective of the enterprise/sponsor relationship. The web site of The Christian Enterprise Trust of Zambia (1995) states one of its guiding principles as relationship, described this way:
As members of Gods family we esteem the importance of relationship. Only relationships are eternal. Programs, plans, institutions and money are not eternal. Therefore, we will promote relationship based on respect, mutual accountability and trust in the conduct of our affairs.

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These virtues are perhaps more often said than done in many organizations worldwide, yet they are critical to the success and sustainability of any enterprise. 2.4 In group-based FBOs, the group will feel obliged to live up to the expectations of their sponsors, will treasure the enterprise that benets them and will have the inclination to sustain the venture Some FBOs have adopted a small group network of enterprises as their strategy to help a large number of unemployed congregation members. The model has worked sustainably, especially with Food and Agriculture Organizations (FAO) rural development program. Over the past 13 years, FAOs Peoples Participation Program has implemented small-scale projects in rural communities across Africa Ghana, Kenya, Lesotho, Sierra Leone, Swaziland, Tanzania, Zambia and Zimbabwe as well as many in Asia. Through these projects, FAO has rened a development strategy that mobilizes rural people to increase agricultural production, build up capital assets and manage their natural resources. According to FAO (2000), the benets of group projects include: . Signicant economies of scale. Individual small farmerscannot afford to undertake activities that involve additional investment or risk, but a group of people can share costs by pooling ideas, capital and labor. . Cost-effective systems for development assistance. Most governments or donors do not have the staff or funding to reach each and every rural household. When clients are organized in groups, it is far less costly to deliver inputs, training, credit and other services. . Collective learning. Individual farmers have particular talents and skills but do not have the opportunity to share them with their neighbors. In a group, they can learn from each other, and share valuable new skills as well. . Promoting democracy. As individuals, the rural poor expect to have little or no say in decision-making. In a group, they learn to discuss and solve problems together. They elect their own leaders and hold them accountable. Later, they apply these principles in community life (FAO, 2000). Further, these groups are bound together by a common purpose Christian fellowship that provides a way to sort out differences, considering that people sometimes drift apart, friends argue and businesses fail (FAO, 2000), and thus provide a stable environment for growth.

2.5 FBOs will have the inclination to support graduates from their enterprise development centers to set-up independent enterprises, providing them with necessary support and creating positive developmental changes To a large extent social interventions by FBOs are motivated by Mathew 25:31-46, which is considered a calling to help others. But supporting enterprise development in disadvantaged areas is about more than just creating jobs and opportunities for individuals and businesses. It is part of developing enterprising communities where people, resources and nance are brought together to catalyze and support permanent change (Westall et al., 2000). Intervention by FBOs is a testimony that they are equally concerned with the declining standards of living among their congregations and wish to promote positive change. 3. Research method The initial phase of this study was essentially exploratory and a qualitative, inductive approach using open-ended interviews was appropriate (Fontana and Frey, 2000). This technique highlights areas of concern to the interviewee and captures attitudinal and perceptual data (Wilson, 1996). 3.1 The design The research method thus resembles Hammersley and Atkinsons (1995) ethnography for listening and asking questions in the context of sociological and anthropological studies, and Glaser and Strausss (1967) grounded theory, referred to as moving from the specic to general since it involves developing individual perceptions or observations into more generalized statements or theory Hussey and Hussey (1997, p. 13). The approach shares the following general characteristics with ethnography as described by Atkinson and Hammersley (1994): . a strong emphasis on exploring the nature of a particular phenomenon, instead of testing hypotheses; . a tendency to work primarily with unstructured (and semi-structured) data; . investigation of a small number of cases in detail; and . analysis of data that involves explicit interpretation of the meanings and functions of human actions, the product of which mainly takes the form of verbal descriptions and explanations, with qualication and statistical analysis playing a subordinate role. Ekanem (2003), however, modies this research approach into longitudinal inquiry consisting of a sensitising proposition, in-depth interviewing and direct observation, thus making this research neither strictly ethnography nor purely grounded theory. As in Ekanem (2003), this study is different from both approaches in the following respects: . Interviews are semi-structured and not completely unstructured. . The researcher does not live in the research setting for an extended period, but is present sporadically, mostly during interviews. . Whilst ethnography (and indeed grounded theory) focuses on participant observation (Hammersley and Atkinson, 1995), the approach used here relies

