by David R. Befus
Two years after it began, the author explains why ADIN (Asociación para el Desarrollo Integral) in Colombia is being used as a model for creating other kingdom business mission projects.
Marcos Coralles had been praying for over a year for funding to expand his handicraft business in northern Colombia. How Marcos’ prayers were finally answered has everything to do with a book I wrote almost a decade ago: Kingdom Business (first written in Spanish, Negocios Para El Reino, in 2000). A subsequent article “Kingdom Business: A New Frontier in Missions” appeared in the April 2002 issue of EMQ. Both the book and the article promoted “the potential of economic development and job creation” as a tool for missions. For the past two years I have had opportunity to apply this hypothesis to a specific mission project—job creation through a church association in northern Colombia, an area in economic reconstruction after years of civil war. Leaders of the AIEC denomination in northern Colombia had read the Spanish version of the Kingdom Business book and at a lunch meeting in Cartagena in October 2006, suggested that the northern coast of Colombia would be an excellent place to put the theory into practice, with the support of their 700-plus member churches. By October 2007, my wife and I moved to Sincelejo, Colombia, and the first projects were funded on December 4, 2007.
The program, called ADIN (Asociación para el Desarrollo Integral), is now almost two years old and has been turned over to Colombian leadership. Two full-time salaried professionals administer the program for over four hundred client businesses, and the income generated by loan payments provides a small surplus each month after covering one hundred percent of its costs. The program is being used as a model for creating other kingdom business mission projects. This is due to the following reasons.
1. It was started without donations. The first problem many missionaries encounter when addressing the need for job creation as a tool for Christian ministry is that such a project requires capital. ADIN was able to attract soft loans for its start-up capital—funds provided with a written contract for repayment, including interest. Although one of these loans was from a secular bank, Christian business people were behind this effort to access borrowed funds to create businesses that would generate income and employment. The fact that no donations were involved also got ADIN off to a good start by creating an identity that was connected to, but different from, the denomination that birthed it.
From the start, ADIN was an entity separate from the church, with a specialist purpose (job creation) and the need to be sustainable. There were no donations for office installation, initial salaries, or “overhead.” All expenses have been generated from the capital, which ADIN has invested in client businesses. Over half of the start-up capital was obtained with loan covenants that required interest payments and eventual capital repayment, and the rest was restricted as revolving venture capital.
2. The analysis of the target group was realistic. The desire to create a professional program to address the need for jobs and income was not new, and the denominational leaders had already tried several approaches that had failed. A key element in crafting this new program, then, was the issue of integrity. Ironically, although many rules exist in the churches related to Christian life and practice, the issue of paying back money is an area that seems to have been glossed over in discipleship. Not paying back loans, and not keeping one’s word, has been laxly interpreted as “part of the culture”—like showing up late. The challenge, some said, was not so much to fund viable businesses, but to create an environment where funds would indeed be paid back when businesses were profitable. Thus, a very strict approach regarding payback of capital was developed from the start.
Each potential loan received intensive analysis. Solidarity group mechanisms, whereby clients take responsibility for the payments of other clients in the group if they default, helped identify (through group members who knew each other) viable client businesses, ensuring that all loans would get paid. Furthermore, initial funding was provided only for a four-month term, with the expectation that some recipients would not keep their commitments.
The strict requirements of the program have resulted in only a thirty percent acceptance rate in the churches where it is proposed. Some church groups want donations, or do not like the solidarity group methodology. But that has not been a problem, since there are more than enough clients in the denomination and other church networks for the present level of capitalization of approximately $80,000.
3. It included a focus on finding entrepreneurs. Although ADIN has many of the financial products outlined in the Kingdom Business book, the emphasis in Colombia has been on identifying and strengthening entrepreneurs who can then help employ many other people, without any external funding. Most clients come into the program after accessing the “drip/drip” funding available in the informal “loan shark” sector that costs one percent per day. The immediate result they experience with ADIN is that, freed from such high interest rates, they can capitalize their businesses.
The process, however, of finding real entrepreneurs is complex, and ADIN requires a series of three entrepreneurial training courses for each cycle of financing. During the first cycle, the difference between cash flow and profit is clearly presented, along with the need to distinguish between consumption and investment. Some clients do not have a vision for expansion of their business beyond the first cycle; to continue to provide loans to such clients only creates dependency, which is not a goal of the program. Therefore, only those clients who demonstrate a growing business and responsible management are allowed to continue receiving a second or third loan.
