Umunthu Microfinance: Fighting poverty in Malawi with small loans

The low income earners in and around Malawi’s commercial capital Blantyre are heaving a sigh of relief following the effort by the Umunthu Microfinance, an organization which is providing them with loans to help start or boost their small scale businesses.

 Sibaud.: We want to help people help themselves.

Sibaud.: We want to help people help themselves.

Formed four years ago, the organization has lifted lives of a many business minded residents in the city especially women who were previously desperate to get loans for their respective businesses.

Owner of the organization, Philippe Sibaud who is based in the UK, told Nyasa Times during his recent visit to Malawi that the organization is pushing ahead with its aim of “help people help themselves.”

“The first time I came to Malawi was in 2007 to buy sugar from Kasinthula Cooperatives in Chikwawa. I kept on coming over the years for the reason. And finally, I came up with the idea of micro finance which is economic empowerment,” said Sibaud.

Sibaud says the organization whose main offices are in Bhana House in Blantyre, has so far registered  about 600 clients,  a boost from 400 last year and 200 two years ago, he says.

According to Sibaud, the organization which he says is among the smallest among the country’s money lending institutions offers the clients to borrow money which attract a minimal interest of five percent payable in five months.

“We want people who have business ideas, serious projects, which we can support. For example, small traders and farmers. For the first loan, we lend up to K40, 000. If the first loan is successful, people can access the second loans which could be up to K50, 000 and we can go as higher as K100, 000 although at the moment we don’t have people who have accessed loans to that amount.”

He said the idea of lending such small amount is to avoid pushing people into debt that they can be struggling to repay.

“We don’t encourage people to over borrow. As such we don’t allow those who have borrowed money from other lending institutions,” he says.

Besides challenges like failure of some people to repay the loans in time, the organization seeks to extend its operations to more rural areas in few years to come.

“The ambition is going step by step. It is like building a wall; you go brick by brick. We started with small office, now it’s growing bigger. The most important thing is that year by year we are making progress by fulfilling our social mission on the ground,” says Sibaud.

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9 thoughts on “Umunthu Microfinance: Fighting poverty in Malawi with small loans”

  1. Ulaha Observer says:

    extend to other areas

  2. wozitsata says:

    Keep fire burning Mr.Sibaud. Mind u 2gether w can develop malawi

  3. Tribalist says:

    This guy says “serious projects”. Now what type of serious business can someone really do with K40,000? These are the types of questions our journalists do not ask. What about interviewing some of the loan recipients to find out how they have fared? Have they really been able to boost their businesses with these types of loans?

  4. Quota system says:

    But thou shall not dupe poor Malawians with high interest rates. They have to benefit also

  5. popapo says:

    Good development as such loans really get impact on beneficiaries. In Lilongwe the SSLLP with support from Kiva provides livestock loans to borrowers (farmers) of up to USD600, however there is no interest and is payable in 18 months. Need t share notes between these organisations.

  6. Jando says:

    The other existing banks should borrow a leaf from the interest chargeable by this bank

  7. Gwede says:

    When are you extending your operations to other districts?

  8. That’s cool of you Mr Sibaud. Malawi needs people who can wholeheartedly invest in the SME sector. Keep it going!

  9. Robert says:

    Working together we can change many lifes from bad stuation let’s nt depend every thing on govermet,remember we are goverment

Comments are closed.