An Approach To Solving Daycare Issues In Kenyan Slums
A Solution To Increase Daycare Revenue In Kenyan Slums
In Kenya, there are at least 3000 informal daycares in operation. A large portion of these daycares are situated in the Slums. Parents who work outside the slums leave their kids at daycares who have a poor quality standards. Early child development is very important, and kids who do not get the opportunity to learn in a safe place have been shown to perform worse in life. The kids do not have good food, or a safe and clean place to stay. Kidogo, a non-profit organization is working to change that.
Kidogo’s mission is to provide a safe place for kids to stay that has healthy food and water, is safe, clean, and a place where the kids can have fun. Now this might seem like a long shot for a slum, but they are actually doing it. How? They have a unique technique of using mothers to provide the daycare service. The moms, fittingly called “Mamapreneurs” run their own daycare business either in their own home or a center provided by Kidogo. Kidogo gives the moms $200 USD to renovate their home to meet their high quality standards. The moms also earn money from their daycare service. They charge 7–10 cents per kid per day for their service, making anywhere from 72–96 dollars a month. That’s not a lot of money per month, so I decided to change that. Kidogo wants to bring their monthly salary up to $150, pretty much doubling how much they earn now. You might be thinking, “Why don’t you just increase the price of their daycare service?”, well, you can’t. Remember, these families live in the slums, where there is little money, and people’s job situations are volatile. This was my first time going at a challenge by myself so, coming up with a solution was both fun and a teaching experience. In this article I’ll give a brief overview of my solution, and my many learnings from it.
The Solution
I decided to go with a multifaceted plan to increase income for Mamapreneurs. It consists of a total of 5 ideas sitting under two main umbrella ideas.
Efficient Use of Resources
- Using Sack Gardens to mitigate current food costs
- Selling extra produce grown from the sack gardens for profit
Reaching Out to Secure More Funding
- Campaigning with local daycare centers to partner with them for donations
- Contacting companies to get a portion of their CSR initiative
- Using micro-finance loans to cover initial set-up costs of the sack gardens
I’ll go ahead and break down each idea briefly now.
1)
Using Sack Gardens To Mitigate Current Food Costs
Mamapreneurs cook breakfast and lunch for the kids. The Mamapreneurs get the food necessary for cooking from a local vendor for around 78 dollars a month. That’s a huge portion of their monthly income gone. There had to be a way for Mamapreneurs to get cheaper food that was still healthy. My solution was sack gardens. Sack gardens/vertical farms are a cost efficient way for people to grow produce in a small area. The idea revolves around using used burlap sacks as gardens. Soil, manure and plants go into the bag and eventually grow into produce bearing plants. I found that by using sack gardens, food costs reduced to $23–28 USD a month. This is a 61% food cost reduction that gives the Mamapreneurs another ~$50 USD a month. However, there was one issue with this idea: the upfront cost. The upfront cost to set up the gardens totaled from $246-$325 USD. There is no way that a Mamapreneur can currently pay for that, so I decided to use a micro-finance loan to cover it(explained later). At some locations, mothers do not have to make any food, as the parents provide their kids with food. I thought there was still an opportunity for Mamapreneurs to make money here, as they could sell the raw produce to the parents. This would generate another $48 USD for the Mamapreneurs.
Selling Extra Produce For Profit
During the months of April, August, November and December, Mamapreneur revenue drops 50–75% and some centers even close down. This is because kids with older siblings come home and take care of the younger children resulting in a drop in need for a daycare. This is a major issue which I targeted. The idea is quiet simple: to sell raw produce to parents. Considering 85% of the population in Kenyan Slums are food insecure, there will surely by people willing to buy the sold produce. This idea would give the Mamapreneurs $30 when attendance drops to 0%, and $35 when attendance drops to 25%. This might not seem like much , but considering that otherwise Mamapreneurs would be earning nothing, it is significant because it could mean one more month of getting by.
2)
Campaigning With Local Daycare Centers To Partner With Them For Donations
One way Mamapreneurs could earn more money is if they get directly paid from Kidogo. The only way that is going to happen is if Kidogo secures more funding in the form of donations. I thought that Kidogo could partner with local daycares to gather donations from them. Assuming each donation center provides $11 a month, and Kidogo can tap into 15% of the private daycares in Kenya, Kidogo can get around $38,000 a year from donations alone. If Kidogo puts this in a bank, interest will be earned which can be given out to Mamapreneurs. Mamapreneurs will get around $5 a month from the interest. The reason for putting the money into the bank instead of splitting up the donations to give directly to the Mamapreneurs is that there is no guarantee that the next year they will get donations.
Contacting Companies To Get a Portion of Their CSR Initiative
CSR(Corporate Social Responsibility) is something that companies have. It requires them to give back to the community. Most companies spend large amounts of money in donations to help. Kidogo can market themselves to such companies to get a portion of their donation. One such company is Safaricom, the largest telecommunication company in West Africa. They have a CSR budget of around $640,000 USD. Assuming that Kidogo can secure 5% of that budget, they will get $32,000. Again Kidogo will put the money into the bank to get interest which will be distrusted to the Mamapreneurs. Mamapreneurs will earn a huge $83 monthly.
Using Micro-finance Loans to Cover Initial Set-up Costs of Sack Gardens
As mentioned before, Mamapreneurs will use micro-finance loans to cover the 200+ dollar set up cost for the sack gardens. Micro-finance loans are loans of small amounts which have very low interest rates. Musoni is a micro-finance institution which gives out loans at 4% interest rate. The Mamapreneurs will contact Musoni and get a small loan that can be paid off without significantly reducing their monthly profit. Monthly payments are low enough that the Mamapreneurs can still earn $150 a month
Impact
The impact of these 5 ideas is HUGE! Each Mamapreneur will earn an extra $113 dollars a month for a total of $198 a month on average. This is a lot of money for mothers living in slums. The money can go towards improving the daycare center quality even more, or to support their family and improve their quality of life. This also creates a higher affinity for more mothers to become a Mamapreneur, causing a chain reaction resulting in more and more kids going to high quality daycare centers. The hope is that the childcare issue in Kenyan slums can be eradicated!
Learnings
I learned a lot from this challenge. Here are my biggest takeaways:
- Data: Data is key in making a good recommendation. Without data, your recommendation has no backing. You need to figure out the numbers of everything to see if your idea is truly feasible.
- Time Management: Time management is everything. I learned that I need to start early in order to produce a high quality recommendation.
- Reach Out to Learn Perspective: Perspective is very important because I am creating a recommendation for a group of people whose shoes I have never worn. I need to reach out to people who have experienced the slums to make a feasible solution.
- Use Feedback to Improve Recommendation: Utilizing friends and family for feedback is very important to improve your recommendation.
Finally, I would like to say thanks to Kidogo for giving us the opportunity to develop a solution that has the potential to impact MILLIONS!
Check out the deck:
Connect with me:
Linkedin: https://www.linkedin.com/in/vikram-menon-986a67193
Email: vikrammenon03@gmail.com
