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Micro enterprise with giant partners

14 March 2011
Peter Ryan and microfinance clients in Malawi

Peter Ryan (centre) with members of the Kadwala lending group in Malawi

A year long partnership with financial services organisation Deloitte on a training programme that aims to be a leader in the microfinance field, and partnerships with Unilever and Celltell, means MicroLoan CEO Peter Ryan sees huge potential for new forms of corporate social responsibility

 

The MicroLoan Foundation started in 2002 with £10,000 saved from small donors and one man on a bicycle who was based in a garage in Malawi.

It makes small loans from as little as £10 to poor women, who are formed into groups. The groups are jointly liable to repay the individual loans they receive.

We now have operations in Malawi, Zambia and Namibia and have made over 110,000 loans from 23 Branches. And because we know we help on average five dependents and one orphan with every loan we make, that’s over 660,000 people.

We meet our borrowers every two weeks to give advice. Unlike financial services in the UK, 80 per cent of the of MicroLoan Foundation’s work is training and mentoring.

What’s more we are helping our borrowers upscale to more substantial businesses like farming - with advice and loans for irrigation and fertiliser and the sale of small scale solar panels that provide enough energy to charge a phone and fuel a light bulb. In addition we are setting up a robust and continuous system to measure social impact - a Progress out of Poverty Index.

We have also just signed a partnership agreement with United Nations Development Programme (UNDP), to develop what’s called bottom of the pyramid marketing with Unilever and Celtell. We will lend money to poor women so they can wholesale these company products.

It is a major step up, from selling tomatoes, good corporate social responsibility and makes good business sense

I cannot stress enough how much help we have had from individuals with strong corporate experience. Accountants  - you can’t run a microfinance operation without strong financial control, PR- we had a former PR Director of Diageo, and a Director of Barnados went to Africa for four months, to assess the impact of our work on women and children. Our management information system, MicroLoan Manager, was written totally by a volunteer and we are now fortunate to have corporate relationships for advertising and PR. The list we hope will go on. Most of these introductions came to us through networking and it was networking that led us to our relationship with Deloitte.

With no adequate training programme available, the Deloitte project, fills a long overdue internal requirement. It also puts us in a position to be the lead player in NGO, and microfinance training, and obtain support from international organisations, such as UNDP, who are actively looking to support microfinance training programmes. The opportunities therefore for dual branding are excellent.

In the short term Deloitte’s work will have an immediate impact on the quality of our staff – 100 branch and loan managers, their motivation and their ability to deliver the right services to our women borrowers. We cannot build without good people, who understand the need for, and are committed to continuous improvement.

Deloitte are also helping us in other ways.

They are rigorously assessing our in house management information system, and comparing it with other systems available in the market place. This is crucial, as we want to integrate accountancy software, network our branches, and shortly thereafter, develop the provision of mobile banking, flexible savings, the transfer of money on mobiles and potentially insurance.

Deloitte is providing advice on how to optimise our customer relationship management system salesforce.com and presentations to particular donor segments.

Of course it is no good building a Ferrari, if you can’t afford to put petrol, into the engine.

Our strategy is to build an organisation making over 1m loans a year to poor women in sub Saharan over the next 10 years (we currently make 60,000). So raising funds will be crucial to achieving our objective. We think an extra £1.5m a year will be sufficient.

The Deloitte partnership gives us first class endorsement, both in the UK and internationally, and will help bring in new corporate and other partners.

I hope that we can find a way to work together over the coming years to help even more people. The world needs it.

www.microloanfoundation.org.uk