An Entrepreneur's Viewpoint

Kad Africa is one of our Mango Fund investments. As we have mentioned in a prior blog, Rebecca and Eric  are growing passion fruit on a commercial scale in beautiful Fort Portal. As we speak the vines are growing and the first fruit will soon be on their way!! Pray for God's protection and bounty.

Rebecca and Eric attended our Mango dinner in Kampala when we gathered many of our entrepreneurs and heard them speak about their businesses, hopes and dreams. I had the chance to express my dreams about entrepreneurs and the importance of business and work in the life of the community. They have reflected my words in their blog. We all share this enormous vision for Africa and how real economic development driven by the people of Africa will release countries from the bondage of poverty and exploitation. Maybe I'm becoming an idealist at last! Maybe there is hope for me.

Anyway, here are their recollection of my words. I believe they are far more eloquent than the ones I actually delivered, so thanks Rebecca and Eric!

Moving Words

“The majority of our investments are with honest folk, with good business ideas who are learning to implement as we all go along. These are the people that energize us, whether they are building thriving medical clinics in rural areas, or milling rice and maize or recycling plastics from dumps or growing passion fruit on a commercial scale. In each we see the delight that comes from dreaming, from seeing things come to fruition, from realizing that things are possible and from seeing their lives becoming productive. In each we see the awakening of hope and a glimpse of God’s purpose for work in our lives.”

Inspiring words of wisdom from Andy Mills, one of the founders of The Mango Fund Inc. Check out his blog and his write up on KadAfrica at, The 5810 Project – Spend Yourself: Passion – from Fruit to People.

Follow KadAfrica at http://www.facebook.com/kadafrica

Encouragement and More Investment Insights

I’ve been back home a day or two now and I’ve processed through the immediate rush of e mails, mail and phone calls that inevitably pile up. Now I have a little time to reflect on the two weeks that I’ve spent in Uganda.

I think this was probably the most encouraging trip that I have been on in recent years. I had a sense of real progress that is being made, by us and by our friends in both Arua and Uganda. This is happening against a backdrop of increasing difficulty in the community.

The country continues to be challenged by the world’s economic situation and the downturn in NGO investment. Some of this is because of the economy, but much has to do with the poor results from Billions of dollars of spending over the years. Top down money doesn’t work! Add to that a debilitating culture of corruption and it makes it very hard for the average man or woman to make ends meet, never mind to try to build a business and create wealth. There is so little available free cash, that even the smallest investments in machinery or working capital are hard for the average business person to make.

However, there remains great opportunity, and when we match a person with strong entrepreneurial skills, a fertile business idea and some capital, real progress can be made. The key is to identify each of those elements successfully. We’ve clearly made some bad bets on people over the years. Some have been deliberately dishonest (very discouraging among those who claim to be Christians). Others have tried and failed: some because the business idea didn’t work others because they were unable to operate successfully.

 But the majority of our investments are with honest folk, with good business ideas who are learning to implement as we all go along. These are the people that energize us, whether they are building thriving medical clinics in rural areas, or milling rice and maize or recycling plastics from dumps or growing passion fruit on a commercial scale. In each we see the delight that comes from dreaming, from seeing things come to fruition, from realizing that things are possible and from seeing their lives becoming productive. In each we see the awakening of hope and a glimpse of God’s purpose for work in our lives.

The projects that people are bringing to us seem to be better conceived as well. Their ideas are cogent and match the market realities. The plans are simple and operable. They need a lot of work, but that’s the value we add.

In particular in Arua, I have found a way to get people to move away from a “grant” mentality to a business mentality. What do I mean by that? When I first looked at business plans I couldn’t understand them. There were people who had not made or sold anything bringing me 25 and 30 page plans that had everything in it except a good business model! And the investment monies that were being asked for were totally unrealistic. Often the proposal called for a new building, cars and trucks, state of the art large scale manufacturing equipment etc. Simply stated they didn’t make sense, and the investment levels were in the hundreds of millions of shillings. What I began to realize is that this is grant writing, not business planning. This community has survived by writing big proposals and hoping that a number of them would be granted as a way of bringing money onto the community. The grantor was only concerned with giving to projects so that it could report back to its donors and the recipient was only interested in using the money. No one focused on the simple question: is this a good business proposal and is there a management team here that can execute? As a result, you can wander all over Uganda and you will find facilities that have been built and equipped that have never worked or today remain idle. There is a coffee processing facility in Arua that was an investment of the Uganda Coffee Development Authority and US Aid. It cost hundreds of thousands of dollars to build and equip, and yet it never processed one coffee bean!

The business mentality that I am driving people toward asks a completely different question. It asks: How much can you do with the smallest amount of money so that we can get going and test our ideas, learn from our mistakes and grow out of the profits? We know this as classic start-up thinking. It minimizes risks and maximizes the likelihood of success. An example from Arua. Samuel brought a plan to us in June for creating a major poultry facility. Samuel has some experience in the business, so he starts at some advantage. But the plan was expansive and covered several different aspects of the poultry business all at once. He was, not surprisingly. Looking for a grant from the Ugandan Government at the time and this was his “grant” plan. However he thought it worth bringing to us too. We shared with him the need to start small, to think about walking before running (or crawling before walking) and told him that we couldn’t fund his plan. He was very disappointed, but instead of giving up, he worked with Blasio for the next few months to create a completely different approach – starting small. That was the business plan he brought to me this last week, and the plan that we funded. In fact we liked the plan and Samuel so much that while he already has a loan, we have agreed to make that convertible into equity. So hopefully we will be the minority shareholder in a poultry enterprise in Arua soon. I believe that Samuel ahs a good opportunity to build the integrated poultry business he brought us in the initial plan. But this way it works!

