Project Overview
In Malawi, food insecurity is caused by drought and poor irrigation systems, over-cultivation of land, and a lack of access to credit and training for farmers. Women are particularly affected – they produce seventy percent of household food but have less access to and control over their level of agricultural education, credit and improved technologies than that of men.
The key challenges in extending and expanding financial services to women in Malawi include lack of financial literacy, limited use of technology, lack of loan capital and lack of support in accessing markets. When financial literacy is improved for these women and they are linked to financial services and institutions, this leads to an increase in their overall income and wellbeing which in turn extends to the improvement of their family’s nutrition, healthcare and education.
To enable poor rural households in Lilongwe, Dowa and Kasungu Districts in Malawi to overcome chronic food insecurity through improving financial literacy, CARE Australia aims to achieve the following outcomes:
- 20,000 women, from 1,000 Village Savings and Loans Associations (VSLA’s), will have increased skills in financial literacy and business management
- Rural communities in Lilongwe, Dowa, and Kasungu Districts will have increased access to banking through improved mobile phone banking technology and coverage
- Radio and video recordings will be made to facilitate agricultural extension in remote communities in the three project districts.
Project Achievements
In this reporting period, the project carried out a series of trainings in finance education, mobile network technology and business management. Project staff and women who have participated in CARE’s Village Savings and Loans Associations for more than two years and who are ready to expand their small farm and micro-business enterprises took part in the training. To date, over 15, 840 Village Savings Loans members have benefited from this project.
Training in financial literacy
- Training of 280 Village Saving and Loans Association members including 4,423 women and 100 Village agents
Linking Village Saving Loan Associations to banks
- 79 Village Saving Loans groups have opened bank accounts, depositing US$15,597
- 1,185 Village Saving Loan members have opened individual accounts, depositing US$10,934.
Identification of mobile operators in the area
- Project staff worked with trade developers to identify areas of mobile network operation to link the closest network to Village Agents and Village Saving Loan Associations.
- This activity led to mobile operators scaling up their mobile network staff working in areas with reduced coverage to establish working relationships with the Village Savings and Loans Associations, improving access.
Develop and air three community radio programs
- Progress has been made towards development of radio programs to air from three radio stations
- Each radio station will produce one program in each district of Lilongwe, Dowa and Kasungu, spreading radio broadcasts will broadcast farming messages to project participants and the broader community to help improve family food security.
Gender based violence reflection meetings
- In December 2014, project staff supported CARE’s ‘16 Days of Activism Against Gender Based Violence’.
- Staff discussed how CARE’s interventions might potentially put women at risk of gender based violence, particularly women participating in village savings and loans project who could be at risk of violence. The more they become economically empowered, the more power relations in the home begin to change.
- This led to the incorporation of gender-based violence monitoring activities into the project to raise awareness and encourage project participants to report violence to the relevant authorities.
Training of Village Agents in mobile money technology and bank operations
- 150 Village Agents from Lilongwe, Dowa and Kasungul have been trained in mobile money technology. This knowledge will help Village Agents to pass on their knowledge to the Village Saving Loan Associations.
- Additionally, of the 150 participants, 109 have opened their own mobile money accounts.
Training of VSLAs groups in business management
- This project planned to train 250 VSLAs in business management through local Village Agents. However, due to community demand, 351 groups have now been trained.
- This training was designed to equip VSLA members with knowledge and skills to select, plan and manage small scale businesses. Following the training, 2,995 VSLA members including 2,459 women have started new small businesses including selling second hand clothes, dry fish, vegetables, firewood and charcoal, maize grain and flour, doughnuts and fritters, peanuts, and soya beans.
Monitoring and Evaluation
CARE Australia routinely assesses the progress on all areas of the Financial Literacy (Malawi Microfinance) project and reports regularly to assist in making recommendations on any areas requiring improvement and adjustment.
Impact goal
To enable poor rural households in Lilongwe, Dowa and Kasungu Districts in Malawi to overcome chronic food insecurity by way of financial literacy training, business management skills training and improved access to credit.
The project has four components:
- Financial literacy training
- Development of mobile technology for branchless banking
- Business management training
- Information Communication Technology (ICT) methods (such as radio and video programmes) will be used to educate smallholder farmers on how to increase household crop production and therefore increase income generation.
Project aims include:
- To improve knowledge and skills in finance management at a household level
- To facilitate the development of branchless banking for rural communities
- To strengthen and diversify household livelihoods through entrepreneurship development and access to agricultural education via ICT methods.
Project outcomes include:
- 20,000 women, from 1,000 Village Savings and Loans Associations (VLSA), will have increased skills in financial literacy and business management
- Rural communities in Lilongwe, Dowa, and Kasungu Districts will have increased access to banking through improved mobile phone banking technology and coverage
- Radio and video recordings will be made to facilitate agricultural extension in remote communities in the three project districts.
Funding from Footprints Network partners will provide:
The money CARE Australia receives through Footprints will go towards training women on financial literacy (component 1 above) such as savings and borrowing, financial budgeting and planning, formal financial institutions contractual requirements, managing risks and wise borrowing.
Project background/needs:
In Malawi, food insecurity is caused not only by drought and poor irrigation systems but also by over-cultivation of land and lack of access to credit and agricultural education for farmers on how to increase crop production.
Women are particularly affected – they produce 70% of household food but have less access to and control over their level of agricultural-related education, credit and improved technologies than men.
The key challenges in extending and expanding financial services to women in Malawi include lack of financial literacy, limited use of technology, lack of loan capital and lack of support in accessing markets.
When financial services are available to poor women, the increase in their income and wellbeing extends to their family’s nutrition, healthcare and education.
In order to access capital they need to link up with financial institutions and be financially literate in understanding and analysing credit risks, profitability of loans or savings, and conditions and contracts.
Community Involvement:
CARE selects Village Agents (VA) from the villages to become finance trainers for the project. CARE staff identify the VAs from the VSLA groups (or the groups themselves nominate one or two women) who fulfil the selections criteria – e.g. are able to read and write, have good interpersonal skills and are willing to work voluntarily with a small contribution from the community. CARE then seeks approval from the village leadership to appoint them as VAs.
With ongoing support from CARE, Village Agents will train 1,000 VLSA groups consisting of approximately 20,000 members in financial literacy and business management.
In order to do this, CARE will train the VAs in savings and borrowing, financial budgeting and planning, formal financial institutions contractual requirements, managing risks and wise borrowing.
Project fit into larger strategy or programme:
This project fits into CARE Australia’s long-term overarching Remote Isolated Populations programme which commenced at the beginning of FY14 and is focused in Africa (e.g. Zimbabwe and Malawi) and Asia Pacific (e.g. Cambodia and Laos). The aim of this four year programme is to reduce poverty and remove barriers experienced by remote and isolated communities. These populations are generally politically and economically marginalised; land poor; lack access to productive resources and services; are highly food insecure with low nutrition and health status, and have weak resilience to hazards and shocks. The projects which fit under this program are cross-sectoral with a common focus on women’s empowerment, and intersect in the areas of education, livelihoods, water, sanitation and hygiene and reproductive health.