Guest Spot

Comsip to move thousands out of poverty line

The savings culture among Malawians remains low owing to several challenges but not limited to low penetration of banking services, poor disposable income in the population whose majority lives in rural areas as well as low financial literacy. However, interventions at the grass roots are being undertaken to reverse the trend. Our reporter STEVE CHILUNDU engages Comsip Cooperative Union Limited chief executive officer TENNESON GONDWE, who explains about a project to stir savings culture and wealth creation in the population.

Q. What is Social Support for Resilient Livelihoods Project (SSRLP) all about?

A. First, let me explain about Comsip Cooperative Union Limited. It is a body corporate, a member-owned union of savings and investment cooperatives registered in 2007 under the Cooperative Societies Act (1998). It was born out of the need to serve the community members who are organised into savings and loans groups (SLGs) to graduate into multipurpose cooperatives.

Comsip has been implementing livelihood initiatives targeting Public Works Programme (PWP) and Social Cash Transfer (SCT) beneficiaries in the World Bank-funded projects during Masaf 3 and 4. The rationale was to make these safety net programmes more productive beyond the goal of smoothing consumption and make beneficiaries more resilient and sustain their livelihoods. This was achieved through Comsip savings and investment approaches as a cash-plus model, and these include a Savings first: to develop a savings culture and savings as a habit; Savings-plus building capacity to improve household earning capacities and Integrated approach-taking on board other human development indices of nutrition, health, sanitation, education and others. These delivery approaches use the group approach and groups become platforms for different development initiatives.

With the positive impacts on beneficiary livelihoods during the Masaf 3 and 4 livelihood initiative activities affirmed in the end of project evaluation reports, and with vast experience in building capacities among ordinary Malawians in mobilising savings for investment and as its main thrust, during the design of the successor project to Masaf 4, the MSSRLP, Comsip was asked to design a more productive inclusion project to target the PWP and SCT beneficiaries in the districts that were to benefit from the Word Bank supported project (MSSRLP). Comsip developed a Theory of change for the Inclusive Community Resilient support which later was changed to the Livelihood (productive inclusion) sub component. The theory of change informed the design of three transitional livelihood packages that are at the core of the livelihood sub-component in MSSRLP. These are Basic Livelihood, Enhanced Livelihood and Graduation. The design included building productive vocational skills for the youths in the targeted districts. This design departs from the Masaf 3 and 4 livelihood initiative designs.

Q. How are you identifying beneficiaries for the project, and how is the project impacting households and individuals?

A. Beneficiaries for the PWP and SCT programmes are the ultra-poor with labour and without/limited labour respectively and these are identified through the Unified Beneficiary Registry (UBR). Comsip introduces the livelihood intervention to the PWP and SCT beneficiaries and those willing to join the Comsip savings and loan groups are registered in the Comsip MIS system. These beneficiaries in Comsip groups are subjected to various capacity building activities in group organisation, financial literacy, business management, nutrition and health promotion, climate smart agriculture technologies, value chains, cooperative management and record keeping among others. There are some impacts noticed in the way the beneficiaries think that they can improve their livelihood, savings levels are rising, improvement in their business investment including dwelling houses, improvement in health and sanitation at household level even diversification in food consumption following the nutrition lessons.

Q. Malawi largely suffers from lack of a savings culture, how are you convincing rural citizens to start saving, and what results are you realising?

A. As Comsip, through our mind-set change or transformative trainings, beneficiaries are taught advantages and disadvantages of savings and we introduce the savings products that they can use to save at group level. These are community members who oftentimes have heard or participated in village savings and loans commonly known as Banki Mkhonde. Once they understand our Comsip savings products, savings which are at variant with Banki Mkhonde such as mandatory savings, voluntary savings, share purchase and purposive savings, they become convinced that they too can save and improve their livelihoods. Usually our savings first approach; thus savings before any expenditure and the sharing of at least 60 percent of their share contrary to sharing out all the money realised as it happens with Banki Mkhonde, gives them hope of continuity. There has been tremendous improvement in savings and with purposive savings, which is a goal saving, households have managed to purchase fertiliser, household assets and meet basic needs. It must be mentioned that our savings first approach departs from the conventional understanding of savings which is a residual income. Since wants and needs surpass the income earned the conventional pattern in savings cannot be fully realised.

Q. So far, how many savings groups have you established, how much have the groups saved, and what are your targets?

A. So far, a total of 2 572 SLGs have been formed to date with 38 119 beneficiaries, of which 22 percent are youths and 69 percent are females. These beneficiaries in groups have mobilized savings amounting to K377 661 375 as at December 31 2021 and this is intermediated at group level. Our target is to reach out to the planned 70 000 households and have a sustained savings per household above the poverty threshold of $1 per day. It must be mentioned also that the Livelihood interventions also applied in the Urban Cash Transfer to cushion the Covid- 19 pandemic in the cities of Lilongwe, Zomba, Mzuzu and Blantyre. It is pleasing to note that the urban poor were eager to start savings groups and start small scale enterprises. A total of 12 664 members who received K105 000 for three months have been organised into savings groups and by December 31 2021 they had mobilised a sum of K353 367 557 in savings which are on lend to members. This represents 30 percent of the total cash received to cushion the Covid-19 for those in savings and loan groups. These groups are still productive. Going forward, we urge the government to consider the livelihood intervention as a cash plus to safety nets as a forward-looking strategy to make household self-reliant and resilient and graduate them from these programmes.

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