MicroLoan Foundation Awarded Big Lottery Funding
Chiswick based microfinance charity receives £250,000
Thousands of people in Malawi, one of the world’s poorest countries where life expectancy is just 36 years, now have the chance to escape poverty and enjoy a better quality of life thanks to Big Lottery funding granted to the MicroLoan Foundation (MLF).
Microfinance charity MLF has been active in Malawi, where 90% of the population is ‘ultra poor’, living on an average of 45p a day, since 2002. It gives a ‘hand up, not a hand out’, to women by making available small loans and training to help them build sustainable businesses. The women use the profits they make from activities such as fishing, farming, baking, tailoring and market trading to feed, clothe and educate their families.
Now, Big Lottery funding of £255,772 will allow MLF to expand its new Microventures project which will assist its existing clients to grow more advanced, higher margin commercial ventures. It will also provide them with crucial health awareness training in HIV/AIDS and nutrition. The project was initiated because the lack of access to focussed skills training and poor health within the family unit were hindering clients’ ability to develop beyond basic business activities.
Peter Ryan, Chairman and founder of the Microloan Foundation says,‘The vote of support for our work from the Big Lottery has come at exactly the right time in our evolution and we are hugely grateful for the assistance it will provide. For the sake of the people we are helping it is our duty to use it wisely.’
The project’s ability to help transform lives is illustrated by the experience of Aida Mugonde, one of MLF’s first Microventure clients. Twenty-nine year old Aida is a single mother of three children. When her husband divorced her she was left with no source of income and moved back to live with her mother, surviving on subsistence farming.
Following training Aida now runs a successful tailoring business. ‘I have paid off my original loan and made profits which I have used to build my own house with a tin roof, send my children to school and buy a good sewing machine to improve my business,’ she says.
MLF, whose patrons include Sir Bob Geldof and Gaby Logan, started out in Malawi five years ago with just £10,000, a man on a bike and a mission to reduce significantly the depth and breadth of poverty in as many communities as possible. Since 2002 it has made more than 10,000 loans to women and had a positive impact on some 50,000 dependants.
The repayment rate on the loans, which are commonly £25-50, has averaged around 96% since inception and repaid money is recycled into new ventures. The loans are made to self-formed groups of around 15 people with the groups taking collective responsibility for repayment. This ensures that members support each other in their business activities.
MLF, which intends to extend its network of branches in Malawi from six to twenty to cover the whole country, plans to increase the number of loans from the 5,000 made last year to 11,000 this year, 20,000 in 2008 and 35,000 by 2009, helping many more families in Malawi out of poverty and giving them hope for a better future.
March 8, 2007