MicroLoan Foundation
Grant
MicroLoan Foundation supports women in Malawi, Zambia and Zimbabwe (from 2015) by providing loans and on-going business training.
MicroLoan Foundation is a registered UK charity that works with the poorest women in rural sub-Saharan Africa. The charity helps these women start a small enterprise to enable them to make a living, buy food, medicine and send their children to school. MicroLoan Foundation started in Malawi in 2002 with a grant of £10,000 and entered the Eastern province of Zambia from late 2009. The Foundation has plans to register an interest in operating in Zimbabwe in 2015. By providing specialist business training, mentoring and support, in addition to encouraging women to save, 98% of the loans are repaid in full - which means that money is then recycled to help others.
Summary
MicroLoan works in the rural areas because there is a dire need, and its complexity and costs of operations deters others. In fact, over 50% of our client base earns under less than $1.25 US equivalent and virtually all are below the $2.50 level. Loan types range from simple trading, restaurants, livestock, to farming and solar lighting.
We focus on women because women and children are the foundation stones for the future. Women own just 1% of the world’s resources and face social, economic, political and cultural discrimination. And yet women are entrepreneurs. They produce 60% of all food and run 70% of small- scale businesses. Women support one another to make their businesses successful and spend their profits on their families. And, of course, their husbands are delighted – in over 60% of MicroLoan cases husbands or men are actively involved.
We form the women into self-supporting groups that elect a Chair, Treasurer and Secretary and train them how to work together and run their businesses with a training programme that has been adapted for illiterate women with little or no formal education. So that means, pictures, role play and songs. We don’t believe in taking physical collateral; instead we develop the group cohesiveness and training to ensure repayment is achieved whilst protecting social impact.
We formed our first loan group by Lake Malawi, where Livingstone signed a treaty to abolish slavery in 1867. In that group was a lady called Catherine, who had a family of 12, looked after orphans and had no source of money other than the meagre income of her husband.
She was given a first loan of £20 to buy and sell fish, another to add to her savings to buy a fishing net - to fish from the shores of lake Malawi, and subsequently more loans to progressively buy 3 fishing boats, build a house for rent, open a shop and install a water pipe in her village. We visited Catherine last year with the retired business author Charles Handy. “Do you know”, he said, “when you add up her employees and related dependents, your loan of £100 is actually directly helping 156 people - that’s the ‘’Microloan Multiplier Effect”.
Social Impact
We currently directly help 32,000 women and their families at any one time and employ just under 150 local staff. We have 23 branches supported by an HQ department and have disbursed over £24.0 million in loans since we started, and made more than 370,000 loans to just under 80,000 women. With an average of 5 family dependents for each loan, their employee’s families and village communities it’s clear we are affecting the lives of 100’s of 000’s. The staff and related structures ensure we can deliver ‘quality’.
MicroLoan has been committed to quality and social impact since its inception. We have since 2009 had a Social Performance Management Manager and now have a team of three specialists on the ground in Africa. Our purpose is to ensure we achieve financial robustness (‘sustainability’) and social impact in equal measure.
Core to the programme is our commitment to the Grameen ‘Progress out of Poverty Index’, which we developed with Grameen Bank in both countries. This enables MicroLoan to monitor the level of ‘poverty likelihood’ as clients enter and progress through the programme and is linked to strong policies which ensure that the needs of the women are put at the heart of the operation.
This quality is earning MicroLoan a good reputation. We were chosen in 2013 to host a visit by Christine Lagarde, Head of the IMF, been featured on the BBC and Daily Telegraph charity appeal and speak regularly at international development and microfinance events. We also share best practice and learning with other operators and count Sir Bob Geldof amongst our Patrons.
Grant Request
Your grants will enable the MicroLoan Foundation to grow in new countries - in particular to open a new microfinance operation in Zimbabwe in 2015. You can also help us in other ways, we are always keen to talk to volunteers with a wide range of skills, marketing finance, legal, IT, social media, research, business management – please mail our CEO at peter.ryan@mlf.org.uk
MicroLoan is registered UK charity that supports the opening and running of our own overseas microfinance operations. We have overseas fundraising offices in the USA and Australia. Local African operations to comply with the local regulations of the Reserve Banks are registered as Ltd companies, but are 100% owned by MicroLoan UK with the appropriate local safeguards on their charitable status. The charity is frequently independently audited by donors and receives funding from DFID and the Scottish Government.
http://www.microloanfoundation.org.uk/