For example, Coralles made handicrafts from straw (caña de flecha) in the small town of Colomboy. For over a year he had seen a great opportunity to get involved in growing, preparing, and coloring the straw, and had been praying for help. The ADIN program provided him with a loan of $250 to start this business, and then a second injection of $500 in the second cycle, both which he paid back. When he received his first loan in December 2007, he worked with his mom in handicraft production, but now he employs sixteen people. He has over $1000 in capital, and although he wants to be involved in the ongoing training of ADIN, he has no need for additional funding. His tithe is actually recorded on his financial record keeping, and at this point is equivalent to fifty percent of what the pastor of his church was making when ADIN began the Colomboy project in December 2007. Such tithing, and its impact on the church, is typical of many of ADIN’s clients.
It should be noted, however, that the phenomenal growth of Coralles’ business is somewhat exceptional. His is the only business, in a group of fifteen that were funded in Colomboy, that has demonstrated this kind of success. But there are other success stories, too: a business that makes butter and sells it door-to-door, a carpentry shop where the owner is especially gifted, and a lady who makes all kinds of products out of sea shells. The introductory talk that is given in churches when ADIN is first presented mentions the God of creativity and innovation who “gives us the ability to produce wealth” (Deut. 8:18), and this ability is found in some surprising and remote places.
4. The goal included providing support for the bi-vocational pastor. The church network that created the ADIN program did so with the specific expectation of creating income for pastors who do not receive enough from their congregations to survive economically. The concept of generating supplemental income from businesses is written into their church constitution and is part of a pastor’s job description. Over ten percent of ADIN clients are bi-vocational pastors, and businesses such as stores, butcher shops, rental of supplies for special events, and growing chickens are now presented as models for how pastors can generate supplemental income. However, it has become evident that not all pastors who apply for loans have the interest or ability for managing small enterprises; thus church leadership has also had to deal with a few cases where pastors did not want to pay. However, the efforts to help hard-working, responsible pastors via loans for small businesses have, in general, been met with considerable success.
FAQs of the Program
The success of the ADIN program has generated interest in replicating such a program in other places, and we are currently assisting several groups who have sent representatives. The Kingdom Business (or in English, “Where There Are No Jobs”) book is used as a beginner’s primer, and then the Operations Manual, what one of our U.S. lenders calls “the playbook,” is shared with visitors who want all the details. Here are some of the questions we are asked:
• Why did you start a new organization, rather than work with already existing ones? Prior to starting ADIN, we tried promoting the project idea with other organizations, but did not find any interest. For example, neither Opportunity International, where I used to be the regional director for Latin America, nor World Vision, where I organized the microfinance division, have projects in this area of Colombia.
Another issue which can come up in working with existing organizations is that they may be reluctant to work closely with churches in such projects. The ADIN program is purposely borne out of churches. Not all of the loan clients are Christians (or even go to church), but they come into the program through being identified in meetings in churches. My book and the past article in EMQ address the serious issue of “mission creep”—which is what happens when the Christian ministry focus disappears in business projects. The creation of an agency that is separate, but closely held by the church, seems to avoid this tendency.
• How can the program grow? The program in Colombia grew much larger and faster than originally anticipated. The formula here, which may not be the same for other countries, is that approximately $30,000 of capital is needed to provide the salary and expenses of one full-time professional. In other words, at present, with two full-time people and over $80,000 in capital, the program is able to generate a monthly surplus. The market for obtaining borrowed funds, rather than donations, has been explored by several U.S. organizations. The concept, as presented to us, is that U.S. foundations can actually invest in projects like ADIN, booking the monies as “accounts receivable,” and allowing them to do good, even with invested funds. In fact, we have heard from our investors that they have done better with a four percent loan to ADIN than they did last year in the stock market. How many foundations are open to doing this?
ADIN is not necessarily looking for more money. The agenda of the church association was to develop a program to promote job creation and increased incomes in or through the churches. The problem with integrity—especially in some cases, where pastors have not behaved in an exemplary manner—brought to the forefront the need to address discipleship issues in the churches before trying to promote a wider outreach. From my perspective, the fact that the national church is dealing with the “integrity issue” is an unanticipated bonus ministry. The Colombian Church is being forced to grapple with the important question, “What does it mean to be a Christian in the real world?”
