A recent study by the Poole College of Management at North Carolina State University delved into entrepreneurial small businesses established to combat poverty in rural Africa. Surprisingly, the adoption of the entrepreneurial model resulted in unforeseen social changes, causing friction and discontent among the small business operators and their communities.

“This work was done in rural Kenya, in an area where society is collectivist—everyone is accustomed to sharing what they have and supporting each other to the best of their ability,” the researchers explain.

“It’s also an impoverished area, and the entrepreneurship program was designed to help members of the community pursue businesses that would allow them to prosper financially.”

Unintended consequences

The study involved thorough interviews with 25 individuals participating in the entrepreneurship program in rural Kenya. Over four and a half years, the researchers conducted six visits. Additionally, one of the researchers immersed themselves in the villages to observe firsthand how the community engaged with the pertinent small businesses.

“One of the things we found was that many community members were not happy that someone in their community was moving from the collectivist model—where everybody does what they can to help each other—to an entrepreneurial model, where goods or services have to be paid for at a specific rate and at a specific time,” they explain. “This led to social friction. For example, entrepreneurs were threatened with being cursed—bad things would happen to them or their families.

The tension resulted in some participants of the entrepreneurship program withdrawing, and returning to a collectivist way of life. Yet, others persisted in their entrepreneurial endeavors, with religious backgrounds emerging as a key factor.

Irrational fears

Upon embarking on entrepreneurship, all participants encountered the specter of curses. Those adhering to traditional religious customs in the area harbored fears of these curses, prompting some to halt their entrepreneurial pursuits. Nevertheless, a subset managed to harmonize their entrepreneurial activities with their religious convictions by delineating boundaries between business and personal spheres.

“In other words, some study participants decided that as long as they were still willing to share the things that belonged to them personally, the curses would not apply to them—even if they continued to treat the business itself purely as a business,” the authors explain.

“One takeaway message here is that organizations that oversee programs focused on introducing entrepreneurship in order to alleviate poverty really need to account for local cultures and contexts when developing those programs. You can’t assume that a program that works well in one place will work well in another, and taking a uniform approach across multiple cultural contexts can easily lead to unintended consequences.”

“A program intended to help alleviate poverty only ended up helping some folks, while others were left behind and potentially worse off than before the intervention.”