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IMPACT OF COMMUNITY SAVINGS AND INVESTMENTS ON LIVELIHOODS - AUGUST 2012

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COMSIP COOPERATIVE UNION

PWP a catalyst for rural savings
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Vision: “COMSIP Vision is to create a culture of vibrant, sustainable savings and investments amongst COMSIP Cooperative Societies in Malawi”,

Mission: “COMSIP Cooperative Union exists to deliver flexible Savings and Investment products and services to economically empower Malawians to improve their livelihoods through member owned savings and investment cooperatives”

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Contents
I do not regret Lucy, a product of COMSIP Mlambala Cooperative Manyamula has potential to grow Limbikani Cooperative shines Lutundu women making ends meet Mayilosi Machenga opens hawker
Produced for: COMSIP Cooperative Union Limited P/Bag 105 Lilongwe MALAWI Tel: +265 1 750 837 +265 1 753 871 +265 1 759 331 Produced by: Editorial & Photography Cell: Email: design Email: LALA COnSULt & trAdE lalaconsult@gmail.com VITIMa NdOVI +265 888 858 601 vndovi@hotmail.com

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Fax: +265 1 750 848 Email: comsip@comsip.org.mw Website: www.comsip.org.mw

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ANALYSIS

Playing on tune
CHAIRPERSON OF SAkATA COMSIP COOPERATIVE in Zomba is at pains to explain how poor, illiterate but ambitious people lost their property and money to some microfinance institutions because of prohibitive conditions including interest rates on loans and tight repayment schedules. How do you expect one to do business in a week and start repaying a loan at a very high interest rate?” She asks. She recalls how some villagers had their iron sheets removed from their roofs, bicycles and livestock taken away and ended up with nothing, especially after poor harvests. “this meant no food in the house, no money for business and at the same time your roof is gone.”

She is certainly one of those who are relieved with the coming of Community Savings and Investment Promotion (COMSIP) and its interventions to reduce poverty in Malawi. She is convinced that COMSIP’s approach is for the benefit of the members, who play by their own rules. the culture of savings is inculcated in members and each group comes up with its own interest rate for on-lending. Since the groups are memberowned, it places the greater responsibility on them including honouring the repayment schedules without a whip. A total of 3, 228 groups have been formed in both rural and peri-urban stemming from the internally felt need to pull together their resources and the desire to improve the members’ livelihoods. In total there are 72,

Typical participation of members in COMSIP groups

403 members of which 61 % are women. In the words of reverend Kenneth Muyila of Manyamula C.C.A.P one’s savings in a group can help others. Besides interaction with the members of the community in a forum, reverend Muyila has a strong conviction that COMSIP groups are a way to go in reducing poverty, especially “that members voluntarily save”. the majority of the groups have evolved from mere loose set ups to more organized and inclusive groups. A number of them have graduated into cooperatives and in the process enhanced their collective bargaining power, improved saving and loan portifolios as a result they are offering members better loans and capital for different businesses. Available figures indicate that all the 3 228 mobilised K180 million has been mobilised by the members who are involved in different small scale business activities. the progress made so far by the participants in mobilization of communities, savings, on-lending and benefits derived from there, has also attracted the desire from those outside the groups. It is encouraging to note that others are already getting organised with an aim of affiliating themselves to COMSIP. the savings and on-lending have enabled members to engage themselves in different business ventures which, in their own words, would not have been possible without COMSIP and have greater impact on their livelihoods. Visiting groups in different districts and getting the testimonies from the participants, one clearly sees the vigour, ambition and motivation displayed by participants. It is clearly evident that this has impacted positively on the livelihoods among the members and their families. In line with the perfectly designed 8 Jobs in the Comsip intervention, members are educating their children, developing permanent houses, consuming nutritious food, have access to portable water. A

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DANCING AND PREACHING COMSIP MESSAGE: (Top) Members of Chilaweni cluster (Right) Rev. Muyira of Manyamula case in point is at Limbikani Cooperative of rumphi, where the group has prioritised the 8 Jobs and given members a timeline to fulfil them. High on the list is access to portable water. to date, 52 out of 56 members (92.85 %) tap their water from the district supply water system. It is evident that the participants in COMSIP groups are directing their impressive entrepreneurial energies towards feeding their families, clothing and educating their children, and supporting themselves. At the same time they have continued to save their income based on the COMSIP model. It is also pleasing to note how creative and organized different groups have been after training that is provided by COMSIP covering areas like financial literacy and business management. For instance Uliwa and Manyamula Cooperatives have added a social aspect to the traditional products of savings, shares and loans. they have a social fund where members contribute so that they can be assisted in difficult times like illness and death. In fact those at Uliwa have gone a step further by planning ahead in case of death of a member. In their thinking, savings of a deceased member will be paid to a beneficiary, in most cases the youngest child. Where rural livelihoods seem to be precarious for most communi-

ties in Malawi, members of COMSIP groups feel they are better off than their colleagues who are outside. A number of members are maturing and have graduated from small-scale into medium scale enterprise through the same savings and on-lending. they have upped their capital and loan figures. However, there have been set backs in the mobilisation of groups as well as finances. Most of them border on power struggle, low literacy levels to understand the concept, misconception, selective understanding no one would have captured it better that Group Village Headman Mkhalira of traditional Authority Mwahenga in rumphi: “COMSIP is making a tremendous difference in the livelihoods. Members have learnt how to save and can access their money anytime. those who are improving their houses are not only doing for themselves but also development of their communities.”

