One of the world’s least developed countries, landlocked Malawi’s average annual per capita income is just $900 (2009 est.) Some 53% of the population lives below the national poverty line and 90.4 percent live on less than $2 per day (PPP). Agriculture employs 85% of the workforce and accounts for 39.2% of the $4.082 billion GDP (official exchange rate). Malawi’s economy depends on substantial foreign assistance from the IMF, World Bank, and donor nations.
The government faces many challenges including developing a market economy, improving educational facilities, facing up to environmental problems, dealing with the rapidly growing problem of HIV/AIDS, and barriers to investment such as unreliable power, water shortages, poor telecommunications infrastructure, and the high costs of services.
Nearly one million Malawians live with HIV/AIDS. Each day in Malawi, 300 people become infected with HIV/AIDS. In a country of approximately 15 million people, almost 12% of all individuals between the ages of 15 and 49 are infected. People suffering from HIV/AIDS-related conditions occupy more than 70% of all hospital beds. Life expectancy has dropped to 50 years. The terrible toll of HIV/AIDS, which results in 68,000 deaths per year, is not limited to the suffering of the sick and dying. It has created a generation of orphans, and severely undermined national efforts to lift the country out of poverty. Many FINCA clients care for one or more orphans.
Climate for microfinance:
• Poor and rural people have very limited access to financial services; the few commercial banks tend to focus on businesses in urban areas.
• Microfinance institutions are an integral part of the financial system. They are not currently regulated but the framework is gradually being put in place.
• With significant donor support, several microfinance institutions have begun to reach scale and sustainability and are expanding their services.
FINCA Malawi (Founded 1994)
FINCA Malawi is headquartered in Blantyre and serves all 28 districts in the country. Research has shown that incomes are at least a third higher in the FINCA family, often making clothes, medicine and school fees attainable.
A beacon of hope, FINCA Malawi expanded client outreach by over 12 percent to 16,689 microentrepreneurs, and closed 2009 with a loan portfolio of $2.7 million. The program injected over $10 million in loans to Malawi’s struggling economy, an increase of 18.1 percent. FINCA loans, averaging just $241, have remarkable power to remake lives in Malawi, as each one represents nearly 27 percent of annual per capita income.
Martha Ngwinda plans to expand her flourishing nursery school
Village Banking groups: 1,275
Average loan: $215
Loans outstanding: $5,522,442
On-time repayment: 98.1%
Services: Village Banking and individual loans; microinsurance;
testing working capital and payroll lending
Geography: Malawi is a landlocked, sub-tropical country in southern Africa that is slightly smaller than the state of Pennsylvania. Malawi is bordered by Zambia, Tanzania and Mozambique. Lake Malawi covers 20 percent of the country.
Population: 15.4 million
Ethnicities: Chewa, Nyanja, Tumbuka, Yao, Lomwe, Sena, Tonga, Ngoni, Ngonde, Asian, European
Religions: Christian 79.9%, Muslim 12.8%, other/none 7.3%
Average life expectancy: 51 years
Median age: 17.1 years
Literacy: 62.7 percent
Government: Multi-party democracy
* Program information is updated on a monthly basis from reports from the field.