Finally I would say that my enthusiasm is buoyed by the people we have on the ground. We’re all learning together and it is a steep learning curve, but we’re getting there. So thanks, Ted, Grace and Sam in Kampala and Blasio in Arua. Thanks also to the steady hand of George in Boston, and Ross on the Investment Committee.

A Day in the Life of ..and Some Pictures!

Sitting in Entebbe Airport with George waiting for the flight to Amsterdam and then homeward to Boston. These are the times when I wish I could just close my eyes, click my heels and be back in Kansas – or at least Winchester MA!

On our final day, we signed a new loan for Mango fund for a medical clinic in Tororo, bought an X-ray machine, spent 4 hours talking about all aspects of our fledgling Mango operation, and finally visited a farm  and a “distillery” for Essential Oils.

Both George and I agree that this has been a very productive and enjoyable visit. On the one hand we would like to be back in a few weeks to push things forward, but on the other, the investment in time and travel is very intense.

We have made remarkable progress since our first visits. In Arua, there are businesses that have expanded and exist at all only because of our visits. The leadership of the town is focused in new ways on building their community and the importance of business in that process. Among a small, but growing, group of people there is a building confidence and excitement about working together. We are clearly delineating the difference between a “grant” mentality and a business approach. There is a long way to go, but now with power in the mix, we can begin to think about other opportunities. Just this week, it was announced that the Rift Valley Railway was going to repair and reopen the rail line from Tororo to Pakwatch. This would bring a low cost transport option to Arua that will again change the dynamic of competition.

The Mango Fund is up and running. Offices in Kampala, 4 staff and a client list already of 11 clients in businesses ranging from recycled plastics to Medical clinics. Ted Pantone has developed a good network of contacts and we are developing a robust pipeline of potential investments. The investments are spread throughout Uganda.

Here are a few  photographs that might  bring some of this to light.

Mango Team in the field

Deeper into the field

To the secret still - for Essential Oils!!

With the Kato Family - see who's not cool!

The Mango Fund team in Kampala

Passion - from Fruit to People

Another day in Kampala meeting with clients and friends.

Our day started meeting with the owners of a very exciting investment for Mango Fund, Kad Africa, from Fort Portal. Fort Portal is in the western part of Uganda and is at the foothills for the Rwenzori mountains. It is, by repute, one of the most beautiful places in all of Uganda and is a jumping off point for many tourists on their way to see the “Gorillas in the mist”. There are several really beautiful lodges there and I look forward to making time to go there next time I’m here.

Eric and Rebecca with Ted and George

Kad Africa is owned by Eric and Rebecca – a Kenyan and California who have just recently married. It is a farm in Fort Portal that the Mango Fund has helped equip with irrigation equipment so that they can grow passion fruit. Passion fruit are much in demand in Uganda and the rest of the world. They make delicious juice, although Eric himself doesn’t like it! Passion fruit requires very technical horticultural practices, but offers very significant rewards. There are very few commercial farms in Uganda.  The five acres planted will yield a crop of thousands of kilos every month! That’s a lot of passion! The first fruit will begin to be harvested in February and the full plot will be producing by April. Eric and Rebecca are so enthusiastic and nervous as the as they wait for the first “fruits” of their labor.

I then met with a group of folks from Arua, who were all former pupils of St Joseph’s College in Arua. St Joseph’s is a government High School, that at one time produced some of the most talented graduates in the country. However in recent years it’s reputation has fallen. This group of men represent a new association of St Joseph’s Old Boys who are determined to help the school regain its high reputation. They have begun on a number of initiatives including the awarding of scholarships to talented students, the provision of solar power and the development of an IT capability. Their activities are already paying dividends with the school enjoying significantly higher test score results. We talked about many options they face and discussed the right way to proceed. I readily agreed to help in any way I can as the availability of a first class High School in Arua is vital if we are to expect the most successful people to stay in the community rather than to migrate to Kampala for their children. I look forward to working with this thoughtful and motivated group – more passion on display!

One other meeting of note was with a young American from Oklahoma City who has spent the last year in the field buying and selling maize. He is looking to expand this year and add a degree of processing – cleaning, drying and storage - to his business. I was reminded of how much opportunity Uganda holds for people who want to work hard, bring a little capital and keep their eyes open. Another man with enthusiasm and dare I say it – passion!

Uganda anyone?

The Definition of a Great Day

A really fabulous and fulfilling day in Kampala. These are the days that keep us coming back to work here! Let me share it with you.

The day started at Mercy Junior School in a small town on the outskirts of Kampala called Zzana. As I have said before, Kampala is a city of hills and valleys. The wealthy live on the hills, the poor in the valleys and with the rains “everything” flows downwards and gets trapped. Zzana is one of those poor areas – a slum. Houses are 6 x 6 concrete boxes with tin roofing, often held down by rocks. Families are often large with parents looking after the orphaned children of relatives who have died because of AIDS or other diseases. The only hope for a kid is through education and Jesus.

Mercy Junior School has been founded by a church – Jesus Commissioned Ministries – to educate kids with this background.  Gail and I started supporting the school about 5 years ago and I have been joined by a number of good friends who have helped make certain building projects work through the years.

Before!

Then, the school was a couple of plywood partitioned rooms in a church that had papyrus walls, a crude wood structure and an old tin roof that leaked all the time. There were 40 – 50 “students” who were really being fed and babysat by the church/school. There was no official curriculum or trained teachers and no bathroom facilities. The parents paid nothing to send their children to school and many days the kids just didn’t come.

After!

Now, the school has seven classrooms built in brick, with a proper roof on each. There is a proper pit latrine. An area next to the church has been bought and converted into a playground. There is a qualified head teacher who is working to train the other full-time teachers. There are over a hundred students, each of whom pays school fees. 50% of the parents pay the full tuition. They teach the Uganda National Curriculum, and from anecdotal evidence our kids are outperforming the other local school. We are now receiving transfers from other schools. The parents are very engaged and demand quality for their children who come to school every day. And so it goes. What hope and joy!

