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Small loans for rural women

Helping You Community Forum (HYCF) is a non-government organisation in Karonga, northern Malawi, that is offering easier credit to rural women. This helps them start businesses or accelerate existing small businesses.

Many of these women are largely excluded from mainstream financing systems. Banks often require collateral security as a precondition for financing businesses.

HYCF has come up with financing options which can easily be accessed by the predominantly poor women. They offer loans as low as 50,000 Kwacha (50 Euros) to the women to start small scale businesses. HYCF hopes the women will be enabled to get financial independence through successful business ventures.

24-year-old Caroline Munthali who lives in Mwenelondo, a rural community in Karonga, had for long been unemployed and only relied on her husband’s small income from his barbershop to support their family. “It was really tough for me and my husband, I felt sorry for him because he had to earn everything for me and our children,” she says.

In April 2022, Munthali secured a micro loan from HYCF. This money helped her to start a small business. She sells roasted fish, and the profits she makes help to support her family. “It is good to do something for a living other than depending on a man for everything,” she says. “Times have changed, and couples need to work hard to support children. I now feel empowered because I can buy food for the family.”

So far, the HYCF has given loans to 20 women in Mwenelondo. “Women’s economic empowerment is key to the country’s growth. Therefore, it is important to empower these women to be self-reliant,” says David Ghambi, founder of HYCF.

Financial literacy is critical if the women are to thrive in business. Without it, it is likely that the loans will be misused. HYCF therefore trains the women in business-management skills to increase their likelihood of success.

23-year-old Esther Mwalwimba, borrowed 50,000 Kwacha (50 Euros) to start a meat shop. She also benefited from HYCF’s financial literacy training. “The training equipped me with skills to run my small business. I will repay the loan on time so that others can borrow and benefit just like I have done.” She says the business income helps to pay school fees for her child.

HYCF’s David Ghambi is hopeful that the programme will expand to more communities in Karonga district and serve more rural women. “It is nice to see that this loan programme has transformed the lives of vulnerable women. These women are now able to give their children more nutritious food and send them to school, so indeed, there is need of scaling up this initiative in many areas because we have seen how impactful it has been,” he says.

Rabson Kondowe is a journalist in Blantyre, Malawi.