• Are U.S. investors a better medium for doing kingdom business? After almost two years in Sincelejo, my wife and I continue to be the only “gringos” here. The last missionaries evacuated the area in the late 1970s, and the civil strife and political instability prevented any new arrivals. It was only four or five years ago that the roads, which we travel every day to see projects, were cleared of guerrilla checkpoints. We welcome the arrival of U.S. businesses to help create jobs, but have found it challenging to even host our U.S. investors since there are no hotels in this town (population 400,000) with hot water. This dearth of availability of modern hotel facilities is, in itself, an opportunity for investors.
I presented the idea at a “business as mission” conference where I met Christian business people in the hotel industry, but I never heard from them. The number of unemployed people (100,000) and low salaries ($4/day) create a great environment for starting a business. The same church networks would be very happy to help, should there be any takers! As we see containers of aloe vera and ñame being shipped out of Sincelejo, we think there are great opportunities for investing here.
Creating a business in a foreign environment is not easy. I appreciate all the good examples that are presented in the “business as mission” literature and conferences, but missionaries cannot call upon such large and high-cost project ideas for the environment in which they find themselves. That is why projects like ADIN have to be created. International investors may be able to do something bigger and better, but how do you find them?
• If you are using a form of microfinance, is it subsidized? The ADIN operation received no subsidy for office installation, training, employee salaries, or anything else. This is not because anyone was against donations, but rather due to the fact that none were available. Borrowed capital was placed with clients on a monthly fee schedule, and the fees were used to pay rent (month #1), buy a computer (month #3), hire a first full-time staff person (month #5), and then hire a second staff person (month #7). The program is now fully sustainable from the fees charged on the capital that it has in place. Missionaries who help to start these programs should realize, however, that the “subsidy” is them. All client revenue could be plowed back into the ADIN program because the missionary (in this case, me) did not require financial support. The other side of this phenomenon is that once national leadership is in place, the missionary may need to find something else to do. Over a period of two years I went from being the director of the start-up program, to co-director with the new national manager, to performing staff duties under his direction, to being a consultant. Happily, work on start-up programs in other places allows me something to still do, as I am only occasionally involved on work with the ADIN project.
• What have been the major surprises? The religious expression in many Latin American churches is intensive, and it has been interesting to see people who “look very Christian” (i.e., pray, fast, spend a lot of time in church, obey all the rules, etc.) completely ignore their responsibility to meet their financial obligations. This has been a bit of a surprise, also, to the leadership of the denomination where ADIN was borne, causing some churches to hesitate to be involved in the project. It is like playing soccer, where they say, “If you know you cannot play without getting into a fight, it is better not to play.” I respond by saying, “Would it not be better to have a faith strong enough to play, and not fight?”A related surprise has been the difficulty of identifying the management and staff for a development loan program. The board of ADIN is comprised of seasoned Colombian leaders, who were planning the program one year before it began. Yet they seriously considered and rejected four candidates before they chose the present manager, who has done a great job. In Honduras, where a similar program is being developed, the process of finding the right leaders has also been difficult. Such a program requires a very special leader who is responsible, has business training, has a vision for ministry, and is willing to work with the poor. But the biggest surprise for me has been the incredible impact the program has had—especially considering the small investment with which it was started. I am shocked by the ability of these people to live on so little, and to benefit so much from what seems to me like a very small amount of money. Every day I see businesses with only a total capital of $500 that are providing income for entire families. It is amazing how much good can be done, without any donations, through a program like ADIN. That this program then recycles its capital to worthy small businesses and completely covers its costs while it does so is an additional wonder.
Those who would like to better understand the ADIN project are invited to visit it in Sincelejo, located two hours south of the major Colombian city of Cartagena. For specific questions, write email@example.com.
Befus, David. 2001. Negocios Para El Reino. Latin America Mission.
_________. 2002. “Kingdom Business: A New Frontier in Missions.” Evangelical Missions Quarterly 38(2): 204-209.
_________. 2005. Where There Are No Jobs: Enterprise Solutions for Employment and ‘Public Goods’ for the Poor. Latin America Mission.
David R. Befus started many of the Opportunity International programs in Latin America, where he was regional director for many years. He also helped to start World Vision’s microfinance program in Latin America, Africa, Asia, and Eastern Europe. For the past decade he has worked with the Latin America Mission, and his book Where There Are No Jobs is available at http://www.wheretherearenojobs.com.
EMQ, Vol. 46, No. 2, pp. 158-164. Copyright © 2010 Evangelism and Missions Information Service (EMIS). All rights reserved. Not to be reproduced or copied in any form without written permission from EMIS.