My goal now is to get the buildings all finished and painted. While we have been adding one classroom or two per year, I think it is time to finish it all. I suspect to get it all done it will cost $20,000 or a little more. Not a lot for such progress. The finished facilities will attract more students and allow for higher fees and therefore create a sustainable enterprise. This could not have been conceived of just 2 years ago. God is good.

If any of you would like to join me in finishing this thing off, please contact me at amills@tkc.edu.

From Mercy Junior School, I headed back to the Mango Fund offices, where I caught up with Ted and George. They were working on new deals (as we had been yesterday too) and we had a series of very productive meetings with three potential clients. Two were in the medical clinic space and one in agro-distribution. These seem to be areas that we know best and I think our ability to ask questions and know what the opportunity looks like is rapidly improving. The bottom line is that we have decided to invest in all three. As a result of our loans, one will build a surgical theater , one will add an X-ray machine and the other will buy some equipment and  more aggressively buy maize in the open market to trade. It’s always interesting doing due diligence for investments here, particularly with smaller companies. It’s like peeling an onion – you never quite get to the center! But we’re learning how to focus on the key issues and make good judgments to allow us to move quite quickly (one of our values).

In the evening, Mango Fund held a year-end party for all clients. We had 20 people in a Chinese restaurant in downtown Kampala. People from all over Uganda, with different businesses attended. It was a little quiet at first, but soon folks warmed up and enjoyed talking with each other. The highlight of the evening for me was when each business person was asked to talk about their businesses and the Mango Fund. I wish we had recorded these wonderful stories of vision, small beginnings, risk taking, hard work and perseverance. It excited my heart to see how much the practice of business was changing lives and communities. I hate that business is unfairly under attack as being the problem, not the solution. If you had needed a more complete justification for the existence of the Mango fund, I don’t know where you would find it.

Now I’m back in the hotel, with a real sense of satisfaction and ready to get at it again tomorrow! But not before my malaria pill and a good night's sleep.

Where are we flying and when!?

My apologies to regular readers for the gap in coverage. I am still well and on plan here in Uganda, but sometimes you have to be prepared to be flexible. Yesterday was a good example.

Our friend Robert is the manager of Eagle Air in Arua. He does a wonderful job of looking after passengers. It is a difficult task, as he often doesn't know the timing of flights or the flight plan. I always speak with him the night before a flight and he gives me his best advice, which was to turn up at 10am for an 11am flight, which would take us directly to Entebbe. Easy! Well at 8am the next morning I get a call from Robert saying the flight is coming early, is not going directly to Entebbe, but via Yei in S. Sudan, and could I be at the airport at 9am. No problem, I’d rather not be going to Yei, but the early nature of the flight will still allow me to get to Kampala (1 hour drive from Entebbe) in time for my 1pm lunch appointment. So I scramble to get the driver, the owner of the car and Blasio organized with little success, so my plan was simply to drive the car to the airport, leave the keys with Robert and hope Samson got his car back. Well as it turns out Blasio then arrives at the hotel and is able to arrange everything. So off to the airport we go.

Our trusty steed!

Arriving at the airport, I sense something wrong as there is no-one there except Robert and a few police and grounds staff.  Robert smiles and tells me plans have changed and that the plane has just left Entebbe (1 hr 15 min journey). We’re back to the 10am scheduled flight. No problem. Except, the plane doesn't arrive till almost 12,and it’s still going to Yei, and I won’t be in Entebbe till 2pm! What to do. The African approach. Go sit and have a bottle of Stoney (a very strong ginger soda) at the little café/shed at the airport and talk with friends. The plane will arrive when it will arrive, I will be in Entebbe when I will be in Entebbe and  it will have flown to whatever towns the company decides between take-off in Arua and landing in Entebbe. A couple of quick calls to the folks I’m meeting and they understand immediately. This is travel in Africa. Everyone does what they can. Hakuna Matata!

It all worked out fine except that all the meetings were shifted around and I didn't finish until nearly midnight, so my faithful blog readers were sacrificed to the need for sleep.

Yei Airport - where is the Duty Free Shop?

Another installment with real content tonight. Just consider this an early morning snack for you!!

The Good, Bad and Good

Power is out and I have a low battery, so this will be short and sweet, and I hope I can get it all done.

This was my last day in Arua, so it was filled with trying to get things wrapped up.

The first meeting was with an old friend, whose business is struggling, but he perseveres. He has tried several things in a related consulting and training space and may now have a good idea to productize an offering that will get him away from the value-added man hour business. This was a time for encouragement and mentoring and I look forward to the progress he will make next time I’m back.

The second meeting of the day was going to be with my most difficult default client. She was scheduled to come with her husband and he had confirmed the meeting on Friday. But guess what? They were no shows and when we called they just hung up. This is my most frustrating experience lending in Africa. She took the money and used it for purposes other than that which it was intended, and then has lied to me three times to my face about when she will repay. I have discovered that her reputation in the market is very poor, but I did not know this at the time. Proverbs 22:1 says that “A good reputation is more important than silver and gold”. Obviously this is not part of God’s wisdom that she has chosen to follow! Her failure to act well in this matter is well known now all over town. This is a classic lose lose situation, but I will not let it dampen my desire to help others move their businesses forward.

T he fun part of the day was signing two new loan documents with new clients. Both of these men had brought overly large and complex business ideas in June when I was last here. They were the product of the “grant” mentality that exists here – ask for the kitchen sink, package it in a nice document and see if you can get an NGO to fund it. We talked about how and approach to business differs and how they need to start small and build up as they go forward and learn. Neither man was put off by the June rejection  and have worked with Blasio over the Fall to rethink their business approach and have both developed very sound plans. It was on the basis of those realistic and sound plans that we inked the loans today. They will have the money in their account tomorrow, and they are off and running! Blasio has done an excellent job of working with them and has shown me how much he has learnt in the time we have been working together.