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more on in-depth interviews. Observation is limited to what the researcher can see when present for interviews. 3.2 Project selection The initial sample of three centers was purposively approached through a church contact and met the following criteria: Church sponsored enterprise; benets people from disadvantaged backgrounds; had a physical location for its operations. Contacts through Christian networks added nine additional centers (Table I). One, run by the Salvation Army, was dropped because their approval process took too long. Efforts to get for-prot Muslim or Hindu organizations were not successful. 3.3 Data collection and analysis Data collection took place between June 2003 and March 2004 and involved discussion with program beneciaries and administrators, and in some cases pastors from the sponsoring churches. Some organizations availed secondary data to supplement discussion notes. The three-stage, sensitization, interview and follow-up exercise took three to ve hours in each center. Six centers warmed to the exercise, while others were indifferent, treating the research team with suspicion possibly because we were getting to know too much about them. Data from project notes were categorized into themes and sub-themes. Patton (1990, pp. 306, 393-400) refers to these as indigenous categories and contrasts them with analyst-constructed typologies. Grounded theorists refer to the process of identifying local terms as in vivo coding (Strauss, 1987, pp. 28-32; Strauss and Corbin, 1990, pp. 61-74). A conceptual schema was developed to tie the data together and respond to the research questions as coherently as possible. 3.3.1 Limitation. In view of the qualitative, in-depth nature of this research, the authors recognize that the small sample size, the regional focus of the study, together with the early stage of the pilot research, mean that the ndings must be viewed in context. As a consequence, we shall not attempt to generalize the ndings, but rather treat the cases as individual events from which evidence and themes can be drawn.

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4. Project summaries 4.1 The Card Project On a dusty road behind Nairobis sprawling Kibera slums, former prostitutes and AIDS sufferers gather to make Christmas cards. Others pack nished products for export to Australia, Britain and the USA through a church network. They are all members of a project started four years ago by Australian Church Missionaries with help from All Saints Cathedral in Nairobi. The workers record their daily output. The record is used to pay them at the end of the month on a piece rate basis. Each woman at the center is guaranteed payment for four quality cards a day (the arrangement provides about $65 a month, which is approximately 20 percent above the minimum wage in Kenya). As excess cards are sold and paid for, the pay for an average worker rises to more than $120 per month. The project has lost several members to AIDS, but replaces them immediately by a someone from the victims family.

Project Floor mat manufacture Craftsmanship Textile products Leather works Greeting card manufacture Textile products Healthcare Seed nancing Craftsmanship Small and Micro Enterprise Program (SMEP) Textiles (clergy vestments and uniforms) Prostitute rehabilitation Ex-prisoners reintegration Ladies integration program Street boys Prostitutes/abject poverty Broken families Abject poverty Graduate joblessness Ex-prisoners reintegration Disadvantaged mothers

Enterprise

Social background

Challenges HIV/poverty Social reintegration Family reintegration Social reintegration Poverty reduction Poverty reduction Affordable healthcare Economic development Social reintegration Poverty reduction

Beacon of Hope Philemon Ministries Tulip Ministries Tumaini Ministries The Card Projecta Amani Ya Juu (Lasting Peace)a Tumaini Clinics Nairobi Chapel Development Fund Gloag Welfare Project National Council of Churches of Kenya (NCCK) Maridadi Fabricsa

