Phil Goodwin turned his back on Mammon to follow a different calling, and is now using his skills to help one African country develop a sustainable economy...

THE woes of Northern Rock, Lehman Brothers and now Bradford & Bingley, have sparked much hand-wringing in the financial community as to the whys and wherefores of the turbulence affecting the capitalist system.

Phil Goodwin, the former head of Montagu Private Equity and now founder of Fusion Capital, a micro-finance provider in Kenya, believes that some kind of correction was `inevitable' as the system devised ever more complex ways of making money.

"One of the reasons I suppose I left private equity and the world of finance was that I felt that the deals were becoming more complex, and less about investing in businesses and promoting enterprise.

"I'm glad I'm not involved in UK finance now. I think the credit crunch was inevitable. Whenever the financial system becomes uncoupled from the real world, it goes wrong.

"This is a classic case where people were doing some very, very clever things repackaging assets, but who had no connection with the people on the ground borrowing the money."

Phil, who lives in Wilmslow, turned back to education after leaving his high-flying career in finance.

Born in Derby, the son of an engineer, he had always been a high-achiever at school, winning a place at Keble College, Oxford, to read politics, philosophy and economics.

Having loved his time as a student, from an academic point of view as well as a social one, Phil enrolled to study for an MA in Biblical Studies at Manchester University.

"I nearly became an academic before opting for a business career, and I really enjoyed the MA, so much so that I've started a part-time PhD.

"I'm a Christian and have always had a fascination with the Bible. I have been studying Hebrew and Greek, and it's been great being back in a learning environment, doing something different.

"Going back to the original languages of Christianity and trying to understand what it means is just fascinating."

Without ever appearing `holier than thou', it is clear that Phil's faith is a major part of his life and his work in Africa.

As well as Fusion Capital, which invests in growing businesses in Kenya - there's a lack of enterprise finance there - Phil and his wife Estelle run a charity, Kibera In Need, which is helping some of the 500,000 children living in the massive Kibera slum in Nairobi.

"It's about putting something back," he says simply.

Phil and Estelle have just raised more than £10,000 for KIN, having cycled from Land's End to John O'Groats in just 14 days.

Brought up as a Methodist, Phil admits he lost his devotion for `much of my adult life', but has now recovered it.

In tandem with his spiritual reawakening came the need to try and use some of his money to bring about change.

He explains: "In the course of my private equity career, I had obviously made some money and, about three years ago, I seriously began to investigate what I should do with some of that money.

"Anyone who has been born in this country and received the education and background that I did, was very lucky. I was lucky, too, to get involved in a growing industry. I think that sometimes you have to acknowledge that those who make money are not always a genius or more hardworking than anyone else - good fortune does come into it."

Phil wanted to give more than just money to helping the needy: "There are countless charities working in the Third World. What I wanted was to do something sustainable and which involved using my skills in finance.

"I wanted to make a real difference, and in Kenya you do that by supporting business. It's the old story - instead of giving someone a fish to eat, if you teach them to fish it's a lifetime skill.

"If you help someone grow their business, that creates jobs and wealth and raises taxes which pay for social improvements."

Phil was introduced to a man called Luke Kinoti by a friend of a friend, who could help him set up a fund to help small businesses, and the rest is history.

Fusion has already raised more than £2.5m in its first round of fundraising, and is already at work in Kenya.

"Luke had a 20-year background in micro finance, he'd financed loads of really tiny businesses and had an idea to do it on a larger scale because of the funding gap for small and growing businesses.

"We're up and running and it's very exciting. It's like the UK was 10 to 15 years ago - visiting business people really excited about what they do.

"I had got a bit jaundiced with UK private equity, and now I am loving investing again. I'm enjoying this more than I have anything else in years."

He has been to Kenya around a dozen times in the last two years. Fusion, which is backed by around a dozen of Phil's contacts and business associates, has made more than 100 investments, and created around 1,000 jobs.

"We are proving that it can work to invest in Africa, and that's exciting. There is a lot of caution about investing there, it's seen as too risky, but in micro finance the default rate is low, only around three per cent.

"We're not getting carried away, but proving it works, is profitable and creates jobs, means that we can think about maybe expanding in other countries."

The father-of-three, who describes himself an honorary Mancunian, having moved to the city in 1990, and then twice shunned moves to London, sees the north west as home now.

Turning back the clock, Phil came to the city to run 3i's office here, having worked for the venture capital giant for eight years, including a stint in Japan.

"I arrived mid-recession and had to lay off a third of the staff, which was not at all pleasant, but from then on we were very successful. After that I went to HSBC and persuaded them that they should open a private equity base in Manchester.

"I'd worked for 3i for five years and they wanted me to move back to London, but we didn't want to go - my wife and children were settled and happy here. I went to see an old friend at HSBC and persuaded him there was plenty of business here and they should back me to do it.

"We opened in 1996 - I'm pretty sure HSBC thought it was going to fail and I would end up moving to their mainstream team in London."

The cynics at the bank were comprehensively proved wrong as the Manchester office became a powerhouse of private equity in the regions, with successful deals such as AM Paper, really putting the team, and Phil Goodwin, on the map.

There then followed a name change as HSBCPE became Montagu Private Equity, and a top-level shake-up, which saw Phil asked to head the entire UK business.

"I agreed to do it, but only for five years. Again, we decided not to relocate, as the children were happy in school here and my wife was settled too.

"I had a great time, but didn't want to commit for another five years and, at the end of 2005, I stepped down."