Microfinance Program for Women

Micro Finance Program in Lusaka, Zambia

In order to help a sick child recover completely it is important to supplement the medicines with food and nutrition. Unfortunately, the AIDS epidemic has destroyed the fabric of the African community and most households are headed by grandmothers caring for 5 or more orphans. These grandmothers do not have a permanent source of income and struggle against odds to provide regular food or support to the family. We realized early in our work that if we were to succeed in making a real difference in the lives of all the HIV+ children we had to make sure the grandmothers had a regular source of income. Microfinance - a program by which poor people are given small business loans without collateral has been implemented successfully in many countries. Through microfinance poor women get loans to start a business and over time as the business grows, they repay their loans. Worldwide the repayment rates within Microfinance vastly exceed that of traditional banking. We decided to launch our own microfinance program to help these grandmothers. 

In November 2005, we launched an innovative microfinance program for women impacted by HIV/AIDS in Zambia. We built our program with the help and expertise of the Foundation For Women. Our vision for this program is to strengthen communities impacted by HIV/AIDS and malaria in an environment where unemployment rates are 67% or higher. In developing the program, Power of Love had to take into account the special circumstances of the loan recipients, namely the high incidence of HIV/AIDS in their lives. For example, the women may be HIV positive and may fall sick or die during the loan process, all of them spent a large part of their day in providing care to one or more sick children and may not be able to attend to their business every day, and the fact that they were themselves aging grandmothers. Unlike traditional microfinance programs, we decided to focus not just on successful loan repayment but on proof positive that the loan recipients’ lives were being improved.

For a report on new loans provided in 2012, please click here.

How does the program work

Our micro loans program provides women caregivers with microloans and business training to engage in income-generating activities. These women, who care for HIV/AIDS patients and orphaned children, are critical to maintaining family structures in the community. However, they are themselves highly vulnerable to poverty and sickness. With the ability to generate income, they can support and empower themselves, while providing care that is essential in the community response to HIV/AIDS. 

womenThe microfinance program was launched in November 2005. We studied the microfinance experiences of various organizations across multiple continents to learn best practices and models that would work best in our unique situation. After 3 months of team building and 5 days of business training, 70 women received loans between $60-120. Since then over 450 loans have been provided and the program has seen a loan repayment rate consistently better than 92%. As a result of the businesses started with loan money, the diet of several families has improved significantly with many women reporting that they can now afford 2-3 meals a day as opposed to a single meal before they started the business. The women are also saving a small amount each week as personal savings and have their own passbooks to record their savings. Overall, we believe over 5000 children and adults have been directly impacted by the program through better nutrition, school attendance, and increased life expectancy.


Some of the businesses started by the loan recipients are:

  • Manufacture of tie-dye material;
  • Sale of fresh fish;
  • Sale of dressed chickens;
  • Sale of live chickens;
  • Sale of hardware;
  • Sale of used clothing;
  • Sale of charcoal;
  • Sale of Mealie meal (a Zambian staple food);
  • Sale of dry fish.

For an update on businesses run by our women entrepreneurs click here.

The loan grantees work with team leaders in the selection of the business(es) and base their decisions on an understanding of gaps in the market, their own ability to build and run the business and an analysis of the profitability potential of the business. The women work in groups and there is a healthy debate process that occurs to ensure that all aspects of the business have been thought through. Our long term goal is to incubate hundreds of women into small-business.

Impact of the Program

At this time we have 170 women running moderate to successful businesses. To date, more than 450 loans have been provided to care givers of HIV positive children and we plan on  providing an additional 50-100 new loans loans in 2013. As a result of these loans, the health and nutrition of the family has improved and most of the children are back in school. In addition, women who are on their third loan cycle have become role models for both women and men in the community. The menfolk are supporting the women and coming forward to take care of their businesses. The impact of our program is significant and sustainable.  

Typical Micro Credit Activities 

At the start of a new loan cycle, the women entrepreneurs undergo a week long business training and upon successful completion receive loans in the amount of $125-130 each. Susequently, the women meet weekly wit the loan officer to make payments, ask questions regarding the running fo their business, discuss business related issues like store design, store layout etc. and other topics that are of importance to them , for example how to take care of HIV positive children, the importance of keeping children in school, prevention of HIV etc. A typical women in our program is Brenda and you can meet her here.  

Beneficiary Profile: All the loan recipients are women and have at least one child who is HIV positive. Second, most of the loan recipients have children who are HIV positive and are enrolled in Power of Love's pediatric HIV/AIDS care program. The pediatric HIV/AIDS care pogram provides the children with food, medicines, weekly health check-ups from the Community Health worker/Nurse, psychosocial counseling, and other health care services. On average loan beneficiaries provide care to four children, and three elderly people at home. This implies that our micro loans program benefits at least 1400 people directly (assuming an average household size of 8) and many more indirectly.

Traditionally, microfinance programs face many challenges and therefore we carefully examined the factors that increase a borrower’s chances for success. After in depth research, Power of Love concluded that rigorous training and support in several areas are needed for long-term success. These areas are:

  • Learning to work as a team
  • Running a profitable business
  • Becoming a responsible borrower
  • Developing relationships of mutual support

Our program has four corresponding phases to train participants to be successful in these areas.

Team-Building: Traditionally microfinance projects fail because participants are not supported or motivated enough, and haven’t learned to be responsible for repaying loans and running a business. Team-building addresses this risk by creating a small network of committed borrowers.  Participants learn to work in groups of five to support a common or individual business. They become accountable to one another, motivated to work together towards a common goal, supportive of each other. They learn about each other personally, especially about the struggles in their lives. They identify how each person’s individual skills can benefit the team. Participants meet weekly for several months.

womenBusiness Skills Training: Typically, microfinance programs provide capital with little training. Power of Love is unique in that it provides mandatory, in-depth business skills training to all borrowers. We are using the One-Up Business Training program, a well-known and successful course in southern Africa, to teach participants how to develop and manage their businesses. A certified Head Trainer teaches five hands-on modules:?

  • Market Investigation
  • Buying
  • Costing and Pricing
  • Selling
  • Money Management

The training program guides the participants in the selection of their business and detailed analysis of their strategy. The program is designed for beginners, but is rigorous. Extensive exercises are completed and monitored by the Head Trainer. Lectures complement the hands-on exercises. Loan recipients complete the training in groups of five, further developing their ability to work and learn as a team. Each module is a day-long session and training is completed in one week.

Loans and Repayment: Family Caregivers receive an initial loan of Zambian Kwacha 600,000 (approximately US$125-130) to be repaid in 25 weeks with 10% simple interest. Payments are made weekly in the amount of 4% of the total repayment amount. In addition, each participant must save Kwacha 2000 per week to encourage savings behavior.

Each member has a passbook with her own record of loans, savings, and repayment; however all records are also kept publicly, so that the women can track repayments for the entire group. Ample acknowledgment of success in repayment is used to motivate the women in their repayments. Continuous monitoring identifies challenges and group problem-solving addresses any problems that arise.

Ongoing Support and Training: Weekly meetings are mandatory and continue throughout all phases of the loan cycle to create a support and motivation network for the participants. As participants go through the program, needs for additional training and support may arise and will be addressed. Additional programs may include peer training, growing a business, and literacy.

 Read Stories of Women who have Received Loans from Power of Love