Widows income-generating program Social safety net

Note: Projects with informal export market

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Table I. Surveyed projects

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4.2 Beacon of Hope In Ongata Rongai, a fast growing peri-urban center south of Nairobi, another group of women make oor mats. They too will export their products to the USA through their church network. The founder of the center speaks with satisfaction about the progress of the initial 27 apprentices and is looking for a new work place for them to start a small satellite enterprise as new apprentices take up their old place. They will continue to make mats, which the center will continue to market for them. The more experienced ones make up to $120 a month. 4.3 Amani Ya Juu (Lasting Peace) At up-market Riverside Drive, 2 km west of Nairobis city center, women from disadvantaged backgrounds produce an assortment of textile goods for the local market and export to the USA. The women undergo a three-month training, by which time it is expected that they will earn at least Ksh5,000 ($67) per month on piece rate basis. The more productive ones earn as much as Ksh18,000 ($240), which is more than ve times Kenyas minimum wage. The centers sales grew from $500 to about $8,000 per month in less than three years. The center can best be described as a business incubator since the women continue to work there for four years after their training. They then set-up satellite centers where they will be mentors in training more women, with marketing assistance from Amani ya Juu helping to maintain the family network. Today, 50 women earn an average of Ksh12,000 ($160) per month. The womens commitment to lasting peace is exemplied by a large Unity Quilt hanging in a small prayer room that is effectively the boardroom of the center. Every afternoon the women gather to share spiritual guidance and the peace that is the pillar of their venture. The center does not discriminate against any religion or social background, fostering a family atmosphere. The message from the artwork is that there may be conict resolution methods from all cultures, but one from higher up is sustainable. 4.4 Philemon Ministries West of Nairobi, in Kangemi, the Philemon Ministries are helping ex-convicts return to society through enterprise. The program takes about six months and involves reorientation focusing on brainstorming on how they can be useful citizens, reconciliation with their families and sharpening craftsmans skills learned in prison. Two to three months are spent networking with other reformed ex-convicts and agencies that could help them raise capital for purchasing tools of their respective trades, with the last months devoted to setting up their respective enterprises. By the sixth month, the better ones mostly older ex-convicts earn up to $500 from sale of goods manufactured during the re-integration period, which usually provides them with sufcient capital to move out on their own. 4.5 Tulip Ministries In the slums of Korogocho, east of Nairobi, the Tulip Ministries are helping former street children, drug addicts, orphaned children, school dropouts and young adults from broken homes with skills development and counseling and in the process generating income from a textile enterprise. The ministrys aim is to build these young

people spiritually through rehabilitation with the hope of enabling them to develop the character and leadership essential for running a sustainable enterprise. Their textile enterprise is bogged down by high turnover resulting from their program of reconciliation and re-integration with families. The center manager says the enterprise is largely sustained by older participants who stay longer to learn the trade and possibly want to settle into some rewarding enterprise. 4.6 Tumaini Ministries The crime that is a major barrier to development in Korogocho temporarily affected the operations of the Tumaini Ministries when all of their leather processing, tailoring and carpentry tools and materials were stolen, but they were not discouraged. Four of their graduates in leather works make leather covers for Bibles in various church congregations around the slums, earning up to $350 per month. They also make other leather products that sell easily in the local market. As for the other trades carpentry and tailoring the center is looking for a more secure building to provide adequate security and storage. 4.7 Tumaini Clinics Tumaini Ministries Clinic project started two years ago in the slum areas and is working toward self-sustainability. The name of the clinics, Mwangaza ulio na tumaini, means light that brings hope. The two clinics in Kibera and Korogocho bring hope to the people in these slums by offering affordable yet adequate healthcare. The clinics charge a at fee of 20 shillings (about 25 US cents) for consultation and medicine. On average 200 patients come to the clinic each day, contributing to an daily income of about $50, enough to pay for medicines, a competitive salary for the in-charge nurse and support staff (laboratory technician, watchman and cleaner). To accomplish this feat the clinics involve volunteer professionals from the church to help in packaging medicine, examining patients and referring serious cases to public hospitals. The clinics have put in place an ambitious program for achieving independence and sustainability. They want to use their experience to set-up clinics in up-market areas of Nairobi, where they would charge full fees. Proceeds from the up-market clinics would help support the slum clinics. 4.8 Gloag Prison Project Father Gloag, a Catholic priest, started this program in 1986 to help prisoners countrywide gain trade skills and acquire certication while in prison. The intent is to curb the vicious cycle where former convicts nd themselves back in prison because of social alienation and lack of legitimate gainful activity. The program has helped thousands of ex-convicts reintegrate into society by making them independent either in employment or as small entrepreneurs. The skills training begins when they are in prison and by the time they come out they are qualied in some trade to be absorbed into employment, if they are lucky, or start a new venture. More than 85 percent of men end up with trade certication, but fewer than 50 percent of women do so. The majority of prisoners are under 35 and most who take up trade training are over 30 years. The younger prisoners prefer courses like computer training, accounts or academic work with the hope of securing a better future

