The Grand Plan

Nearly exactly a year after I volunteered for 6 weeks in Northern Mozambique, I returned to Mossuril, a small village in Nampula Province, following the completion of my undergraduate degree in Glasgow. I was asked to project-manage the development and administration of a microfinance bank, the start-up and consultancy of local businesses and just generally contribute to the economic sustainability of a rural community in the developing world.

After six days of travelling over two ferries, a boat, two trains, four flights and two buses, I arrived at 'Sunset Boulevard', a restaurant and guest house which is the main base of the Teran Foundation. The foundation was set up and still run almost entirely by British author Lisa St Aubin de Teran who lives less than a mile from the site. To date the foundation has established a college of tourism and three 'Pensãos' (bar/restaurants with small-scale accommodation facilities) employing local people to build, maintain and run them. The foundation has also funded school fees, housing improvements and business development loans on a commercial basis to over 500 people in the 8 years it has been operational. It is this provision of loans which Lisa wants widely expanded through the establishment of a microfinance bank.

The most useful thing I learned during my politics degree is the relative inability for anything substantial to be achieved through politics alone. An economic incentive was always required for major change, whether positive or negative. This is no more true than in the case of social development in the developing world. Regardless of the good intentions of policy-makers, without economic vision and sustainability, changes are often superficial and ineffectual. With this in mind, I focused my studies on discovering the most appropriate economic incentive to push development.

The dominant paradigm in development theory of how to include the poor in economic activity without the intervention of the state is through microfinance. The loaning of small amounts of money to poor people who would otherwise be excluded from the market has the potential to make money for the poor themselves, the communities they live in and the banks that lend the money, provided it is done in the right way. This form of capitalism, valuing both social and financial returns, goes under the umbrella term of social business. It can also take the form of cooperatives, worker-owned enterprises and regular businesses which guarantee the donation of a certain of profits to charitable causes in the surrounding community. Regardless of the type employed, what is becoming clear is that social business is the only reliable way to return social benefits to communities, especially in times of economic hardship when charitable donations from all directions decrease.

My role here is very simply to manage a business. The business will aim to make money, expand and diversify like any other. The difference between my business and the majority of others is that I will achieve these goals through the development of rural communities in, what was 20 years ago, the poorest country on the planet. This blog will record my progress in attempting to achieve those goals and what happens along the way. Hopefully it will prove useful both to those wanting to know about microfinance provision in rural Mozambique and to those wanting to know how I'm getting on a long way from home.