FINCA Malawi. Foundation for International Community Assistance Village Bank Sponsorship Inaugural Packet. Tea & Empathy

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1 FINCA Malawi Foundation for International Community Assistance Village Bank Sponsorship Inaugural Packet Tea & Empathy The Kanthunkhama Village Bank Kanthunkhama means You Achieve Through Hard Work

2 FINCA Malawi: The Kanthunkhama Village Bank Supported with donation from Tea & Empathy Members of the Kanthunkhama Village Bank Location: The Kanthunkahma Village Bank meets at the Msumba School in the small fishing village of Nkahata Bay. Nkahata Bay straddles the mountains of Malawi s Rift Valley and is just 50 kilometers from Mzuzu, the largest town in northern Malawi.

3 MALAWI Geography: Malawi is a landlocked, sub-tropical country in southern Africa that is slightly smaller than the state of Pennsylvania. Malawi is bordered by Zambia, Tanzania and Mozambique. Lake Malawi covers 20 percent of the country. Population: 13 million Ethnicities: Chewa, Nyanja, Tumbuka, Yao, Lomwe, Sena, Tonga, Ngoni, Ngonde, Asian, European Religions: Christian 79.9 percent, Muslim 12.8 percent, other/none 7.3 percent Average life expectancy: 41.7 years Median age: 16.5 years Literacy: 62.7 percent Government: Multi-party democracy Economy: One of the world s least developed countries, Malawi s average annual per capita income is just $600. Some 65 percent of the population is considered poor and 29 percent live in dire poverty. Agriculture employs 90 percent of the workforce and accounts for 40 percent of the $7.6 billion GDP. A severe drought in 2005 left more than five million people in need. Nearly one million Malawians live with HIV/AIDS. Each day in Malawi, 300 people become infected with HIV/AIDS. In a country of approximately 13 million people, almost 15 percent of all individuals between the ages of 15 and 49 are infected. People suffering from HIV/AIDSrelated conditions occupy more than 70 percent of all hospital beds. Life expectancy, which was once thought to be as high as 55, has dropped to 37 years. The terrible toll of HIV/AIDS, which can result in more than 80,000 deaths in one year alone, is not limited to the suffering of the sick and dying. It has created a generation of orphans, and severely undermined national efforts to lift the country out of poverty. Many FINCA clients care for one or more orphans. Malawi s economy depends on substantial foreign assistance from the IMF, World Bank, and donor nations. Despite major challenges, the government has been able to improve the overall economic climate. Climate for microfinance: Poor and rural people have very limited access to financial services; the few commercial banks tend to focus on businesses in urban areas. Microfinance institutions are an integral part of the financial system. They are not currently regulated but the framework is gradually being put in place. With significant donor support, several microfinance institutions have begun to reach scale and sustainability and are expanding their services. Most data taken from U.S. CIA, The World Factbook, April, 2006 and U.S. State Department sources.

4 FINCA MALAWI Mzimba Kasungu Lilongwe Karonga Mzuzu Nkhata Bay Ntchisi Salima Mangochi Clients: 20,404* Village Banking groups: 1,171 Percent women: 79% Average loan: $227 Loans outstanding: $2,406,829 Client savings: $916,550 FINCA HQ Branch Locations Capital City Dedza Balaka Blantyre Zomba Mulanje Services: Village Banking and individual loans; testing working capital and payroll lending *Stats as of 3/31/08 FINCA Malawi is headquartered in Blantyre and serves all 28 districts in the country. Research has shown that incomes are at least a third higher in the FINCA family, often making clothes, medicine and school fees attainable. FINCA Malawi partnered with the Johns Hopkins Bloomberg School of Public Health s Center of Communication to pilot test its Village Banks as a means to disseminate HIV/AIDS prevention and behavior change messages. The pilot, funded by the Bill and Melinda Gates Foundation, may be rolled out to microfinance programs worldwide. A FINCA Malawi Client Story Martha Ngwinda plans to expand her flourishing nursery school Martha Ngwinda often had to choose between feeding her children and sending them to school. To boost her income, she started a nursery school in her home. With her first FINCA loan of 1,000 kwacha (US $10), she bought cups and toys for the school. It was the first time I had ever touched such a large sum of money. Martha has now hired three neighbors to teach the 30 children at her school. She s using a 15,000 kwacha (US $120) loan to purchase books, toys and food. With her savings, she s planning to build a separate classroom and open a primary school. From deep down in my heart, I can say that FINCA has helped a lot. At first, I was nobody. But now I can buy what I want, continue to pay school fees for my youngest daughter, and help my parents, especially my old mother.

5 Kanthunkahma Village Bank Member Information: Name Sex Business Type Loan Amount (local currency) MK Total 290, MK $2, * This total represents the initial loan disbursement; therefore, the total is under $5,000. The entirety of your donation will be used as loan capital in subsequent loan cycles. In Her Voice From the Voice of a Kanthunkahma Village Bank Client: Loan Amount USD 1 Leah Chirwa F Fish selling 20,000 MK $ Kabefu Msumba F Fish Selling 20,000 MK $ Lucy Banda F Fish selling 15,000 MK $ Faany Phiri F Second hand clothes 20,000 MK $ Mirriam Chirwa F Snack selling 20,000 MK $ Milka Mhone F Baking 10,000 MK $ Grace Banda F Fish selling 20,000 MK $ Madalitso Msumba F Fish selling 20,000 MK $ Rhoda Phiri F Second hand clothes 10,000 MK $ Layina Salima F Restaurant 10,000 MK $ Dyness Mchanga F Selling Eggs 10,000 MK $ Tiliya Chirwa F Fish selling 10,000 MK $ Ruth Phiri F Vegetable Selling 10,000 MK $ Esther Banda F Produce 20,000 MK $ Alice Banda F Snack selling 10,000 MK $ Ireen Phiri F Fish selling 20,000 MK $ Martha Chirwa F produce 20,000 MK $ Annie Chirwa F Fish selling 10,000 MK $ Esnarth Litepu F Fish selling 5,000 MK $ Liyan Salima F Fish selling 10,000 MK $ We will invite friends to join us in our relationship with FINCA for business success Thank You, FINCA International - Leah Chirwa (Chairperson)