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Microfinance

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Mrs Simwelele Microfinance article

Microfinance

Small Loan Programme       

This is a programme under Primach, whereby small loans are given to parents on the compounds to start small businesses. 

The selling and buying projects are a common feature in most of our communities because most people do not have the ability to process raw materials into finished products ready for sale.

By giving small loans to people to set up businesses like these, Primach hopes to empower parents economically so that they eventually take over the full support of their children.

In this way, the project aims to bring back the dignity of a parent/guardian by according them a chance to become bread winners.  It also encourages community participation.  When a household is empowered, then it will subsequently empower the community where they live.

In all businesses, we always ensure that before the beneficiaries receive any assistance, they are well trained to manage their proposed businesses. Therefore the office shall design training programs which will equip people in the following areas i.e. project identification, financial management (basic understanding on profit & loss), records management, market identification, etc.

Examples of the businesses undertaken by those under microfinance are selling kapenta (small fish), tomatoes, and charcoal, making and selling door mats, and selling chickens and eggs.

In all these projects we shall ensure that the necessary resources are available before we come in to assist someone i.e. availability of human resources, land/space especially projects such as poultry & gardening, accessibility of raw materials, etc. This means that a survey shall be carried out as a way to help the beneficiaries choose project that are viable and beneficial.  

For these projects to be sustainable and to improve on accountability, we operate a revolving fund.  This means the beneficiaries will be given seed capital to invest and agree on the period within which they can start repaying the soft loans, which will in turn help the next group in line. We do have in place a policy document that governs the operations of this micro-finance program and ensure that the beneficiaries are clear on what is expected.

Loans range from 150,000 to 500,000 Kwacha.  This is between about £20 and £70.  the standard period of time to pay back this loan is one month, and Half the loan should be paid back in the first two weeks, and the rest in the following two weeks. 

There is no interest on the loans, unless the person fails to pay it back in the given time. In this case, the interest is at 10% and doesn’t increase.  This is there as an incentive to the person to pay back on time.  We encourage them to remember that by paying back on time, more people can benefit from loans.  

In order to monitor the businesses that people have set up Primach tries to visit each one every week.  This could be someone in her home or in a market in one of the compounds or even in the large market in town.  We try to encourage them and to teach them.  We give technical advice when needed.  For example, if we find that the products are not displayed well then we will encourage them to change so that people will want to buy from them. This is particularly important in the market, where there is a lot of competition to sell the same things. 

It is generally accepted that to every undertaking there is a risk factor attached and we know that in the above-mentioned programs we shall face risks. However, we hope to overcome them by

1.    Imparting Christian values and beliefs alongside whatever help we shall render.

2.    Build-up team spirit using the group initiatives.

3.    Use follow-ups as a way to build strong relationships with our beneficiaries.

This is Janet Phiri who was one of the first to benefit from the Microfinance scheme.  She used to sell groundnuts in the market but now she sells charcoal.  She was originally loaned 200,000 kwacha and paid it back in two instalments of 100,000 kwacha.
Janet has 5 children and a husband who drinks.  He doesn’t work.  Janet is keen to learn English and eager to participate in lessons.  Her enthusiasm has brought her along way as she has become one of the strongest students in the beginner’s class she attends every Monday. 

Janet was given help because we found that she was so poor, she was not able to buy food or to pay school fees for her children.  Mrs Mfula knows her from church and through working with her there she came to know her strengths and weaknesses.  She decided to give her a chance.

If you would like more information about the Microfinance Project, please contact Primach at the following address or by e-mail:

If you would like to send a donation, please make your cheque payable to 'Primach' and send to the following address.  If you want your donation to go to a specific project, please mark the back of your cheque accordingly.  If you want to GiftAid your donation, please tell us, including your address and postcode.  Thank you.

Primach

Rose Bewick,

Tan y Bryn,

Glanwern,

Borth,

Ceredigion, SY24 5LT

rosebewick@msn.com.

Mrs Simwelele microfinance article  

Primach UK is a charity for tax purposes.  HMRC reference number XT23597

Primach Zambia registered charity number:  01711