MANILA, Philippines—A Filipino group named Rags2Riches has won the grand prize in a worldwide business plan competition for micro and small entrepreneurs. It helped 300 women in the Payatas dump make a decent living from weaving scraps of cloth into fashionable products.

Rags2Riches topped the Business in Development (BiD) Challenge held in the Netherlands. Through its help, the women who used to earn P1 per foot rug now make as much as P12,000 a month making rugs, bags, wine holders and other products designed by fashion icon Rajo Laurel.

Their products are fashioned from scraps of cloth that end up in the 22-hectare dump in Quezon City.

Rags2Riches was among the 24 entrepreneurs from Argentina, Bolivia, Colombia, Ecuador, Kenya, Peru, Tanzania, Uganda, Cameroon, Mozambique and the Philippines who took part in the BiD Challenge.

Its leader, Fr. Xavier Alpasa, SJ, had tears in his eyes when he accepted the award and the prize money of 20,000 euros (P1,237,400) during the ceremony on Tuesday in Rotterdam.

Use prize money

Rags2Riches is expected to use the prize money to construct a bigger working area for the women, purchase more sewing machines and increase the working capital to cope with the growing demand for its high-end bags and other products.

With the extra funds, the group is optimistic that it will hit its profit target this year of $40,000. (The targets were $7,000 in 2007 and $15,000 in 2008.)

The number of workers is also expected to rise to as many as 500 next year.

The ceremony was part of the weeklong Creative Factory, where the finalists from around the world got together to discuss ways to help push each other’s cause.

“When they mentioned Rags2Riches, I was instantly in tears. And while walking to the stage, people were hugging me as they also believed that Rags2Riches should win,” Alpasa, of Ateneo de Manila University’s Simbahang Lingkod ng Bayan, said in an e-mail to the Inquirer.

“The chair of the jury then read the rationale for choosing Rags2Riches and as he read, I continued crying onstage. I was very emotional as I remembered all the Rags2Riches nanays (mothers) continuously praying for this win,” Alpasa said.

Direct to the market

Rags2Riches has come a long way from 2007, when Ateneo students, alumni and professors, as well as prominent alumni of De La Salle University and Simbahang Lingkod ng Bayan, first met to help an initial group of 24 women from Payatas make more money from rug-making.

The group was formed out of concern for the women, who were not getting their fair share of the profit from their painstaking work.

The young professionals and concerned citizens behind Rags2Riches did away with the middlemen or traders—who got the lion’s share from the sales—by directly linking the women with the market.

The women are not only making more money. They are also helping protect the environment because they use only scrap cloth collected from the dump in the production of Rags2Riches’ growing list of products that are making a mark in high-end markets here and abroad.

It is estimated that more than 50 tons of scrap cloth have been transformed into affordable works of art, including yoga mats, wallets and eyeglass cases.

Social impact

Rags2Riches bested 18 finalists from around the world that took part in the competition of the best business plans for social development, which was organized by the BiD Network based in Amsterdam.

“The jury cited the combination of creativity, ability to connect the rich and the poor, the solid background and experience of the entrepreneurs, the remarkable results and the social impact,” Alpasa said.

Rags2Riches and EchoStore, which retails products made by cooperatives and other social enterprises, were the two finalists chosen to represent the Philippines in the international competition.

Eye on European market

The two business plans won in the Philippine BiD Challenge held in November 2008, which was hosted by the Philippine Business for Social Progress, with Citi Foundation as a major sponsor.

“The award and the entire BiD experience have opened many doors to the European market that we will aggressively pursue through exports within the year,” Alpasa said.

The runners-up in the BiD Challenge were a project from Bolivia involving organic and hypoallergenic baby food made with Andean cereals, and one from Colombia that dealt with converting coffee waste into biomass to produce bio-ethanol and bio-fertilizer. Inquirer.net

Tags: Rags2Riches