As any Oxford resident knows, there is no better way of getting around the city than on a bicycle.
The same advantages that have drawn both Dons and students to cycle in Oxford – moving faster, further and carrying more – are the benefits sought for low-income Kenyan micro-distributors who make their living carrying products from warehouses to small shops and market stalls.
Based on concerns voiced by the distributors, Oxford researchers accepted the challenge of how to improve access to a productive asset, capable of transforming daily lives and businesses, and examining new ways for corporations to support the most vulnerable in their value chains.
In January, Mutuality in Business researchers successfully launched a pilot study connecting these micro-distributors with bicycles and testing a new form of asset financing inspired by the risk and reward sharing of equity contracts. The bikes, (pictured), are financed by the project’s Kenyan microfinance partner, Longitude Finance.
If successful, the research will improve the ability of micro-finance to support the growth of small businesses and suggests a new way for companies to grow through creating mutual benefits.
The research is the result of collaboration between Oxford researchers at Saïd Business School and the Centre for the Study of African Economies and Catalyst, Mars, Incorporated’s internal think tank. Of note, this research pilot employs a research methodology – randomised control trials (RCTs) - more usually associated with the testing of new medical advances. RCTs provide a credible way to measure the causal impact of a social intervention, although their application is still very limited in a corporate space.
‘Bicycles open up the uplifters’ [micro-distributors’] ability to reach more customers, especially in the country where distances are greater and the infrastructure is primitive’ says DPhil candidate Muhammad Meki, who helps lead the study, ‘but many local entrepreneurs struggle to find the money to buy them, and can’t afford to borrow.’
Dr Kate Roll, Research Fellow and research co-lead commented ‘This important research not only pilots a new way for corporations to support and help build the businesses of those in its value chain, but also a new, more mutual way of providing asset finance. If we supply evidence that a more mutual way of providing finance improves overall sales performance, we can encourage businesses to adopt more responsible, mutual practices and improve some of the problems faced by those working in poverty.’
During the launch in January the MiB research team covered over 850km visiting key centres in the rift, lake and central regions of Kenya to recruit the 30 participants for the pilot. Twenty of these participants will be riding new bicycles in February 2017.
The results of the trial are expected in Spring 2017, and the findings used to refine both the experiment and the RCT itself before a full-scale launch of the business innovation in the summer.