Celebrating at T3 Church

On Sunday morning, Laura and I commemorated several firsts and a farewell: our first time going to church in T3 (a suburb of Maputo), our first time sitting in a church service that lasted over three hours (3 hours, 35 minutes, if you count from the time it was supposed to start), and a farewell celebration for Bruce and Mabel Callender, who have been living in Mozambique building churches for 10 years. This was their last Sunday before retiring.

The video makes apparent the great level of appreciation and admiration that the Mozambicans have for Bruce and Mabel for their help through much hardship over the past decade.

The community was also celebrating because that morning was the first time that the church had met in their new building. They had previously been crowding into a smaller caniço structure next door.

(Today also marks the first time that I've tried video editing, using the "video" mode on our still camera and the free software that comes with Windows, no less. Move over, Hollywood!)

Laura had the idea of posting some video footage of this morning's service. What a great way to open the window into our world just a little wider. Please let us know if the video has worked for you -- if it's an effective tool, we could try to extend the experiment a little further.

So, whenever you're ready to glimpse today's African celebration, pop some popcorn, throw up your feet, and roll the clip -- today's feature is about 35 seconds long.

Samuel, micro-entrepreneur

Just how small does an enterprise need to be in order to be called "micro"?

Laura has been reminding me for days now (if truth be told, it's probably been two weeks) that I'm in need of a hair cut. What better opportunity than this to explore micro-enterprise in action, and to give you a glimpse into the life of a micro-entrepreneur.

Samuel is a young man that I've gotten to know through his work as a guard at the house where Laura and I are staying for the next week, and also as a guitar player at one of the local churches that we've attended a couple of times.

Samuel, who is in his mid- to late-twenties, is a high school student. Mozambicans are hungry for education. Many people missed out during the civil war that ended in the early 1990s, and are now trying to catch up as adults.

Last week I learned that Samuel also owns a barber shop, so I asked if he would take me there some day. That day was today.

Samuel's shop is a small building made of caniço (pronounced "kan-ee-soo"), which is a thick, hard reed that is Mozambique's traditional construction material. The shop also has a corrugated metal roof and a wooden door that is fastened closed with some stiff wire. Most days, Samuel has an employee who does the hair cutting. Today, however, Samuel would cut my hair because his employee didn't show up for work.

The shop doesn't have electricity, so it closes at dark (which is about 6:00pm). The barber's main tool, a set of electric clippers, is powered by a car battery running through a transformer. The battery is recharged at a shop not too far away that has electricity. Each charge lasts nearly a week.

Samuel had never cut "white" hair before. The trickiest part, he learned, was cutting the soft little hairs on the back of my neck. His blade was a little dull, but otherwise he did a great job.

Samuel has a price list posted on the wall. My cut cost 15,000 meticais, which is about 60 cents. Some fancier cuts cost up to 20,000 meticais.

Samuel's shop is relatively successful (at least, that's my observation). When he set up shop a year and a half ago, he took out a loan of 5,000,000 meticais, which he was able to pay back in just a few months. On this day, he had a customer at the shop before me, and by the time I was done, there were several other people waiting their turn outside.

If you're ever in Maputo, I would definitely recommend Samuel's barber shop, though I would have to show you where it is since there is no sign out front (Samuel assured me that everyone knew it was a barber shop). And you just can't beat the price.

A Bump in the Road

Potholes are commonplace in the streets of Maputo. The bump that I hit today was more figurative, but no less frustrating.

A few weeks ago, I was excited about the possibility of partnering with an existing micro-credit lending institution, leveraging its existing infrastructure and experience for maximum results. In Sunday's blog posting about Graduation Day, I first expressed the possibility of a chip in the veneer:

The participants [of our first micro-enterprise training program] challenged the bank's business model and interest rates, and provided suggestions to one another about credit options that might be superior.

I spent this morning exploring micro-credit options that exist for poor entrepreneurs in Maputo. I didn't expect to run up against such discouragement.

There are three micro-credit banks officially registered with the government of Mozambique: Banco Oportunidade, at which my comments in the previous posting were directed (operated by Opportunity International); NovoBanco, which is operated by Pro-Credit; and SOCREMO, which until recently was owned by the state.

All three offer similar loan terms: they require the lender to have a track record of success as demonstrated through an existing business, and they charge crippling rates of interest: for the smallest loans, the three charge from 5.5% to 6.5% per month. That's 90.1% to 112.9% per year. Business success is a lot more difficult to come by with such a high cost of capital.

Not to mention that, in Canada, those rates would be a Criminal Code offense.

(For the armchair economists in the group, you're right -- developing nations do have higher interest rates than we would expect to have in a developed nation. But not that high. The Banco de Moçambique, Mozambique's central bank, reports that its overnight rate is just below 16% per annum, and inflation has been slightly negative for the past quarter.)

Micro-credit is supposed to be a broadly-accepted development tool. It's supposed to have freed poor entrepreneurs from the grips of money lenders and their usurious interest rates. Last year was even declared the International Year of Microcredit by the United Nations and a cadre of other well-respected multinational organizations.

Why, then, are the poor still faced with such steep interest rates? And what requires an organization such as Opportunity International -- operating as a registered charity in developed nations, receiving donations from well-intentioned Westerners -- to charge such a high rate of interest?

There must be a good explanation, but I haven't heard it yet.

The potholes in Maputo are numerous and deep, but none yet deep enough to have swallowed my hope. Tomorrow we'll start looking for alternatives.