Unlocking Access by Reaching Remote Rural Communities – Let’s Reach Them

Unlocking Access by Reaching Remote Rural Communities – Let’s Reach Them

MalawiDedza, Malawi
Organization type: 
nonprofit/ngo/citizen sector
Project Stage:
$1 million - $5 million
Project Summary
Elevator Pitch

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

CUMO is a not for profit provider of financial services to the rural poor especially women. It promotes village enterprises in order to alleviate poverty.

About Project

Problem: What problem is this project trying to address?

CUMO was created to reduce financial exclusion amongst the rural poor. Although the number of banks increased, remote areas of Malawi remained financially excluded. 80% of Malawi’s population lives in rural areas while financial exclusion is at 55%. In these areas: • Transportation is a challenge as the road network is bad • Communication is difficult and unavailable - even where mobile phone coverage has reached, connectivity is poor and unreliable; • Entrepreneurship skills lack • Financial literacy is low • Effects of HIV & AIDS are evident • Degradation of environment is rapid • Collateral is unavailable

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

Because their remoteness and the transport limitations they face, rural people find it difficult to access financial institutions which are located in urban centers. Using a community based, branchless delivery model, CUMO’s brings financial services to the rural poor instead. CUMO’s model is community based in that its Financial Services Officers (FSOs) live in communities they serve. It is branchless because No branch infrastructure is required. CUMO staff do not handle cash – the company transacts with clients through infrastructure already existent in their localities. Loans are disbursed direct to their bank accounts, while repayments are through agricultural dealer shops available in the communities. Identification of clients is done through the chiefs of the areas. Village banking and group solidarity techniques are used.
Impact: How does it Work

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

CUMO’s branchless and cashless delivery model provides maximum convenience and safety to clients and staff. Mostly, the group model is followed, thereby ensuring collective decision making, joint liability and preliminary risk assessment. Groups are self organized helped by the FSO for their area. Initial training covers business basics, savings management and group dynamics. Further training is provided by CUMO’s mobile training unit (CETC). KAT 67 Madalitso is a 13 member group from Mkaliwafa Village, T/A Kachindamoto, 75km east of Dedza and 60km away from the nearest bank branch. The group was established in 2007. After initial training, the group started mobilizing savings and borrowing from CUMO. CUMO facilitated opening of the group’s bank account into which savings are deposited and CUMO loans are disbursed. Loan repayments are through a Farmers World (Agro dealer) Shop located 7km away from the village. Repayment data is transmitted to CUMO’s head office by the supervisor of the area through mobile phone internet. The group’s first loan was MK75,000 (US$ 275). It is currently servicing a MK1,215,000 (US$4,450) loan obtained in May 2012. Many of the group members have built modern houses while two have bought vehicles. The group has accumulated MK172,000 (US$625) in savings.

Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?

In remotest villages, CUMO is almost always the only formal financial services provider. Loan price, size and term differentiate CUMO from informal lenders (usury). In areas close to main roads, FINCA, Micro Loan Foundation, Opportunity Bank, and COMSIP are present. Our flexible, adaptable and comprehensive model makes us unique. We use local structures while mobile phones transmit disbursement information to clients and repayment data to CUMO. Laptops allow clients to review the status of their loans in the field. Our comprehensive package comprising village savings, health and credit life insurance, loans, and training is delivered at the clients’ door step.

Founding Story

The idea was conceived by Concern Universal in 2000 when the rural communities it was working with were improving their food security status but the lack of access to financial services was holding them back from diversifying their activities and ultimately from increasing their incomes. CUMO was created as a way through which communities that were keen and committed to improving their quality of life could access financial services from enterprise development components of Concern Universal’s food security and sustainable livelihoods projects in Dedza district in 2000. CUMO is now a self sustaining operation, present in 14 districts, employing 177 staff and reaching out to 62,000 clients making it the largest private provider of microfinance services to rural areas of Malawi.
About You
CUMO Microfinance Limited
About You
First Name


Last Name


About Your Organization
Organization Name

CUMO Microfinance Limited

Organization Country

, DDZ, Dedza

Country where this project is creating social impact


How long has your organization been operating?

More than 5 years

Has the organization received awards or honors? Please tell us about them


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How long have you been in operation?

Operating for more than 5 years

Which of the following best describes the barrier(s) your innovation addresses? Choose up to two


Social Impact
Please describe the goal of your initiative; outline what you are trying to achieve

To improve lives of the rural poor by taking financial services to the door steps of the remote and difficult to reach communities with a special focus on women; and

to become a viable regional rural microfinance network capable with capacity to meet the diverse financial needs of remote communities as part of efforts to reduce poverty.

Which barrier(s) to financial inclusion does your solution seek to address? (select all applicable)

Physical and other accessibility obstacles that prevent communities from reaching financial services, The lack of affordable financial products tailored to the needs of underserved and excluded communities,, Powerful incentives for financial service providers to move up-market, Other (Please describe below).

If you selected 'other' above, please specify which other barriers to financial inclusion you solution seeks to address:

Knowledge and literacy barriers that prevent communities from doing business meaningfully

For which underserved or excluded communities will your solution create access to valuable, affordable, secure and comprehensive financial services?