A book keeper at Mlambala

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PWP a catalyst for rural savings
Until the World Bank’s Board of Executive Directors approved US$150 million support package for Malawi’s Rapid Response Programme on July 17, forty-three year old Christina Phiri of Bibi Labisoni Village in Traditional Authority Ndindi, Salima District was a worried person. rratic rainfall last season resulting into poor harvest has pushed her into a precarious livelihood as she is food insecure. A widow, who lost her husband five years ago and has a family of five to support, Christina lost the money that she sunk in the garden and has little left to sustain her livelihood. “I am worried. I don’t know if I will afford to buy farm inputs this year, subsidised or not,” she said in an interview prior to the budget session of parliament. Prices of maize and other food commodities have already started escalating due to several reasons, among them the low yield levels and the 49 percent devaluation of the local currency in the month of May 2012 from K168.00 to K250 per one United States dollar. the aftermath of the devaluation and the inflationary effects has made it difficult for people like Christina to purchase food and other household necessities. Christina is one of the, 1.6 million rural people who, according to the Malawi Vulnerability Assessment Committee, face hunger in about 15 districts of the country. to the relief of many, government has responded through a set of initiatives. With support form the World Bank, the government has initiated the rapid response Program (rrP) consists of a rapid response development Policy Grant which is a budget support operation worth $50 million; and additional financing for two on-going projects which will get $50 million each. the projects are the Irrigation, rural Livelihoods

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Phiri banking hope on poultry and Agricultural development (IrLAd), and the third Malawi Social Action Fund (MASAF III). “these programmes are aimed at assisting the poorest in our communities to cope with life. during the 2012/2013 fiscal year, however, the programmes will be scaled up to capture those that may have fallen below the poverty line due to devaluation,” said Finance Minister dr. Ken Lipenga in his budget presentation. the minister said these programmes, supported by the World Bank, will be implemented during the period when beneficiaries have the most need for additional income to spend on their family needs including food and non food expenditures and agriculture inputs. “the resources will also help quickly scale up social protection programs and agriculture investments for small farmers to mitigate the effects of the adjustments in the economy on the poor,” Sandra Bloemenkamp, Malawi’s Country Manager for the World Bank. Savings and investments According to Paul Chipeta, Operations director at Local development Fund intensive Public Works Programme (PWP) aim at creating more community assets and building community resilience to help sustain the rural poor. the Additional Financing (AF) for MASAF – with components of PWP and community savings and investment - will help scale up the nationwide social safety net program through labor intensive public works targeting 586,000 households or 2.9 million peo-

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ple, an increase from 250, 000 households. Savings and Investments - as a sub component of the Community Livelihoods support - aims at the creation of opportunities for community members and entrepreneurs especially beneficiaries of PWP to increase their incomes hence livelihoods and in the process act as platforms for other development activities that will increase the functionality of existing facilities and their participation in local economic development. the function is implemented through Community Savings and Investment Promotion (COMSIP), which together with LdF have been used as by government as vehicles to deliver social protection programmes. Chipeta indicates that the design of the new project is that COMSIP is supposed to save about five percent of the total number of beneficiaries, representing 30, 000 households with savings and investment component in the financial year 2012/2013. Christina, a member of a local savings and investment group in her area anticipates to benefit from the programmes that will provide mitigation measures for the vulnerable people in rural and urban areas, and smallholder farmers. In turn she is expected to save part of her wages through her Umozdi Cluster. She participated in the PWP in 2009 on a road project in her area. According to COMSIP Chief Executive Officer tenneson Gondwe members use part of their wages to save in a group a thing that has previously facilitated the formation of savings ad investment groups across the country. Gondwe says the majority of the 3, 228 COMSIP groups trace their routes from the members’ participation in the Public Works Programme where they got their first savings set aside from their remuneration of K2, 400. However, wages for this year and future interventions have been revised upwards. “the successes registered by these members has given rise to demand for more groups in rural and peri-urban areas” said Gondwe. Increased savings and loans, business activities, money circulation in the communities, general income and capital for participating individuals, provide disposable income which they use for food, household items, school fees and medical expenses. It is generally believed that when poor people are hit by shocks, they resort to coping strategies that cause irreversible losses, such as withdrawing children from school, reducing essential consumption (food,

Community members making use of their savings and investments health care, and so forth), and selling productive assets. Additionally, budget constraints prevent low-income households from taking up investments opportunities that can increase their human and physical capital and, thus, their future incomes. “Safety nets can reduce underinvestment in nutrition, health, education, and productive assets that would otherwise worsen health status, physical growth, learning, productivity, employability, and wages in the future, says Gondwe adding, “We feel the culture of savings can render help to the communities to cope up with the shocks and improve livelihoods. an assessment study commissioned by MaSaF and done by Centre for development Studies found out that the mobilisation of savings through initiatives like PWP is important for the continued existence of COMSIP groups. “through the savings mobilised, loans become available to the group or non group members at different interest rates as means of growing the group finances. Successful savings mobilisation has the potential for development and the reduction of poverty,” indicates the study report. Chipeta indicates that the emergency recovery project has incorporated a number of recommendations from different studies that observed some setbacks in the implementation of the PWP under Masaf III. New format this year’s programme is an improvement of the previous efforts and government has built on the past experiences. “this time around there is a predictability of the programme, meaning people will know exact time the programme will be implemented,” says Paul Chipeta. Government has this year increased the working period on PWP from 12 to 48 days, staggered throughout the year and increased wages to K300 from K200 per day. the format has incorporated recommendations made during budget consultative meetings and two separate studies commission by LdF. Both Chipeta and Gondwe are optimistic that the recovery programme will build on the past achievements and bring meaningful impact on the beneficiaries. “We have done very well in terms of savings but we need to talk more investments and products. there is need o provide more information on the kind of products,” said Chipeta. It is hoped that the intensive PWP will assist the participating households in alleviating poverty, enable them to manage risks more efficiently, help them make more and better investments, and Facilitate beneficial reforms in the social sector and other areas. But the benefits will also trickle down to other people like Steven Kumwenda of Limbikani Cooperative of rumphi who in the previous cycles has sold seedlings to the PWP. “We stand to benefit a lot with the new arrangement,” said Kumwenda Interventions such as these target primarily four main vulnerable populations; the chronic poor, the transitory poor, vulnerable groups and losers in reforms to which Christina and others belong to. Some success stories from the PWP cycles from 2009 to 2012 have been highlighted here as they relate to community savings and investments.

