New round of microloans

The Capacity Foundation’s microloan programme is re-starting this month, more than two years since it was suspended owing to the COVID-19 pandemic.

The programme will be funded by a £7,200 donation from Capacity Marketing For Charities: this is the company that Anne and I founded in 2001 and sold to our colleague Richard Millar two years ago. You probably guessed that the Foundation was named after the company and we are absolutely delighted that Richard is able to continue the generous financial support for the Foundation. Richard is also a trustee of the British side of the charity.

The donation translates into K9 million (Malawian currency) and could assist more than a hundred families. The ‘entry level’ is K80,000 (about £64) but some loantakers from previous rounds will qualify for larger sums. The biggest loan we ever issued was K500,000 (£400) to someone who was by that time on her third successive loan.

Everyone receiving a loan for the first time attends a week-long business skills and marketing course run by Capacity, after which a business proposal has to be submitted. The Area Development Committee (ADC – 15 people representing the 50 villages in Malenga Mzoma) will help identify potential loantakers and they will assist with administering the loans and ensuring payments are on time.

The loans attract a charge of 20% of the sum borrowed, repayable with the loan sum over ten months, which will be used to pay for infrastructure and other improvements decided by the ADC. In this way, the loan programme not only supports families directly but also provides funding for local development (the Social Action Fund – SAF).

These ‘before’ and ‘after’ pictures show one of four bridges that were repaired with SAF funding in 2019, right before the pandemic halted the loans programme.

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