Banks bridging gender gaps in Malawi

Recognising the hurdles Malawi women meet to access financial services, Gladys Mponda teamed up with nine friends to put together their savings to keep their business ambitions afloat. The effort is bearing fruits.

The 10 set up Malawi Union for Informal Sector (Mufis) in Blantyre. Today, the group, situated opposite Nandos downtown Blantyre, runs a successful poultry business which is boosting their income and livelihood.

“Before we started saving our proceeds, it was difficult for us as women to start businesses. Even those who had bank accounts were struggling to get business loans because we did not have any collateral,” says Mponda about the group which subscribed to NBS Women in Business services in 2011.

According to her, the women, who opened chiperegano (community banks) account in July 2011, raised about K500 000 in five months and shared about K1 million later, which saw her venturing into selling chicken while her friends vend assorted items imported from Tanzania, South Africa and other countries. Following their success, similar groups are mushrooming in Naperi, Manase and other parts of Blantyre.

At a time financial inclusion has become a global buzzword as well as a gender equality issue, this is a good example of women who are petitioning hard to improve their access to savings and lending facilities.

Women form 52 percent of the population, but they remain a disproportionate part of the poor and have less access to financial resources than men.

United Nations Women (UN Women) under-secretary-general Michelle Bachelet says enhancing women’s access to social protection measures “not only empowers them but can also help combat rising inequalities and persistent poverty in many countries.”

“Financial services—such as credit, savings, insurance and remittance transfers—are critical for women’s economic empowerment and serve women’s investment in technologies that enhance the productivity and profitability of their businesses,”  says Bachelet.

In 2006, the UN Capital Development Fund (UNCDF) reported that women in Malawi are considered relatively marginalised and are likely to have less access to education, credit, land, property and employment opportunities than men.

And President Joyce Banda recently said it is unfair that most women have no access to bank loans and other financial services.

Such inequalities call for affirmative action to empower women economically. Only two of five banks responded to our questionnaire on their quest for women access to banking.

National Bank of Malawi (NBM) corporate affairs manager Anne Magola says this does not only affect women because there are also “many males” who have no access to banking facilities.

Interestingly, bankers know the benefits of increasing women access to banking in view of the role they play in most families.

Magola said: “If they [women] get banking facilities, they will put them to intended use. This makes them grow their businesses and develop their families. The effect of this is that they will come to the bank and borrow more. They will also become role models within their communities and influence others to become our clients.”

Despite this realisation, Magola says that banking in women presents no lesser challenges than transacting with men. The setbacks include poor book-keeping, failure to separate personal finances from business revenue, poor saving culture and unreliable loan repayment.

In 2008, a nationwide survey by Finscope on financial matters indicated that only 19 percent of the population had bank accounts. Of the banked, only 17 percent were women.

The same year, NBS Bank launched “Women in Business” initiative to cater for both rural and urban women with banking products suitable for them. The facility accords women soft loans for SMEs and special events as well as training in business management, business planning, record keeping and separating business income from household funds.

“Women can do much better in their businesses if assisted to access banking services,” says head of the women in business section, Esnat Ntchembe.

Ntchembe explains that women, especially urban dwellers, are responding well to these facilities. Although the trend hints at calls for more strategies to increase the banked population in remote areas, she says women have subscribed to SME loans, women business savings and chiperegano loan accounts.

“These accounts have flexible terms affordable for women,” says Ntchembe.

She explains that chiperegano loan is just an improved edition of the saving and lending arrangement that women in rural communities are already doing, saying: “We took advantage of the fact that women are already aware of what’s involved in the chiperegano arrangements. We wanted to assist them to do it in a more secure way”.

Available in all branches, the investment deposit targets groups of women who would like to raise funds for business. Among others its features include, a minimum of K5 000 balance, limitless deposits and withdrawals, no service fee and interests.

“When assisted, women tend to be more serious with their business and they are good at repaying the loan. The risk comes when their husbands intervene in the running of businesses and sometimes misuse the wife’s business capital,” she says.

As Malawi celebrates International Women’s Day, there is need for programmes that directly boost the development of women’s businesses and livelihood.