Modernizing of micro shoe industries in Bangladesh
Bhairob, Bangladesh, has traditionally been a footwear producing area, and more than 7000 factories have been established here over the past few decades. Around 40 per cent of these factories are micro-enterprises employing between three to ten workers.
Most factories use low-cost materials and manufacture the shoes by hand. This results in low-quality footwear which has a low market value. The whole process is labour intensive. Most of the micro-entrepreneurs have not had any formal training on shoemaking, and there is a lack of understanding of the shoe market value chain.
IFAD’s Promoting Agricultural Commercialization and Enterprises (PACE) project improves the livelihoods of moderate and extreme poor through a sustainable value chain approach. PACE is different from other projects in that it is not limited to on-farm activities but also targets off-farm interventions in rural areas.
Together with a local NGO called People’s Oriented Program Implementation (POPI), PACE supports entrepreneurs to increase efficiency and improve the work environment. POPI provides micro-entrepreneurs with latest tips and tricks of the shoe producing craft. With the training, beneficiaries are now able to produce shoes using machines and optimise their business processes. Factory owners have also improved safety and working conditions. As a result, the producers are now able to compete with local, national and international products.
The interventions generated employment opportunities for extreme and moderate poor people, especially women. Shibli Begum is one of the beneficiaries of the PACE project. She is from Jamalpur village in the Bhairob Upazila. Before venturing into footwear, she was a typical housewife and had a busy life raising three children. Her husband Shahidul was engaged in multiple businesses, including shoe manufacturing over the last 20 years. Although Shibli visited her husband regularly in the factory, she never thought about becoming micro-entrepreneur herself. Inspiring stories from other women motivated her to become one.
Shibli got involved in the sector with US$ 3580 as an initial investment. With the PACE training, Shibli was able to gradually mechanise her small shop. Her average production cost decreased and profit increased after the PACE training. Eventually, she turned her micro-enterprise into a little factory. Many footwear producers, like Shibli, learned about using quality input materials, operating machinery and identifying end markets and buyers. Both the number and salary of the workers in the factory almost doubled.
Shibli now runs a factory of 50 employees, most of whom are women. Their monthly income, work environment and quality of life has improved through the PACE interventions.