Breaking out of poverty
Improving people’s lives is the core business of social business enterprise, rags2riches.
SUSAMARIE Estabillo flashes a big, warm smile as she holds open the gates to the quaint house that is home to Rags2Riches, Inc, a social business enterprise that was founded and is based in Manila. The organisation helps impoverished communities in the Philippines lift themselves out of the cycle of poverty.
“Welcome to Rags2Riches,” says Estabillo, as she leads the way to the “offices” on the first floor where Reese Fernandez-Ruiz, one of the founding partners and current president of Rags2Riches is waiting.
Fernandez-Ruiz is only 27. She was barely 22 when she started Rags2Riches, an eco-ethical fashion and home accessories line, along with eight other like-minded Filipinos whom she met, by chance, while on a university visit to Payatas.
Payatas is the country’s largest open dump site: It is the size of 40 football fields and is located in Quezon City, one of the poorest and most densely populated parts of Metro Manila. Communities that live around Payatas (the area around the dump site) mostly scavenge for a living. The unemployment rate is high but residents are resourceful in scavenging for material which they can sell for a small amount of money.
“There are about half a million people living in Payatas and they get everything … food, furniture, clothes … from the dump site,” explains Fernandez-Ruiz. “While we were there, we noticed a group of women who were scavenging for scrap material to make foot rugs which they would then sell for just a few pesos. The scraps of cloth were also hard to come by because some others had taken advantage of their situation and get the scraps directly from garment factories and selling them to these poor women. It was completely scandalous!
“I mean, these poor women were only earning 10 to 15 pesos (70 sen - RM1) a day from their rugs! They had no access to the marketplace … I mean, there was no way they could go to department stores to sell their products and now, they couldn’t even get the scraps from the site anymore and had to buy them from a middleman.
“It was very hard to see how people with big dreams and who worked really hard, could not get anywhere simply because they lacked opportunities. We knew that we had to do something about it,” she says, adding that Estabillo too was among the group of women weavers at Payatas.
Fernandez-Ruiz and her partners – a mixed group that included a Jesuit priest and several young professionals that shared the vision – realised that to make a lasting difference in the lives of the community, they had to embark on a programme that was sustainable.
A one-off effort to offer aid or money would not suffice. They wanted to empower the communities instead of just doling out aid.
“We realised that it would take a long time to actually solve this problem because there are a lot of poverty-stricken areas in the Philippines. As long as these communities are not out of poverty, our work is not done.
“We decided that we needed to form a business – a for-profit enterprise driven by our social values. And that is where we are today,” she explains.
Building on talent
Rags2Riches used the weaving-skills of the Payatas women as the launch pad for their business. The company approached garment factories for material scraps which they in turn gave (not sold) to the women at Payatas. They also provided training for the women.
Though they already knew how to weave, the women were put through a skills programme which they had to pass in order to become artisans with Rags2Riches. As artisans, they would be paid Fair Trade wages for their work. The women, many of whom are stayat-home mothers, are paid based on the number of hours they work each day. As soon as they complete their allocated work, they are paid, regardless of whether the products are sold. This way, says FernandezRuiz, they can be assured of a constant income stream based on their own effort.
“The first thing we did was transform the foot rugs they were already making into better-looking ones with designs and colour schemes. We talked to the communities about our programme because we didn’t just want to tell them what to do … we wanted to listen to them and make them a part of this process. And, we learnt a lot from them,” she says.
Earning the trust of the community at Payatas, however, took time.
“At first, the community didn’t trust us and we understood why … they were very jaded. Many different politicians and corporations had been there before us but they would stay for a day, feed them, take lots of photos and leave. So of course they were suspicious of us. What made us any different? We knew that it would take a while before they saw that we were there to stay. It took around two years to gain their trust.
“We started with three artisans and that slowly grew to nine and then 15. Now, we have 900 artisans, not just from Payatas but several areas in and around Manila,” says Fernandez-Ruiz with obvious pride.
Apart from engaging their skills, the company also introduced the artisans to the market by getting them to sell their wares at bazaars.
“They had to man the booths themselves. Initially, they were very scared because they had never done anything like that before. They used to sell their rugs to a middleman and not to a market that was primarily English-speaking.
“But once people started admiring their products and making them feel like their work was worth paying for, they emerged from their shells and started being very proud of their products. Within three hours, 700 rugs were sold! When we saw that, we knew that there was a market for this, so we decided to do more,” she shares.
Fernandez-Ruiz and her team then approached acclaimed Filipino designer Rajo Laurel and presented their business model to him, showing him samples of their products and proposed that he design something to add value to their products. He agreed.
“He started transforming the foot rugs into wine coolers, vanity kits, bags – and immediately, the value of our products increased and we could give back more to our artisans,” relates Fernandez-Ruiz.
Estabillo was one of the original three artisans to join Rags2Riches. She, too, was skeptical when she first heard about the livelihood programme initiated by Rags2Riches. However, she agreed to give it a go, thanks to the persuasion of her priest.
“I wanted to give up initially because the training was difficult. But I didn’t want to disappoint my priest, so I continued,” she recalls.
Her persistence paid off. Within three weeks of working under the programme, she received her first pay cheque.
“The first thing I bought was a large chicken for dinner for my family,” she says, with tears in her eyes. “Before, I’d have to scavenge for food from restaurants. This was the first time I could actually buy food that wasn’t spoilt or left over.”
Estabillo is now the workshop supervisor, overseeing the production of the fashion and home accessories produced by the company.
Apart from earning more money than ever before, Estabillo and the other artisans have also been taught the fundamentals of financial planning through the company’s Quality of Life Programme.
“We teach them how to save. Saving for the future is an understated but very important indicator of people who are ready to get out of poverty. To be in poverty is to live a hand-to-mouth existence. With savings, they can think long-term, which is a luxury for people who live day by day. So, this is very important for us and for them. We are very encouraged to see that some of their savings are not getting depleted, which means they are earning enough to support themselves and save some, too,” says Fernandez-Ruiz.
Rags2Riches now sells a wide array of woven products, apart from foot rugs. Working with notable Filipino designers, the company has a fashion line comprising designer totes, hobos, satchels, clutches and wallets as well as chokers and necklaces and a home accessories line of rugs and cushions.
Their success has won them acclaim and a huge following in the Philippines and abroad.