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• Week 6: Challenges to the Microfinance Market
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• March 2008

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The sector has a number of limitations. The majority of the players in the sector consist of NGOs. By and large, they have limited outreach, and low financial self-sufficiency. The sector generally lacks human capital, MIs systems, financially self-sufficient institutions, and customer focused products. Given the average age of the MFI operators, most are now approaching a decade, growth is slow. There is a small grouping of MFIs at the top of the market near 10,000 clients, and a larger number with around 3,000 clients each. Read more

Mozambique is fertile ground for social enterprise growth, with the microfinance industry a prime example. Overall, microfinance in Mozambique is a young creature in a challenging environment. The country has the infamy to be one of the poorest in the world. It gained nationhood only in 1975, with few existing human and developmental resources after the departure of the Portuguese. Civil war destabilized and further delayed progress in the country for nearly a generation. Read more

For microfinance, social enterprises, and the NGO sector broadly, quality human resources and social capital are all in short supply in this country. The literacy rate is one of the lowest in the world, below 50%, a primary reason for their anemic Human Development Index (HDI) score of .038, putting it deep in the lowest quartile in the world. Read more

I approach social enterprise as the wider umbrella for development efforts, under which certain sectors are examples. Some have specific technical needs and unifying characteristics, like microfinance institutions (MFIs). My fundamental approach in doing development work is to build effective organizations that are fulfilling a real need for customers” (a defined group of people), have good staff, operate transparently, and bring about triple bottom line results. In my opinion, this is nearly a universal need for entities trying to do change work - whether a for or non-profit entity, in the first world” or developing economies. Read more

” Language. Portuguese. It is pretty clearly spoken here, and for Portuguese that is saying something. With my Spanish and French and Catalan from my time in Barcelona, I find I can understand most things. There are some people, however, who I don’t understand at all, no matter how many times they repeat what they are saying. I do pretty well getting myself understood. Again, there are a few who don’t understand me. Unluckily, 1/2 of them appear to be at the hotel I am staying. The wait staff must be terrified of me by this point.
” Great Food. Seafood and Portuguese style meat. Huge shrimp, feijoada, what they call pumpkin leaves, chicken. Lots of chicken. Okay, too much meat, too many french fries.
” It was the 120th anniversary of the founding of Maputo, the capital city (Do you know its former name?) There was a concert by the capital building. What a party; lots of ladies offering beverages. Leave early, so as not to participate in the inevitable drunken later night repercussions. Read more

Mozambique is off the American radar (as is most of Africa, mind you) but particularly this former Portuguese outpost and socialist state. The place hasn’t been a country for very long - having only achieved independence in 1975, followed by a civil war where they only stopped killing each other in 1993. The diversity in history and culture is quite something. http://en.wikipedia.org/wiki/Mozambique.

Portuguese treatment of the place is quite old dating back to the 17th century. However, it was far from benevolent - with a focus on extraction and trade, followed by a slash and burn exit. The civil war has parallels with Nicaragua in that many white foreign governments were meddling to fund a group against the government to the seeming detriment of all its people and infrastructure. The government, with apparent populist support, wasn”t able to get things going and the few initiatives it did launch brought mixed results - at best.

The bottom line is that the country hasn’t had anything to build upon to develop from. For example, there are train tracks, but they don’t run where people want them to go. They were for agricultural and mineral transfers from countries further interior to Africa to reach water ports. The country is near the bottom of all statistics. A potential benefit of this is that, now that there is peace and relative economic stability, many donors are heavily involved here, so there are lots of resources.

Not there yet. I have a few hours. It is a decent airport, like a small town mall. For some reason, the gate areas are incredibly uncomfortable with little seating, but you have to wait at your gate, because you can’t trust the information on the departure screen and the announcements made over the intercom are unintelligible. After coming this far, I”m not going to miss the last 1 hour flight.

My flight is late. ‘Delayed’, is what we are told, we aren”t told how long. The gate attendant mills about for 1 hour. Finally I ask if they know where the airplane is. They say they do. Oh? Where is it? It’s on its way to Maputo? On its way? Yes? Did I miss it leaving here? No…. the conversation goes on. Conclusion: the flight is late due to weather (it is raining) and it is behind schedule.

We leave, after what seems an eternity. Okay, it was really only 4 hours late. On the take-off and landing, we have to turn off ALL inside lights (even your overhead reading light) due to safety. That one was new to me. Glad to know they are concerned with safety.

I get to Maputo at midnight Tuesday, 36 hours after the start. My bag is the last one out of the chute. There is one taxi left at the stand, under one streetlight. The place looks abandoned at that hour. The streets are wet, following the heavy rain storm. The city is very dark at this hour, streetlights are out. But, the air is cool, and traffic is light (okay none). Most importantly, the driver accepts for payment a mix of dollars, Euros, and Rand.

Mozambique is an interesting country; my first week went well. Getting here is a long haul, however. I started in Santa Fe, New Mexico, USA early Monday morning. We boarded an airplane. After falling asleep, eating some yummy airport food, and losing my fleece jacket somewhere along the way in Atlanta, I got myself onto an international flight.

I was in the cattle section, in the back, next to the bulkhead. But, I had a window seat and no one next to me - luxury I tell you, basically business class.

We fly for 8 hours. That has us land in Daccar, Senegal, at 4:30 AM. 20 people get off the plane; 5 get on. They service the airplane and a bunch of other stuff, not sure what…that takes 2 hours. Then, we take off again, with the sun rising. Another 8 hours across Africa to South Africa. I’ve now watched every movie on offer, and had enough snacks to make me feel a wee bit bloated.

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