Opportunity Malawi weathers the economic storm, with your partnership
Malawi is one of the poorest countries in the world, with 90% of the population living below $2 a day. Macroeconomic issues in 2010-2011 continued into 2012, hitting the poorest families the hardest. Under new president, Joyce Banda, Malawi is recovering from the effects of the former president’s actions. With the international donor community supporting the new administration, fuel availability and cost and foreign exchange are improving the outlook. Amidst the economic turbulence, Opportunity Malawi made adjustments to meet the needs of struggling families and marched forward with its outreach goals.
Our global network team is ensuring that Opportunity Malawi emerges from the economic crisis stronger as a result of our continued focus on our mission, vision and long-term strategy. During the first half of the year, Opportunity Malawi achieved increased outreach in the following ways:
Approximately 70% of Africans work in agriculture and these households are some of the poorest in the world. Opportunity found that farmers in Africa are producing at only 40% of their potential because they cannot access the needed best-practice information, financing and markets. With your help we work with small-scale farmers in Malawi to adopt more productive agriculture practices, link up with buyers and extension service providers, and access inputs to grow more food.
Opportunity spent 2010 and 2011 working with small-scale farmers and learning from them which financial tools and services they need to succeed. In 2012, Opportunity’s Agriculture Finance team aims to bring services closer to clients using mobile phone banking. This gives clients access to their funds from their own rural village, and uses GPS to capture household data and map out exact farm plots to better understand how best to use the land.
The agriculture finance program has grown tremendously from its start with Malawian groundnut and tobacco farmers nearly five years ago. Crops funded in Malawi now include: maize, sugarcane, cotton, and tobacco
At the end of 2011, Opportunity served 53,536 active loan clients in Malawi, and 411,840 savings clients.
Thanks for all your support that makes the continuing work in Malawi possible!
Joseph Meke started his maize business in 1999 in Ndirande, Malawi. Soon afterwards, his wife gave birth to their first child. They now have three children, including five-year-old twins. Providing for his growing family is one of Joseph’s primary motivations for succeeding in his business. Joseph routinely travels nearly 100 miles to buy his grain from the city of Ntcheu. He purchases 300 bags each trip for about $7.90 per bag and resells them for $9.40.
Joseph tried to expand his business several years ago, but banks denied him because he lacked collateral. Joseph felt he had nowhere to turn; until he heard about Opportunity Malawi. The numerous access points provided by Opportunity are crucial for Joseph in his business: he deposits his earnings in Ndirande and withdraws cash to purchase maize in Ntcheu. He also says that he loves using Opportunity’s cellphone banking system to check his account’s balance on his mobile phone. He checks his balance at least once per day,especially before making any payments from his account.
In addition to saving with Opportunity Malawi, Joseph took out an individual loan of $3,290 in May 2010. With this money, Joseph was able to purchase a van to cut down on costs associated with transporting maize from Ntcheu to Ndirande. Since making this investment,Joseph says that his profit margin has increased from $197 to $658 per month.
Now, he is currently operating two maize shops and has hired four employees, in addition to leasing a warehouse for $13 per month to store his inventory. Joseph also recently reinvested his profits to purchase three small houses which he now rents out at $66, $40, and $26 per month to supplement this income.
Opportunity has invested more than $20 million over the last 10 years in the use of electronic and mobile technologies to reduce transaction costs and bring services to the most marginalized and remote clients. By establishing low-cost satellite branches and deploying ATMs, point-of-sale (POS) devices and mobile banks in outlying areas, banking services are provided to people in their own communities.
Opportunity has launched an electronic wallet strategy tailored to the needs of Malawi. Building on existing infrastructure, Opportunity is designing and implementing new electronic and mobile banking technologies to reduce transaction costs for customers and increase the number of people who have access to these critical services.
Capturing clients’ biometric information provides convenient and secure access to finances, even for those who are illiterate or lack formal identification. See the image below where bioemetric technology is allowing our client, Mercy Chipeta, to access her account without formal and expensive paper identification.When clients open an account, their fingerprint is scanned and stored in the bank’s system, enabling electronic transactions at retail and ATM locations. New technologies use cell phones, and satellite and broadband Internet to further increase Opportunity’s reach. The Opportunity Technology Center provides high-tech management information systems solutions for its banks.
Removing Barriers: Increasing Delivery Channels to Build Access
During the first six months of 2011, Opportunity Malawi opened two new satellite branches and an additional kiosk, bringing the bank’s total outlets to 39 including its fleet of mobile banks. Opportunity Malawi also provides financial services to clients through Point of Sale devices at 57 merchant shops, 28 ATMs and via cell phones. Clients in Malawi now have 160 access points throughout the country.
Agricultural Lending Developments
Over the past six months, Opportunity Malawi has established new partnerships with External Service Providers. They work mutually to maintain crops in line with expectations of the rural model and expand their agricultural loan portfolios into new geographic areas. Mapping and profiling activities are underway to give farmers accurate knowledge of their farmable land and to help the bank determine the exact amount of input loans each farmer needs. During the first half of 2011, the agricultural team received specialized training to equip them to train agriculture loan clients.
Agriculture Client Financial Literacy Training
Opportunity Malawi is implementing innovative agricultural microfinance in rural communities. Opportunity recognizes that most of our rural clients have no experience with banks or financial services and have varying degrees of literacy skills. Thus, targeted financial literacy training is a core component of the rural expansion model. Opportunity is developing, piloting and implementing a series of multimedia training products for financial literacy including methods to deliver DVDs and demonstrations at key times and locations in rural villages.
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Combined with other sources of funding, this project raised enough money to fund the outlined activities and is no longer accepting donations.
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