Turning Tradition Into Profits

Folole Tofa Poasa found a niche baking wedding cakes. Photo: Courtesy Asian Development Bank

Starting up a small business in the Pacific Islands is difficult, as land is usually communally held and cannot be used as collateral. It is even more daunting on the volcanic, largely rural island of Savai'i, which, though larger than Samoa's main island of Upolu, has a smaller population of 45,000. Yet an innovative small business development project, supported by a US$3.5 million Asian Development Bank loan and under implementation since April 2002, is enabling women to play an important economic role in a male-dominated society and, in so doing, improve lives for their families. The project includes a pilot component to provide loans of up to T5,000 (US$1,600) for micro-enterprises and a guarantee scheme for small business loans up to T20,000. Both are run by non-government organizations.

In the village of Falealupo, in the island's western corner that still bears the scars of a devastating cyclone in the early 1990s, Lologo Alusamoa is using her skill as a weaver of fine mats as collateral. Sitting in a modest fale, Alusamoa threads the fine strands of a pandanus leaf to make a high quality ie ole malo (ceremonial fine mat), a prized gift at Samoan weddings, funerals and investitures.

The quality-and price-of a fine mat depends on the time spent making it, from 16 to 25 weeks. However, the buyers of such mats usually reside in the capital of Apia or overseas, while the weavers live in rural areas.

To bridge the gap, the NGO Women in Business Foundation (WIBF) acts as a go-between. "Not only do we match buyer and seller, we also protect the interests of both parties," says Rosa Me, a senior project officer for WIBF. "I check on the quality of the mat for the buyer and, if the weaver has been tired and the stitching is not as good as it should be, I ask her to do it again," says Me. "I also protect the weaver against a buyer who tries to reduce the price from the one they had agreed upon."

In this case, the price is T2,500 (US$800) for a mat that takes 25 weeks to make and Me pays Alusamoa weekly installments of T100. This is the only cash Alusamoa and her husband receive and enables them to vary the subsistence diet of home-grown crops for their seven children.

"This is my fifth fine mat," says Alusamoa. "From the sales of earlier mats, we bought a water tank (a highly desirable item in this rain-fed area) and sheets of corrugated iron to re-roof our fale. We would also like a loan to carry out house improvements, including cementing the floor."

In addition to finance, WIBF provides business counseling that includes advice to save a little each month through the NGO for emergencies. "Saving is a relatively new concept in Samoa as people generally distribute money to the church and to their family obligations and spend the rest on themselves," says Me.

In another village, Samauga, in a fale with pigs and chickens running around, a husband and wife, Opeta and Maima So'oalo, are seeking a loan to take their micro-enterprise to another level. The pair slice and deep-fry taro and bananas and sell them as "chips" in small plastic bags.

Maima's biggest market is students at two nearby schools, but she also sells through retail stores. After deducting costs of taro, bananas, cooking oil, salt and plastic bags, the profit margin is around 60 percent. Sitting bare-chested on a mat, Opeta says he wants to expand and improve the kitchen to be able produce more chips, and also to venture into making panikeke (Samoan pancakes), a popular breakfast food and snack.

"There is only one neighbor selling pancakes and he usually runs out of supplies by mid-morning. I think we have a niche, especially at weekends," he says.

But if his profit margin is so high, why does he need to borrow? Sheepishly, Opeta explains that, as one the few villagers earning cash, he is frequently approached for "loans" in addition to his fa'alavelave (family obligations). However, few of the loans are repaid and he is cash-strapped.

More ambitious projects are backed by ADB's guarantee scheme for small business loans of up to T20,000 (US$6,400), run by an NGO, the Small Business Enterprise Center. In just over a year, SBEC has processed over 170 loans.

In the village of Saipipi, Folole Tofa Poasa, a jovial woman, runs a large bakery that makes cakes and pastries. After starting in a shack eight years ago, Poasa, helped by a loan, now employs a staff of 10.

She found her niche in wedding cakes-Samoans love elaborate cakes, the fancier the better-for no one was making them on Savaii and people had to order them from Apia. She builds cakes up to 50 tiers high with ornamental edibles such as Bibles-open or closed-for a largely Christian clientele.

The loan enabled her to import equipment such as ovens and mixers to mechanize manual tasks, as well as decorations and water fountains. The monthly average of three to four orders soars in the popular wedding month of December, when she once made 11 cakes in a week.

The writer is based in Manila, Philippines, with the Asian Development Bank.