Fincoop Sacco injects K10m in village banks for Lilongwe

Fincoop Savings and Credit Cooperative (Sacco) has disclosed that it has disbursed nearly K10 million in business loans to village savings and loans associations (VSLAs) in Lilongwe.

The financial cooperative is implementing a three-year project called Increased Access to Financial Services by the Low Income Rural Communities through Savings and Credit Methodology targeting eight districts in Malawi.

The other districts Dowa, Blantyre, Dedza, Thyolo, Mulanje, Mzimba and Nkhata Bay.

Fincoop Sacco is one of the five partners Financial Access for Rural Markets, Smallholders and Enterprises (FARMSE) has engaged to help in the implementation of different projects aimed to help graduate poor communities along the poverty spectrum from ultra-poor to a productive pathway on a sustainable basis.

FARMSE is a seven-year project being funded by the International Fund for Agricultural Development (IFAD) and it aims to help graduate poor Malawians along the poverty spectrum from ultra-poor to a productive pathway on a sustainable basis.

And speaking after disbursing business loans to VSLAs under Traditional Authority (T/A) Kalolo in Lilongwe on Monday, the Fincoop Sacco  boss Macmillan Nankhonya disclosed that 40, 000 people from 8, 000 households have been targeted to benefit from the initiative in the said districts.

“Our role is to provide access to financial services and loans to small and medium entrepreneurs while FARMSE is providing capacity building to the VSLAs to ensure that we achieve financial inclusion programmes. We rolled out this project in June 2019; and so far, we have disbursed K50 million to the targeted groups,” said Nankhonya.

However, Nankhonya emphasized that the progress has been slow due to the outbreak of the coronavirus disease (Covid-19) pandemic, which he said has negatively affected their operations.

FARMSE Knowledge Management and Communications Officer, Golie Nyirenda, said through its matching grants approach, her organization is working to bring financial services to the rural communities, especially where there are no conventional banking services and people travel long distances to access them.

Nyirenda observed that lack of knowledge on how to run VSLAs has been one of the major contributing to loan default among members of various associations.

“Most of these people have been in different village banks, but then they did not have the capacity to run these groups. But with this support, they are now able to run their groups. Hence, FARMSE aims to build institutional capacity of the village banks so that they are able to improve access to credit for their micro, small, and medium enterprises,” she said.

Fincoop Sacco is a member-owned, democratically-controlled financial cooperative society, serving micro, small and medium entrepreneurs and salaried employees throughout Malawi.

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