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Nkozomba: A model farmer without limits

Nkozomba tells it all
56-yEAR-OLD FLOSSy NkOzOMBA STANDS tall and can be counted among the successful dairy farmers and business women in her Foliji Village, if not the entire Thunga Area of Traditional Authority Chimaliro in Thyolo district. ike most business persons, she started small and has seen her savings and investments grow within a relatively short period. She traces her beginning to the devastating hunger of 2000 in Malawi, especially in her district that prompted a group of women to come together to do business. nkozomba was one of the founding members of the group. the husband had just been forced to retire from work with one of the big companies in Blantyre due to ill health Capitalising on the situation, the group started selling maize at the nearby Bvumbwe market. the transformation of this loose group of women took a new twist in 2008 when it was linked to COMSIP Union which later provided training grant of K496, 000. It was this grant that is earnestly described as a launch pad for nkozomba, the business woman and a dairy farmer. trained

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in business management and financial literacy, the women initiated a group business that made them realise profits. “We shared the profits in equal amounts of K10, 000 with which members started individual businesses at the end of 2008. I invested the K10, 000 into growing vegetable and Irish potatoes,” she says with awe of pride. Later nkozomba bought her first dairy cattle at K29, 000 using proceeds from her vegetables and potatoes. She was lucky as the cattle was already pregnant and gave birth within three months. As a matter of fact, she was the first in the group to acquire dairy cattle. typical of an investor, she later sold both the cattle and calf and went ahead to purchase what she describes as a pure breed at K90, 000. In the subsequent period, she has added the number through buying and breeding. She is a proud owner of seven dairy cows that produce an average of 86 litres a day. She also has two calves. “this translates to an income of between K90, 000 and K100, 000 in a month,” suggests nkozomba who is also a treasurer of a local milk bulking group in her area. In 2010, nkozomba sold five cows. She

used the money to buy a car, a toyota Mark II and a plot at thyolo Boma where she has constructed a house, with a roof that has used 56 iron sheets. She plans to rent it out once fully finished. She estimates to have sunken about K450, 000 on the construction. “I have benefitted a lot with the initial K10, 000 and training we got from COMSIP,” she says. nkozomba’s husband was initially against dairy farming. She has juggled her proceeds to invest in farming as well using composite manure from her cows. Her yield has been bumper over the years as compared to other people who are not members of Zatonse group because she can afford fertiliser as well as apply composite manure from her kraal. A Junior Certificate holder and with a husband’s troubled health, nkozomba is able to pay from her proceeds schools for two children at a private school totaling K90, 000 per term. nkozomba is happy that members of Zatonse group, all women, have embraced the COMSIP concept and are continuously making savings from their businesses. “Women will always need a push and they can do better. thus is what COMSIP has done to us,” she concludes.

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I do not regret
e recounts that years of working in different companies that did not help him and his family. Ironically, he worked in the accounts departments. “You know I could not save any penny due to high costs of living in the city,” complains Kaponda, a father of three boys and one girl. Kaponda reveals today that he was not sure as to whether or not his decision was good for himself and the entire family. But his home-coming coincided with the government sponsored Public Works Programme (PWP) aimed at improving incomes of the poor by raising cash incomes for poor households through investment projects which use labour intensive methods of implementation and which provide a public good. “I participated in the road project from Chilaweni to Kaliati Village and got K2, 400 after working for 12 days,” says Kaponda. Born 44 years ago in Solobala Village, traditional Authority Machinjiri, he is one of the members of Kapoche savings and investment group, an outcome of the second component of Community Livelihoods Support (CLS) Component within the MASAF 3 APL II- LdF Mechanism project implemented by Local development Fund (LdF) from 2006 to 2009. From the income realised form the PWP, members agreed to save K1, 000 while the remainder was used for their household needs. Kaponda was one of the 25 members who were trained on savings and investment, an initiative that aims at the creation of opportunities for community savers and entrepreneurs especially beneficiaries of PWSP to increase their incomes hence livelihoods as an exit strategy. In the process, it is hoped, these act as platforms for other development activities that will improve the functionality of existing facilities and their

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WHEn MAtHIAS KAPOndA dECIdEd tO call it quits working in industries in Blantyre and headed home to Chilaweni in 2009, his friends and family members feared he was irrational and feared for his livelihood.

DOING IT RIGHT: kaponda showing his pigs participation in local economic development. through his involvement with the Kapoche COMSIP group under Chilaweni Cluster, he has seen his life improving and does not regret re-locating to his village. After the initial training, the group drafted its own rules, among them members’ weekly savings of K50, interest on loans at the rate of 10 % and a share price of K5, 000 each. they are now happily involved in savings (voluntary and mandatory), share purchasing and lending. the group’s financial position as of June 2012 indicates a total of K353, 800 is in loan circulation, K170, 145 is from savings while K151, 410 is from share purchasing. “We started with K3, 000 after members’ initial savings. that is the amount of money we started on lending with to members,” he says. to date Kaponda has three shares with a total value of K15, 000 and does not hide his excitement at the benefits from COMSIP group. He first got a K10, 000 loan from the group’s savings and grew onions in 2010. the yield from the garden brought him K60, 000. He invested part of the profits into the same onion garden while the remainder was used for other necessities. Kaponda seems not to be a believer of putting all eggs in one basket. He used part of the profits on his second loan to buy two pigs, one of which produced 6 piglets. the number of pigs and goats has multiplied which he describes as a source of income for his family. “After paying back the loan, I started purchasing iron sheets for my house. Since I already had burnt bricks, I also commenced constructing a permanent house,” Kaponda talks of his benefit. the total for iron sheets and cement was slightly above K150, 000. now on his third loan of K40, 000, he has diversified his business to include selling of motor vehicle spare parts and clothes that he gets from as far as Mzuzu in the north.. Kaponda says he is also able to assist his ageing parents with basic necessities from his businesses, a thing that would have been far fetched if it was not for the culture of savings and investments that he has adopted through COMSIP.

