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On Point

Lighting the Entrepreneurial Fire in the Third World

by Austin Bay
November 20, 2002Uganda, or Thika, Kenya?

What caliber of economic and entrepreneurial fire, that is.

For Mary Wanango, the bean lady in the Paidha town market (two colorful acres of intense open-air sales action every Wednesday morning), the impact of a $15 loan has been enormous.

Mary, dressed in a cotton rainbow, is all business about beans. Her initial $15, provided by the woman's business coop at St. Peters Anglican Church in Paidha, turned her into an international trader.

"I now cross the border to the Congo town of Kudikoka," she told me through a translator. "Because I have capital, the loan, I can now buy several kilos, 20 kilos in bulk, cheaper than I buy in Uganda."

Her business has boomed. "My customers here in Paidha buy more at a lower price. I have repaid the first loan and sought another." Her import cost at border customs, if the Congolese and Ugandan border cops don't pump for a bribe? "1500 Uganda shillings."

That's roughly 80 cents. Don't sniff, that's steep government taxation for Uganda's rural West Nile Province, where 1200 shillings is a good day's wage.

Exchange rates and local economics, however, only begin to suggest the potential economic impact of small but highly directed loans, or in some cases, small-scale aid programs.

St. Peters Church in Paidha -- the town only appears on a detailed map -- is directly engaged in the hottest concept in international development and aid: micro-development.

From Bangladesh to Thailand, think small and do small has cachet among governmental and non-governmental aid and development advocates. The best programs, however, really don't "think small," they think large in a different way. They seek to encourage and promote the productive dynamism of human will and creativity empowered by experience, education and ethics.

I spent two weeks in Kenya and Uganda examining several micro-development and aid programs. Micro-development attracted me a decade ago as a means of slipping capital into developing nations beneath what I dubbed "the corruption horizon." Corruption savages economic development -- ask investors in Global Crossing and Enron. Small, targeted programs are less likely to attract big thieves with Swiss bank accounts.

Since 1950, international agencies have spent a cool trillion in U.S. dollars on anti-poverty and economic programs in developing nations, with much of it wasted or pilfered. In too many cases, "spending large" has not produced large, or medium, or even small results. Big dams and bad debt aren't the crucial development issues -- they are building human economic expertise and thwarting corruption.

East Africa has a growing number of people who are doing precisely that. The majority of the programs I saw support their small-scale finance activity with business advice, economic education and ethical counsel. The goals: building the economically savvy "human infrastructure" and civil society that undergird liberal capitalism.

That isn't thinking small, it's thinking long -- then proceeding to build the human spine of 21st century economies.

In Kenya, I visited Nairobi slums and outlying towns with Faulu-Kenya, a non-sectarian micro-finance corporation dedicated to building people who can build an economy. We spent one morning in Thika, where Faulu-Kenya is advising a church organization on how local leaders can create, fund and operate a "village development bank" in a grass-roots effort to fight unemployment.

One Kenyan businessman told me: "There are many in our national government who support these efforts fully. But doing for yourself, for ourselves -- with good advice and models, of course -- this empowers the people for building a stronger, expanding national economy."

Bishop Henry Orombi, of the Anglican diocese of Nebbi in Uganda, where Paidha is located, has set up 52 women's economic cooperatives. Through two lending cycles, only two groups defaulted on loans. "These programs are a means for people in developing nations to move from aid, a receiving mentality, to doing," Orombi said.

Hope isn't a method. These programs are the slow but genuine road to a better future.

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