When the Mentor Lives Next Door: Growing Businesses Through Community-Based Support

For most young people in Mozambique, entrepreneurship is the main way into the economy.

BY: Safinia Aiuba, Adrien Rebord - 10. November 2026

Every year, around 500,000 young people in Mozambique enter the labor market. Only about 25,000 formal jobs are available to them. In the rural districts of Niassa and Nampula in the north, the gap is even wider. There are few large companies and formal employment is scarce, and hiring in both the public and private sectors remains limited.

So for most young people, entrepreneurship is not simply an alternative to employment — it is the main way of entering the economy.

They produce and sell food, repair motorcycles, raise poultry, sew clothes, work as carpenters, operate mobile-money services or run small neighborhood shops. Around 90% of Mozambican businesses are micro or small enterprises, and in rural areas many consist of an individual entrepreneur, a family business or an artisan employing only a few people. These businesses provide essential goods and services, diversify household income and create opportunities where larger companies are absent.

However, starting an income-earning activity and understanding how to operate a business are two different things. The Training and Jobs for Young People (HOJE) project addresses this gap by supporting experienced local entrepreneurs to become trusted business mentors. They combine practical advice with the relationships, reputation and networks that help small enterprises survive and grow.

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Financial education to develop business acumen

Many young entrepreneurs know how to bake bread, repair an engine, grow vegetables or produce furniture. What they have never learned is how to take stock of whether these activities are actually profitable.

For example, a baker may copy the price charged by the neighboring business without calculating the cost of flour, cooking oil, charcoal, transport, packaging, unsold products and her own time. She may sell everything she produces and still lose money.

Or a trader may use the same cashbox to purchase new stock, buy food for the household and pay school fees. At the end of the month, money has circulated, but the entrepreneur cannot say how much the business earned, whether the stock increased or whether any profit was made.

Most entrepreneurs have never received basic financial education. They were not taught to record income and expenditures, calculate margins, control stock or distinguish turnover from profit. Marketing and sales are often also unfamiliar concepts: They may wait for customers rather than actively attract them, offer the same products as everyone else, and have little experience with presentation, customer relations or promotion.

They are already entrepreneurs in practice, but many lack the tools and language to understand their own enterprise. They know how to work in the business, but not yet how to step back and manage the business.

But short entrepreneurship training courses are rarely sufficient. Concepts such as pricing, saving or recordkeeping only become meaningful when they are applied to actual transactions. The HOJE project, which is supported by the Swiss Agency for Development and Cooperation, fostered the emergence of community-based Business Development Agents (ADNs) to bridge this knowledge gap.

During regular visits, the ADNs sit with entrepreneurs to review their figures, identify where money is being lost, and test more appropriate pricing or ways of organizing their business activities. Potential ADNs are identified among successful local entrepreneurs who are recognized in their communities, have relevant business experience and are willing to mentor other entrepreneurs. They are then trained and supported to provide locally accessible business development services.

A recent assessment was conducted by the project across eight districts in northern Mozambique. Over 230 entrepreneurs who had completed the business training alongside 30 local business mentors confirmed the importance of this support. Financial management was identified as the most valued training area, while field interviews showed that many participants had previously neither calculated costs and margins nor separated household and enterprise funds. Mentoring helped transform theoretical knowledge into everyday business decisions.

Lucas Luis, a trainer and community-based Business Development Agent.

Building a market for mentoring

HOJE applies a Market Systems Development approach that centers on one practical question: How can useful business support continue when the project is no longer paying for every activity?

For mentoring to last, it needs a workable business model. Someone must provide the service, entrepreneurs or other organizations must value it, and the costs must be covered in some form. This means testing who is willing to contribute, how services can be packaged, and which combinations of individual mentoring, group training and specialized assistance are affordable. But a sustainable market does not mean that every conversation, referral or mentoring visit must become a separate economic transaction.

ADNs receive benefits that go beyond the fee paid for mentoring. Supporting other entrepreneurs strengthens their reputation as competent and trusted businesspeople. It brings them into contact with potential customers, suppliers and partners. An ADN may later sell another service, receive a referral, enter a new market or develop a commercial relationship with an entrepreneur initially supported as a mentee.

The entrepreneurs also receive more than technical advice. Through the ADNs, they may gain access to clients, suppliers, savings groups, public institutions and specialized service providers. They build confidence, visibility and recognition within their community. These intangible benefits are part of the value exchanged. The relationship can therefore remain worthwhile even when every interaction is not directly paid.

The question is not whether every mentoring conversation can be sold. It is whether the overall relationship creates sufficient value for both the entrepreneur and the ADN to continue it.

HOJE’s role is to help this emerging market take shape. It trains ADNs and develops practical tools, such as this mentoring manual, to strengthen system actors. It also demonstrates the value of mentoring and helps create networks and associations through which providers can exchange expertise, refer clients and become more visible. It can temporarily share costs or commission services, but it should not permanently determine the price or contribution.

