UK based MFI drives microfinance in Malawi, Zambia, and Zimbabwe:
In the evolving field of microfinance, adapting to clients’ needs is crucial for lasting impact. Established in 2002 by Peter Ryan, MicroLoan Foundation operates in Malawi, Zambia, and Zimbabwe, with over 35 branches across these countries. Committed to women’s empowerment and poverty alleviation, MicroLoan, as led by Group CEO Medha Wilson, has supported over 4 lakh women by providing loans and business training, fostering economic independence and community development.
Pioneering Graduation Loans
One of the most notable initiatives launched by MicroLoan this past year is the ‘graduation loans’ program. This new approach responds to the evolving needs of female entrepreneurs whose businesses are expanding beyond the scope of traditional microfinance loans.
Inspired by the microfinance model pioneered by Grameen Bank, MicroLoan Foundation’s core operation involves lending to small groups of women. However, as their businesses grow and begin employing multiple individuals, it became clear that they required more tailored financial solutions.
The graduation loans pilot aims to meet this demand by offering larger loan amounts and supporting entrepreneurs as they scale their businesses. “The graduation loans mark a significant step in our commitment to empowering entrepreneurs,” said Medha Wilson, Group CEO of MicroLoan Foundation.
Impact on Communities
The success of the graduation loans program is already evident, with many women transforming their businesses, creating jobs, and contributing to their local communities in meaningful ways. The need for these larger loans highlights a key issue – that many entrepreneurs in the region are still significantly underserved. Through this program, the MicroLoan Foundation is working to address this gap, providing much-needed financial support to fuel growth.
“This initiative demonstrates our dedication to evolving alongside our long-term clients. It’s inspiring to witness the tangible success of our clients who have taken advantage of this opportunity,” added Wilson.
MicroLoan recognizes that entrepreneurship is a dynamic journey, with financial needs changing over time. By staying attuned to these shifts, the organization aims to provide ongoing support to help women entrepreneurs thrive. Says Wilson: “Our mission remains grounded in creating sustainable growth for our clients, fostering economic development, and enhancing their quality of life.”
Award Recognizes Achievement
Another significant achievement for MicroLoan Foundation this year was the recognition garnered by MicroLoan Zambia, which was honored with the esteemed ‘60 Decibels Top Impact Award’. The award highlights the foundation’s contributions to financial inclusion and social impact. Medha Wilson expressed pride in the recognition, stating: “Winning the 60 Decibels Top Impact Award, where we placed 2nd among 35 African Financial Service Providers, has raised our profile globally. This recognition underscores the effectiveness of our initiatives.”
MicroLoan’s work doesn’t just resonate in Africa but also on the global stage. MicroLoan Zambia ranked 4th globally out of 114 financial service providers in the 2023 Microfinance Index. “This ranking highlights the critical role microfinance plays in driving social change, empowering women entrepreneurs to create sustainable futures for themselves and their families,” said Wilson.
Innovative Funding Solutions
MicroLoan Foundation remains the sole shareholder of its operating entities in Malawi, Zambia, and Zimbabwe, strategically leveraging a combination of grants and social investments to fuel its growth across these regions. Over the past 3 years (2020-2023), MicroLoan’s subsidiaries have raised external debt from Microfinance Investment Vehicles (MIVs) and private foundations.
In particular, MicroLoan Zambia has secured $5.2 million, while MicroLoan Zimbabwe raised $100K in external debt from foreign lenders. MicroLoan Malawi has raised approximately $5.4 million from both local and foreign sources, with 67% of its funding secured domestically. Wilson adds: “We have raised external debt of over $5.2 million in Zambia and $5.4 million in Malawi, tapping into Microfinance Investment Vehicles (MIVs) and private foundations.”
Investors Help Mitigate Risk
Despite these achievements, MicroLoan faces challenges such as high currency volatility, costly hedging requirements, and underdeveloped financial markets in the region. “As we continue to scale, we are increasingly looking at blended-finance opportunities to mitigate risks like currency volatility and underdeveloped local financial markets,” shared Wilson. Technical assistance grants from social investors have helped mitigate some of these challenges by enhancing innovation, digital expansion, and staff development. Looking ahead, the foundation is exploring blended-finance opportunities to scale operations further while navigating the complexities of Sub-Saharan Africa’s economic landscape.
Technology Aids Inclusion
In recent years, the MicroLoan Foundation has embraced technology to enhance its services and reach underserved communities. In Zambia, the digital savings platform ‘Katumba’ is helping clients build financial resilience by creating a digital footprint for credit assessments. “We are currently working with over 10K clients and aim to scale this platform to reach 50,000 low-income households,” said Wilson. The goal is to help more individuals save and eventually access credit through their digital footprints, promoting financial inclusion.
Another technological milestone for MicroLoan is the ‘Oleyas Project’ in Zambia. This initiative integrates digital solutions with the foundation’s Management Information System (MIS) to improve efficiency and transparency. “Our focus is on areas with poor connectivity, using mobile-first design principles to ensure all clients benefit from our services,” explained Wilson. By leveraging digital tools, the organization is enhancing its capacity to deliver life-changing financial services even in remote regions.
Rural Economic Empowerment
In Malawi, the MicroLoan Foundation has also been working to strengthen the rural economy through the ‘Smallholder Safety Net Upscaling Program (SNNUP).’ This initiative is designed to support smallholder farmers, particularly women, by offering specialized loans and developing a tailored credit scoring system. The program also integrates mobile money services to enhance financial inclusion and operational efficiency. “This initiative fosters gender equality in the agricultural sector while ensuring that women in rural areas have access to essential financial services,” noted Wilson. The project aims to empower female farmers, strengthen rural activities, and improve household incomes.
Future Focus: Sustaining Growth
As MicroLoan Foundation moves forward, its focus remains on expanding its reach and enhancing its services. With a clear commitment to empowering women entrepreneurs, its journey continues to be one of resilience, innovation, and social impact. “Our mission is rooted in creating sustainable growth for our clients, fostering economic development, and improving their quality of life,” concluded Medha Wilson.
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