Tionana (see you later) Malawi

Sadly this will be my last post for a while, as I head back to the UK this week, leaving MicroLoan Foundation’s (MLF) Social Performance Management (SPM) work in the capable hands of Chikonzero.

It’s been an amazing experience for me! An opportunity to work with MLF’s hard-working and inspiring staff, to learn so much about what the nitty gritty of microfinance really involves, see how clients are benefiting and listen to clients to serve them even better – and of course the opportunity to spend almost a year working in the beautiful and welcoming country that is Malawi.

I am not going altogether, but will continue to work for MLF based out of the UK until the end of the year, assisting Chikonzero with the many facets of SPM work that are coming up. This includes amongst other activities…starting to roll out poverty assessments for new, ongoing and exiting clients to better understand who MLF’s client base is and the differences MLF is making in their lives; integrating the adult learning approach into training methods so it’s easier for clients with limited education to apply the messages; using exit data at branch level, and allowing exiting clients to discuss their issues and suggestions with their Branch Manager.

The plan is to be back in Malawi in November so more updates will follow then. However, until then, it’s tionana!

Visiting Zambia

MicroLoan Foundation doesn’t just work in Malawi, but have two (soon to be three) branches in Zambia too, so I headed over there to see what the issues in relation to Social Performance Management are. I was looking at whether the team there are working with the poorest, how they do their training and what can be done to address client exit. I came away feeling extremely positive: though poverty levels seem to be less severe than in Malawi, the team are being proactive in working with the poorest, the training is thorough and effective, and exit rates are being kept down by good communications between staff and clients, and by responding to clients when they raise a complaint. For example, clients said that they weren’t keen on fortnightly repayments, so the Zambian team have reacted by piloting a 3-weekly repayment loan product.

Otherwise, I was well looked after at a small local guesthouse just 5 minutes walk from the office, where the staff were delighted to learn that I could speak (a few!) words of Chichewa, which is very similar to Nyanja spoken in Zambia. They therefore took it upon themselves to create dictionaries for me to further my education and made sure I was fed the tastiest Zambian chicken and Nsima (local staple)!

Putting Social Performance Management (SPM) into action

We’ve just held our second MicroLoan Foundation (MLF) SPM workshop, with no fewer than 35 attendees, including Malawi and UK management and all of the branch managers from across the country. The purpose of the discussions was to present the findings of all the piloting research that’s been going on over the last 6 months or so, get everyone talking about the issues and ready to commit to tangible actions to ensure that MLF really is reaching its clients in the most effective way it possibly can! It was two days of intense workshopping, including role plays (and great hilarity!), voting and group discussions.

The highlights were:
• agreeing to pilot a couple of new products to make it easier for the poorest to join MLF
• committing to increased focus on training for field staff and clients through a dedicated training development programme
• focusing field staff more on the reasons for client exit via exit assessments and interviews

Integrating the many valuable and practical commitments made on the day will be Chikonzero’s job, though working closely with the Operations Manager.



Picture:
Workshop attendees discuss key operational issues

Senior management in the field

Chikonzero is certainly being kept very busy! This last week he’s taken part in the 3-day internal training course on PRA (see previous post) which also included going to the field to try out his new research skills. In addition, he’s been out doing more business assessments to hone his PRA skills and get more insights into the issues that clients face in running their businesses.

Members of MicroLoan Foundation (MLF) Malawi’s senior management have been coming along to the business assessments to get a feel of what the issues are on the ground for their clients. It was a great opportunity for clients to meet management staff, and for management to reconnect to the charity’s clients, and understand in more detail the ways in which they use the MLF loans. So far we’ve had the CEO, Finance Manager and HR Manager attend the assessments, with more planned.


Chikonzero with James Kajamu (CEO) with a client



Chikonzero with Julius Kamanga (Finance Manager) interviewing another client

Welcome our new SPM officer!

I’m very pleased to report that we have found my replacement! His name is Chikonzero Undi and he comes to us with lots of relevant experience and bags of enthusiasm for making sure MicroLoan Foundation is achieving its social mission. Chikonzero’s background is in research and monitoring & evaluation, and he’s also set up his own community based organisation working on a voluntary basis with vulnerable people.

Chikonzero is being kept extremely busy not only learning the ropes of what MicroLoan Foundation does on a day to day basis – all the way from clients and Loan Officers up to management at Head Office – but also shadowing me on my various SPM activities. He’s already taken on an active role in carrying out some social assessment questionnaires and a business assessment. Next week there’s a 3-day internal Participatory Rural Appraisal (PRA) course taking place for him, the internal audit staff and regional managers. He’ll use the people-centred research skills he learns in his ongoing work with clients, ensuring that MLF’s operations are always working hard to meet their needs. Just as well he’s able to soak information up like a sponge! When I leave (in just over a month) I know that Chikonzero will keep the momentum up on the SPM activity.