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“Nkhongono ku Wanthu”

Nyirenda: plucking cotton STUDIES HAVE SHOWN THAT INTEGRATION of women in savings and investment groups is aimed at empowering them economically as well as the communities they are living in. nkhongono ku Wanthu members are involved growing different cash and food crops in the rich alluvial soils of Karonga to generate their household incomes and capital for the businesses. nellie nyirenda, the group’s secretary, has in 2012 harvested 12 bales of cotton and sold them at a total of K93, 600. Like in the previous year, 38 year old Nyirenda got a loan from the group and purchased the much need farm inputs including fertilizer and pesticides. She was motivated by the good prices in 2011 when the best cotton lint fetched a maximum of K304 per kilogrammes. though the number of members looks small, as of July, the group had K1.2 million in circulation a factor attributed to the nature and magnitude of the businesses they have ambitiously invested in. “I intend to buy my own fishing nets,” reveals nyirenda whose house is just 500 metres from Lake Malawi. Mlare area is close to the famous ngara fishing village. Cotton is the country’s fourth largest crop after tobacco, sugar and tea. It supports seven percent of the farming families in the country. Just across the road is another member of nkhongono ku Wanthu who has also benefitted from her participation in the savings and investment group. Harriet nyandekha, 22, grows cotton but also trading in powdered soap that she gets from across the border in Tanzania. She has incrementally taken four loans starting with K5, 000, K15, 000, K27, 000 and K50, 000. the profits have also risen each time she has invested the money in her business to the point that apart from the managing the daily household needs, she has also bought louvers, eight iron sheets and five bags of cement. She indicates the total value at K49, 000. “I can do my own budget and spend the money as it feels. My friends are still relying on the husband to supply everything for them,” Harriet nyandekha, a holder of 330 shares in the group’s savings.

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ctive participation of women in planning, decision making and leadership positions are a common feature in Community Savings and Investment Promotion (COMSIP) groups across the country. In some cases, more women groups have been seen to be more vibrant than those with gender mix and impacting positively on the livelihoods of the concerned families. One such group is nkhongono ku Wanthu, a savings and investment group of Mlare in Karonga. With only 35 female members, they are actively participating through individual as well as group businesses to improve the livelihoods of families.

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Nkhumano members in winter cropping
When many farmers have folded their arms, relaxing and enjoying the fruits of the last farming season’s sweat, members of nkhumano Cluster in Mhuju Area, rumphi have decide to be different this time around. hey have gone down stream to engage themselves in winter cropping. On a sunny day in July, members of nkhumano Cluster are busy in the dambos; planting, weeding and clearing the bushes to expand their gardens. Others are harvesting fresh green maize for sale at the area’s market. “this ensures us food security and income,” explains 62 year old norias Harawa, who is full of praise for the areas Community development assistant. She has already grown beans, tomatoes and other vegetables which she intends to sell and consume in her home. “the vegetables are also important for our dietary needs in our homes”. Because of her advanced aged Harawa has engaged two workers who are doing most of the work. “I have used my recent loan of K5, 000 to pay the labourers who are giving me a hand this time,” she says from her garden where she goes twice in a day to supervise the labourers. Harawa has previously gotten loans in the amounts of K5, 000 and K15, 000 to finance her tobacco and maize farming. Harawa feels she lives a comfortable life because of the savings and investments from time to time for a number of activities, mainly farming. She is optimistic that she will repay her loan in good time with the income she will generate from the sale of her crops from her winter farming. Mary Bingu has only accessed loan once from her savings amounting to K3, 000 but is hugely seen as enterprising in her farming activities, more especially winter cropping. She used the money to purchase subsidized

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AT WORk: Reaping the benefits of savings and investments fertilizer at the start of the farming season last year. She has realised what she describes as bumper yield and enough for her family. Seen in her garden with two watering canes in her hands in July, she is a huge inspiration to others and describes herself ‘a model farmer muno mukaya pera chara kweniso mu COMSIP’ - not only in her area but COMSIP as well’. “I find it easy at my house. I have plenty food through out the year and I manage to pay school fees for the children from the sale of her produce,” she says. In her neatly demarcated garden, she has also planted a variety of vegetables and maize, staggered in the times of planting and harvesting. Her sales from vegetable brings her between K1, 000 and K1, 500 daily and she is assured of a sustained income for a considerable period translating into improved livelihood in her home. the good thing, as she observes, one does not need transport to sell the produce ‘as customers come right here in my garden. Bingu plans to get another and bigger loan again at the start of the next farming season. “I will need more fertiliser this year. I want to cultivate more land since I plan to buy some livestock after harvest,” she reveals her plans. the farming activities resulting into businesses by members of groups like nkhumano ensures them food security and more disposable income for households especially during lean periods. the area’s Community development Assistant Jacob Moloko observes that members of the Cluster have seen the benefit from winter cropping in terms of cash and food security and more members of the COMSIP group want to be heavily involved. “the potential is big and the natural resources are under-utilised,” he observes adding that those who have taken the lead will naturally motivate others in the group as well as community. nkhumano was formed as an exit strategy of the Public Works Programme where members were involved in a road project in 2009. they operated in three independent groups until 2011 when they formed a cluster under the banner of nkhumano, presently with a total of 33 members – 12 men and 21 women.

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“I am proud of her. She has tried her level best from the savings and businesses she is involved in.” - Lucy says

Lucy, a product of COMSIP 8 Jobs
23 YEAr-OLd LUCY GOMAnI IS A BUddInG electrician with grade II qualification and doing her industrial training in Blantyre. She did her artisan training at Andiamo Campus in Balaka district.

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er ambitions to pursue her dream career would not have been realised with the meagre family income, mostly from her dad’s pension. Her aging father retired from civil service some 14 years ago and depends on pension as the only source of income. His advanced age and ill-health have impacted on the family’s wellbeing. It is the wife, Monica Simon who has turned into an overnight breadwinner for the family. In February 2010, the 53-year-old participated in the Public Works Programme. Convinced to save K1, 400 from her wage of K2, 400, it made her member of what is known today as tiyamike savings and investment group. It is one of the three groups in Chilaweni Cluster, trained in business management and financial literacy last year. Public Works Programme (PWP) is aimed at improving incomes of the poor by raising cash incomes for poor households through investment projects which use labour intensive methods of implementation and which provide a public good. Simon has voluntarily made savings in the group on number of times from the money she has realised from selling sugar canes at Chilaweni Primary School. With an initial loan of K8, 000 and later K2, 000, she has invested in number small-scale businesses including chicken rearing and piggery. She bought one pig which produced four piglets. “I am happy that I am able to save some money. It is easy to get a loan as I feel as long

as I have fulfilled the repayments,” Monica says adding that she has sold some pigs to finance her daughter’s course at the tune of K14, 000 per semester. Simon has largely relied on the profits from her businesses to finance her daughter’s course in electrical installation besides other household needs. “I do not think I would have managed to pay for her tuition if I was not involved in saving and investments. I am happy she is almost there,” she says about her daughter who wants to upgrade. Simon has promoted her small scale business by re-investing the profits and added loans that she has obtained from the group’s savings. On how the mother has financed her education, Lucy responds: “I am proud of her. She has tried her level best from the savings and businesses she is involved in.” Monica is one of the 25 members of tiyamike group whose members have seen their money in form of savings, shares and interest reaching K215, 215.00 with K144, 700 in circulation among the members at an interest rate of 10 %. For the majority of poor and rural women like Monica children are their greatest security as well as their hope for a better future. She justifies her toil and money spent on her daughter’s future: “At times it is very difficult to feed my children and pay their school fees. My hope and future is in their education to help me enjoy life when I become old and cannot work any longer.” She is a living testimony that her participation in the COMSIP group has improved matters in her house as she has a ready option in case of pressing demands like illnesses and food.

