Matthews (MAVISALO's Secretary) giving us one of his big smiles.

“COMSIP…” called out Matthews, holding his hand in the air. “…Chop!” responded the fifty people gathered in the meeting room, as they brought down their hands in a chopping motion. The group is the Manyamula Village Savings and Loans organization, or MAVISALO, which Boyd and I visited last summer. And COMSIP is a Malawian government program designed to reduce (chop!) poverty by promoting a culture of saving. After the cheer, a feeling of enthusiasm remained in the room as the group settled down to start the meeting.

I held this exuberance in my mind as I read Canaan Gondwe’s most recent report on MAVISALO’s progress. MAVISALO, which already works to encourage savings among members and provide local loans at reasonable rates, is growing rapidly. They recently welcomed 80 new members for a total of 130 members!

Capacity Building and Training

In addition to the initial “seed money” from Spirit in Action, MAVISALO also was awarded an $800 grant from COMSIP (Community Savings and Investment Promotion) for training in financial literacy management and business management. Some of the topics covered at the recent training for MAVISALO members were:

COMSIP training for MAVISALO members

• Savings mobilization
• Credit management
• Monitoring of financial operations
• Business idea generation
• Business planning, records, and evaluation
• Market research and marketing
• Product costing
• Planning for profit

“These trainings have impacted on the members positively,” wrote Canaan in his report, “in that members will operate their small enterprises with skill and positive attitude.” Many of these topics are also covered in the Small Business Fund program training and so MAVISALO members who are not involved with SBF also have a chance to learn these skills. Also, everyone who has received some training in the past can review, refresh, and evaluate their current business models. The MAVISALO Executive Team is working to certify the group as an official COMSIP Cooperative, which will open up even more opportunities for leadership building, business training, and community grants.

All this is part of creating a stable, prosperous, rural economy in Manyamula Village through locally led education and entrepreneurship. Canaan closed his report with a few words of encouragement, echoing that hopefulness of the group “chopping” together, “All is well as we work together to alleviate the suffering of many poor households.”

**Click on photos for a full-sized version.

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**Don’t miss the video about our visit to Manyamula Village, Malawi posted below!

At the end of last year, Canaan Gondwe, a SIA partner living in rural Malawi, gathered together forty-one other people to form the Manyamula Village Savings and Loans group (MAVISALO). They applied for and received a small grant from SIA to start a poultry house that would serve as the start-up capital for their loan fund. Members also bought member shares of about USD$6.50 each to join the group.

Tanya with MAVISALO members, July 2011

Since their start in 2010, MAVISALO has generated USD$950 from three rounds of broiler chickens and has given out 40 loans, totaling over USD$8,000. Their repayment rate is 98.8%.

Also, because the program is community-based, the interest generated from the loans (at the rate of 5% per month) goes back into the loan fund so that more people have the opportunity to borrow and expand their businesses. “Members of MAVISALO are able to save through shares given to their local-based institution and also they are able to access loans for their economic empowerment,” explains Gondwe.

Building Community

When I visited Manyamula this past July, I saw that MAVISALO was about more than just economic empowerment and loans. The whole group meets once a month to review their constitution and address any concerns. At these meetings, they work entirely through consensus agreement so that everyone is included in the discussion. Also, since they work together in the poultry house, sharing shifts to watch over the baby chicks, they are building a strong team where everyone contributes.

Hear testimonies from the members and encouragement from the leaders, in this video, featuring the MAVISALO group!

The Value of Local Leadership

As an outsider and a visitor, I know that I only got to see a presentation about the program, rather than live with that program. Indeed, since this was my first time to Malawi, I was learning about the culture as I was there. However, rather than be overwhelmed by my uncertainties, I surrendered to the experience and, in the end, came away so grateful for the local leadership of the project. I appreciated that SIA is built on trust of the local leadership, relying on their knowledge of the village context of business and credit.

During the visit, I built a stronger relationship with Canaan Gondwe and I came away so grateful for his leadership and community involvement. He is able to make this savings and loans group successful by adapting it to fit local realities, especially as the program continues to grow, expand, and face challenges. I also saw how much time and effort he was giving to the program. Before, I pushed aside his requests for funds to cover administrative costs, but now I am working with him to define the administrative responsibilities and explore how SIA and MAVISALO might adequately compensate him and others for their energy and expertise, so that the program can continue to thrive.

Related Posts:

• More than Wealth: Justice
• MAVISALO’s Chicken House
• What’s it like in Rural Malawi?

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“The opposite of poverty is not wealth. It is justice.” – Leonardo Boff

One of Spirit in Action’s callings is to create more opportunities for social justice – working towards a world based on equality, solidarity, and human dignity. One project that we have supported is the Manyamula Village Savings and Loans Group (MAVISALO), a community-based organization in Mzimba, Malawi, which helps bring security and credit to this rural community of subsistence farmers.

Since the group started this loan fund, using individual contributions and profits from a poultry project, MAVISALO has made steady progress towards encouraging saving and increasing access to loans for its members.

“The private financial lending institutions and the commercial banks of Malawi were not providing the opportunity to village members to save their money. These institutions provide loans at high interests rates and ask for collaterals, which village members can’t afford.” As the quote at the top implies, MAVISALO is driven to do more than just create wealth among members – they are also creating a system that honors and trusts the village members by allowing even traditionally disadvantaged people to access financial services.

