OIBM tour continues

jon — Sun, 26 Feb 2006 05:53:57 -0500

Our tour of Opportunity International Bank of Malawi continues! After some discussion it seems that Marissa and I will be working with OIBM to construct their website and train employees on how to publish to the web. Today they took us to the homes of a few of their “success story” clients. I have heard so much wonderful hype about “microfinance” that I really enjoyed the chance to meet some of the people that have benefited from it directly.

We first meet Essime Mussa and her husband who now run a profitable grocery store in a town called Kaliyaka just outside of the capital city Lilongwe. The grocery is a one-room storefront with a large service window extending across the face of the building. An inventory of everything from soap, sodas, to breads is stacked up against the back wall from floor to ceiling. Several steps lead down from the store to the road in front and display the stores stock of maize and cooking oil.

Essime told us that her and her husband had decided to sell their stock and return to their village just before her husband heard about the group loans available from OIBM. Essime received a group loan in which payments where guaranteed by the assets of herself and 10 friends. If one friend could not make the bi-weekly loan payment, the missed payment was divided among the remaining nine friends and paid. Essime used the loan to diversify the offerings of her grocery and expand its stock. She said with the loan of 20,000 malawian kwacha (about $148.00), she was able to begin to offer more high demand items like maize and cooking oil at her store.

Since that time Essime has received and paid a group loan of 40,000 MK (about $296.00), and individual loans of 65,000 MK ($481.00), 100,000 MK (about $740.00), and 160,000 MK (about $1185.00) each time expanding the monthly gross income of her business. We asked Essime how the microfinance loans had affected her life she told us that now she is able to make a better life for her family. When Marissa asked for more specifics, she proudly told us how her store now has a brick structure and that she has been able to build two houses – one for her family and another to rent. She says with the expansion of her business she has also been able to buy two cell phones, a home theater system (yes… a home theater system… we know we all want one), and has been able to install electricity and water to her house.

Essime’s goal for the future is to expand into wholesale and to become a supplier for the other grocery stores in her town.

The next client we meet was Silvia Kamphonje who is currently repaying her seventh loan to OIBM. Silvia, a true Malawian renaissance woman, is a single mother of seven who has used loans from OIBM to diversify her struggling second-hand clothing importing business into a poultry farm. Both the clothing business and the poultry farm are run from her backyard.

Before receiving loans from OIBM, Silvia says that the stock in her business was not enough to produce the income needed to support her family. She says that the loans helped Silvia expand her stock of chickens and that now se makes enough to send all of her kids to school, buy clothes, pay school fees, and purchase enough feed to keep the chickens healthy.

Silvia received training through OIBM, along with her loan, which she explains helped her to give herself a regular salary and to know how to re-invest profits back into the business. She says her future goal is to build a second house that she could rent… Sounds like real estate is booming in Malawi.

Tour of Opportunity International Bank of Malawi

jon — Thu, 23 Feb 2006 06:43:21 -0500

Today, Marissa and I toured a successful microfinance bank, called Opportunity International Bank of Malawi (OIBM). The bank is quickly gaining international attention. For those wondering, microfinance is an effort to provide traditional banking services like loans and savings accounts to the poorer sectors of the population. These sectors of the population are generally excluded from financial services because most commercial banks believe that it is not profitable to serve them. From what I understand, OIBM differs from most commercial banks, not in the way it is run, but in the people that it seeks to serve as clients.

Interestingly, while OIBM is different from most commercial banks, it is also different from most other microfinance institutions which are typically run as non-profit organizations. OIBM aims to be a fully for-profit bank with specially tailored services to meet the needs and demands of people of lower levels of income. The bank offers savings accounts with a manageable minimum and small business loans to help people expand their home businesses into new areas. In just three years OIBM has already begun to return a profit and serves 40,000 clients!

Immediately when you walk into an OIBM bank you get the feeling that you are in a real bank that is doing well. People treat you professionally and are dressed in suits. The floors of the building are made of marble. Our guide explained that OIBM wants their clients feel proud putting their money in the bank.

The bank offers all services in English (the language traditionally used in banks in Malawi), and in Chichewa (the language the people actually speak at home). The ATM machines allow clients to get money at any hour of the day and use fingerprint scanners instead of PIN numbers. Another thing of note, clients of the bank are always address as sir or madam. For many of the clients, because they are in general poor, this is the first time in their lives they have been shown such courtesy by a large business.

Almost all of OIBM’s employees are Malawian, another rariety here for a larger business. We also were able to meet some of the bank employees who spoke passionately about the services they are offering and the work that they do to expand economic opportunities for all of Malawi.

Both Marissa and I were really encouraged by what we saw… there are so many “development initiatives” here in Malawi. Something about this one really gave me the impression that it is making a genuine difference in people’s lives. We will keep you posted on further developments. Tomorrow we are going to tour some of the client’s businesses.

Barrio Malawi - microcredit

OIBM tour continues

Tour of Opportunity International Bank of Malawi