Entrepreneurs

How these women went from earning 20 cents a day to sending their children to college

For Cynthia Cabrera, life was tough.

Work, for her, meant long days spent weaving hand-crafted rugs for a daily wage equivalent to 20 cents — barely enough for a bag of rice.

Hers was a story like tens of thousands of other artisans, mostly women, living in Payatas, a district in metropolitan Manila — one of the most impoverished regions in the Philippines.

To make ends meet, district residents had created a textiles enterprise upcycling fabrics from a neighboring landfill. Their profits, however, were regularly siphoned off by the merchants who would take them to market.

A child seen atop Payatas dumpsite in Quezon City, the Philippines
Michel Troncy | Getty
A child seen atop Payatas dumpsite in Quezon City, the Philippines

So when a priest brought their plight to the attention of a group of 10 entrepreneurs, they decided to do something about it.

What resulted was Rags2Riches, a fashion house designed to cut out the middlemen and give artisans fairer wages by improving their designs and capturing a more affluent market.

At the same time, the founders made it their mission to provide financial education for their members. That includes helping them set up bank accounts and creating automatic savings plans — a novel concept in a country where around 80 percent of adults are without bank accounts.

"When you're poor, opportunities can be a limited resource and long-term planning is a luxury," Rags2Riches co-founder Reese Fernandez-Ruiz told CNBC Make It.

Ed San Juan

As the daughter of a missionary mother, Fernandez-Ruiz grew up close to that situation and said she was "always looking for ways to address it." At 21, Fernandez-Ruiz was the youngest among the co-founders when she joined the cause straight out of college in the Philippines in 2008.

In the 10 years since launch, the company has taken on more than 1,000 artisans, providing them with the materials and training to ensure consistency across the brand.

"Initially, we had a 97 percent product rejection rate," explained Fernandez-Ruiz.

"But we knew we were in this for the long haul. It's difficult enough to find a stable market for even the biggest brands, let alone for small ones, so we knew we had to get the product right."

Now Rags2Riches' products are sold at international stores like Anthropologie in the U.S. and the U.K. and Cambio & Co. in Canada.

They're also available online and from the company's two physical stores in Quezon City, one of which is also home to the head office and an on-site factory.

Rags2Riches' head office and factory in Quezon City, the Philippines
Karen Gilchrist
Rags2Riches' head office and factory in Quezon City, the Philippines

At present, the company employs around 200 artisans, 30 percent of whom work at the main site while the rest work from their homes in Payatas.

Cabrera was one of the artisans to join Rags2Riches early on. She now works as a community enterprise manager, looking after the other weavers as well as handling the purchase of materials.

"I know how to save money and I'm now more confident," Cabrera told CNBC Make It in the Philippines.

Filipino artisans work at Rags2Riches' factory in Quezon City, The Philippines
Karen Gilchrist
Filipino artisans work at Rags2Riches' factory in Quezon City, The Philippines

Now in her 40s, the role has enabled Cabrera to open a bank account for herself and her young niece for the first time. She has also been able to set money aside for renovations on her parents' home while others have saved enough money to send their children to college.

"There's been a lot of change in the way we can now live and plan for the future," said Enrique Tango, a coordinator at Rags2Riches and a member of the Homeweavers Upward Looking Microenterprise Association.

"My behavior totally changed," he said. "Before, I had no interest in saving, but now I've been able to send my daughter to college."

"Some of my peers have also gone on to set up their own businesses," he added.

Fernandez-Ruiz said she hopes to expand the business over the coming years to help close to 4,000 more artisans across the region.

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