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than taking up one of the older trades. There is no follow up once beneciaries are out of prison, but some return to seek assistance in purchasing trade tools. 4.9 Maridadi Fabrics The Anglican Church of Kenya started the Maridadi project in 1967 to provide an attachment program for poor single mothers and widows from slum areas of Pumwani and Shauri Moyo who had undergone textile training elsewhere. After the attachment, the women set-up their own small enterprises. The center helps them to market their products but pays them only after the sale. Since, its inception the center has helped thousands of women improve their status through enterprise and has expanded to include women from all disadvantaged backgrounds. The center is linked to a wider church network in Europe where some of the products are sold. 4.10 National Council of Churches of Kenya Since, 1975, National Council of Churches of Kenya (NCCK) has run a small-scale business enterprise program in Mathare Valley for disadvantaged mothers who visit its feeding program with malnourished children. The report to the 56th General Assembly noted:
The project provided the urban poor in the slums with the minimum food required for survival. It was later recognized that the project could not continue feeding people endlessly and therefore ways and means had to be sought to make the people self-reliant to avoid dependency when the feeding program ceased (NCCK, 2002, p. 146).

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The challenge was not just providing micro-nance, but getting them into economic activities that would generate income. With help from the US Agency for International Development, the program was expanded countrywide. Among its achievements is that it has managed to shift what was purely a welfare approach to social issues into a business approach. This paradigm is now emulated by other FBOs. 4.11 Nairobi Chapel Development Fund The Nairobi Chapel presiding pastor has started a number of FBOs with the help of his congregation and is moving up a notch by establishing a church development fund. The aim is to help unemployed university graduates to set-up an enterprise that would provide a majority of its members with sustainable livelihoods. To nance this, the church is creating a revolving fund of Ksh10 million ($150,000) through its church network. This model is similar to the NCCK program. 5. Findings The ndings reveal two incubator models of venture formation by FBOs. These can be classied as: (1) base enterprises giving rise to group satellite centers; and (2) base enterprises with budding individual subsistence ventures. Each of these models emphasizes skills development as a basis of successful venture formation. There is a strong inclination towards assisting new ventures with micro-nancing and marketing through church networks.

In the rst incubator model, the emphasis is on group development. The period of incubation they learn not only the skills but how to build condence among themselves. Members had similar social backgrounds either as former prostitutes or people living with HIV/AIDS. Work environment bonds them and becomes a source for supporting one another. Other benets include group investments such as land to build homes for themselves and equipment to enhance their output. They, however, remain dependent on the incubator for marketing channels, technology and product development. The second incubator model focuses on provision of skills and micronance to set-up individual enterprises. Beneciaries of this model have diverse backgrounds and very difcult to nd a common theme to bind them. Although monitoring and evaluating these set of entrepreneurs is difcult most of them end up coming back for more assistance either having failed or are not able to make ends meet. As Welsch and Kuhns (2002, p. 10) observed about an earlier study:
. . . the author does not imply any attempt to test hypotheses. The analyses use the thesis statements as a framework to highlight and link to related, possibly useful, theoretical foundations.

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Likewise, in this study the two models are discussed below in the context of the ve research questions advanced earlier. 5.1 Measuring success or failure Have the FBOs in this study succeeded? If success is measured in terms of community impact and the income earned by group and individual enterprises, then they have succeeded. The head of the Australian Church Missionaries in Kenya said in the interview:
The majority of recruits were initially shy and lacked self-condence. They have since become a lively happy group and lled with condence. Notably, their dress codes and hairstyles have greatly improved, indicating that they are not merely meeting physiological needs but have extra income to do other things.

