Community-Institutional Microcredit, Microinsurance and Microenterprise Development Program

Community-Institutional Microcredit, Microinsurance and Microenterprise Development Program

Zambia
Organization type: 
nonprofit/ngo/citizen sector
Budget: 
$100,000 - $250,000
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

The project involves working with communities through provision of microcredit, microinsurance and microenterprise opportunities to community-institutions for improved support for OVC. Opportunities will involve intensive technical support through capacity building of key individuals in the community for effective management systems and cash management strategies in business. The technical approach of working with community-institutions ensures sustainability and high leveled transparency and accountability among the implementers. Key to success is strong monitoring and evaluation frameworks that are designed to provide accurate feedback for progress. The project puts in systematic implementation and coordination of activities, resulting into evidence-based improved OVC living standards.

About Project

Problem: What problem is this project trying to address?

The economic conditions in which our beneficiaries live are characterized by rural setups and essentially low-income populated. Fishing, hunting and agriculture are the means of survival and because numbers have become big, these activities are no longer viable. With the increase in community sizes and the lure of the cities, rural life has undergone fundamental changes. Otherwise communities are well structured and information flow is well articulated. At ward level, there are councilors who respond to civil issues while traditional chiefs take up the custom rule through the village headmen and women. Zambia’s contemporary culture is a blend of values, norms, material and spiritual traditions of more than 70 ethnically diverse people. Most of the tribes of Zambia moved into the area in a series of migratory waves a few centuries ago. Zambia got its independence in 1964 which was a one party state and grew into a multiparty state when the MMD took over power from the UNIP government in 1991. It has grown economically and socially. The work culture is always community embraced and togetherness is evident in all community projects. This gives an opportunity for the program to succeed due to cohesiveness of community efforts. However, with the technical support that will be in form of capacity building, community-institutions will implement activities effectively.

Solution: What is the proposed solution? Please be specific!

Increase in poverty levels in Zambia becomes number one concern for development and demands more than just providing support services. HIV/AIDS and its adversities have a lot more magnitude at community level especially with increased numbers of orphans. The increased numbers of OVC due to loss of parents as a result of HIV/AIDS has descended most of them into poverty to an extent of dropping out of school; less access to better nutrition and healthcare. This program attempts to innovatively respond to these issues through the provision of microcredit, microinsurance and microenterprise opportunities offered at community-institutional level in order to help the affected OVC households. This will promote community engagements that will foster development at individual, household and community levels. Micro-financing services are relatively being advanced by a number of Micro-financing institutions but solely focused at profitability for individual gain. This project desires to make the community work by empowering community-institutions in which the very affected individuals get engaged and participate in the transformation of their livelihoods. Self-help projects dwells more with family units but our approach is at community-institutional level where an existing gazetted and more official community structures are predominantly identified to house the project for security purposes.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

 Establishment of partnerships with financial Institutions around the world especially those that will buy-in, including provision of the initial funding for the pilot phase and signing of a Memorandum of Understanding, resulting in a well documented mutual partnership.  Organizational assessment and development planning, including initial assessment and recommendations, resulting in a well written Assessment report (baseline).  Capacity building of selected community-institutions for the Pilot phase in the management of savings and credit, and micro-processes, including engagement, staffing and organization of members, along with comprehensive, step-by-step guidelines and materials for all critical and ongoing social-oriented business activities, resulting in a well written training Manual and business plans templates.  Disbursement of loans and determining insurance premiums, including customizing planning processes, identification and/or clarification of all critical issues and specific strategies to address each issue, resulting in transparent and accountable implementation of the projects..  Monitoring and Evaluation of the business models, including identifying performance goals for each community-institution, clarifying roles and organization, and customizing employee performance management system, along with comprehensive, step-by-step guidelines and materials for all critical issues pertaining to profitability and viability, resulting in more impact-oriented outcomes and well documented impact assessment and analysis reports.
About You
Organization:
National Orphan Fund
About You
First Name

Kilby

Last Name

Lungu

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About Your Organization
Organization Name

National Orphan Fund

Organization Country

, LK

Country where this project is creating social impact

, LK

How long has your organization been operating?

1‐5 years

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Innovation
What stage is your project in?

