MICROCAPITAL STORY: Hapinoy, the Sari Sari Store Chain of Philippines, Partners with Microfinance Institutions to Provide Women Franchise Opportunities

A partnership of big players seeks to franchise independently owned groceries throughout the Philippines. Founded in 2006, Hapinoy targets to open and/or convert 40,000 sari-sari stores by the end of 2008, by providing especially women borrowers a Hapinoy franchise.

The word sari-sari is roughly translated to English as “various kinds.” Sari-sari stores which sell single-packaged goods, are usually privately owned and operated inside the owner’s house. To start a sari-sari business costs around USD 1,540 and there are about 700,000 sari-sari stores in Philippines. Founded through a partnership between Smart Communications, Inc. (SMART), Philippines’ wireless service provider, and Microventures, Inc., a social business enterprise, Hapinoy stores are branded sari-sari stores owned and run by microentrepreneurs. Supported by the Microfinance Council of the Phillipines, Hapinoy is in partnership with four microfinance institutions (MFIs); the Center for Agriculture and Rural Development, Inc. (CARD), the largest microfinancing institution in the Philippines, Lamac Multipurpose Cooperative (LMPC), Taytay Sa Kauswagan, Inc (TSKI ) and Kasagana-Ka Development Center, Inc (Kasagana Ka).

Hapinoy works with the borrowers of partner MFIs who are known to have better repayment rates. This group usually includes nanays, the work-at-home mothers. In partnership with manufacturers, such as Unilever and Nestle, Hapinoy provides a direct link to production resulting in higher margins for the Hapinoy store owners on the goods sold. The company makes money by getting a percentage off the merchandise. The financial details as to how much Hapinoy receives are not disclosed.

An essential part of the work Hapinoy does is to provide training for the store owners. Training and capacity development include retail concepts such as inventory management, store efficiency and branding. Through the support of SMART, stores install internet kiosks to provide online access. Growing from the first year target of 8,000 Hapinoy stores, Hapinoy targets to reach 100,000 stores by the end of 2009. Currently there are Hapinoy stores in six communities; Laguna, Caloocan, Batangas, Quezon, Iloilo and Cebu.

By Ipek Kuran, Research Assistant

Additional Resources:

Hapinoy

SMART – press release

PSFK article

How Feasible are Sari Sari Stores – 13 December 2007

The sari-sari store: informal retailing in the Philippines – Journal of Small Business Management – October 1, 1997

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