The more important question in this study is: can the enterprises be sustained? Evidence from sales trajectories especially for small group enterprises is promising. In these groups record keeping is key to lasting relationships. It also instills discipline regarding expenditure and a democratic culture, building respect for the views of others and separating personal and enterprise earnings. These features were not associated with individual micro enterprises linked to any of the FBOs in what I describe as the second model. The small group enterprises knew what they wanted in order to succeed, but the majority of individual micro entrepreneurs complained about almost everything including not having sufcient tools from the donors. While both individual micro enterprises and small group enterprises were unanimous that with sufcient nancing and marketing of their products, they would succeed and sustain their enterprises, they were talking of two different levels. Individual micro entrepreneurs nd it very difcult to move beyond the dependence level if after skills development they stay a way from their trade too long because this puts them back to dependence zone and seeking for assistance to meet basic needs. They suggested immediate nancial assistance to acquire tools after training to enable

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them to start off. With such help they hope it may be easier to move out of dependence and face the challenges of growing a micro enterprise. Figure 1 shows that social enterprises are characteristically dependent on the sponsor. As they begin to grow into independent enterprises, they begin to experience incubation problems including nancing and skills development. In most cases donors provide tools as part of capital towards enterprise development. Usually if there is no funding, those who already have gone through skills development fall back into dependence cycle. In this regards, enterprises that successfully, go through the donor incubation program (with sufcient funds and training to go it alone), too experience typical micro and small enterprise (MSE) problems identied by Ndemo (2001) such as lack of: infrastructure, motivation, nance and markets. Further, it is argued (Ndemo, 2001), the age of an entrepreneur and level of education too impacts on the entrepreneurs ability to succeed. The ultimate success of the enterprise will depend on social, political and economic environment within which they exist. Centers such as Beacon of Hope and Amani ya Juu encourage savings, which groups pool as initial capital in a satellite enterprise. This form of organizing a business enterprise assures any group of individuals an effective means to combine their resources, however, small. It permits greater resource mobilization than that within the capacity of most individuals or small enterprises. It is a catalyst for local entrepreneurial growth: cooperatives retain within the communities in which they

Figure 1. Towards independent entrepreneurship

operate the capital that they mobilize there, as well as surplus derived from outside transactions, both accumulating for further entrepreneurial development (World Summit for Social Development, 1995). In the experience of the Gloag Project (provides skills development and acquisition of tools), most enterprises they consider successful involved other factors as well. These include: age, motivation, education and availability of infrastructure (Figure 1). While most prisoners are below age 35, those under 30 do not consider trade training essential to starting a small enterprise after their prison life. They may think they have sufcient time to do something else or may simply lack motivation. In the majority of enterprises considered very successful, owner/managers have good educational backgrounds either prior to or after their stint in prison. Infrastructure also has a role. Furniture makers working in slum areas have to carry materials to a source of electricity to do patterns or special cuts, a waste of time that impedes enterprise growth. 5.2 Individual inclination to sustain the venture through faith Often a project almost literally stands between its participants life and death. It is probably the best thing that ever happened to most of them and they would do anything to sustain it. If such a project fails, then it must be for reasons other than participants determination. The individual resolve is intertwined with church goals and objectives for enterprise development. As evidenced by the Nairobi Chapel, coordinators of FBO enterprises are key members of the church and through fellowship have developed a close relationship with their beneciaries, too. These enterprise models have a chain of relationship that is fused by faith. In projects where participants may not necessarily come from distressed backgrounds but are nevertheless disadvantaged, those who come for assistance are people who are already motivated and looking to a successful venture. With disadvantaged single mothers whose backgrounds are clean, the resolve to persevere and succeed is written all over their face. In projects like NCCK, Maridadi Fabrics and the Nairobi Chapels micro-nancing program, participants come with certain goals in mind. This makes it easier for the FBO to link them with sources of help, and has worked especially well with the Chapels graduate program. In projects with younger participants, like Tulip and Tumaini Ministries, which cater for street girls and boys, respectively , issues of sustainability are far fetched. The majority of participants drop out before being adequately trained. Some return to their families after counseling both the victim and the parents, and some are unable to resist the lure of drugs and the streets. Until robbery affected operations at Tumaini, only four of more than a hundred who at one time had been resident at the facility had successfully made it to either employment or starting a micro enterprise. 5.3 Group inclination to sustain the venture through faith If one model were to succeed, it would be the cooperative model. The resolve demonstrated by members of the groups at Beacon of Hope, the Card Project, Amani ya Juu and Tumaini clinics has far reaching implications beyond their interest in the enterprise. When they lose a member, as it has happened to AIDS, all are affected, as sisters would be when they lose one of their own. In all of these projects, those who were committed to sustain them were mature ex prostitutes, ex convicts and people