Operating for less than a year

Share the story of the founder and what inspired the founder to start this project

Kilby Lungu with the help of friends from USA, UK, Panama and within Zambia founded the National Orphan Fund, a first social enterprise agency in Zambia. He had begun his work with a small commitment of helping orphans and vulnerable children during the time he worked on a USAID funded OVC scholarship program. His interest was cultivated into a more workable venture when he discussed the plight of orphans and vulnerable children in rural areas with friends overseas and shared that he was contemplating finding a more lasting solution to the challenges surrounding OVC.
Upon sharing in a number of contacts on skype with friends, Kilby started with “friends of orphans” which later was changed into National orphan Fund. He prepared a business plan with the help of Yukari Komuro, a Japanese-American friend who works with the American Institute of Research (AIR) and has a lot of enthusiasm about the projects. She helped with compilation and editing. Another friend Michael helped through provision of advice and also pushed in making the organization get the registration for non-profit in Zambia. Some initial funding was wired into the account by Anne Sherwood, who also pushed for the opening of the accounts.

Social Impact
Please describe how your project has been successful and how that success is measured

So far, with our commitment, there has been successful progress. The encouragements from the community leaders who have appreciated the program and only look forward to the full-scale implementation. The community volunteers are satisfied and the primary beneficiaries have received support from the community groups. The involvement of the community-institutions has ensured project to be delivered within or under budget. The completion of the project (pre-implementation demo) has also been done on time and all requirements met. In Siavonga district, for example, 6 women and 4 men have received training and are working well.
We keep in mind the most important measure of project success to be dependent on beneficiary Satisfaction. This will be measured through key performance indicators which will be focused on the number of orphans and vulnerable young people and children receiving support.

Keeping our partners (stakeholders/sponsor) informed throughout the project. Communicating to them using face-to-face conversations (yes, as good project managers this has worked for us), status reports, e-mail, status meetings, voice mail, formal documentation, even skype if we have to. Our beneficiaries (primary and secondary) will be kept informed and remain engaged throughout the project.

How many people have been impacted by your project?

101-1,000

How many people could be impacted by your project in the next three years?

1,001-10,000

How will your project evolve over the next three years?

Evolvement of the project will be through the multiplicative principle of operations. The funds repaid are re-invested into community projects. After the project demonstration on two business ventures (poultry and fishing), viability of business assured sustainability due to lucrative proceeds. This will support orphans and vulnerable young people and children sustainably. The project brings every citizen’s need in terms of poverty alleviation strategies and the approach is well branded. It is the most viable and self-sustaining mechanism that promotes community engagements. Since many players will be involved, including the participation of women and youths, employment levels will increase, resulting into well functioning systems for entrepreneurship and insurance principles.

Sustainability
What barriers might hinder the success of your project and how do you plan to overcome them?

The barriers identified and addressed include:
a) Existing Cultural beliefs among communities hinder effectiveness due to personal interest. Some community members have gotten used to paternalistic aid and handouts hence to be given a loan for social projects appears as though it is not for the community but individuals. However, we plan to run information sharing meetings within community to sensitize them of the projects dimensions. Further, we intend to use traditional leaders and political leaders influence for information dissemination.
b) Most women have not advanced in education and have problems with bookkeeping and reporting. It is difficult to articulate issues affecting their businesses. Our approach of using community-institutions provides room for having educated women participating in community work and providing necessary assistance. The training of women in entrepreneurship skills and project management skills ensures effective coordination and reporting.
c) Marketing search barrier retrogress profitability. It becomes difficult to progress with business due to lack of marketing strategies. Our approach is based on vibrant marketing principles that cost-effectively ensure profitability. Market search is done by us, allowing individual businesses establish markets together. For example, individual businesses come together with their

Tell us about your partnerships

Our partnerships have been our most treasured component in programming. We collaborate with an array of government line-ministries at national, provincial and district levels. We have close rapport with the Ministry of education due to the fact that we are working on an education theme. We are so into schools rather than communities. We partner with community development and social services for social support programs. To ensure success, we partnered with a bank for cost effective financial services and retail banking provisions.
NOF received support from an array of individuals, families, business houses and foundations as funders of particular activities, including further efforts of exploring collaborations that will provide support at community engagement level. Planned scale-up is predicted on partnerships with like-minded civil society and national coalitions for sustainability.
Efforts are being made to establish working partners at local and international level. The local partnerships will include working with 250 institutions and community groups. These will include community schools, orphanages, government schools, community-based organizations and other human service organizations. At international levels, funding agencies and foundations are considered to be partners by virtue of the collaboration in terms of the provisional agreements.