CUMO provides financial access to the rural and excluded communities of Malawi, 40% of whom live below the poverty line. 80% of Malawi’s population lives in rural and remote areas. At least 80% of the target group are women. CUMO operates exclusively in rural areas. Currently CUMO is in 14 of Malawi’s 28 districts and hopes to expand coverage to other districts of Malawi. The client base in the districts CUMO has reached now stands at 62,000

Could your solution work in other geographies or regions? If so, where?

CUMO’s model could work in most rural regions of Africa especially where formal means of identification are non-existent and road infrastructure is bad. Existing infrastructure and modern technology can be innovatively used in support of the effectiveness of the model. The Solution works better in geographical regions where population densities are reasonably high.

If your solution is dramatically successful, how will things be different in 10 years?

Currently CUMO is servicing over 62,000 clients from rural areas of 14 districts of Malawi. Success stories confirm that CUMO’s is positively impacting socio-economic lives of the economically active poor. CUMO envisages attaining a client base of 115,000 by 2015 and doubling it 5 years thereafter to 230,000 clients by the end of the 10 years. The number of districts of CUMO’s presence will grow to not less than 20. Evidence indicates that CUMO is probably the only formal financial institution that reaches the remotest parts of Malawi. CUMO intends to maintain its unique model as well as focus. By modernising processes through point of sale devices in collecting points, mobile money and mobility of its FSO’s, CUMO expects to remain a self sustaining institution.

What will have had to have changed to make this happen?

CUMO’s key challenge is availability of additional capital for increasing outreach. As a non deposit taking microfinance institution, external financial support is still necessary for further growth. Current developments in the regulatory enviroment of microfinance will work in support of CUMO's growth as they encourage branchless financial delivery models.

What has been the impact of your solution to date?

CUMO is the largest provider of financial services to the rural poor in at least 4,000 remote villages from 14 districts of the country. Its client base is in excess of 62,000 people, 80% of whom are women.
Its community based, branchless and cashless model has been key to expanding outreach and enabling rural people to engage in viable businesses at village level. By taking services to the remote areas, CUMO has helped to improve the quality of life of communities which in the past depended on subsistence farming and poorly paid agricultural piece work known locally as “ganyu” enabling them to at a minimum feed their families and send their children to school.

What is your projected impact over the next five years?

CUMO intends to increase outreach to 115,000 by 2015 relying on further advancements in technology and increased efficiencies. The number of geographical districts is expected to increase from 14 to 20. Savings facilitation and provision of credit to the formerly financially excluded will create rural wealth. Health insurance services will improve quality of life amongst the target groups by enabling access to quality health care. Entrepreneurial training services will provide skills for meaningful business. New products are envisaged including mobile money transfer mechanisms which should further increase financial inclusion and micro-housing loan products for the improvement of rural housing.

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

CUMO’s key challenge is availability of additional capital for increasing outreach. As a non deposit taking microfinance institution, external financial support is still necessary for further growth. Already, the Company is in negotiations with lenders with interest in the microfinance sector for additional resources. Low literacy levels mean that CUMO has to support a mobile training unit. CUMO is negotiating with existing development partners for continued support for the continuation and expansion of mobile training unit.

Winning entries present a strong plan for how they will achieve and track growth. Identify your six-month milestone for growing your impact

• Grow client base to 70,000 in the 14 districts, disbursing MK600 Million (US$2 million) and maintaining financial sustainabil

Identify three major tasks you will have to complete to reach your six-month milestone
Task 1

Address loan officers’ productivity challenges through improved means of mobility to increase the average case load from 450 to

Task 2

Upgrade MIS to allow automated processing of repayment data to maintain portfolio quality at PAR 30 days of 3% and a repayment r

Task 3

Introduce point of sale receipting devices in paying points to ensure immediate availability of repayments for further disbursem

Now think bigger! Identify your 12-month impact milestone

Grow client base to 80,000 in the 14 districts, disbursing MK1,192 Million (US$4 million) and maintaining financial sustainabil

Identify three major tasks you will have to complete to reach your 12-month milestone
Task 1

Conclude negotiations with Symbiotics and Habitat for Humanity for additional financial resources for on lending.

Task 2

Solicit financial support and expand the mobile training unit to support the increasing client base.

Task 3

Introduce new financial products including mobile money and house improvement loans.

Tell us about your partnerships

In delivering its services, CUMO works with:
a) local leaders (chiefs) to ensure that it is dealing with bona-fide members of the community;
b) banks and agro-dealer shops for disbursements and collection of loans; and
c) NICO life Insurance Company for delivery of insurance services.

USAID, UNDP/UNCDF and DFID have supported introduction of new services including entrepreneurship training, health insurance, point of sale devices, and equipment for expansion to new areas.

Are you currently targeting other specific populations, locations, or markets for your innovation? If so, where and why?

Yes. Unreached 14 districts of Malawi in order to contribute towards increase financial inclusion of rural people in malawi.

What type of operating environment and internal organizational factors make your innovation successful?

A wide branch network of agro dealers to serve as paying points in addition the bank branch network;
Resonable coverage of mobile phone based internest services;
Staff willing to live in remote areas
A well constructed Management Information System
An insurance Company williting to reach rural people
Sufficient Loan Capital
Customer oriented products

Please elaborate on any needs or offers you have mentioned above and/or suggest categories of support that aren't specified within the list

Demand for CUMO’s services is overwhelming hence additional resources whether pro-bono or by way of investment for on lending are a critical need. Support towards technological advancement is also important to increase efficiency and contain costs. Client education is a critical need which also requires grant funding.