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Mlambala Cooperative
Walking into a one-roomed office for Mlambala Cooperative at Lihaka Trading Centre in Phalombe one’s eyes directly meet the flip charts pasted behind the clerk’s chair. On the flip charts, are the cooperatives records showing savings, share purchase and on lending for the reporting period.

...“life has improved since I started saving in the group, I am able to buy basic commodities and pay for children’s fees,” testifies Makhoyo...

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he records are neatly written and are easy to follow even if one is not a member. the cooperative, as at June 28 2012 had a saving profile of K794, 785.00 from shares, savings and interests charged on loans. “We want our members to be abreast of all what is happening in the cooperative,” indicates Margret Kazembe, the youthful Clerk at the office. the records on the posters, according to Kazembe are periodically updated to reflect the prevailing status. these include loans, shares and savings. Mlambala has recently graduated to the status of a cooperative with 137 members who are involved in different businesses and agricultural activities. they include rearing of animals like pigs, goats, chickens and dairy cows. they are also in small scale business ventures like baking, selling of mandazi, flitters and vegetables. One unique feature at Mlamabla is that loan opportunities are also open to non members at an interest rate of 40 percent as compared to 20 percent for members. records in the office indicate that between January and June 2012, a total of 316 people benefitted through loans, of which 176 were

no members. “It works to the benefit of the cooperative because non members pay a higher interest rate,” explains Kaembe. Edna Makhoyo of Mphinda Village in traditional Authority Chiwalo is a member of one group in the cooperative who has twice accessed loans. She got the first loan (K5, 000) in May and the second one (7, 000) in June 2012. On both occasions, she invested the money into buying and selling vegetable at Lihaka trading Centre and says she sis able to support her five children from the proceeds. “Life has improved since I started saving in the group. I am able to purchase basic commodities and pay for children’s fees,” testifies Makhoyo in an interview at the makeshift Li-

haka market. Another member, Chrissie Waiti who got K1, 500 loan and started buying and selling potatoes at the same market. She has since used to proceed to support her family and has bought a pig at K3, 500. Waiti hopes the pig will turn around her fortunes into a brighter future. “I want to buy additional pigs because I regard keeping livestock as a big investment,” she reveals her ambitions. As an empowerment drive and support towards the group, members of the six groups that operate under Mlambala Cooperative namely; Chisengeleni, Likwiya, Mphwisi, Muyone, Lomwani and Alinafe were trained in financial literacy and business management.

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has a strong conviction that COMSIP groups are a way to go in reducing poverty, especially “that members voluntarily save and freely chose what sort of business they should invest their money in”. According to Gondwe, there were already groups in the area involved in different business activities dating back to 2004 but could not expand due to a number of factors including lack of capital and financial knowledge. In the meantime, members of the group are involved in share purchasing and on-lending. He says the cooperative is still working out modalities to guide them in mandatory and voluntary savings though every member contributes K100 every month towards social fund. Poverty though Manyamula is rich with fertile soils where a number of crops grow easily, most men migrate to South Africa to look for jobs, gender based violence is rampant and high prevalence of HIV/Aids resulting in widespread poverty. Groundnuts, soya beans, sunflower, maize, and peas are some of the crops that people grow in the area but have not benefitted from them over the years because of poor market systems. Located west of Mzimba Boma along the dusty road to Inkosi Ya Makosi M’belwa’s Edingeni headquarters, Manyamula relies on those who have migrated to South Africa for financial and material support, with a few who are involved in subsistence agriculture especially women. Supplies, including food and groceries are either sourced from the Boma or across the borders in Zambia.

MARkET TIME: Tembo

Manyamula has potential to grow

ithin minutes of a chat in his office, a modern building block constructed with funding from Malawi Social Action Fund (MASAF) he will have given you the full picture of the group he heads. Impressively, he will retrieve a document in a way that shows his filing system is orderly and up to date while he does much for the talking without referring to notes. “We contacted COMSIP after noticing high interest rates in commercial banks and other micro-finance institutions. People were being ripped off in broad day light,” he

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WHEN ONE SITS DOWN WITH CANAAN Gondwe, chairperson of Manyamula Village Savings and Loans (MAVISALO) in Mzimba, he will get the impression of a naturally born leader who knows and systematically articulates the members’ problems, initiatives they are undertaking to improve their livelihoods and strategies to fight poverty.

starts. COMSIP Union, supported the group with training and its matching grants totalling K317, 500.00 before MAVISALO was registered as cooperative by Ministry of trade in april 2012. Membership MAVISALO is a grouping of 150 members. Ironically, the cooperative has more men than women (86 against 64), all united to fulfil one mission; fight household poverty. the composition is made up of members of different backgrounds, status and profession. Among them are the clergy, teachers, health workers and ordinary people from the community. reverend Kenneth Muyila is a Parish Minister of Manyamula C.C.A.P Congregation and is a member of MAVISALO. He believes one’s savings in a group can help others while he could be also benefit from the same. Besides interaction with the members of the community in a forum, reverend Muyila