Picture: Chikonzero interviews a client as part of MLF’s social assessment work

A client’s business under the spotlight

Part of what we’re also looking at with the Social Performance Management work we’re carrying out here at MicroLoan Foundation (MLF) is protecting the clients from over-indebtedness. One way in which this is currently addressed is by the savings clients have to have as a deposit in order to access a loan: 10% for their first loan and 20% for subsequent loans. This ensures clients are taking loans that are appropriate to their means. Another way is the group themselves. If they feel that a client is asking for a loan that’s too high, they will step in and suggest she reduces the amount requested. For example, they would know that she might have struggled to pay her loan back in the last cycle because, say, there was an illness in the family, so would advise she does not put undue pressure on herself in the next loan cycle until her family situation has settled down again.

In addition to this, we’re also looking at how business assessments might be integrated into MLF’s operations. These would give further insight into the relationship between the client’s business and her ability to repay her loans. I’ve therefore been trialling the methodology and in the process have gained some fascinating insights into what it means to be a MLF client and small businesswoman. I’d like to share just one client’s story with you now…

Magret Msimuko is a widow and on her 6th loan from MicroLoan. She is based in Nkamenya, a small trading town in the Central Region of Malawi. Her first four loans were spent her business of trading chitenjes (the colourful cloth used as skirts) in the local villages for maize. The maize she would then sell in the market-place. Before setting out she would work out how much maize she needed to trade for the fish and cloth in order to ensure she made a profit. It was hard work, and involved walking long distances between villages to carry out her trading business, but she made a profit, was able to send three children (one of whom is an orphan) to secondary school and make regular savings into the MLF group savings account.

Recently in her 5th cycle, she decided to change her business to a small restaurant which doesn’t require her to spend her days walking. It’s based in the bustling main market centre of town, and she serves tea and scones, as well as the staple nsima (made of maize) with vegetables and meat or beans. With the two most recent loans she has set the business up, buying tables, chairs, pots and plates as well as the necessary food-stuffs and fuel. Though she set up in the rainy season, a difficult time of year before the harvest when people are at the most vulnerable to food insecurity and don’t have much money, she is optimistic that now the harvest is in full flow the business will start to take off.

Why clients decide to leave MLF

Part of the piloting activity we’re doing is to look at why clients exit MicroLoan Foundation. The Branch Managers have been working hard, visiting clients’ homes and carrying out questionnaires looking at the client’s business and any problems she might have had, what she thinks of MicroLoan’s procedures (interest rates, repayment frequency, savings and so on), how the group functioned and what changes she would suggest making. I went out with the Central Regional Manager, Susan Kondowe, this week to do some follow-up unstructured interviews with a selection of the ladies who’ve already done the exit questionnaire. This allows us to compare the results from the questionnaires and the more informal interviews, to see if we’re really getting to the heart of the issues clients are facing. We’re pleased by the level of similarity between the two methods of data collection, which goes to show the Branch Managers are doing a great job.

The types of reasons clients are giving for exiting are varied but include personal or family illness, having to focus on farming during the rainy season and disliking the repayment frequency of 2 weeks.

To give you more of an insight into the types of issues a client might face, here is Mary Chauma’s story. Mary runs a successful small restaurant in the centre of Kasungu, and originally joined MicroLoan a few years ago right after the death of her husband because she wanted to grow her business. After 5 loan cycles she decided she didn’t need any more loans, as she’d done what she’d set out to do with the business and it was thriving. Then last year she was keen to rejoin, wanting to further strengthen the business, but sadly her younger sister was very sick and ultimately passed away, meaning she had to spend time nursing her and then paying for her funeral costs. This meant that the funds she had set aside for her deposit to access a MicroLoan loan were diverted to the funeral costs. Despite these family tragedies the restaurant continues to flourish and is assisting her with her household financial needs, and she’s hoping to rejoining MicroLoan as planned soon.



Photo: Susan Kondowe (on the right) speaks to a client about her reasons for leaving MicroLoan Foundation

Recruiting my replacement
It’s amazing how the time flies! One minute I’m wandering around Kasungu not really knowing where I’m going or what I’m doing, and now we’re immersed in piloting the social performance management activity and it’s time to recruit my replacement. We’ve had over 50 applications for the role and interviews take place this week. I’m sure we have a gem in there!