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with HIV (some who had suffered discrimination because of their status). As direct beneciaries, cooperative members have a strong incentive for efcient operation and continuous innovation in response to changing business environments, achieving thereby high rates of both initial success and long-term viability. They favor long-term development of their enterprise compatible with the interests of the community in which it operates. The stability they assure within local communities itself induces further entrepreneurial expansion (World Summit for Social Development, 1995). 5.4 FBOs will to support successful ventures In all of these projects FBOs have invested such huge amounts of resources that it would be difcult for them to abandon the projects. NCCKs social enterprise program, which started in back 1975, grew from 4,136 clients to 13,911 between 1996 and 2002, with annual disbursements increasing over the period from $631,200 in 1996 to $4,034,696 (in Kenya shillings) in 2001 (NCCK, 2002). Maridadi Fabrics has run social enterprise skills development assistance since 1986. Father Gloags project has helped thousands of entrepreneurs acquire tools for venture start-ups. These older programs are all in the process of expanding services to include other enterprise ventures like international market promotions through their church networks worldwide. Coordinators at Beacon of Hope, Amani ya Juu and the Philemon Ministries think they have achieved what they intended, including nurturing fellowship and touching many lives by building character, developing leadership and rehabilitating people considered outcasts in society. 6. Conclusions and implications for policy 6.1 Conclusions The pilot nature of the empirical investigation reported in this paper limits the extent to which rm conclusions may be drawn from it and makes policy recommendations that are specic to the Kenyan context inappropriate. However, what the cases show is that faith bases social enterprises can offer some benets to disadvantaged people. In each case, FBOs utilized different methods of incubation to make an economic impact. Some, especially those involved in rehabilitating disadvantaged women, sought a group approach to nature the budding enterprises. At the same time, a larger scale and more comprehensive investigation is required in order to fully assess the scale of these impacts; the specic effects on sustainability; any change in FBO-beneciary relationships and dependence over time. Perhaps the main conclusion from this work is that it shows sufcient evidence of empowerment and condence in those who previously felt helpless, the provision of means for meeting physiological needs and building of working capital. The contribution from FBOs promises to be increasingly important as they play an expanding role in the economic development, to justify a more in-depth investigation, in a context where the MSE sector is experiencing demand-side deciencies, combined with a need for technological and knowledge upgrading, in a situation of resource scarcity. 6.2 Implications for policy and recommendation Although it is premature to draw policy implications from the Kenyan pilot study, the wider knowledge base does enable certain policy implications to be drawn. Whilst FBO represents a potential means of growing and diversifying the SME base in developing

countries, whether or not this potential is actually achieved in practice, depends on a variety of factors, some of which are under the inuence of policy makers. An essential prerequisite in this regard is the creation of a facilitating environment for all businesses in the country, since this is necessary in order to encourage investment. Key policy issues relate to creating the conditions to support such poverty reduction programs, together with policies to encourage and facilitate different forms of co-operation between FBOs and the wider MSE environment. Dening the role for policy to attract increased FBO activity includes promotional activities; creating an appropriate and effective legal and regulatory framework; capacity building programs for disadvantaged groups that include training and the wider role of business support services and other intermediaries that must include special micro-nance programs. FBOs should retain control over the monitoring and evaluative process, over its planning of income generating activities, implementation and costs. This is essential to ensure sustainable and decision-based development. In this regards, Graham (1997) has underlined the importance of ensuring that monitoring and evaluation is built into the program from the beginning and does not become an activity imposed upon the program at some later date. When it becomes part of the standard operating routine, evaluation becomes a valuable tool. When it is an afterthought, a management tool for external managers, a decision-making or diagnostic tool considered at a crisis moment, evaluation becomes a burden and a controversial and difcult activity. Finally, developing policies to encourage and facilitate SME development in developing countries through FBO-community partnership requires co-ordinated actions on a number of fronts, involving various state and private sector partnership.

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