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!