Community Development Bank
- Community development
- Climate change
- Financial services and markets
- Food security
- Renewable energy
- Microfinance
- Social enterprise
Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.
Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?
Founding Story
Jones
Ntaukira
Empower Inc
, NSW, Sydney
, LLG, Lilongwe
1‐5 years
SSE Social Entrepreneur of the Year 2010 (Founder)
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Operating for 1‐5 years
We believe in human potential and the capacity of people to action their vision for change if given the resources and opportunity. The main goal of our initiative is to enable financial inclusion, starting with the South-East Mzimba region (38 villages). This would enable the region to provide its people with: Promote a culture of saving and a safe centre for local deposits; Provide affordable capital for businesses as well as local development projects; Provide vital business education to entrepreneurs and leaders to develop viable business and development plans; The means to deploy renewable energy solutions such as solar lighting through tailored loans; The possibility of insurance services should the Bank Committee decide to add to their service provision capacity.
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,, Other (Please describe below).
Gender based barriers
Remote villages and their social entrepreneurs. Rural populace accounts for over 80% of Malawi’s total population mostly as small scale subsistence farmers. Over 50% of the total population live below poverty line mostly in very remote locations neglected by MFIs and Banks due to high operation costs to access them. Agriculture is the highest GDP contributor as high as 70%. CDB wants to introduce very simple and quick financial system and education flexible enough to be understood by a grade 5 drop out. CDB also in essence brings the town to the rural as much as possible thereby enabling the creation of jobs and locally driven development
One key success factor to CDB is a 5 year community vision which is arrived during a Participatory Vision Workshop and revised every year. This ensures that everyone taking part in CDB is aware of where the communities want to go and how they will achieve their dream. This ensures that the CDB is built on Unity, Trust, Transparency and Accountability. That said, the CDB model can be replicated anywhere in Malawi and beyond as long as a Vision Workshop is priotised. A number of villages (as many as manageable) can come together as a Development Epicentre and develop a CDB of their own.
We anticipate that in 10 years CDB’s would enable a highly decentralized, community driven approach to development. Local epicentres for rural finance would reduce reliance on external or predatory money lenders and shift the responsibility and energy for development towards local village committees that collaborate at a regional level. This would in turn make the work of many Aid and Development organisations redundant or relegated to support roles that work off existing social infrastructure. Additionally, we feel that there would be an increased culture of saving among the rural people. CDB’s financial services must diversify to include Livestock insurance, school fees loan, life insurance, seed bank and adhoc. We also expect that Village Development loans will be large enough to afford large projects like biogas or hydro plant installation thereby increasing rural electrification which was key to the development of this project idea- access to renewable energy technologies.
Employment of a technical person
Intensify Women and Human rights campaign
Introduce Mobile Banks to ensure security of deposits
Introduction of a number of vocational training
Develop strategic partnerships for example with the Veterinary Department to provide extension services to livestock farmers like poultry and dairy farmers
From 1 village of 40 households, the first and only CDB has grown to reach 38 villages with a population of more than 5000. The bank’s capital has increased from MK155, 000 to over MK1million in less than 1 year. 9 individuals have already accessed business loans. Over 300 people have undergone a business development and management training. 1 village has acquired a solar lantern loan, one has acquired a loan to construct a water tank and have access to clean water. A culture of saving has begun with more people joining. Leadership skills among the leaders have improved tremendously. Some people were taken on an education visit to another area to learn how to lead and this has since increased their self confidence. One of the rules for the CDB is that a Woman must always head the CDB and also in any committee and club they must achieve 50:50 gender balance and this has empowered women.
Currently there is only one CDB in one district in the northern region. The target is to have a CDB everywhere Empower establish a new project. Thus in the next 5 years we expect to have 2 more CDB- one in the central region and one in the southern region.This will help directly reach out to more than 30,000 people.
Increase Bank capital base to MK3million excluding deposits
Village by village awareness campaign
Introduce small cash loans
Allocate special money for loans for renewable energy technologies
Construct a community development centre, to house the CDB, a community hall, library (information centre) and a dispensary.
Fundraising and budgeting
Community contribution- contribute resources and materials within reach like sand, labour, quarry and bricks
Chiefs (communal land owners) to allocate land for the project and be approved by an AGM
CDB already is in the process of partnering with Opportunity Bank of Malawi to become its mother bank. Later on, we intend to have Mobile Van Banks visit the CDB on schedule weekly to ensure security. CDB can also take loan from the mother bank at times. We also partnered with Business Expansion and Entrepreneurship Development (BEED) Malawi, which offer internationally certified CEFE training in business development and financial management.
Targeting other very remote areas especially in the central and southern region of Malawi. The reason is to extend this initiative to other able communities who are willing and ready to turn their situation themselves without being exploited. Our target is to have 1 CDB in each region within the next 5 years and eventually 1 in each district for the next 20 years.
We are a valued-driven organisation and our partners work within this framework. Our operations centre on facilitating community-driven change with a view towards making our role redundant. Thus at the core of all activities is the intent to transfer knowledge and build local capacity around the provision and management of financial services in a manner that does not require our sustained involvement.
We would love to partner or get an investor to help us replicate CDBs across Malawi. We can also offer support and collaboration with other organisations and innovations.