Finally, we met with our original group of entrepreneurs that formed the original Business Vision Arua (BVA). It was really a time to share issues and ideas and talk about the future. These folks are committed to seeing business grow in Arua and for Christ to be honored. Their group is informal, meets regularly, discusses their business issues (rather like a YPO activity) and they are the nucleus for a broader group being formed in town. Above all they are friends and we enjoy our time together.

Tonight I’ll try to pack and get ready to move on. I will be sad to leave my friends here (and the weather for those of you in the Northeast US!). It has been a very profitable trip and I am surer than ever that God is working through these minor efforts of ours.

Preparing for the Coming of the King!

One of my greatest privileges every time I come here is to be invited to preach at either the Cathedral or St Phillips. This morning I preached at the Cathedral. Today was the first Sunday of Advent, as the Church turns its focus toward the coming of Christ into our world. My topic was “Preparing for the Coming of The King”. I first focused on the nature of the King who left His glory and came to earth as a human with the specific mission to be the perfect and complete sacrifice for us all.  I used Colossians 1:15-20 as my text and I commend it to you today.  I compared Christ to earthly King’s, who are/were neither all powerful nor focused on the wellbeing  of their subjects. But then, I moved on to the fact that Christ will come again, and as the bridegroom in Matthew 24 or the landowner in Matthew 25, He will be looking to see who is prepared for Him. I then talked some about where we are falling short and what it might look like if to be prepared and have Jesus say to us “Well done, good and faithful!”

The picture below was taken surreptitiously as communion was being taken, so you can get a sense of the interior of the Cathedral. There were about 500 people in attendance.

Following the service, I was able to have some downtime, read my Bible and catch up on some e mails, particularly with my family. I had been sending SMS messages to them, but I found out after several days that they had not being going though. We all thought we were being ignored!

We had some bad news in the afternoon when we found out that one of our partners had had a break-in and lost the very machine that we had helped them acquire just a few weeks earlier. There is a great deal of thievery here, and it makes me angry for those honest folk who are trying to build the economy only to have their assets stolen. We’ll meet with her tomorrow and make money available for her to get a new machine.

After a few more quick meetings, I hosted a small dinner tonight at White Castle, the nicest hotel and restaurant in town. With me came Isaac (from HIL) and his wife Sally and Blasio and his wife Susan whom I had only met briefly once before. We all had a great meal, most of us having the whole grilled Tilapia! In the picture to the side, Blasio and Susan are on the left and Isaac and Sally the right. The young man behind in the middle is Eric, our wonderful driver who I have blogged about before.

Thanks Mr. Mayor

A quick update as I’m in the middle of finishing my sermon for tomorrow and we’re in the middle of a power outage, so I need to preserve my battery. For those who are curious, I have had a successful day navigating the top step! We said goodbye to Ted this morning at the airport. We used the time before the plane arrived (on time) to talk through the way Mango fund and the Seed fund are working together in Arua. We had a few fine tuning points to make, but generally we’re very comfortable with the cooperative nature of our relationship. In reality, there is not a great deal of opportunity for the larger investments that mango typically make, but instead the Seed fund has the opportunity to see early investments, carry them through a couple of loan periods and then move them over to Mango. It has worked in three deals now, and we can see another couple that might become Mango clients in the next year or two.

Following Ted’s departure, Blasio and I headed over to see Sylvia our stationary and printing client. By the way, I’m driving here again and I really have fun with it. The roads are so pitted with deep potholes in places that all the bikes, cars, trucks and buses wend and weave their way along the road. At times you can have oncoming traffic on the wrong side of the road, avoiding the biggest holes. Its rather like a slow motion ballet. Not exactly the Nutcracker but ….  Mayor Asiki (more on him below) has assured us that this will change as the road gets remade in February. While I’m glad for Arua, I will miss this bit of fun!

Sylvia is a wonderfully energetic entrepreneur who will never give up. If only we had another hundred of her in town! Her business has evolved form an internet café to a printing operation, a stationer and her latest plans have her moving in to the paper products manufacturing business. The first piece of equipment to be added will be a commercial paper cutter. I know she’ll make it work. It is one of the first examples of how people are beginning to think about how access to regular power can change the landscape.

Following a short visit at a local for profit (but loss making) nursery school, We travelled to meet the mayor, Charles Asiki (pictured here) at the West Nile Golf Club!! Yes, there is a 9 hole course, built by the British many years ago that is located right in the middle of Arua. The Club is in need of a cash infusion through new membership, and we talked about a few opportunities to do so. Charles was joined by several old friends and we had a wide ranging discussion about business opportunities in Arua. I hope we might see some opportunities arise out of the meeting.  A quick note on Charles. Arua has grown dramatically in the last 10 years. There are almost 80,000 people who reside in town and many more travel into the market every week. With a small municipal budget, Charles does a wonderful job keeping the town clean and safe. He is flying to Senegal next week to address a conference on urban policy. A recognition of the great job he has done. He is in the middle of his second 5 year term, and I hope he will consider a third, though it is a major personal sacrifice, so thanks Charles!

That Darn Top Step!

The Slumberland Guest House whose tag line is “Just Ideal for Resting” is my home away from home here in Arua. I always stay in the same room (102) and I know most of the staff. The experience here this trip has been significantly different because of the availability of 24 hour power. I even managed a hot bath this morning, with enough water in the tub to cover my knees! But there is one thing that I just can’t get used to – that darn top step! Pictured to the left, you will see that the top step of the staircase is almost twice the height of the other steps. I’m not sure whether this was an architectural whim, or just a big OOPS from the builder, but it continues to confound me. As I stumble to bed at night I trip up it and as I stumble bleary-eyed to breakfast each morning I fall down it! As you can see there is a lot of stumbling going on here in Arua! You would think I would learn, but my learning curve is extremely shallow, after all there is often 8 hours between my tripping up and my falling down. Plenty of time to forget! I’m in my dinner wait period right now – that period of time between ordering food and actually getting it. The wait varies between 1 and 2 hours, depending on something, but I’m never sure what. Still, since I’m featuring the step in my blog, I hope I remember it on the way down to eat in a few minutes – or an hour or so!