Explain your selections

NOF has a unit that is focused at fundraising and supporting programmes. It is our nature to generate funds to effectively run programmes. For sustainability, CIMID has a diverse of funding sources that include an array of local and international funding agencies. We have a strong fundraising drive through competitions and campaigns, including individual and family donations. Funds are categorised into restricted and unrestricted; restricted being funds that are awarded through contracts and bids such as USG funds, United Nations fund and other development cooperation funds; the unrestricted funds are funds that we generate through our own effort and might be given for that purpose by funders. The project will receive an initial loan for pilot phase and repay back in five years. This is from local and international financial institutions or MFIs such as rabobank.
The project will charge interest rates on every fund given as a loan to community-institutions and grow its base capital. The Microsafe (insurance subsidiary project) will also build base capital through the premiums of every equipment and machinery. The savings of individuals, families and community based groups through life insurance policies and other cover of risks will generate revenue which refinances the project.

How do you plan to strengthen your project in the next three years?

The CIMID program is planned to scale-up to every community in Zambia. NOF has put up a strategic plan to build the concept the next three years in three provinces; namely Lusaka, Southern and Eastern provinces. When the three provinces have show progress on effectiveness we shall identify provincial lead-NGOs to be the implementing agencies after undergoing intensive capacity building courses in entrepreneurship and project management. We shall have community developers deployed in districts so that they provide coaching and mentorship to projects.
We shall develop business-oriented transparency and accountability system tools that will be provided to projects for feedback and analysis of impact. Our data management specialist will develop templates or database systems which will give a provision of each funded community-institution to computerize response and generate reports. The data tracking mechanism will be instituted to provide track of deliverables.

Challenges
Which barriers to employment does your innovation address?
Please select up to three in order of relevancy to your project.

PRIMARY

Underemployment

SECONDARY

Restricted access to new markets

TERTIARY

Lack of skills/training

Please describe how your innovation specifically tackles the barriers listed above.

Underemployment: CIMID program will attempt to create over 200 jobs among women and youths and probably create more with time. The program will expand rural jobs for women and youths, and improve the investment and macroeconomic environments; encourage and support entrepreneurship.
Lack of skills/training: CIMID will devise training systems with needs of labour markets. In order to respond effectively to this barrier, the CIMID program prioritizes opportunities for technical and vocational education and training for youth.

Restricted access to new Markets: through collective market approaches, the CIMID program recognizes the communal supply especially with the help of the Organization to provide market sources in the cities.

Are you trying to scale your organization or initiative?
If yes, please check up to three potential pathways in order of relevancy to you.

PRIMARY

SECONDARY

Enhanced existing impact through addition of complementary services

TERTIARY

Influenced other organizations and institutions through the spread of best practices

Please describe which of your growth activities are current or planned for the immediate future.

The 2011 pilot phase is the most compelling implementation because it will involve more of technical approach in terms of organizational assessments and development plans. For the identified Ten (10) pilot community-institutions, capacity building is designed to be so intensive in order to reduce on any changes of failure among the community-institutions. To this effect, the selected districts for piloting are Siavonga, Mumbwa, Lusaka and Sinazongwe. There will be two in each district except for Lusaka and Siavonga where we shall have three pilot projects. Our expansion plan is scheduled for 2012, upon ensuring that the monitoring and evaluation of the pilot is conducted thoroughly.

Do you collaborate with any of the following: (Check all that apply)

Government, Technology providers, NGOs/Nonprofits, For profit companies, Academia/universities.

If yes, how have these collaborations helped your innovation to succeed?

Collaboration with government through line ministries has provided valuable support in form of policy articulation and operational terms and guidelines. The line ministry provides policies for compliance and adherence to practice. We are working with non-profits through such collaborations that provide a platform of sharing best practices and also possible funding avenues. The for-profit businesses come in to provide market source for the products of the program and also give guidance on possible market exploits. The universities and academia provide advice and guidance in terms of program modification towards efficiency and success.