Social Enterprise in Tibet


Challenges: In the past few decades, the Tibetan economic landscape has undergone a dramatic degree of change, shifting from a predominantly subsistence, agricultural economy to a new mixed economy.  This new marketplace is dominated by the commercial interests of Han migrants, making the traditional bartering system of local Tibetans no longer viable. Many villagers, including young girls, have migrated to bigger cities such as Lhasa to look for jobs in housekeeping, childcare, and in restaurants.  But once there, they have been exploited.  At the same time, many Han migrants have moved into villages and townships to set up businesses and send earnings to their families in other provinces, instead of reinvesting in the local community.  This situation calls for an economic empowerment program for Tibetans that includes training in employable skills, access to capital and business know-how in order to compete with Han businesses, and an emphasis on preserving Tibetan cultural identity.  The need for this type of program is especially urgent for Tibetans who were hit the hardest by the Yushu earthquake, as they need to rebuild their lives as well as the local economy.

Solution: TVP’s Social Enterprise Program embodies the old adage, "Give a man a fish, and you feed him for a day; teach a man to fish, and you feed him for life.”  Our objectives are to alleviate poverty and preserve Tibetan culture by providing culturally-appropriate skills training, business education, and enterprise loans.  Many of our loan recipients in rural villages are farmers and nomads who do not have formal education or marketable skills, assets which are often necessary before starting a business.

How is TVP’s Loan Program Different? People often use terms such as microloan, microfinance and microcredit interchangeably to describe different small loan programs. While TVP has been inspired by Grameen Bank, and other leading lending institutions, our loan program does not fit the characteristics of the traditional microfinance program; it differs in several key factors.

Program
Loan Size
Interest
Method
Target
Traditional Microfinance $200 or less Up to 35% Loan handled by a lending institution Poorest of the poor $2 or less per day
Micro Enterprise Loan of TVP $2,500 3% to 10% Loan handled by members of local communities Entrepreneurs with proven success

Our Target: TVP’s main focus is in rural villages and townships where about 80% of Tibetans still live and maintain strong cultural identities. While most micro-finance programs work directly with the poorest of the poor, TVP identifies entrepreneurs with proven successes.  That is, those who are ready, willing and able to create social change in their own communities by starting or improving small businesses, creating jobs, employing locals, and helping others to help themselves.

Progress

Beginning in 2006, TVP began to shift its focus from a charity model to helping people help themselves by providing vocational skills and training and business start-up grants. By 2009, TVP had 19 trade apprentices who became successful woodworkers and won a contract to build 42 low-income family houses. It also improved wool-processing skills training for about 35 women in the Lhoka area. Subsequently, TVP saw the need for an artisan market outlet and opened a handicraft co-op store in Lhasa, which also housed the TVP Lhasa office until 2008. In 2010, Tibet Tourism Bureau and Lhasa TV Station collaborated and produced a documentary to showcase the store as a “Cultural Heritage” model and showed it on TV every day for a week. Since then, the handicraft store has been invited to different trade shows in mainland cities, such as Beijing and Shanghai.

Starting in 2008, TVP began to research business development and microfinance model programs; conducted field research; wrote rural enterprise development guidelines including lending procedures; and provided loans to six motorbike repair shops as a pilot program in Nagchu, TAR. By the end of a two-year term, 100% of the loans were repaid on quarterly repayment schedules with 3% annual interest rates, and the businesses were still open. With this success, TVP decided to put greater focus on small business development and established lending groups, known as Co-ops, and we already made good progress.

Impact

  • 15 business training workshops conducted

  • 269 entrepreneurs have trained

  • 102 microloans provided (about 70% of them are still running)

  • 92% payback rate on required payments 

  • $230,000 re-invested through revolving loan program in the field

  • 50 microbusiness received start-up grant and in-kind support including storefront tents in Yushu

Invitation: TVP’s goal is to improve the current lending capacity from $230,000 to $500,000 in our Enterprise Loan Fund. Consider investing in entrepreneurs and businesses on the Tibetan Plateau by making a generous donation today.  TVP is a nonprofit with 501(c)3 status, and your donation is tax-deductible to the extent allowable by the law. 

Success Stories

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Tibetans helping  themselves with micro-loans & small business training.

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