Back to the serious stuff for those who struggle to see the funny side of life.

Three major meetings today. The first was between Ted, Blasio and me, in which we talked through our work here in Arua and the new deals we have in the pipeline.  Then we met with Samuel our egg producer. We had agreed a loan earlier in the week, but we are so impressed by the opportunity and the young man, that we have decided to offer an equity investment rather than make him a loan. This is a brand new approach for us, and we have had to think through all the issues of getting liquidity in a privately held company in Uganda. Eventually, we decided upon a dividend strategy with a put and call option after 3 and 5 years respectively. This more accurately reflects the risk reward that we find here and it will be a good test case for potentially bigger investments for Mango Fund.

Ah the dinner bell – I’ll be right back! Excellent dinner – vegetable curry. But we lost power. Ted and I ate much of our dinner by the light of my mobile phone resting on top of an upturned water bottle, Quite an interesting effect and to be recommended! This seems like the more normal Slumberland experience, but the back-up generator seems to be working fine! 

Back to our meetings.

The final meeting was with my dear friend Isaac who is the head of Here is Life (HIL), a ministry aimed at the people of Aringa – who are largely Moslem.  HIL has three main ministry areas:  a radio station, a translation ministry and a school and farm.  While HIL has had many wonderful ministry years, the school and radio station lose significant money and this puts great pressure on the entire ministry. The translation ministry has just celebrated the completion of the New Testament in the Aringa language. The Bible is now the primary text in many primary schools (can you imagine that in the US?). Isaac and I have had many strategic discussions over the years and today we talked through the options for HIL. I believe that at the end of our session we had felt led by the Holy Spirit in a certain direction, and I felt the weight lift from Isaac’s shoulders. He will now convene his Board to continue the discernment process with this latest input. Please pray for Isaac, he is a wonderful man of God and his heart for the lost is infectious.

All in all another great day in Arua. Praise God!

A Honey of a Trip!

Today we headed north to Yumbe. When I say we, I’m referring to Blasio Leeti, a native of Arua who is our man on the ground here, and Ted Pantone who manages the East Asia operations for Mango Fund (www.mangofund.org). He is also a proud graduate of The King’s College in New York City (a shameless plug for TKC!) A picture of our crack investment team is below!!

Yumbe is the home to Blessed Bee for Life, our honey processing and distribution investment in West Nile. BBL is headed by our good friend Mophart Maphu, a man who has had a vision to make honey a significant cash crop for the very severely underdeveloped Yumbe district. He has patiently taught bee keeping to farmers in the region, built hives and become the cash market for them all. Our joy is to provide encouragement, business advice and loans to allow him to more quickly increase the volume of honey he is able to buy and process. This year his product has passed the certification testing for quality, and soon he should be fully certified by the Uganda Bureau of Standards, allowing him to sell his product in all outlet types and also to export his honey. Last year’s sales were approximately 30m UGX,  this year it looks like he will exceed 100m UGX! Each time we meet with Mophart he sees more clearly the opportunity before him. We discussed next year’s crop purchase plans and he is planning a further significant increase in volume. The money that this puts in subsistence farmers’ pockets is very significant.

The trip to Yumbe is only 78 Kms, but it takes over 2 hours each way. It is rough and bumpy and frankly a tiring journey and one fraught with tense moments,  as the local pick-up trucks filled with goods and passengers come careening at us at top speed. To travel from Arua to Yumbe in the cab of a truck costs 10,000 shillings ($4), but if you want to sit on top of the cargo in the back the rate is only 5,000 shillings. Most pick the top, and as the trucks go past, I’m always surprised that we don’t hit the legs and feet that hang over the side. Ted assures me that this happens all the time and that feet are mangled regularly. Our driver Eric is very skillful and it always amazes me how he handles our SUV with such calm and precision. When you’re on these roads you literally put your life in your driver’s hands – thanks Eric!!

Safely back in Arua, we met with the Church of Uganda (Anglican) Bishop, Bishop Joel. Joel is a native from West Nile and has a great heart for seeing his people thrive rather than just survive (his words). He is always thinking about how the church could make investments that would help the community, but also help the church financially. Today we talked about an opportunity that both he and I had been thinking about separately. It was fun to see how much my meetings and teaching on business influence him. This is exactly why I keep returning and meeting and teaching and encouraging. I can never know the impact I might have, but as long as God keeps leading me back I’ll come and leave the outcomes to Him, but I know that God wants his people in West Nile to be released from this debilitating poverty.

Blessings

Gentle Voices from S Sudan

Today we experienced an unexpected bonus – 100 women from S Sudan dancing and singing at the hotel all day long! The group comprises Sudanese exiles living here in Arua. They are of the Dinka tribe and are active in keeping their native culture alive. They were being filmed during the day for broadcast into S Sudan at some point. They are a very gentle people. Their moves are slow and graceful and their voices are soft and melodic. They literally sang and danced all day. We came and went during the day, and every time we returned they were still dancing! Given the difficulties that the people of S Sudan have experienced in these last years, their songs were both beautiful and moving. We were privileged to witness their performances, even if I did my “ugly American” bit and had to be asked not to film them!!

Below you see them in a camo type uniform, later they changed into traditional dress and finished with modern suits. Apparently they’ll be back tomorrow. I know they’ll sleep well!

