Download Village Bank Report, FINCA Malawi

Village Bank Report, FINCA Malawi
First Report
Tenacity
Prepared for Chicago Trading Company
Organization:
FINCA International
Contact:
David Chalfant
Director of Development
202-971-4695
[email protected]
Date:
June 10, 2016
Malawi Country Overview1
Malawi is a landlocked country located in southern Africa. Formerly a British protectorate, and
known as Nyasaland. It is bordered by Zambia to the northwest, Tanzania to the northeast, and
Mozambique on the east. Malawi became an independent nation in 1964. After three decades of
one-party rule, the country held multiparty elections in 1994. Arthur
Peter Mutharika is a Malawian politician, educator and lawyer who has
been President of Malawi since 31 May 2014. Mutharika has worked
globally in the field of international justice. He is an expert on
international economic law, international law and comparative
constitutional law. He informally served as an adviser to his older
brother, President Bingu wa Mutharika, on issues of foreign and
domestic policy from the onset of his election campaign until the
President's death on 5 April 2012.
Malawi ranks among the world’s least developed countries. Over half
(53%) of its 16 million people live below the national poverty line. The
economy is predominately agricultural, with about 80% of the
population living in rural areas. Major agricultural products include
tobacco, sugarcane, cotton, tea, corn, potatoes, cassava (tapioca),
sorghum, pulses, groundnuts, and Macadamia nuts, as well as cattle
and goats. Agriculture composes approximately one-third of the
country’s GDP.
The economy depends on substantial inflows of economic assistance
from the IMF, the World Bank, and individual donor nations. The
government faces many challenges including developing a market
economy, improving educational facilities, managing environmental
problems, and satisfying foreign donors that fiscal discipline is being
tightened. Barriers to foreign investment include unreliable power,
water shortages, poor telecommunications infrastructure, and the
high costs of services.
The rapid spread of HIV/AIDS has also been a major setback for the country. Nearly one million Malawians live
with HIV/AIDS. Each day in Malawi, 300 people become infected with HIV/AIDS. While access to anti-retrovirals is
improving there are 68,000 HIV/AIDS related deaths per year. The pandemic has created a generation of orphans,
and has severely undermined national efforts to lift the country out of poverty.
Sources: CIA World Factbook (https://www.cia.gov/library/publications/the-world-factbook/geos/mi.html) and UNDP
(http://hdr.undp.org/en/media/HDR2013_EN_Statistics.pdf), accessed 7 November 2014.
1
2|Page
Malawi was hit by a drought linked with climate change last year, while flooding also hit its southern region. A
new drought caused by the climatic phenomenon El Nino is now ravaging the country and is reported to be the
worst drought in 100 years. As a result of this very severe, multi-year drought President Mutharika and has
recently declared Malawi to be in a “state of national disaster”. 2About 2.8 million Malawians face food insecurity,
making country one of the worst hit in southern African drought.
In Malawi, poor and rural people have very limited access to financial services; the few commercial banks tend to
focus on businesses in urban areas. Microfinance institutions are therefore an integral part of the financial system,
with micro entrepreneurs bringing new economic opportunities to their communities.
Malawi Statistics
Population (July 2014 est.)
Life expectancy at birth
GDP (purchasing power parity, 2014 est.)
GDP per capita (2014 est.)
Human Development Index (2012)
2
16,777,547
52.78 years
US $4.26 billion
US $254
0.418 (170 out of 186 countries)
http://www.aljazeera.com/news/2016/01/southern-africa-severe-drought-leaves-millions-hungry-160118140707396.html
3|Page
FINCA Malawi
FINCA Malawi was founded in 1994. Headquartered in the commercial center, Blantyre, it serves all 28
districts in the country. Research has shown that incomes are at least a third higher in the FINCA family,
often making it feasible to purchase clothes and medicine, and pay for school fees.
FINCA Malawi’s current outreach exceeds 40,000 micro entrepreneurs and has a loan portfolio of $8.2
million. The table below provides a snapshot of FINCA’s operations in Malawi.
FINCA Malawi (as of Feb. 2016)
Clients
Percent women clients
Loans outstanding
Average loan size
On-time repayment
49,389
60%
US $18,810,239
US $367
94.4%
Given the limited access Malawians have to financial services, FINCA has partnered with The MasterCard
Foundation in order to significantly scale up financial inclusion. The development of mobile banking
technologies has opened up new opportunities for FINCA to reach remote areas and provide financial
services to its clients at a very low cost. FINCA will roll out new delivery channels using technologies that
improve its business model and geographic footprint, enabling scale up, long-term growth and outreach,
particularly around savings mobilization.