GONDWE AND HIS PIGS

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FEEDING TIME: Nkhoma looking after his chicks who pays school fees for a Form III son. despite his physical challenges, 53 year old Phillip theu is another active member and holds 10 shares in the group and does a multiple businesses including tailoring. He has twice gotten loans (K25, 000 and K30, 000) from the group with which he has bought raw materials for her tailoring business as well as financing his other businesses. “I am the only one here doing tailoring and was failing to meet demand. l can manage to satisfy a number of customers with the capital, especially those in need of uniforms for children,” he challenges. On the benefit, he feels the little he gets from his tailoring activities enables him to feed his family of five, pays school fees for one child in secondary school as well as pay for labour in his gardens. “I am sure I can get a bigger amount in loan as I still need more capital,” says theu. On his part, Sylvester nkhoma has seen a big business opportunity in his area, where relish is said to be a perennial problem. He is rearing 100 chickens besides his usual farming activities. His loans of K35, 000 and later K60, 000 were used to buy fertiliser and finance his chicken venture, respectively. Based on simple calculations, he is supposed to get K140, 000 from the sale of his 100 birds after six weeks of rearing them. “the demand for broiler chickens is high here and I wished I had more of them,” he says. He is responsible for 12 people in his house but challenges that he is not daunted since he harvested enough and plans to sell some of the maize. nkhoma has also bought a cow and a calf from his proceeds at a total value of K35, 000.

Plans But Gondwe fears that though the cooperative is growing in terms of shares, the capital is still small because members access loans in monthly cycles at an interest of 5 percent. Shares in the cooperative are at K1, 000 each. As at July, 2012, the MAVISALO had K2, 200,000 in circulation as loans at an interest of 5 percent. While there is a lot of interest for community members to join the cooperative other villages are also mobilising themselves into groups with an intent to joining COMSIP due to the impact they have seem with members of MAVISALO. “the coming of COMSIP has helped us a lot as we have entrenched the culture of savings and expanded our business ventures. Members are more excited with the shares as a new arrangement, especially when they know they will walk home with something after a year,” he narrates. However, Gondwe who himself is into piggery, says there are a lot of opportunities for members now that they are doing their businesses in a systematic fashion. “they have already expressed interest in acquiring skills in piggery and poultry management through training as the two are big businesses in the area,” he concludes. He also suggests that the many farm produce in his area creates opportunity for the farming members to get into value addition using crops like soya, groundnuts and sunflower. “Members need to be supported to get some hand operated devices so that they can process oil and other products right here as opposed to selling the produce to our neighbour who in turn sell us processed products,” laments Gondwe. the many businesses by members of MaVISALO, according to community members, have contributed to the money circulation in Manyamula while impacting on human development indicators as articulated in the COMSIP’s 8 Jobs. these include food security, access to education, medical care, good housing, and economic empowerment for women.

“naturally, people here did not have the culture of saving and until recently, a few were involved into business ventures, observes the area’s Community development assistant. COMSIP’s impact the culture of savings boasted by loans as well as training in financial literacy and business management has reinvigorated members to engage extra gear. they have used their savings to access loans from the group and re-capitalise their small-scale businesses. this, according to members, has enabled them diversify the traditional sources of income and relied less from the cash repatriated from South Africa. Glory tembo’s husband migrated to South Africa to seek fortunes about five years ago and she claims his support is erratic. this has impacted on the family livelihoods as the wife, like others in the community, fends for the children and dependants. “My life is different from how it was before I joined COMSIP. I think I can advance,” says tembo who sells fish, tomatoes and other vegetables at Manyamula market. She cultivates the vegetables herself. With 14 shares in the group, 28 year old tembo, has benefitted through loans from the cooperative to finance her businesses and farming activities. She wants to increase the number of shares and expand her business. “I bought a plot at Mzimba Boma with the K8, 805.02 I received as dividends on my shares and added profits from my businesses. I want to construct a house for rent. I have already bought bricks,” she talks of her plans to purchase iron sheets on her next loan. Her last loan and biggest was K30, 000. “I am better off than those who are not in COMSIP group. I manage some basic necessities at home,” says tembo, a mother of three

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Nellie: Showing extended part of the house (Inset: her farm produce)

A succes story of Mbungu
NELLIE MBUNGU IS DESCRIBED By THE Community Development Assistant (CDA) as innovative and influential among the members of Tuyepampene Cooperative at Mlare in karonga. She leads by example and has made great use of her savings in the group to fight household poverty,” observes Kondowole Kayange, CdA of Mlare area. Indeed, the 41 year old mother of three, has used every trick available to see her savings grow while at the same time improve the livelihood in her home. She sells flitters, cooked rice, farm produce and zitenjes (wraps) besides her passion in farming. Mbungu started with a loan of K3, 000 with which she bought 10 Kilograms of flour for flitters. She realised a profit of K5, 000. She has gotten loans in the different amounts and invested in different initiatives as long as ‘I get a profit for the sustainable livelihood’, with the last being K50, 000.


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One of her profitable businesses is selling of cooked rice during market days, every Monday at Mlare and surrounding places. “I get a profit of K14, 000 every Monday when I sell my rice at the market,” she says as a way of giving example of her many businesses she is involved in. Mbungu says she does not have problems with school fees for children and food these days unlike before she joined her COMSIP group. All her three children are in Form III at Mlare Secondary School where she pays a total of K21, 000 in school fees per term. In addition she also supports one orphaned child. “I do not think this would have been possible without the culture of savings that we have adopted,” she says with a smile on her face as she displays some of the products. She regularly travels across the border to buy clothes and zitenje at the popular Kyela market in tanzania and sells them at Mlare and other trading centre close by. Some of the tangible benefits through her participation in the cooperative include an oxen bought at K15, 000, bicycle at K18,

000 and extension of her house that cost her around K60, 000, with a bigger amount on cement and iron sheets. On her fifth loan, Mbungu who is also a local church elder, used part of the loan to buy subsidized fertilizer for farming activities. “I have taken some of my farm produce for exchange with those that are in short supply here,” she says. For instance, she bought 15 bags of groundnuts ands took them to Kaporo where she bartered them with rice. She says: “I made a good profit after selling the rice right here.” She has seen her savings and business profile growing so too the loan he gets from the cooperative and the profits she churns out According to Kayange, many community members look at her as what hard work and involvement savings and investment through a cooperative can yield. “We have all seen how she has improved her life and her entire family,” testifies Kayange.

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Somba women reaping benefits
TWO FEMALE MEMBERS OF NTIkITA Cluster have stories and want to prove to the world that the saving culture can really bring a difference in one’s life.

