By Soazic Elise Wang Sonne, Timothy Kinoti, Nina Fenton and Claudio Cali
African artisans have the capability to produce jewellery with international appeal, but reaching those markets is often impossible for them. Ethically sourced fashion company SOKO aims to bridge this gap by tapping into ethically conscious consumer markets and passing on most of the benefits to African producers. Here’s what we’ve learned about the impact of this kind of development work.
Founded in 2012, SOKO1 designs jewellery and fashion accessories and supports a growing network of low-income artisans in Kenya to produce these products using ethically and sustainably sourced materials. Finished products are sold worldwide through shops and online channels. SOKO has received finance from Novastar Ventures, a venture capital fund that is supported under the European Investment Bank’s Impact Finance Envelope for Africa, the Caribbean and Pacific.
Under the EIB-GDN programme, Soazic Elise Wang Sonne and Timothy Kinoti surveyed artisans working in Kibera, Kenya, one of the largest urban slums in sub-Saharan Africa. To gain insights into how SOKO is helping to improve the skills and livelihoods of the artisans that work with them, the researchers compared the responses of artisans working with SOKO with those of a group of artisans not currently affiliated with the network2. Altogether, 192 artisans were interviewed. The analysis has brought interesting insights into the way SOKO is influencing its workers – and on the potential impacts of working in Kenya’s handicraft sector3.
The artisan industry provides young people with livelihoods. Roughly 75% of SOKO artisans are below the age of 36. The age distribution of the non-SOKO artisans was similar, with an important exception: SOKO does not work with artisans below the age of 18, whereas there were a few respondents below this cut-off working outside the SOKO network.
Few women become professional artisans. 95% of artisans interviewed are male, including around 90% of those in SOKO’s network.
Artisans do not need a high level of formal education. Roughly 60% of artisans have reached at least an upper primary school educational level, but only 10% went on to vocational college or higher education level.
Linkage to a global supply chain may be paying off: the artisans who SOKO links to international markets earn approximately 37% more than artisans not working for SOKO every month – a statistically significant difference. The wage gap between SOKO and non-SOKO artisans is particularly large for female artisans. However, a more advanced analysis indicated that the difference may be caused by differences between the artisans who work with SOKO and their peers. Further investigation would be needed to conclusively pin down the role of SOKO in raising incomes.
Vulnerability to poverty. Both the workshop leaders and the other artisans working with SOKO tend to be slightly better off than non-SOKO artisans, even when statistical methods are used to control for differences between the two groups. However, the difference in the probablilty of falling below the national poverty line was only statistically significant for the workshop leaders. Given the small size of the sample, the results should be interpreted with caution. We also found that female worker artisans in both SOKO and non-SOKO workshops are more vulnerable to poverty than male worker artisans.
Some evidence suggests that SOKO may be enabling artisans to invest in their children’s future. SOKO artisans spend more on their children’s healthcare than non-SOKO artisans, and the difference is statistically significant. On the other hand, the difference between levels of spending on education was not significant once statistical matching techniques were used to control for differences between the groups.
SOKO’s trainings seem to be benefitting the artisans attending and some of their peers. Almost all artisans mentioned having acquired specific skills from SOKO. Among the 85 SOKO artisans who mentioned they have acquired new skills, the majority were lead artisans (66%). This group benefits from direct training from SOKO. In addition, 15% of artisans affiliated with SOKO mentioned they have received training through other satellite SOKO workshops (“friends"4) indicating that information on skills flow well between SOKO workshops.
SOKO aims to boost sustainability by enhancing the ability of artisans to generate revenues outside their relationship with SOKO. This way, SOKO’s impact “footprint” exceeds the revenues earned from the company and becomes long-lasting. Most of the SOKO artisans preferred to sell their products to SOKO, which they report offers a better price. However, they also attempted to penetrate other markets, something SOKO encourages. On average, SOKO artisans generated around $240 yearly from other markets. However, key informant interviews revealed that limitations in marketing skills make it difficult to penetrate new markets. They high cost of holding product exhibitions or running formal marketing events also makes it hard for them to “go it alone”.
Innovative uses of technology can promote sustainability. SOKO’s innovation was to provide a platform to link artisans to global value chains, by leveraging the opportunities provided by new technologies and social media platforms. The study showed that this has boosted their livelihoods and contributed to sustainability.
Impact measurement is central to the European Investment Bank’s business. The European Investment Bank tracks the development results of every investment. This helps the Bank to understand what works and how we can further enhance our impact.
The European Investment Bank has been piloting a programme of impact studies of private sector impact investments, partnering with the Global Development Network. The studies deepen our understanding of the impacts of these projects, going beyond the results measurement the European Investment Bank does for every project by collecting data directly from the people who benefit on the ground.
This requires local resources, so the programme has mobilised 30 talented researchers from developing countries to carry out impact studies of impact investment projects in Africa, the Caribbean and the Pacific. The results of the first wave of studies are available here.
The programme shows that academically rigorous research can drive impact. The programme partners have brought in globally renowned experts as impact advisors. These experts ensure that the studies are carried out with maximum rigour and using the latest methods. Their stamp of approval ensures that the results are a reliable basis for decision-making to enhance development impacts by the European Investment Bank and our clients.
Soazic Elise Wang Sonne is a fellow in the innovation, economics and governance for development PhD programme at the United Nations University in Maastricht. Timothy Kinoti is a evaluation and learning managers at World University Service of Canada. Nina Fenton and Claudio Cali are economists specialising in impact finance and measurement at the European Investment Bank.
[1] Meaning ‘Market place’ in Kiswahili
[2] The comparison group were made up of potential workshop leads and workers with the same ability and skills to those who are currently working with SOKO and their selection was made thanks to the help of a chairperson most knowledgeable of the Kibera area and the handicraft sector.
[3] Although the sample is not representative of the whole handicraft sector in Kenya, meaning that the results cannot be too widely generalized.