Our day was more mundane but very valuable. In the morning we met with Samson and Neria Candiga. For those of you who have followed my reports across the years, you will remember that Samson was my first investment. He is a miller of rice and maize. When we met him he had a rice de-huller and produced about 500kg per year. Now he has the rice de-huller, as well as a maize de-husker and a maize mill to produce posho and this year he will process approximately 40 tons of product. All of this has taken place in 4 years. He has learnt a great deal along the way and is looking forward to being able to expand further. Today we talked through the business and the different seasons, and then he reflected on how hard it is to believe how far he has come in this time. He expressed his gratitude and said he had nothing to give us, but his life and the results of his work are all the thanks we need. Praise God!  By the way his company name is Nericandy Millers. Nericandy is an amalgamation of “nerica” (a local variety of rice, “Neria” (his wife’s name), “Candiga” his family name and “Andy”. In Africa names mean a great deal. I am honored. You can see Samson and Neria below.

In the afternoon we visited our friends at CAFECC. A Christian microfinance Organization, partnered with Peer Servants in Boston.  They are making steady progress toward sustainability, but it has taken a long time and great patience by the folks at Peer Servants. They served almost 500 clients with loans this year, and are working towards significantly adding more new clients next year.

Tonight we’ll call it quits early as we’re off to Yumbe tomorrow (2.5 hr drive) at 6:30am. Pray for traveling mercies!

Blessings

Protein and Surgery

My first day back in Arua, and it’s good to be back!

 Many things are exactly the same: The friendly welcome, Blasio (our man in Arua) taking pictures on our arrival as he has done every time we arrive (he has quite a time series of me aging now!), the broken down roads, the hustle and bustle of people everywhere and Room 102 at Slumberland Guest House (“A Great Place for Resting” according to their marketing!).

But there are also changes to be seen. There were 7 planes and 2 helicopters at the airstrip (Arua International Airport!!) this morning while we were there. What caused this parking lot of aviation equipment, no-one was quite sure, but a lot of people had landed! I have never seen more than 2 planes before and one was being “fixed”, a process that lasted for several months. Arua is on the map? The second and serious advance is 24/7 power!! I can’t describe the joy for the people of Arua to have access to a steady source of power. The dam in Nebbi Town is working! What this means for the economic development of West Nile I can’t predict, but I know that without good power you can only go so far.

We had a good day on the business development front too. We agreed to make new investments in two enterprises, both of which are looking to continue expanding in the egg producing business. One will start with 500 layers and the other 300. They have similar production techniques, but different marketing approaches. It will be interesting to see which does better. The vast majority of eggs come from Kampala on the buses. Local eggs would not only be fresher, but also reduce the imports of one more product into Arua. Mostly, they would add to the total amount of protein available for consumption in Arua.  It’s funny to think of an enjoyable food as a protein source, as a statistic, but in a world of scarcity and regular food shortages, these equations are important.  These investments will not only allow for the creation of profitable businesses, but there will be health benefits for the community as a result. That’s why I keep coming back!

Talking about health, we then met with Ronald, our old friend and business partner for Arua Radiology and Medical Center. ARMC is now one of the biggest clinics in town, having begun working with us three years ago with a small office and an old X-Ray machine and an ultrasound. Today ARMC offers a wide range of services and tests and is opening an “in-patient” facility a few km’s south of Arua for surgery and other more complicated diagnoses. The only serious surgery in town today is the Hospital and there is a long waiting list for elective, but necessary, surgeries such as hernias. The new facility will have an operating room, a lab and 12 beds. The facility will be open in January, so if you need surgery and are in West Nile, I have a place for you!! We are looking to lend Ronald the final loan amount to furnish the Operating Room. This too is the fun part of the job.

So a great first day with Ted Pantone and Blasio Leeti. More to come tomorrow. I’m going to call it an early night to catch up on my sleep and to try to get on the right time zone.

Feel free to write a comment. I love getting them. It makes you all seem so much closer.

Blessings

Be Like Barnabas

Sitting at Amsterdam Airport waiting for the second leg of the trip to Entebbe (Kampala). Tomorrow, I’ll take the Eagle Air flight to Arua and begin my work there.

My overwhelming sense is that I should focus on being like Barnabas on this trip. The son of encouragement! As always I leave with the knowledge that there is nothing I can do to help, but that just by turning up – again – the Holy Spirit will work through me to change the course of lives and the community at large. With God all things are possible.

We will be meeting with the friends who we have been working with for a few years now, as well as some new opportunities in the poultry area in particular. Anything that can add a protein source for the community is worth investigating! I’ll also have the opportunity to meet again with the community leaders as well as preach at the Cathedral on Sunday.

Much of this is more of the same. The new news is that Arua now has a consistent supply of power from the hydro-electric dam near Nebbi Town.  The question that I want to focus on is “What new opportunities does a consistent power supply bring to Arua?” I think it’s probably too early for people to have come to conclusions about that, but I will be planting that question in the minds of the folks there.

I will try to write each day and keep you up to speed and as always I covet your prayers.

Blessings

Investing in Africa - some thoughts.

Building a brighter future in Arua!

Investing in Africa is very, very complex.

Capital is both easy and hard to find. There is plenty of microfinance money available, but the amounts are small, the interest rates are high (tending to 100% annualized) and rarely does it allow people to make a significant move up the value chain. The banks have money, but their lending rules are stringent and restrictive. Their rates are lower (25-35%), but it takes months for a loan to be approved and there are tough collateral requirements. Only larger companies can typically qualify for bank loans. By the way, while the bank rates seem high, remember we are working in an environment of 18% inflation!!

This leaves the “missing middle”. Operations that are trying to add value to their overall process by acquiring processing equipment or significantly add to their working capital to build volume or add marketing and distribution capability to their operation. Who serves this group? Too small for banks, too large for microfinance, yet a key generator of economic growth in any environment.

