When fashion met famine: Benetton's Third World crusade

Microcredits are the new black. That was the rather weak joke doing the rounds among the 200 international journalists who had travelled to the near-luxury of Dakar's best hotel to witness the launch of Benetton's new global communication campaign, Africa Works.

Alessandro Benetton, the appropriately elegant but surprisingly understated deputy chairman of the clothing giant, had flown into Senegal's steamy capital in West Africa to announce the company's decision to go into partnership with legendary African singer and anti-poverty campaigner Youssou N'Dour to support a new micro- credit system that they hope will prove a successful model for the rest of the continent.

It is a groundbreaking move for Benetton. The company is notorious for using disturbing images in its advertising campaigns. But it has never before linked itself with a programme involving direct action.

There is kernel of truth in the "new black" joke as, since the banker and economist Muhammad Yunus was awarded the Nobel Peace Prize for his work in Bangladesh, this type of microfinancing has been quietly revolutionising attitudes to solving Third World poverty.

It is based on the idea of giving small loans to people who have no credit history or collateral and are therefore unbankable. After a thorough auditioning of prospective customers and their projects, the applicants are loaned the money with only their word as collateral.

The latest scheme – called Birima after a former Senegalese king – will sanction loans for a longer period than other microcredit projects provided they can demonstrate a positive effect on the community and guarantee profits and development. If the model works, it will be launched throughout Africa.

We gather in a packed hotel conference room decorated with giant posters of Senegalese workers – fishermen, farmers and a toyshop owner who wears his toys as a sort of suit of armour.

The starkly beautiful pictures are the work of the young British photographer James Mollison. They are a world away from the shocking images of dying Aids victims, bloodied new-born babies and mating horses that played such a key role in growing the Benetton brand.

Today the company is present in 120 countries. It includes the brands United Colours of Benetton, Sisley, Playlife and KillerLoop. Its total yearly production is 150 million garments and it turns over more than €2bn (£1.5bn). It is controlled by Edizione Holding, which is wholly owned by the family and is listed in Milan and Frankfurt.

This occasion promises to be interesting in several ways. First there is the spectacle of the awkward dance between the fashion industry and fashionable good causes. Nowadays this requires very subtle choreography if the company is to acquire any real kudos for its product. But the galloping narcissism of some high-profile players in the industry makes it very hard for many of the others to be taken seriously.

At the same time, the pressure for companies – particularly fashion companies – to demonstrate social responsibility has never been greater. Africa is a crowded catwalk for charity shows – crowded and highly competitive. The business TV channels are crammed with slick, expensive ads for giant charities fron-ted by celebrities, and today one nearby hotel is hosting a frankly ostentatious charity conference attended by embarrassingly well- dressed delegates. Add to that the whispers from the hardcore fashionistas that Africa is, well, a bit unfashionable and this is perhaps not an obvious choice for a company like Benetton.

The assembled audience is a mix of the glamorous, the curious and the sceptical. The presence of the saintly N'Dour ensures dozens of TV cameras, celebrities and a sense of occasion that sets this apart from a routine corporate event.

It's soon clear that N'Dour's Birima project is born of an acknowledgement that traditional aid is something of a discredited concept. Speaking from a stage, the singer sounds angry when he says: "Africa doesn't want charity any more. It wants repayable subsidised loans."

Later, speaking to a few of us over lunch by the swimming pool, he is no less emotional and much more explicit. "We are not here to ask for charity. It's a matter of dignity for the African people. I see this as a turning point. If people can't work, they lose their dignity. Working with [U2 singer] Bono, we managed to create a new diplomacy. By getting access to the right people, a lot has been achieved. But I believe this is now the way forward for us and hopefully for the rest of Africa. We will be talking to people and leaders about this microcredit scheme at the next G8 conference."

The interest rates for Birima are yet to be determined and the project will be run by a small team of modestly paid professionals. N'Dour will be the guarantor.

When it is the turn of Alessandro Benetton – the 44-year-old son of founder Luciano – to speak, he flatly refuses to say how much the company is spending on the campaign. However, there is no doubt the cost will run into many millions.

Africa Works will promote Birima. The press and TV campaign will run worldwide until early April. The company is also helping with the funding of the project.

"This is the first time for us. It's an experiment," says Benetton, with disarming honesty. "We are investing a substantial amount of money and we believe it is now more challenging to look for enduring action."

If he has any doubts about the company's marketing strategy in the past, he doesn't let them show now. "I see this campaign as natural progression. The idea for this came about from a discussion between Youssou N'Dour and my father."

Benetton is cool under fire, even when asked if he is cashing in on the Africa cause for the benefit of the brand benefit. He replies: "This is a self-standing project but we are not afraid to say it will be of value to the brand. Our main objective is make these pictures we have seen today become a reality."

Alessandro Benetton didn't join his father's company board until 1998. Until then, he was busy building a separate and seriously successful career. He is the chairman of 21 Investimenti, a group consisting of a system of private equity funds with €1,000m in managed assets focused particularly on France and Italy.

His CV includes an MBA from Harvard and a successful stint as an analyst at Goldman Sachs. He also presides over Benetton's Formula One motor racing team.

Alessandro Benetton enjoys advantages undreamt of by his father Luciano – who founded the company in 1965 after selling his brother's bicycle to buy a second- hand knitting machine in order to manufacture his sister's home-made knitted jum- pers. However, there is no outward sign that Alessandro is handicapped by an entitlement gene. He makes the case for this campaign with quiet logic.

There is none of N'Dour's emotion but he is no less convincing. If he shows the vision to match his track record, he could be poised to become one of the most interesting members of the next generation in European business royalty.

After the main conference is over, he sits down with smaller groups throughout the afternoon and explains his ideas for this project, patiently repeating himself when necessary and unfazed when the line of questioning is hostile.

It's a truly impressive performance and even the most cynical observer would have to conclude he has the gift of appearing to be totally sincere. Even the fashionistas are convinced – in love even (he is also very good looking). They decide that microcredit is one word not two and the joke about the new black is so over. Africa rocks – again.

"We have chosen to support this project because it is based on entrepreneurial talent, hard work and optimism. Hopefully it will successfully promote a new face of Africa. But it is an experiment. We hope it will work," he says.

"Benetton has never wanted to make a moral statement but it has always wanted to give voice to people or individuals who could not have a voice, and then let the discussion go on. All these questions should not be an excuse for not trying. I think by identifying this specific project, we have taken a step forward."

It's a small step for Alessandro and, hopefully, a giant leap for fashionkind.