Please describe the goal of your initiative; outline what you are trying to achieve
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.
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,, Other (Please describe below).
If you selected 'other' above, please specify which other barriers to financial inclusion you solution seeks to address:
For which underserved or excluded communities will your solution create access to valuable, affordable, secure and comprehensive financial services?
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
Could your solution work in other geographies or regions? If so, where?
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.
If your solution is dramatically successful, how will things be different in 10 years?
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.
What will have had to have changed to make this happen?
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
What has been the impact of your solution to date?
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.
What is your projected impact over the next five years?
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.
What barriers might hinder the success of your project? How do you plan to overcome them?
Barrier: Business copying among rural entrepreneurs
Solution: Introduce and promote vocational training (train and provide start-up equipment)
Barrier: Currently heavy reliance on volunteers
Solution: Introduce paid positions within CDB
Barrier: Government delays in offering registration to operate as a financial institution
Solution: Partnership with a commercial bank
Winning entries present a strong plan for how they will achieve and track growth. Identify your six-month milestone for growing your impact
Increase Bank capital base to MK3million excluding deposits
Now think bigger! Identify your 12-month impact milestone
Construct a community development centre, to house the CDB, a community hall, library (information centre) and a dispensary.