Monday, December 23, 2013

(sigh)...Access to Capital

In my work with Partners Worldwide, I implemented the four strategic activities believed to cause long-term change for small and medium size businesses:  training, mentoring, advocacy, and access to capital.  Three of these activities are internally focused on the business, and one is external (advocacy).  I continue to use that strategy in the ICM Marketplace Ministry, and have talked a fair bit of three of the activities in recent months but haven't said much on the blog about access to capital.

Of the four activities, it is the one that I like the least.  But, of course, it is the one that businesses want the most.  It is a necessary evil in my work.  I say "evil" loosely, of course, because it is considered necessary for most business in the world to receive between three-five loans in order to help them increase their business and be able to compete in the market. We often say, "If you give a man to fish, he eats for the day; if you teach him to fish, he eats for a lifetime."  But that is not true.  There are many, many
training programs around here that teach people to sew or bake, but without access to capital...without having "access to the pond, or the ability to buy the fishing boat or net" (to continue the analogy further) the teaching to fish does not do much good.  We are watching "Africa rising" and multi-national companies moving into Africa with their large capital and resources, and at the same time, we see Africans lose contract bid after contract bid to these international corporations.  The profits made by these international corporations often do not remain in Africa but are sent home to the native country.  Africans need to be able to own their own resources and win their own contracts to do the work in their country.  So access to capital is a good and necessary thing.

But it is so complex.  In a warm culture, the lure of a loan brings many temptations from family, friends, church, and community.  In a developing country, the need for school fees, paying for funerals, and paying out of pocket for medical, can hamper the success of a business loan.  People often take a business loan that ends up having no positive impact on the business, as basic business principles or boundaries have not been applied.  So the loan becomes something that can destroy the business.  As Christians involved in loan programs, the most painful thing is to give a loan, have something negative happen (often legitimate) to that person or their business, and yet the loan still needs to be repaid.  Not enforcing repayment can destroy a loan program.  So that is why I say it is a necessary evil.  I would much rather NOT be involved in access to capital.

But since I know it is necessary, I have been addressing it.  This past summer I spoke with Lou Haveman (former colleague at Partners Worldwide) who has developed a program called the Solomon Funds, for people who want to invest their savings or retirement money in access to capital, allowing them to make about 5% annual interest on their investment.  He organized a few donors and was able to secure about $25,000 US for the ICM Marketplace Ministry to use as loans.  But we didn't want to manage the loans ourselves and I didn't want to put ICM in the position of giving loans (again, the giving is not the problem - it's the repayments).  So I approached two Christian micro-finance institutions - one started by the National Council of Churches in Kenya (NCCK) and one started by Food for the Hungry.  I asked them if they would take this money, distribute it to our approved groups, and handle the repayments.  However, the money that I wanted them to coordinate for us was apparently not enough to get their attention.  So after repeated attempts, proposals written, meetings had, two months passed and no positive response was received.  So I approached ICM to see if they would be willing for this small amount of loans in the pilot project to go out under their name.  We eventually worked it out to have it go that way.

I'm happy to report that on December 21, 2013, $25,000 has been disbursed to seven groups, which total 127 people (90 women, 37 men).  These are all groups who have at least one of the members that I have trained in the Training of Trainers for the basic business class, and have multiple members who have sat through the training.  These groups have a peer mentoring aspect to them, so that is helpful.  All of these groups have been in existence for at least six months and only received three times the amount of their savings.  They operate much like the Village Savings and Loans groups that I wrote about in Ghana (click here for more information on VSLs).  These loans should have gone out in October and so I feel bad that they got out so late, but we ran into roadblock after roadblock.  The people waiting were pretty gracious, but unfortunately they lost a lot of opportunity to capitalize on the Christmas busy season for their business.

They will turn this money over and over in their groups for the next six months, and then they will pay it back.  In six months, we will distribute the same money again.  We hope to have more money to distribute at that time, because our businesses in Kakamega and Eldoret will also be ready for access to capital by then, having finished the training, and started mentoring and advocacy.  After six months, the interest and principle will be paid back to the investors, through the Solomon Funds.  If we are blessed, the investors will keep their principle in for another year, and we can start again.  Hopefully by then we will have more funds and can get the attention of a qualified fiduciary to manage the loans for us.  [If you have savings or retirement funds that you would like to invest for one year, and receive about 5% earnings on it, while blessings businesses in Kenya, please email me at or email Lou Haveman at  The money will be put to good use!  I have been working with Lou to bless Ghana and Liberia for several years and we have had great success!]

So I do this part of my work with a sigh...and many, many, many prayers.  I usually lose more than a few nights of sleep over it when decisions are made as to loan disbursement.  It is my neck on the line if defaults happen as well as the reputation of ICM, so I take this very seriously.  We make commitments to the investors and we are putting our activities to the test to be sure that business will actually grow.  In many ways, it is putting other people's money where my mouth is.

At the end of 2013 though, I look back with great delight.  We were able to address all four activities.  We have seen God's hand through the provision of investors and the provision of solid businesses.  We have seen God's hand in the provision of mentors and prayer partners.  We have seen good activity in our advocacy work. And we will now wait to see what 2014 brings.  We pray that it is a year of blessings and growth for our businesses who strive to alleviate poverty and provide jobs.  We pray that it is a year where Kenya sees positive movement forward as a country.  And we continue to watch with anticipation as Africa continues to rise, economically, socially, and spiritually.  ICM calls this the "decade of the African leader."

Thank you for joining me on this journey in 2013!  I have sent out a year-end letter to those of you that I have physical addresses for.  If you did not receive it, you can see it here.  I am so thankful for all of you who continue to pray for, encourage, and support this ministry in so many ways!  I praise God for how He has made the body of Christ!

I also know this is a time of year when many people consider their blessings and chose to pass some of those blessings on to others.  If you feel led to join in this work financially, it is very easy to give by going to, click on donate, and follow the instructions there.  Or you can go to, clicking on Missionaries, then find my name and follow the instructions there.  This ministry continues to need support and we are thankful for every person who joins us in this manner. 

May God bless and keep you in 2014. May He turn His face and smile upon you, and give you His peace.  Mungu awabariki!  Amen.

PS.  My children did arrive safe and sound in Kenya to spend Christmas with me.  So thankful for that too!
This is how they appeared when arriving at the airport after the cold winter in Michigan, exams at Calvin, and long flight to Kenya.
After a couple days of love and pampering from Mom and enjoying the beauty of Kenya, they began to look normal again.

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