This is the market we are trying to serve because the potential impact of these organizations is so significant. But how can we serve these entrepreneurs? Ideally this would be a venture capital equity investment. Invest in a series of these companies, expect a number to fail and make our return from the handful that succeed and grow quickly. But how can we make an equity investment when these companies often have no formal ownership structure or even official corporate formation. And then there are limited equity markets, so how could we recoup our investment gains even if successful?

We are limited to debt investments that in reality don’t reflect the risk/reward equation that investors would normally look for. If things go well, we get our principal back plus an interest rate, while the company can be launched. If things don’t go well, then even our principal is at risk as there is little collateral. We lose the money in the same way that an equity investment would be lost. In other words we bear all the risk and receive little of the reward.

So how do people operate in these environments? One way is to lend to many operations at a very high (50%+) interest rate. The expectation is that there will be winners and losers and that the interest rate on the winners will cover the losses of the failing companies and provide a reasonable overall return to the money lender. The key is to keep lending overhead low so as to maximize profit.

Our approach is different. We are trying to keep our interest rates lower (@35%) and do a better job of picking winners so that our ratio of successes to losses is relatively high. To do so, we need to be more careful with due diligence and provide more management assistance, all of which add to the overhead costs and therefore reduce the overall return. By doing this our hope is to provide a modest return to investors and provide a beneficial lending model to the entrepreneurs themselves. The jury is out on whether we can make this model work, and that’s why we talk about the Mango Fund as an “exploratory” fund.

Finding a market for the tastiest honey in the world!

In addition to the Mango Fund, we also have a “Seed” Fund. Whilst Mango looks to make loans in the $10-50k range, the Seed Fund looks to make loans from $1-10k. We have successfully transitioned two of our Seed businesses to the Mango Fund for higher levels of investment.

The Seed fund is entirely speculative, funded personally by George Veth and myself and is primarily social in nature with the return being secondary. In fact, we do not expect to make a return on this fund, but instead plan to reinvest the money as many times as possible before it erodes through loan defaults. Our goal though is to build a track record of multiple businesses founded and flourishing that might not have existed at all without the Seed Fund.

In the Seed Fund, we start small, spend a great deal of time with the entrepreneur vetting the ideas, avoid financing “one off “deals, and primarily look for small machinery purchases, or working capital provision that will allow for the operation to move to a higher level of skill, volume and quality.

So far our Seed results are mixed, but I think we are learning from our mistakes. During this last visit, we uncovered a further 7 or 8 potential seed investments in Arua, of which I would expect we will actually invest in 4 or 5. It is pleasing that as we refine our approach, we are finding more people who might qualify. Our hope is to launch a movement of entrepreneurs to transform the community. Pray with us that this might be the outcome.

If you would like to discuss this further, please don’t hesitate to write to me, Andy Mills at amills@tkc.edu

Blessings

A

Two lessons and the Holy Spirit!

So what was the learning from this last trip and what progress are we making? Such Western Hemisphere questions! Such first world thinking!

Work on the new Out Patient Clinic in which we have invested

I say this because I’m finding myself increasingly at the intersection of two cultures that don’t always look at things the same way. This cultural intersection often explains misunderstandings. Cultural norms are different. Apply a Western norm to a situation and I get confused and upset. Enforce a Western norm and my African friends become confused and irritated.

This is seen particularly in issues of family, savings, money and ambition.

One thing I know is that “turning up” is reaping huge benefits. I’m a great proponent of “focus” in business. I could define focus in mission work as “doing what you know best in the same place over and over again!” In my case its coming to Arua time and time again and trying to help grow businesses. The first time or two you come to a place like Arua, you are a novelty. No-one quite knows what to make of you. The likelihood is that you will not be back. It’s part of “your” life experience. Perhaps one of your bucket list items! But then you come back …again and again. It’s hard for the people you are visiting not to give credence to the fact that you are sharing your life with them. Gradually you understand more and more of the prevailing circumstances, more and more of the cultural distinctives, more and more of the difficulties faced each day in just living life and more and more of what is and isn’t possible.

The second thing I know is that if we don’t rely on the Holy Spirit, then all of this is futile. We must believe in the resurrection power of Jesus to change communities that have been enslaved for centuries. The power of Christ changes hearts and minds, the power of Christ provides resources and the power of Christ transforms communities. I am fully convinced that God does not want the people of Arua and the West Nile to live in this marginal state of security and economic wellbeing. The importance of asking through prayer as individuals and as a community cannot be understated. This challenges me to ask whether I really believe what I believe? Is my God big enough? Is my faith in God strong enough? Will I continue to proclaim that God and that faith to the men and women of Arua?

Some interesting things are beginning to happen. On this trip, a prayer group of business people has begun to meet. A group of leading citizens has begun to gather together and talk about a community approach to the problems facing the community – how to encourage business, how to press for vital infrastructure needs, how to begin to change their long standing family and tribal culture? A group of business people met twice to encourage me and each other to press forward. So much in Africa revolves around community thinking and action. I am encouraged by these early signs. The proof will be whether they continue to meet and push forward in my absence, or whether they only meet when the “Muzungu” or white man comes to town?

May God’s will be done in Arua and west Nile. Amen!

Travel Africa style. Everyone has a right to the road! This herd took 10 minutes to pass!

Life in Pictures!

For the visual learners among us, here was my Sunday in Arua. Enjoy!



The day starts with a kerosene lamp, a gerry can of water and a plastic basin in the bathtub!




On to worship at St Phillips. This is the 7:30 service with about 800 people. My friend Canon Isaac Anguyo preached on marriage. It's impossible not to get close to your neighbor!




Travel Africa style, or how do you get 9 people in one SUV? With my dear friends the Coppedges and their 4 daughters on the way to lunch. The Coppedges are some of the most wonderful people I know. A day spent with them was pure joy!




