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Theory to Reality - David Befus on launching a Business as Mission Effort in Columbia

Last fall, David Befus resigned from his position as president of a missions agency (LAM) and headed down to Columbia to start a "Kingdom Business" microcredit program from zero, using the principles in his book (Where there are No Jobs) as a guide.

It is a good case study for what missionaries and NGOs can do on a small scale. Starting with nothing, he's begun to see what is possible. According to David, the U.N. considers the Colombia "displaced people" phenomenon as the greatest human development problem in this hemisphere, and he decided to locate the program in the poorest area of Colombia (Atlantic Coast) to address the poorest population.

At this point they have a completely financially sustainable program with one national staff, over 300 loan clients and a fully equipped office that they rent. One bank that he borrows from in the U.S. is now asking him to help start up a similar program in Honduras. Here's an official update that David sent us last week.

Background: Leaders of the AIEC church network, with over 700 churches in the Northern Coast of Colombia, attended a "Kingdom Business" workshop in October, 2006. The Northern Coast is considered to be one of the poorest areas of the country, which has suffered "the greatest human catastrophe in the hemisphere" (United Nations), a civil war which generated over 3,000,000 displaced peoples. The guidelines in the 2001 book, initially written in Spanish ("Negocios Para El Reino") and later published in English (first as "Kingdom Business," then with the title "Where There Are No Jobs") were used to design the program, which, contrary to the "BAM" literature on micro credit, was to be entirely without subsidies, as none were available. A loan program was capitalized with commercial loans, and strict procedures crafted to guarantee on-time payment. A new organization, separate from the AIEC denomination, was created in October, 2007, and funding for enterprises began in December.

Progress: As of the end of June there are 262 business clients in the program, with 22 organized committees that provide on-going supervision and oversight. Office rent and all operational costs have been paid entirely from the interest margin, as has the salary of one full-time professional. During the summer a college intern from Biola University has also been very helpful, and when he leaves another full-time staff person will be employed. Investment funds total just over $50,000, with most of that amount owed to two U.S. entities. During the first semester, the new organization, Desarrollo Integral, applied for and received legal incorporation. The Desarrollo Integral operation, which has not yet received any subsidies, has directly created almost 1000 jobs during its first 6 months, providing income and support for more than 5000 people from households in the poorest sectors of Colombia. This outcome has been generated through a network of churches, in many cases substantially impacting the outreach of the church in a community. ("doing good")

Lessons Learned: (1) Whereas the program was initially targeted at the "displaced," it quickly became apparent that the status of "displaced" was an entitlement badge, and the term was dropped. That the program is targeted at the neediest people, who are often displaced, is now kept a secret, and the fact that many of the clients come from this sector, favored by some government welfare programs, is not discussed. (2) The money lenders in the informal market charge rates in excess of 20% per month. Small businesses that have been able to meet this hurdle rate and make a profit have been even more profitable when the interest costs decrease by 90%. (3) Even in the context of churches, there are some people who are "integrity challenged" when it comes to paying back a loan. The entrepreneurial training program, required of all clients, is a significant effort to add integrity and responsibility to Christian discipleship in the AIEC denomination, and with other churches in the region.

Come and See: Spirit Air and AVIANCA have direct flights to Cartagena, Colombia, and the Desarrollo Integral program run out of Sincelejo, 3 hours by bus from Cartagena. Travel from the U.S. is relatively inexpensive, as are the costs of room and board in Sincelejo. (for more information, send an e-mail to david.robert@telecom.com.co)

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posted by Justin Forman | 7.22.2008 - 6:04 PM

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