Local actors must ultimately decide what works. An individual entrepreneur may pay for tailored support. A group may jointly finance a training session. A specialized service may be contracted by an association, public institution or development program. Other advice may be offered informally because it reinforces the ADN’s reputation or creates a future business opportunity.

This is what a locally rooted market system looks like: Not everything is monetized, but the actors have sufficient incentives, relationships and value to continue participating.

Espinaldo Francisco, a metalworking entrepreneur (right), sits with his mentor Herminio Fernando.

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Nasmi da Fonseca works with Faizal, a business management major.

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Business Development Agents Fernanda Rafael Lagoas (left) and Olésia Alberto.

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Does mentoring create enough value for both sides?

Understanding the impact is key. The 2026 satisfaction and cost-benefit study conducted by HOJE provides evidence that there is impact for both mentors and mentees.

Among the entrepreneurs surveyed, 96% reported an increase in monthly net income, 95% reported higher sales, and 55% had attracted new customers or entered new markets. In addition, 93% were saving, while 30% had increased the number of people working in their enterprises. The analysis estimated that every USD 1 invested through HOJE generated approximately USD 3 in monetized economic benefits over three years.

There are also early signs of demand for mentoring. Some 40% of entrepreneurs had already contributed financially to a quarter or half of the training and mentoring fees, most frequently with MZN 500 (USD 7.80), which represents 10% of the respondents’ reported median monthly business profit after training. This remains modest, but it is significant among a low-income target group and shows that entrepreneurs recognize the value of the service.

For ADNs, the picture is promising but more nuanced. Most already operate their own enterprise and add mentoring to a wider portfolio of activities. The role can generate direct fees, but it can also increase their credibility, expand their networks and bring new clients to their primary business. In the study, 63% considered ADN activities economically viable and another 17% considered them partly viable. Yet independent income from mentoring remained limited for many providers.

This indicates that the market is emerging rather than fully mature. Especially in poorer rural areas, a mixed model is more realistic than expecting individual micro-enterprises to finance intensive mentoring alone. Paid services can be combined with group sessions, contracts from other programs, association membership, cross-selling and lighter informal follow-up.

The objective is not to impose a uniform price. It is to allow ADNs and entrepreneurs to negotiate contributions and service packages according to purchasing power, distance, intensity of support and perceived value.

Gender-responsive mentoring

Women entrepreneurs are not starting from the same position as men. In addition to constraints related to capital, information and professional networks, many women carry the double responsibility of managing a business and taking primary responsibility for children, food preparation and other household tasks.

These responsibilities reduce the time available for training, mentoring, market visits and business development. They also make it more difficult to separate household and enterprise finances. Income earned during the day may immediately be needed for food, healthcare or school expenses, leaving little working capital for the business.

Gender-responsive mentoring must therefore go beyond teaching bookkeeping. It should help women develop practical arrangements that reflect their reality: setting aside working capital, paying themselves a defined amount, establishing an emergency reserve, using savings groups, adapting mentoring schedules and involving supportive family members.

But HOJE also shows that entrepreneurship can address the care constraint itself.

Carlas Machava, Eufrasia Manuel and Ornana Ali completed a six-month Early Childhood Educator course on the Island of Mozambique. When they discovered that no local nurseries were hiring, they decided to create their own opportunity. With a prize of MZN 10,000 (USD 146.60) from the HOJE business plan competition, they opened Cantinho das Crianças, initially caring for ten children.

Their enterprise creates employment for three young women in a profession that is often overlooked by conventional labor market assessments. At the same time, it enables other parents, particularly mothers, to work, attend training, travel to markets or dedicate more time to their own businesses.

This creates a double economic effect. The childcare center generates income for the women who operate it, while reducing one of the main barriers preventing other women from participating in economic activities. It also broadens the understanding of “promising professions,” since labor market assessments frequently direct women towards the same small number of trades, such as tailoring, catering or hairdressing, which can lead to local saturation. Community services such as childcare offer a different pathway: One that responds to genuine demand, professionalizes previously unpaid work and creates opportunities for more than one entrepreneur.

After taking an early childhood educator course, three trainees opened their own nursery on the Island of Mozambique.

Equipping the next generation of entrepreneurs

A baker adjusts the price of her product to reflect higher flour costs. A trader rethinks their cashbox system to differentiate business versus household expenses. Three young women, finding no nurseries hiring, open their own. None of these entrepreneurs needed a bigger, better idea: They simply needed someone close by who understood their business and believed it could grow.

Community-based Business Development Agents continue to show the impact that’s possible — for both mentors and mentees — when they become trusted advisors that combine practical advice with the relationships, reputation and networks that help small enterprises meet their potential.