“Today, an institution is born mobilized by the village people themselves and it provides a sound atmosphere that promotes saving culture.” Local leaders have shown interest in supporting the group and using it as a model for others. “This is a great idea indeed to have our own economic institution that helps my people save,” says Group Village Headman, Yesaya Shumba.

Canaan Gondwe, leader of the group of 52 members (20 women and 32 men), has seen a great impact on the community, “Members of MAVISALO are able to smile at the impact the loan project on its members. The impact is not only confined to members but also outsiders as they are served by entrepreneurs who are members. There are youths, widows, HIV people all incorporated in one community institution living together to uplift and empower themselves.”

Great job MAVISALO. Keep up the great work!

RELATED POSTS:

• MAVISALO’s Chicken House
• Children’s Book about Micro-Finance
• “Imagine your life without financial services…”

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“Imagine your life without financial services…” This started the dialog about the microfinance crisis in India between Lawrence MacDonald and David Roodman on a recent Center for Global Development podcast.

Sometimes we forget how critical financial services are to our everyday lives. What if you couldn’t use a credit card and had to carry cash around all the time? Where would you store money if you didn’t have a savings account? Could you buy a house or a car if you didn’t have access to loans or financing?

Roodman went on to point out that financial services are even more important for poor people who often have volatile incomes that change from day to day and season to season. This makes it even harder for them to save money in the good times so that they have it when they need to expand their business, pay for medical care for a critically ill family member, or celebrate a marriage. It is therefore essential that micro-credit institutions help people with financial services – not just loans.

This discussion sparked my interest in light of Spirit in Action’s most recent Community Grant to help establish the Manyamula Village Savings and Loans Group (MAVISALO) near Mzimba, Malawi. SIA helped this driven, dedicated group with a small grant to start a poultry farm. MAVISALO will soon be able to make small loans to its members through a centralized pool of money made up of business profits and membership fees. The group has already gathered together 35 members and opened a collectively held bank account at the local bank!

Encouraging safe and small investments by group members, MAVISALO members can add additional savings into the centralized pool, which then allows them to apply for larger loans when they need them. However, the group has a wide, holistic goal beyond simply providing financial benefits or getting a good return on investment. Canaan Gondwe, the first President of MAVISALO and long-time SIA Small Business Fund Coordinator, say that, “The biggest goal of the poultry and MAVISALO micro-loan project is to attain a self sufficient life in the lives of poor households; [focusing] in the areas of economic, physical, decision-making (political), and spiritual dimension.”

The Manyamula Village Savings and Loans Group near Mzimba, Malawi

Through this project, SIA isn’t only supporting a wonderful, local, grassroots organization in Malawi, we are also showing that we understand the importance of financial services and value the ability to save money as well as borrow it is times of emergency and celebration.

Related posts:

• Interview with Canaan Gondwe – SIA Small Business Fund Coordinator and leader of MAVISALO: http://godsspiritinaction.org/interview-with-canaan-gondwe/
• SIA Small Business Fund – explained: http://godsspiritinaction.org/sia-sbf-explained/

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The best part about talking to librarians is that they know about books on almost any topic! It was through a librarian friend that I heard about the children’s book One Hen: How One Small Loan Made a Big Difference by Katie Smith Milway and Eugene Fernandes. This beautifully illustrated book tells the inspiring story of a boy in Ghana, named Kojo, who starts a small business with a loan to buy one chicken.

The book, for children and adults alike, clearly shows how micro-finance works to change the lives of a family, community, town and country. On the grassroots level, people in a community pool their savings together to create a small loan fund. As the story explains “None of the twenty families in the village have very much money, but they do have a good idea. Each family promises to save a bit of money so that one family can borrow all the savings to buy something important” (p.7). The families take turns borrowing the money to start or expand their businesses. When they pay back the loan, another family gets a chance to borrow the funds.

SIA small business grant recipient in Kenya with her chickens

This idea is what Spirit in Action calls a “merry-go-round” loan or a micro-savings group. In fact, one of the grant proposals approved at the June 2010 Board meeting helps establish a small-scale chicken project in Malawi, where the profits are added to the micro-savings pot, to be lent to different communities members on a rotating basis.

Giving people a chance to borrow money gives them a chance to make an investment in their future. In the story, which is based on the real life story of Kwabena Darko, Kojo borrows a few coins to buy one chicken. He takes care of the chicken, selling its eggs in the market so that he can pay back the loan and buy more chickens to expand his flock. He and his mom also eat some of the eggs to add more protein to their diets. After a year Kojo has made enough to go to school!

Kojo and his mom also benefit emotionally from the initial loan. “Kojo is proud of his eggs. And his mother is proud of Kojo. Bit by bit, one small hen is making a big difference” (p. 11).

Del Anderson knew just how much a few words of encouragement could bring hope to a person’s life. People who know they are loved and supported are more confident in all their enterprises! That’s why, for SIA, sharing and communicating with all our international partners is an important part of our mission. As Del always reminded people: Don’t let impossibilities intimidate you ~ do let possibilities motivate you.

This women's small poultry business experienced high demand for eggs

If you want to find out about just how successful Kojo is in his chicken enterprise, why not check out One Hen? And then read it to a friend or a child and get them thinking about how one small gift can make a significant difference in our world.

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