The Power of Love team and families in our micro loans program truly appreciate your support and generosity. Your support and caring for Zambian women and their families is creating a legacy of empowered women, and a stronger more self-reliant community in Zambia.

A Quick Look at the Achievements of our Women Entrepreneurs in 2016

• Record number of new loans: Added 100 new micro loans in 2016, bringing the total number of active loans to 372.
• Record number of new businesses: 2016 saw the birth of 150 new businesses. Running businesses puts the women on the path of self-reliance even if the business fails as the expertise required to run a business is a permanent skill.  
• 150 new women completed business training: The expertise to run a business is a permanent skill that helps achieve our goal of community strengthening.  
• Mentoring club: A few women formed the "Matero Women in Business" club. The goal of this club is to mentor women whose businesses may be struggling, and encourage others to work hard to expand their businesses.

Over the last six years, 334 women out of a total of 656 have graduated from this program. What is remarkable, however, is that 70% (244 out of 334) of the businesses are still running in the community. In addition, more than one-third of the women graduates have made investments in land, shops, and home extensions so they now have a sustained source of income. Loan repayment rates are between 88-92% despite the difficult circumstances faced by most women.  Overall, the community is stronger as families are improving in health and children are attending school.

Power of Love’s Micro Loans Program: Need and Process

Power of Love’s micro loans program in located in Matero - one of the largest and poorest compounds in Lusaka, Zambia. Matero has a population of approximately 275,000 to 300,000 and is characterized with a high incidence of HIV and unemployment rates upward of 60%. Most residents live on less than a $2 per day – defined as extreme poverty by the UN. Our estimate is that at least 10,000 women in Matero can benefit from a program such as this one.

Typical beneficiaries: Direct beneficiaries are women and children as they have been disproportionately impacted by the HIV and AIDS epidemic in Africa. Most women have no marketable skills, have never been to school, and may not know how to read or write. They range in age from 35 to 67 years of age, and most are single moms/grandmothers caring for multiple orphaned children/grandchildren. At present, we have 372 active loans that benefit more than 2,600 people directly as on average each loan recipient cares for seven people out of which 4-5 are children.

Typical businesses started with loans range from groceries (fruits, cooking oil, eggs, detergent, tea, soft drinks, vegetables, beans, Kapenta (dried fish), fresh fish, mealie meal (a Zambian staple), restaurants, hair salon, cosmetics, used clothing, used shoes, used toys, to Chitenge (Zambian skirts). More recently, a few women have started selling higher value items such as bed sheets, cosmetics, phone covers, prepaid cell phone cards, wedding accessories, jewelry, blankets, floor polish etc. You will like this short video of a loan beneficiary making chips for sale. 

The loan process:  Loan recipients participate in weekly meetings, business training, business mentoring sessions, and refresher training. In addition, our loan officers visit businesses regularly to offer advice on products, store display, inventory planning, and check accounting work sheets. The goal of these activities is to: (i) equip women with the tools they need to run a successful business, (ii) create conditions for women to be socially empowered, and (iii) enable women to gather enough capital and savings so they continue to operate a profitable business even after graduating from the program. These activities are critical to ensure business success and family sustainability. 

Vision and Goals: Our vision is to empower women by providing them with tools to take care of their sick family members, prevent HIV, and by teaching them marketable skills. The goal of this program is to empower women by providing them with business training and loans to start businesses.

Our Program is Unique: Our micro loans program is unique as it is a part of a comprehensive program that includes pediatric HIV care, malaria prevention, and “Safe Park” programs. Since a family can enroll in multiple programs, in addition to learning how to run a business, the women learn how to care for their HIV positive children/family members, the importance of keeping children in school, and HIV and malaria prevention. This multi-pronged approach significantly increases the loan recipient’s chances of success in business.

Impact of Program Activities

Program activities outlined above have resulted in a huge and sustained impact on hundreds of families in our community. The diet and nutrition of all families has improved leading to improved health, more than 700 children have been able to attend school, families are better informed about HIV prevention and care, many women have invested in income earning assets such as an extra room or a plot of land, and loan recipients have built strong social networks. Loan recipients learn how to run a business, and have gathered enough capital to continue running their business in a relatively short (about 10-18 months) span of time. In addition, some loan recipients have become role models for others, enjoy a higher status, and are taking steps toward self-reliance. In addition, they build strong social networks, and many become role models and mentors for others in their community. These help break the vicious circle of poverty and low education. Given below are some metrics for the success of our loans program:

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Measures of Success           

1. Business Operations

• On track with repayments: 338/372
• Business has expanded: 253/372
• Moved to higher value businesses: 87 
• Average capital growth 5%

2. Savings

• Number of women saving each week: 277
• Amount of savings:               $12-15
• Number of women saving via bank account: 142

Schooling

• Children in school or skill training: 67
• Paid for school expenses (books, shoes, uniforms, fees): 782

4. Investments made

• Land, sand, cment and blocks:  48
• Bought or built shops: 6

5. Household Items Purchased

• Stove, freezer, chairs, TV’s, bedding: 112
• Toys, pots, and pans: Almost all families
• Better diet: all (approx. 2600 people)

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Long term impact: We believe that this program has a long term sustained impact due to:

• Skills Development: Women learn a variety of business skills that include record keeping (leads to better information on inventory, sales, profits, receivables etc.), and customer service, and operating a bank account.
• Acquire new habits: Women start saving a small amount each week.
• Better knowledge about HIV and malaria: leads to better health and higher earnings.
• Built relationships of mutual support: these are helpful in the long run.
• Change in culture: as men (husbands, sons) support businesses and help with caring for children.
• Quality of life: Women enjoy a higher status in the community as they share their knowledge, become role models, and demonstrate self-reliance.
• Stronger community: The community is better equipped to break out of the vicious circle of poverty and low level of education.