WGM volunteer Josh from Kentucky about to tuck into a whole grilled Tilapia at the best restaurant in town. Josh grew up in Mississippi and used his crawdaddy eating techniques to pick that fish clean!!




Watching the Euro 2012 final with 400 of our closest friends! Our hopes for Italy died rather quickly, but our hopes for Arua remain strong!

Hope this brings Arua somewhat to life. Come join me some day and experience it for yourself!

Physical and spiritual health

Ted arrived today from Kampala and we immediately immersed him in the world of healthcare. We have been helping Arua Medical and Radiology Center for the past 4 years, and have been delighted with its growth from primarily a radiology center to a much fuller service health center, now offering lab work, general consultation, orthopedics, dentistry and minor outpatient surgery! AMRC has outgrown its city center premise, and is now looking at a major expansion to a second location a kilometer south of the city on the Kampala road. We went to look at the building work being done and both Ted and I were very impressed by the vision of Ronald Debo the CEO of AMRC. The great thing about AMRC is that not only does it continue to grow by plowing back the profits into the business, but it continues to offer services and treatment that were not previously available in Arua and for which patients either did nothing – and suffered the consequences – or went on a three day trip to Kampala. As you can imagine, most did nothing, and serious conditions that could have been simply solved through medication ran their course often to the demise of the patient. So AMRC represents the best of social entrepreneurship – a profitable and growing business providing an ever expanding range of health services to the community!

The new facility is planned to go one step further – inpatient services, offering general surgery. There is a hospital in Arua, but the surgery resources are so limited that only emergency surgeries are done. If you have an “elective” condition, there is no likelihood of being operated on. Hence the great opportunity and need for a private clinic that can perform such surgeries. We are working on how we can help make this plan come to a reality for the people of Arua.

Later in the afternoon I was the speaker at a business prayer meeting held by our friend Reverend John Bill Akutuko. John Bill was my first contact with the Church of Uganda in Arua and initiated the first business breakfast at which I spoke, and which has been the catalyst for all my work here. He is unusual in that he preaches the high calling of business for those of us in the marketplace. He asked me to speak about “Creating and Building our Businesses with Christ as our Model”. A great topic with which I hope I was able to do justice. Following we had a series of people share their reaction, and then on to prayer. It was a very special time of interaction and prayer – seated under the trees in the garden at Slumberland (my hotel). It was both inspiring and relaxing. We felt the presence of God and there was great warmth among the people who attended. Blasio, Ted and I were also able to meet some business people that were new to us.

Well, I’m in the dark with a battery that is fast expiring, waiting for a dinner that was ordered over an hour ago, and knowing that the water will be cold again tomorrow. Not perfect circumstances, I admit, but it looks like rain again tonight (as the last two nights) and this brings cool and food! I find myself very contented and with a strong sense that this is exactly where God wants me right now. He is my strength and shield! My prayer is that all of you reading this blog would also know the peace that comes from believing in Jesus Christ as savior.

Mud and the Billion target!

Praise God, it rained all night. While it was heavy at times, it was mostly a steady soaking rain – just the kind that Arua needed. At last the drought has broken, and people were busy planting in their fields today. But, with rain comes mud! Not just any mud, but a slippery clay-based substance that acts as a cross between snow and ice for pedestrians and drivers alike. This was, of course, the day we planned to head north to Yumbe. Timing is everything! As we headed out of Arua at first light, I realized how difficult this was going to be and wondered whether we should abandon our trip. 5 miles down the road, we found a convoy of lorries literally stuck in the mud and unable to move. The lead lorry was beautifully positioned at a narrow section of the road and blocked the road to all but pedestrians and bicycles. Our driver Eric skillfully backed up, but I was afraid that we were in danger of falling into the substantial ditch on the side of the road. For the second time I wondered about abandonment. Eric had a short cut in mind to circumvent the blockage. This entailed travelling on a very narrow dirt (thick mud) road for some 4 – 5 Kms. We were doing well till we came to the river – normally a stream with a natural fording point, which was now 30 feet wide across the road and with no sense of how deep. I assumed we had come to the end of our journey, but Eric was unphased and drove straight into the water. Quickly the water was lapping over the hood. A remarkable sight! But low and behold we drove right though and out the other side. But now the fun really began as we had a 100 meter hill ahead of us. 25 minutes later we crested the hill, after several failed attempts and the assistance of about 40 – 50 young men most of whom wanted to instruct rather than push. We paid them for their help, and I was ready to abandon again! But Eric seemed unaffected and pushed on. We arrived at our destination – some 60Kms after 2 ½ hours. I would have abandoned – thanks Eric!

And I am so glad we made it because we had a wonderful time with our old friend Mophart who owns Blessed Bee for Life, the honey processor in Yumbe. Mophart has long worked in the honey business and began to expand his activities with the help of Dick Turanski of Glory Bee Foods in Washington State. In the last year Mophart and his board have decided to expand aggressively and we are helping by providing a loan for him to purchase increased quantities of honey from the farms. In yesterdays blog I described how there are so few activities in West Nile that create value and bring money into the region. BBL is one of those organizations – gathering honey from the farms and selling most of it into Kampala. This year they are on track for sales of 100million Ugandan Shillings (UGX) – approximately $40,000. We agreed the target for BBL should be 1 Billion UGX or $400,000. It is hard to express how important it would be to have that level of money coming in to the region. It would be transformational. Now to found other opportunities like this! BBL is also in the business of manufacturing hives and with new power equipment they are in a position to supply large government and NGO contracts. But recognizing that these sources of funds are under pressure, and that farmers can’t afford to buy the all-wood hives, BBL is also beginning to pioneer hives that have bamboo exterior boxes. We’ll see how that goes, but I love the approach. Mophart is a dedicated Christian who has a passion to help his community and to share Christ with his largely Moslem neighbors. He is a joy to be with and a real inspiration. This visit was worth the whole trip.