Kulane in Mozambique

MEDA began work in Mozambique in 1996. The Mozambique economy was beginning to take off after years of revolution and economic malaise. But with a long history of state control, business tradition was slow to emerge in some sectors.

MEDA's main work was in the Xikelene Market, a sea of shacks and shops on the northern outskirts of Maputo, the capital. More than 4,000 vendors sold everything from produce to hardware. Most of the wares were imported from South Africa. Mozambique was only just starting to grow its own commodities, like rice, peanuts and maize.

The Maputo program, called Kulane, operated very much like other microenterprise programs in the MEDA system. The average loan to a client was $250. Generally, loans were made to small groups of people who helped keep each other accountable for repayment. A typical loan was for 16 weeks, with payments required weekly.

By late 2003, Mozambique was one of two remaining countries where MEDA directly operated a microenterprise program (the other being Haiti). By now the industry had changed. Thanks to the efforts of MEDA and others, the microenterprise industry had burgeoned to where many agencies were offering such services, and programs needed to be much larger to function efficiently.

In December 2004, a final merger agreement was signed with Opportunity International for the merger of Kulane with the Banco Oportunidade de Moçambique.

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“Poor people are the solution”

A message by United Nations secretary-general Kofi Annan on the launch of the International Year of Microcredit 2005

Microfinance has proved its value, in many countries, as a weapon against poverty and hunger. It really can change peoples’ lives for the better – especially the lives of those who need it most.

A small loan, a savings account, an affordable way to send a pay-cheque home, can make all the difference to a poor or low-income family. With access to microfinance, they can earn more, build up assets, and better protect themselves against unexpected setbacks and losses. They can move beyond day-to-day survival towards planning for the future. They can invest in better nutrition, housing, health and education for their children. In short, they can break the vicious circle of poverty.

Let us be clear: microfinance is not charity. It is a way to extend the same rights and services to low-income households that are available to everyone else. It is recognition that poor people are the solution, not the problem. It is a way to build on their ideas, energy and vision. It is a way to grow productive enterprises, and so allow communities to prosper.

Where businesses cannot develop, countries cannot flourish. Let us use this International Year of Microcredit to put millions of families on the path to prosperity. (Excerpted from The Marketplace, March-April 2005.)

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