Next Steps

Plans for 2017 are as follows:

• Add women entrepreneurs: Provide an additional 50 loans to first time women entrepreneurs.
• Train 200-250 women in making mosquito bed nets and other useful items, such as hand bags, school bags, cell phone covers, plastic sheets etc. from used plastic bags. The items created can be used for personal or commercial use.
• Provide mentoring and extra support to 25-50 women via the “Matero Women in Business Club”.
• Track the current 372 active businesses intensively so they continue to operate in the community even after this group of women graduate mid-2017 to 2018.
• Track the 244 old businesses run by women graduates operating in the community. We may not have the resources to tackle this ambitious project right away. However, we would like to see them grow bigger and more profitable every day.

Challenges

Loan recipients continue to face significant challenges as family members or they themselves may be living with HIV which impacts time spent on their business. Second, a significant portion of the women’s earnings are used for food, and rent so they are not able to invest enough in inventories and raw materials for their business. Third, the devaluation of the Zambian Kwacha in 2016 led to inflation or higher prices for raw materials. Our loan officers work with the women to help overcome these challenges.

Learnings incorporated since inception of the program 

• Larger loan size is better for business success. Hence, we have increased loan size over the last few years.
• Qualifying women prior to enrollment: Some women had received loans from multiple agencies which made it difficult for them to make repayments on time. Going forward, we are gathering more in-depth information about liabilities before enrollment.
• Counselling and support increases the probability of business success. We hope to provide more customized counseling for women going through personal problems.
• Tracking graduates: We will be tracking a few women over time to observe if business success leads to self-reliance and the reasons for business collapse after graduating from the program.

Traditional Banking and the Zambian Environment

Why traditional banking is not a solution for residents of our community?

Traditional banking has not penetrated most of Africa, and microfinance in Africa has only reached a fraction of those who need it. Commercial banks find is costly to operate a micro-finance program because of the small size of loans, need for new mechanisms, and lack of staff with knowledge of local culture. In addition, women like Joyce are not able to access credit through commercial banks and micro finance institutions as they are not able to provide collateral, do not have marketable skills, and find the paper work complex. And this is where programs such as ours fulfil credit needs of the community.     

Given the above environment, micro loans can empower women in resource poor communities. Programs such as ours result in economic and social empowerment of families in the following ways:  

• Diet and nutrition is better as families can afford 2-3 meals per day as compared to one meal before enrollment,
• women can purchase household items like pots, pans, radios, used TV’s and toys for their children,
• most women can pay for school expenses (uniforms, shoes, school bags, fees),
• most women learn to save (about 40% in our program),
• some women open bank accounts (about 30% in our program as compared to less than 5% before enrollment),
• women can purchase land for building and/or farming which ensures an income in the future,
• businesses can expand (most have in our program),
• women understand the importance of keeping children in school,  
• families have better knowledge of HIV care and prevention and
• women end up with strong social networks and relationships of mutual support.

In addition, micro loans strengthen communities by:

Adding value: Businesses started add value for the whole community as they:

• provide increased convenience. Residents have to travel shorter distances and can purchase smaller quantities,are new to the community and may provide an element of luxury to the residents. For e.g. a hair salon that may offer basic hair styling and braiding for girls. 

Change in culture:

• some men (husbands and sons) start helping in the business,women start saving at home or in a bank.

Prevention of HIV: families are better informed about the HIV prevention & care.

Reduction of stigma associated with HIV due to better information.

Our Loans Program is Customized to the Community

Power of Love’s micro loans program was designed to meet the needs of vulnerable women impacted/infected by HIV. For any program to make a significant long term change, it must be tailored to meet the needs of the community. Over the last ten years we have made several modifications to the traditional micro loans model to suit the local environment.

The Community and Zambian landscape: Our micro loans program is located in an impoverished community characterized with a high incidence of HIV, malaria and TB.  Over the last 12 months, the Zambian economy has been facing high inflation and unemployment rates due to a steep drop in copper prices. These economic developments have led to a worsening of the economic conditions. Some of the modifications made to incorporate the difficult circumstances faced by our loan recipients are as follows: 

• Family sustainability: Due to extreme poverty, our focus is on the health and nutrition requirements of the family and not on repayments of loans. Family sustainability is more important than sustainability of the program.
• Families enrolled in multiple programs: Our loans program is integrated with our pediatric HIV care, malaria prevention and community education programs so we can impact a family in multiple ways to ensure better health and loan repayments.
• Trust: Our loan officers and health care workers are from the community and have a high level of knowledge about the family circumstances of our clients. This build trust.
• Training is participatory: Since many of our loan recipients are grandmothers/single women (who have never been to school and may not know how to read or write), our training programs are participatory and adapted to the local language. For example, during business training, profit is referred to as “money for use” (can be used for family expenses) to distinguish it from loan capital that should be used for business expenses only and not for family expenses.
• Need new ideas: Since there is a lack of formal structure to collect repayments, we are always looking for new ideas to encourage the women to make repayments on time especially during the third and last loan cycle.

Conclusion

Our micro loans program has been successful in empowering women by teaching business skills, the importance of hard work, and self-reliance. We measure success by ensuring sustainability of the family and not so much by repayment rates and financial sustainability of our program. Thus, the community has become stronger as can be seen by the improved health of families, increase in the number of children in school, reduced stigma associated with HIV, and better information about HIV care and prevention. In addition, women entrepreneurs have achieved economic empowerment (investing in income earning assets), and social empowerment (by building strong social networks, becoming mentors and role models). Overall, this program has made a significant and sustained impact on the lives of thousands of community residents.

Thanks for your caring.  We could not have achieved any of this without you.