Malawi is one of the world's poorest countries. More than half of its 18 million citizens live below the poverty line. The vast majority of people subsist on agriculture, living in rural areas where services of any kind are scarce.
FINCA Malawi is a regulated, deposit-taking microfinance institution. In operation since 1994, FINCA serves nearly 64,000 clients at 24 branches and through a network of FINCA banking agents, working out of small shops throughout the country. Our products include group and individual loans, savings and insurance. Given the country's strong rural character, FINCA's strategy features a strong focus on non-traditional banking channels, such as the aforementioned banking agents, in order to reach people who may be hours away from a bank branch.
Reaching the Financially Excluded
Financial exclusion in Malawi is very high: 77 percent of adults are unable to access a basic banking account. While filling this pervasive gap, FINCA Malawi has also been successful at reaching some of the most systematically excluded populations. Women make up about two-thirds of its borrowers, the highest in the region. FINCA Malawi also has a strong outreach of rural borrowers. Given the dispersal of Malawi's population in rural areas, FINCA's growth strategy emphasizes the development of non-branch delivery channels, such as banking agents located in local shops, in order to lower the cost of services.
Quality of Life
Our clients in Malawi struggle with some of the toughest living conditions, even by regional standards. Over half of borrowers live in homes with no water or electricity—among the highest in the world. To light their homes, clients must resort to kerosene lanterns and candles, which are dangerous and costly. These conditions directly undermine the health and education of children.
Very low educational levels also prevail among our borrowers in Malawi. Less than half of the breadwinners have higher than a primary education. This indicator is generally low throughout the sub-Saharan subsidiaries as well as Latin America. Low educational levels place severe constraints on parents' ability to earn a decent income while also limiting the educational prospects of their children.
Income & Employment
Income & Employment
In the midst of a difficult economic environment, it is encouraging to find that FINCA clients in Malawi earn an average annual profit of $2,727. They are also successful at generating jobs, employing 2.9 people per enterprise, the highest in the entire network. This means that about 106,000 people are working in the enterprises of our clients, who estimate that about 20 percent of this employment is directly due to the FINCA loan. Wage quality is also surprisingly good; two-thirds of workers are earning wages that are above the national poverty line.
Women in Malawi are responsible for growing the family's food as well as running the household and caring for children. The majority of FINCA's female borrowers are the main breadwinner in their family, including 21 percent who are single mothers. The great majority of FINCA's borrowers run their own businesses, and they are responsible for creating more than 60,000 jobs, or 58 percent of the total employment.
Attaining Business and Personal Goals
The most common goal, cited by 41 percent of our clients in Malawi, is to grow an existing business. This is pretty common among FINCA clients around the world. But another 10 percent are starting a new venture, which is higher than average. After business-related goals, home improvement is high on the list of priorities; 32 percent of customers cite this objective in Malawi, more than any other country in the network, except Kyrgyzstan.