Microfinance

Empowering small-scale entrepreneurship and economic independence through access to socially beneficial assets and services using microfinance loans.

Why Microfinance?

Enabling financial independence, access to social assets, and economic opportunities is one of the most powerful and efficient ways to alleviate poverty across the globe. However, with a vast majority of adults having no access to formal lending or banking, promoting local entrepreneurship and small business growth is a significant challenge. Further, this is almost impossible for an individual seeking economic support to elevate and stabilise their standard of living in their home and community.

In Malawi, access to finance is the biggest obstacle to business establishment, growth, and success (Malawi Enterprise Survey 2014). Malawians are alienated from formal financial services, such as banks and loans, due to a lack of collateral, high interest rates, fear of indebtedness, and low or inconsistent incomes. Whilst some ingenious and informal solutions have been created locally, such as village banks (a collaborative effort by a group of 20-30 women to distribute micro-loans amongst their community), 73% of these community groups claim to have insufficient funds and want access to more capital.

With small-scale entrepreneurship and the desire for more income-generating activities growing rapidly, and mostly amongst women, accessing financial assets and solutions remains frustratingly beyond reach.

In Malawi, only 18% of adults have access to a bank account, with only 6% of the nation’s population having access to formal lending (PEV, 2020)

About 131 million or 41% of formal MSMEs (Micro, Small and Medium Enterprises) in developing countries have unmet financing needs. (UN, 2020)

The financial inclusion gender gap in developing countries remained at 9 percentage points in 2017, unchanged since 2011. (UN, 2020)

Watch It In Action

Loans provided to local community members

AUD provided in loans in the Nancholi region

%

of customers, within 6 months, followed up with confirmed improved situations

What we are doing

 

Working alongside established village banks, PEV has developed a microfinance service, providing additional capital and loans to the village bank funding pool, allowing more loans to be distributed to support local enterprises and new ventures.  Leveraging the already established and trustworthy village bank systems simplifies the process and promotes community-wide economic independence, and so far this has resulted in a near 0% default rate. 

As Village Banks are the primary source of capital for lower socio-economic areas, this increased investment has a direct positive impact on economic welfare and combating poverty. With the majority of the loan recipients being women, the social and economic benefits for women range from increasing individual financial empowerment, boosting and diversifying household incomes, increasing GDP per capita, and overcoming long-held barriers to gender equality.

 

What it Addresses

The United Nations Sustainable Development Goals

Goal 8: Decent Work and Economic Growth

Targets:

8.10 Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance and financial services for all

I chose to undertake this with Project Everest in Malawi working with the Microfinance Team to determine the viability of offering loans to village banks. This experience has enabled me to apply the skills I have learnt within my degree, whilst considerably expanding my capabilities beyond what can be learnt theoretically. The month has been an unforgettable experience and I will be forever grateful that my university enabled me to undertake this placement.”

Courtney Dudgeon

Impact Programs

How to Get involved

Connecting young change-makers and technology partners you will be testing social enterprise solutions in real-world contexts at the very early stages. This is an opportunity to deeply understand our community members and work with them to develop a meaningful social impact.

 

Get Involved

We believe that tackling global issues won’t be achieved by doing what’s always been done before…are you up for the challenge?

Apply now for the internship of a lifetime; book in a call to activate your application and start shaping real impact.