Mike’s trip to Kasungu

I’ve just come back from Kasungu where Leslie Lyle and I were leading a workshop on our tilime loans. Tilime means “let us farm” in Chichewa and the loans are used to fund investment in the wet season small holder farms many of our clients have. The loans help clients buy seed, fertiliser, pesticides so they can grow maize, soya, groundnuts, potatoes and more. Agricultural finance is critical to the broader development process in Malawi because it is so central to the economy and has such an impact on our clients’ lives. However, it is a very difficult and risky business.

The major challenge this year has been prices. While the 2010-11 rains were good in the opinion of most of our clients and yields were high, this meant the high supply of maize and tobacco (two significant crops) pushed the prices down. Throw into the mix the ongoing shortage of fuel across Malawi which can grind business to a halt, and you have an extremely challenging environment for both clients and the organisation.

We’re working hard on changing and improving our tilime product for 2012 to try and help clients work around and withstand these challenges and economic shocks, and we continue to improve our links to market in Malawi, providing guaranteed buyers and set prices to our clients for certain crops, hedging some of the risks they face every year when investing in their farms.

I’ll be back out in Malawi in November, just as the rains start and clients begin preparing their land and sowing seeds so I’m looking forward to meeting up with some of them and seeing how the work is progressing.