Social Enterprise Associates' client Alex Stainburn of New Caledon recently traveled to Mali to consult on the country's fishing industry. He discovered a vibrant local and even international market for fish in the region, but entrepreneurs often struggle to find capital to fund startup businesses.

By Alex Stainburn

Currently, most of the fish is quickly dried or smoked and boxed up in huge cardboard boxes for transport to Bamako, Burkina Faso, Ivory Coast and even as far as Ghana. There are plenty of opportunities here from ice making and cold storage to simple processing of fish into fillets. What I'm finding, despite these opportunities, is that there is no financing available. Banks have money to lend but suffered a large loan failure a few years ago and are very hesitant to get back into the fishing industry.

I traveled to Mopti, a major hub for the fishing trade on the Niger River, where I met with local leaders and brainstormed solutions to the challenges local fishermen face.

We had a meeting with local government officials and cooperatives this morning to discuss business opportunities in the post harvest fisheries sector. There are plenty, but the real problem is finding money to support these new businesses. Most of my time has been spent trying to pin down who controls the money. For loans up to US$10K, people rely on family and friends, but above that, capital is difficult to come by for potential entrepreneurs.

Banks' requirements for full guarantees and collateral from other sources eliminate most applications for larger amounts of money. We discussed how to overcome this problem with the group. One option was having the government provide a guarantee in return for a small equity stake in the business. This way, the government will earn a little income from the business and have an incentive to see that it succeeds. After a few years, the government can sell their stake and use the money elsewhere. They can start small to begin building trust between all the parties. Word will get around as people see their neighbors making money. This follows an Islamic banking principle of shared risk.

The meetings were productive, and much was accomplished. The trip wasn't all business, I also got the chance to sample the local cuisine. Yesterday I was offered a few cubes of goat meat to try. To be polite I ate them and said they were good. Then I realized that I had just given the green light for the preparation of a huge plate of cubes for me to eat in front of everyone. Who'd have thought that goats are made up mostly of tendons and skin? Luckily, they did not give me a package of entrails to eat that other people were munching on.

Alex Stainburn's company, New Caledon, identifies investment opportunities in least developed economies. He is currently working with several bottling companies in Africa to develop and introduce an African branded, all natural fruit juice into the U.S. market. Alex can be contacted at alex.stainburn@newcaledon.com

Want more? Check out these video clips Alex took between meetings, when there was a moment of free time!