In 2007 we began a three year funding partnership with the MicroLoan Foundation (MLF), on projects in Malawi. Their work provides small loans, basic business training and continuing guidance to vulnerable groups of women and in 2007 our support helped to set up 12 new self-sustaining business cooperatives.
These included five in irrigation, two juice-making cooperatives and five fruit and vegetable sourcing businesses. A particular issue that the MLF has come across is the problem of middlemen taking a large percentage of farmers' profits. Although farmers may improve their production through irrigation techniques, there remains a real need to establish these cooperative distribution companies to eliminate this risk.
They are to be made up of 10 to 15 people, with each member running their own project but benefiting from the support of all the other members in the group. Our funding hopes to have a positive impact on the 180 direct borrowers as well as 1080 indirect beneficiaries.
A key aim of the MicroLoan Foundation is to enable families to become self-sufficient by financing and helping them launch small business projects.
Typical loans enable families to buy goods in bulk and to re-sell them in the local market at a small profit. Just a modest increase in financial resources from money generated through a small business can improve a family's food security and support their children's education.
Established in 2002, the MicroLoan Foundation now has eight offices in Malawi and currently lends to over 150 women's groups, with over 7,000 individual loans distributed in 2007.
Unlike many other developing countries, Malawi is a functioning multiparty democracy with strong civil society institutions, a free press and a tradition of peace. However, it is the 9th poorest country in the world with a population of over 12 million, 90% of which are subsistence farmers who live on an average of 45 pence per day. Due to lack of natural resources, high population, deforestation and low levels of tourism, Malawi suffers a range of economic, social and environmental disadvantages.
This is a three year project which hopes to help families in Malawi set up self-sufficient cooperatives.
Its main aims last year were to establish a vegetable and fruit farming cooperative (concentrating on irrigation), a distribution or sourcing business and to develop the exist
ing Chigwirizano juice project in Nkhotakota, with its 22 members.
Objectives update : August '07
The initial focus has been on establishing these irrigation projects, as the latest time of year that farmers can profitably start using irrigation techniques is July/ August - in order that they get at least two production cycles in before the heavy rains arrive.
That is not to say that other progress has not been made however:
- Although the current harvests in Malawi have been better than previous years, there remains a shortage of vegetable and fruit farmers using irrigation techniques. As part of the overall project, the MLF has established a technical partnership with Total Landcare, (TLC), a local NGO funded by USAID that specialises in irrigation training.
- Due to the necessary focus on irrigation up until this point, a trial distribution business will be set up in the coming months. In order to cut out the current middle men, the initial phase will provide a vehicle to transport the vegetables and fruit, as well as juice and other fruit produce straight to market.
- The Chigwirizano juice group has taken a second working capital loan in order to buy bottles and the necessary chemicals. The group has also planted its own dedicated fruit nursery in order to lower the cost of buying fruits.
- The MLF are currently sourcing local advice from technical experts to train the group in the technical and business skills needed to run a successful juice business. They have also approached the Ministry of Agriculture in Malawi and another cooperative in the south of Malawi for additional input.
Michembo project
The Michembo project is an irrigation programme at a mixed vegetable and fruit farm. There are 15 group members here, and it 
is about 20 minutes drive out of Nkhotakota.
Nurseries are now ready for transplanting as the canals are set out and the water flow has beentestedsuccessfully.
The pump has been bought, tested and is ready to be used so we hope to see some positive results soon.
Snowball success
We are pleased to report that this has now become part of a larger project. With the help of our initial funding, the MLF have now also received four years of funding from Big Lottery to support skills training in a number of areas, including juice (and other fruit produce) production, vegetable and fruit farming with irrigation, bee keeping, knitting and sewing, and maize storage. The project is known as 'Microventures'.
In addition to this, the Malawi National Aids Commission has indicated it will fund HIV/AIDS and nutrition training for all the groups the MLF is working with.
They are now planning some 48 fruit and vegetable projects (including the 12 projects we are funding) over the next four years.
www.microloanfoundation.org.uk