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he cluster members were trained in business management, financial literacy and more recently in forming a cooperative. the cluster has since applied to be registered as a cooperative. While members are conducting different small scale business from their savings and investments, others have already started reaping the benefits from this COMSIP initiative. Patricia Folopensi of njowe Village is a member of the cluster and talks highly of the benefits that have come with her participation in the group. She got a loan of K2, 500 in 2011 and bought subsidised fertiliser believing that food security is paramount in every home. “I yielded 27 bags of maize and I have sold some,” she proudly reveals. A holder of 10 shares in the group, Folo-

Matola showing iron sheets

pense plans to replace a thatch on her house with iron sheets, 10 of which she has already bought at a total of K17, 500 and plans to add more. “I have decided to continue with buying and selling of maize. It brings quick rewards as everyone needs food,” she observes adding that it would have very difficult for her purchase iron sheets if she was not involved with savings and loans as advocated by COMSIP Union. She also got another loan of K7, 000 and invested it in her maize business. “I never dreamt I would sleep in my own house with iron sheets on top,” she cherishes. Her colleague, Joyce Matola has also bought 24 iron sheets at a total of K42, 000. Like Folopensi, she also got a loan of K2, 500 in 2011 and invested it in buying and selling of maize at Chazunda trading Centre, close to her village. She has used the profits to re-pay her loan, bought iron sheets and moulded bricks. “You will find a bigger house here complete with iron sheets next time you visit me,” she challenges. According to the office bearers, ntikita Cluster started in 2009 after members participated in Public Works Programme. they saved K1, 000 from their K2, 400 wages. Members ventured into various small scale businesses after they shared the interests in 2010 from the initial savings, which members describe as handsome. Savings and investment component is an initiative that aims at the creation of opportunities for community members and entrepreneurs especially beneficiaries of PWSP to increase their incomes hence livelihoods as an exit strategy. In the proces, these act as platforms for other development activities that will improve the functionality of existing facilities and their participation in local economic development.

Folopensi in front of her iron sheets

Matola standing on brick oven

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Investment towards permanent buildings

A member participating through gainful activities

Limbikani Cooperative shines on 8 Jobs

Members taking portable water

them. Starting as a small group with 10 members in 2005, registered as a cooperative in 2006, it has 56 members at present who are innovative in the way they are tackling their poverty. “As a group, we agreed to prioritize 6 of the 8 Jobs and concentrate on them. We gave ourselves targets and formulated timeline so that we move together as a cooperative,” says Steven Kumwenda, Chair of the group. Members of Limbikani are individually in-

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LIMBIkANI, ONE OF THE COOPERATIVES IN the COMSIP family is very unique in the way it approaches issues aimed at improving members’ livelihoods within this Rumphi boma based savings and investment group. ased on the 8 Jobs deigned by COMSIP Union as human development indicators of the intervention’s impact on livelihoods, the cooperative has decided to prioritize and concentrate on six of

volved in different business while they participate in the group through savings, on lending and share purchasing. the loans they access from the cooperative are used to finance their small-scale businesses. they use the profits and dividends for household needs as they relate to the 6 jobs they have prioritized. Asset creation According to Kumwenda and corroborated by the Community development assistant Mulenga, 52 of the 56 members have built permanent houses, with iron sheets and most of them with concrete floors. this represents 92.85 percent of the members. Education At the time of interviews, one member of the cooperative Salome Zimba was sitting for the Malawi School Certificate Examination (MSCE). She is among other members who have either gone

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Mtambo (right) a counsellor in GBV back to formal and informal schools to pursue their education or to be able to read and write through adult literacy, respectively. “All the members are able to read and write and it ensures meaningful participation not only in the cooperative but economic activities as well,” adds another member identified as Phillip nyirenda. Health Members of the cooperative have put great emphasis on good health believing that “only a member who is in good health can actively participate in the affairs of the cooperative, conduct meaningful business that bring a positive impact on livelihood.” When the government embarked on distribution of Insecticide treated Mosquito nets (Itns), Limbikani Cooperative made sure that all its members got a share of them. “We are sleeping in the nets and that will prevent us from catching Malaria,” comments Mary nthara. Portable water Like the issue of health, members feel their families can be protected from water borne diseases only of they have access to portable water. the leadership estimates that 49 members, representing 87.5 percent of the members have been connected to portable water supply by the northern region Water Board (nrWB) in the last three years. “We want to see how we can help those members who do not have access to portable water supply,” suggests Kumwenda. Economic empowerment By virtue of being a member, all abide by the by-laws and one of them is mandatory and voluntary savings. Mandatory savings in Limbikani is pegged at K200 per month. these types of savings and share purchasing, ensures that a member has a saving in the group that can be translated into a ready capital for whatever business a member may wish to undertake. A member can also access loans when pressed with other eventualities in the house. Gender Based Violence (GBV) One of the cooperative’s member, 30 yearold Ephrida Mtambo is volunteer counsellor in gender related matters. She underwent training in women economic empowerment, arranged by the cooperative. However, her work involves awareness of the dangers of GBV in the whole community. “We used to experience a lot of economic injustices related to proceeds from tobacco sales,” she says of the experience in her area. One of the contentious issues Mtambo

has pushed through the cooperative is that women also have the right to economic empowerment in family and other set ups. “When community members see what we are doing in the cooperative, they learn something and accept that. We are the torch-bearers,” she puts it. COMSIP Union uses the 8 jobs to quantitatively and qualitatively measure the impact of the support towards individuals. Interestingly, the majority of Limbikani Cooperative members recite and explain in detail the 8 Job, showing their knowledge and application on their livelihoods. the chairperson is upbeat that the remaining two jobs will be tackled with their own milestones “though some members are already achieving them.” He admits that members are not realising their full potential because of other challenges like resources constraints and discouraging remarks from those who are outside the group. “We need proper market research and leadership training for our members,” he observes. As at July 2012, Limbika Cooperative had mobilised K192, 578 in voluntary savings, K254, 200 in mandatory savings and K430, 000 from 430 shares of K1, 000 each. the member with the highest number of shares has 72. At the same time bank balance was K18, 000 while K3, 500 was cash at hand with the treasurer.

