In May, Priti Patel visited the MicroLoan Foundation head office. As Secretary of State for International Development, her visit gave MicroLoan the opportunity to discuss how Department for International Development helped MicroLoan expand our reach and support over 6,000 of the poorest women in Southern Malawi set up businesses to pull themselves and their families out of poverty.
What is DFID?
The Department for International Development (DFID) leads the UK’s work to end extreme poverty. One of the key ways in which they do this is by funding projects run by charities. MicroLoan Foundation applied for the Global Poverty Action Fund and was awarded funding for our Pathways from Poverty project which would run over 3 years.
The Pathways from Poverty project was developed by MicroLoan Foundation. It began in April 2013 and ended in March 2016. Its aim was to provide 6,300 women living in poverty in rural Malawi with loans and business training that would enable them to set up small businesses.
In order to do this, MicroLoan Foundation Malawi would employ and train new Loan & Training Officers (LTOs) and provide them with motorbikes to reach remote rural areas where many of the most marginalised and poorest people live. The LTOs’ role is vital in identifying women with entrepreneurial potential and delivering tailored business training to provide them with the knowledge and skills to set up and run their own enterprises. With the DFID funds, it became possible to hire eight LTOs, as well as a Project Officer, and deliver the project from the seven existing branches in Southern Malawi.
How did the project go?
The project was a success, achieving its objectives and exceeding expectations and targets. The project proved able to adapt and overcome challenges, particularly the difficulties produced by El Niño and the severe droughts, as well as very high inflation rates.
The new LTOs enabled MicroLoan to extend its reach, meaning that thousands of impoverished rural women now have improved access to financial services, as well as greater monetary and business literacy. A total of 6,409 marginalised women were economically empowered by the provision of loans and business training, over 100 more than initially projected. The businesses they have set up have transformed the lives of their families. The increase in household income has meant that they can now afford to buy food, send their children to school, and buy life-saving medicines.
As well as the immediate increase in household income, the impact of the loans and training is long term. MicroLoan encourages clients to save in order to build financial security and resilience. Through training and support, all of the women were able to start doing this. New clients were found to be saving 11% of the loan value, more than the target 10%, and existing clients were saving 21% against their 20% target.
The impact of the loans and training is felt by many more than just the women themselves. The 6,409 women who received loans and training had 30,676 dependents. Therefore, a total of 37,085 people experienced a reduction in poverty as a result of the Pathways from Poverty project.
If you want to read more about our project work and impact, click here.
“The project achieved positive changes in the poverty statuses of its beneficiaries and exceeded the target number of household members who benefited from the increase in living standards.”
(DFID Project Closure Report, 2016)