After lending nearly $1 million to fund business-to-consumer development on the Cheyenne River Sioux Tribe (CRST) reservation in South Dakota last year, Four Bands Community Fund now plans to lend twice that much to develop business-to-business (B-to-B) commerce there over the next couple of years.
“We’re prepared to put up over $2 million and hopefully leverage other programs out there” to support B-to-B commerce, Four Bands’ executive director Tanya Fiddler told Indian Country Today Media Network.
The commitment comes in the wake of a report by the group, a community development financial institution, that showed more than half of spending at 110 entities on the CRST went off reservation. Fiddler believes a robust B-to-B environment will help keep some of that money on the reservation supporting the local economy.
“Businesses and organizations purchase a far greater volume of products and services than individual consumers, and they generally buy in bulk,” the report noted. “Development of locally owned private businesses is a powerful strategy for fighting poverty in rural communities on Indian reservations.”
A high unemployment rate of 23 percent on the CRST reservation means a large number of people live in poverty—62 percent in Ziebach County and 31 percent in Dewey County.
“This is going to create jobs,” said Fiddler. “There’s a strong entrepreneurial spirit here.”
The report notes, “On the CRST, local buying potential for industrial, reseller and institutional markets is sizeable and very important.”
One big obstacle to developing a B-to-B market is willpower. Local firms are going to have to want to deal with each other. “At the end of the day it’s up to the businesses,” Fiddler said.
Fiddler pointed to a number of areas where local businesses could get more work on the reservation. A recent hospital project used lots of offsite contractors, she said. And a local appliance and furniture business could supply refrigerators and stoves to the local housing authority, she said.
Ruefully, Fiddler admitted even her own group could practice what it preaches more. “We do online office products,” she said. “We should spend money locally.”
The report found 49 percent of spending at the groups it surveyed was on reservation, and 51 percent off (the total expenditures were about $5.3 million). Some areas of commerce, like food and automotive, had a big percentage of local spend. But health and medicine and legal and financial expenditures were almost all off-reservation.
Some of the recommendations in the report are: encourage new and continued human capital development, support expansion of existing industries such as home/garden/hardware, office supplies and contracting, provide resources for local businesses to establish an online presence, and encourage networking and reciprocal transactions among local organizations.
Four Bands has made 40 loans totaling $3.3 million since inception, which it said has started hundreds of businesses on the reservation and created or retained 600 jobs.