Steven kumwenda: leading the group

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zimba (far left) and family members draw water from the tap

Lutundu women making ends meet
LUTUNDU IS A SMALL VILLAGE ON THE edge of Chilumba in karonga. It is sandwiched between an airfield on the north and the lake on the southern side. Agricultural activities here are limited due to among other factors the sandy soils and lack of farming space.

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he mainstay for people here is trading, mainly in fish. Lutundu is home to 34 year Jessie Zimba whose business and life took a new twist after she joined the savings and investment group in 2008. today, Jessie is one of the 180 members of Uliwa Cooperative. “I have made a turn around in my business since joining the savings group,” says Jessie who has at one point accessed K60, 000 from the group to finance her business of buying and selling of fish. She has bought furniture worth K25, 000, replaced her old utensils with new ones at K3, 500. In January 2011 she applied for coonection of piped water and was connected after paying K25, 000 to the suppliers,

Mtawali northern region Water Board. Another member of the cooperative is Chetwin Msiska who last year took a loan of K10, 000 and used it to cultivate rice. He yielded five bags which he sold at K30, 000. “Unfortunately, it coincided with my wife’s illness and most of the money went

towards meeting medical bills,” explains Msiska. He feels life would have been difficult for him if it was not for his savings in the group. However, Msiska invested the remaining K6, 000 into fish business and has since bought a pig from the profits besides her daily household needs. Queen Mtawali, 64, is in buying and selling of pails and clothes and sees her businesses flourishing. Starting with a loan of K5, 000 in 2010, she has grown her business from scratch and her profits today are in excess of K50, 000. “I am educating my children and grandchildren with the money I realize from my businesses” she says. Mtawali adds that she has also plastered her house using the proceeds from her business. Jessie, Msiska and Mtawali have used profits from their business activities to meet some of the 8 jobs designed by Comsip for its members. they have opened bank accounts. on top of the savings they do in the cooperative.

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AT WORk: Yasini

Savings and investments change lives in Sakata
42 yEAR OLD DOLEx yASIN COUNTS HERSELF BLESSED AMONG the members of the community in Sakata, Traditional Authority kuntumanji in zomba.

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t’s not long ago that she rated herself as those who are ultra poor by conventional definitions including those of the World Bank. She could not afford consistent meals in her house among other determinants of poverty. As a member of Sakata GreenCooperative, where she has 22 shares in savings, she has taken loans for four times since 2007. “I have yielded enough for my family since I have managed to purchase subsidized fertilisers over the years,” she proudly says. Besides farming, Yasin has been conducting a number businesses, mostly in trading and confirms her earnings have multiplied over the years she has been involved in savings and investment in the cooperative. Using a combination of resources from loans and profits from her businesses, she has since bought a bicycle at K18, 000, a sewing ma-

chine at K40, 000 and 17 iron sheets at K2, 500 each with which she intends to replace the grass thatch on her house. She also offers tailoring services to community members. “the sewing machine helps me get something for groceries on a daily basis,” she says. Another member of the cooperative is Maxwell Semani who has benefitted in some form from his participation in the cooperative. Starting small in 2006, he is now a proud owner of 26 goats, 7 sheep and runs a well stocked hawker in his village. Oh his part, dickson Lisimba is a huge success in the group, largely because of the business he is involved in. He has only accessed two loans of K50, 000 each and bought raw materials for his coffin workshop in the business. “the cheapest coffin I make for an adult person is at K20, 000,” he indicates while shunning the discussion on how many coffins are sold in a month saying “it’s a sensitive topic”. However, Lisimba has repaid all his loan commitments to the group and feels they savings can also benefit others in the group.

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Mayilosi Machenga opens hawker
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DAMIANO MAYILOSI MACHENGA OF Ntikita Cluster in Blantyre is a proud member and beneficiary from the savings and investment in his group. n January, 2012 he got a loan of K20, 000 topped up with another K20, 000 with which he opened a hawker at his house. today, Machenga’s hawker has become a first point of call for villagers who want to purchase groceries. “My sales hit K19, 000 in a day and I replenish stock every two days,” he says of his hawker situated some kilometers away from Chazunda trading Centre on the Blantyre Chikwawa road. He is comfortable with his profits and has already bought a radio cassette player with detachable speakers valued at K5, 000. Machenga intends to use part of the profits from his hawker to hire labour for his garden. “You see I have a problem with my hand and I rely on casual labourers to do work in my garden,” Mayilosi, points out. Going forward, Mayilosi plans to build houses for rent next to his house and has already started buying planks in preparation for the work. “I have already put aside some cash for the purchase of 30 iron sheets and hopefully I can qualify for another round of loan,” he talks of his plans. Machenga, a father of one, has 13 shares and intends to purchase seven more in the second half of 2012. Shares at ntikita Cluster, which has three groups, are at K1, 000 each. the Cluster, with a total of 59 members had total savings amounting to K1, 761, 891 of which K1, 315, 300 is in loan circulation as at June 21.

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Supply chain linkages help rural poor
They blame it on shortage of diesel and other logistical problems in 2011 and part of 2012. Otherwise, women of Chimwemwe group in Salima feel they would have made quite a fortune with the deal to sell Unilever products at Ngodzi Trading Centre.

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FEREGESI CHATUWA

himwemwe Group, like other groups, started when members were mobilized after they participated in the Public Works Programme and managed to save money a couple of years ago. In november 2011, the group signed an agreement to establish a selling point in the area for all Unilever products in the company’s supply chain. “We sold all the products in one a day made a profit of K15, 000 the first and last time we were engaged in the deal,” reports Hilda Mataka adding that projections made by the group promised a lot of profits and income for the group. She says when the group wanted more products, the agent at Salima Boma could not provide them attributing it to shortage of fuel and other logistical setbacks. “But we are under pressure and people have been asking us for the products,” she says. Another member of the group, Feregesi Chatuwa believes if the deal had been effected as planned, the groups savings and loans profile would have improved. the deal is part of the arrangement that savings and investment groups are linked to producers to participate in the supply chain. With assistance from United nations development Programme (UndP), COMSIP broker such supply chain deals that promise rural women with new income for their group’s savings and investments. the profits could have facilitated the availability of finances for the loans and capital for members of Chimwemwe group to start business with.

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Members achieve
a better nutrition leading to a health life
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