FINCA Malawi will expand outreach through three complementary types of agent outlets:
•
Third party agents. These third party merchants or ‘agents’ are carefully selected small businesses
that are strategically placed in locations on the outer periphery of full service branches in areas
where unbanked individuals live and work. FINCA will equip these agents with biometric point-ofsale devices linked to a proprietary FINCA payment system and FINCA’s core banking system,
enabling clients to use their cards at multiple outlets.
•
Mobile banking. FINCA will partner with multiple mobile network operators in order to leverage
their networks and mobile payment platforms so that clients can make mobile payment
transactions. Clients will be able to transfer money between their mobile wallet accounts and
their savings accounts.
•
Light branches/kiosks. These are leanly staffed outlets that use point-of-sale technology and a
proprietary FINCA payment system to replace full teller terminals, and lower technical
infrastructure and labour costs, enabling outreach into less densely populated rural areas. Clients
are able to access services and staff, and receive training on the use of mobile technologies. In
addition to allowing customers to conduct cash transactions, these proprietary outlets offer
account opening, customer servicing, and banking transactions services.
4|Page
About Your Village Bank
Blantyre
The city of Blantyre, Malawi, is home to “Tenacity” Village Bank.
With your generous support, FINCA Malawi continues to thrive and grow. There are many Village Banks in
Malawi and this report focuses on one in Green Corner just outside of the city of Blantyre. Blantyre is
Malawi's center of finance and commerce and its largest city, by population, with an estimated 732,518
inhabitants as of 2008. It sometimes referred to as the commercial capital of Malawi as opposed to the
political capital, Lilongwe. It is the capital of the country's Southern Region as well as the Blantyre
District. The Malawi Broadcasting Corporation (MBC), the country's state broadcaster and the provider of
Malawi's only television channel, has its headquarters in Blantyre. The Supreme Court is also located here.
The city also houses the College of Medicine, the Malawi Polytechnic and the Kamuzu College of Nursing,
constituent colleges of the University of Malawi, located along the Chipembere highway.
The rather unconventional location of the city has meant that Blantyre is overlooked by Mount Soche,
Ndirande Mountain, Chiradzulu Mountain and Michiru Mountain which consolidates the Michiru
Mountain Conservation Area.
5|Page
View after 2 hour hike up Mt. Michiru
Below you will find some background information about your Village Bank, as well as photos of the group
members, and the corresponding loan disbursement statements. The loan cycles are all four months long.
“Tenacity” Village Bank
Loan disbursement statement for Tenacity
Cosmetics Shop
Loan size
(Malawian kwacha)
100,000.00
Loan size
(USD)
$141.00
Meatballs (Snacks)
Second Hand Clothes
Grocery
Restaurant
Maize Selling
Second Hand Clothes
Second Hand Clothes
Grocery
Fried Fish (Snacks)
Cooking Oil
100,000.00
100,000.00
100,000.00
100,000.00
100,000.00
100,000.00
100,000.00
100,000.00
20,000.00
100,000.00
$141.00
$141.00
$141.00
$141.00
$141.00
$141.00
$141.00
$141.00
$29.00
$141.00
Client name
Business type
Fannie Assocaradar
Mabedi
Yamikani Kachale
Alliah P Ndolo
Hanna Doreen Kachale
Pelanie E Kocherani
Perpetual Damuza
Joyce Kasamba
Happiness Kachale
Verity Kamanga
Lonney Chapweteka
Karyn Godcares
Msowoya
Total disbursements
Average loan size
1,020,000.00
92,727.28
$1,439.00
$130.81
6|Page
“Tenacity” Village Bank
The group chose the name Tenacity because they have come to believe in “firmness” or solidarity from
group cohesion. They feel that they will progress and grow together and improve their businesses
together with FINCA.
Client Profile
Lonney Capweteka, Tenacity Village Bank
Business: Fried fish / Snacks | Current loan size: 20,000 kwachas (USD 29.00)
Having the trouble to look for various things to support her family of 5 children encouraged
Lonney to look for financial assistance from FINCA. Aged 47 Lonney heard about FINCA from
surrounding FINCA groups and clients. Upon getting the loan Lonney feels she is now better off
to sustain her family without the problems she faced before.
7|Page
Client Profile (cont.)
Lonney Capweteka, Tenacity Village Bank
Currently Lonney has bought raw materials for her Kanyenya business which are dried fish, flour,
salt and cooking oil. This is to ensure daily suppliers with steady income to support the family
and ably repay the loan. Lonney wants to venture into another bigger business as soon as she
learns from other group members business skills and gains operations knowledge.
Translation
My name is Lonney Chapweteka aged 47. I am married with 2 children and 3 dependants . I joined FINCA
last month , May 2016. Since I joined FINCA I have been very happy , my business has grown and I wish
next time to get a bigger loan and expand my business. The loan that I borrowed from FINCA has really
helped me a lot, and my life has really changed a lot. I no longer face problems that I use to face, I can
see my business growing in future.
8|Page