Themicroloanfoundation's Blog

Pennies for Life: Putting the power back into the public’s pockets
August 24, 2010, 2:10 pm
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Malawi received £77.3 billion of aid from the UK in 2009.  During the same year the president Mutharika spent 9 million on a private jet, £2 million on a wedding ceremony for his new bride and £3 million on 22 Mercedes limousines.  Furious at these revelations, DFID officials reportedly cut the UK’s poverty aid to Malawi by £3 million, “the equivalent to the annual cost of the plane over the next 5 years”.  The Common Public Accounts Committee has raised further concerns about £300 million of aid to Malawi since Mutharika came to power.

Corruption within African governments is no new phenomenon; neither is the “trade, not aid” paradigm.  Yet, with 40% of the country still living beneath the national  poverty line, it is key that Mutharika’s bad behaviour does not impair the opportunities of the country’s entrepreneurial population.  Financial transparency is more essential now than ever.

The Microloan Foundation’s model, which emphasises economic transparency both in the funds we raise and in our performance, enables female entrepreneurs to receive money directly, bypassing corrupt government officials.  Training and mentoring programs then continue to monitor the investment of this money and provide valuable advice, where required.

Our “hand up, not hand out” philosophy not only acts as a kick start to local economies, but blocks money-grabbing officials out of the picture.

Meanwhile, back in the UK, national charitable donations have been on the decline.  Though this is unsurprising given the current economic climate and recent revelations, the government has been receiving a lot of criticism for directing precious pennies towards foreign aid.

Microloan has recently launched a new campaign, however, that puts the power back into the public’s pockets: Pennies for Life.  The campaign aims to put to honorable use the £500m worth of change that is reportedly lying around the homes of the British population, by asking people to donate 1 penny every time they update their Twitter account.


Microloan Foundation spreads the wealth in rural Africa
August 16, 2010, 4:22 pm
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Peter Ryan explains to David Woodward of Director magazine, why his Microloan Foundation is enabling inexperienced entrepreneurs to kickstart enterprise in sub-Saharan Africa

Enterprise can be an effective solution to poverty in rural Africa. But when the average villager gets by on only a few pennies a day, how does a business idea attract the capital it needs to get started? Without collateral, a leap of faith is required. It’s Peter Ryan’s job to supply that faith. Ryan runs the Microloan Foundation, a social enterprise that provides small loans and business mentoring to women in rural Malawi, Zambia and northern Namibia.

Ryan’s entrepreneurial customers are inexperienced and often uneducated. To a conventional bank manager, they look a risky prospect. But out of the 50,000 sub-Saharan loans the Microloan Foundation will make this year, 99 per cent of the capital will be returned, plus interest.

The secret to Ryan’s model is peer lending. The Foundation’s loan managers gather small groups of like-minded women, providing microloans of around £70 to each member to start a business. The loans are “cross-guaranteed” by all the group members, who provide peer support should any of the women fall behind.

Like Grameen Bank, run by Nobel Peace Prize winner Muhammad Yunus, the Microloan Foundation doesn’t provide any loans to men. “It’s the women who manage the purse strings,” explains Ryan. “They are the ones who have to put food on the table.” It might seem strange to a European, adds Ryan, but gender-specific banking hasn’t proved divisive. “The men are very happy that the women are being encouraged to go and earn money to support them,” he says.

Ryan’s aim is to kickstart rural economies. The Foundation’s expansion into new regions is achieved through local loan managers, who develop relationships with village headmen before a Microloan branch is established. Groups of female entrepreneurs emerge naturally, says Ryan. Each group nominates a chairperson, a treasurer and a secretary. They are then taught the basics of accounting, finance and peer support and given bank accounts, before receiving their loans.

Interest is charged for two main reasons, explains Ryan. The first is to ensure that borrowers understand the price of money. Ryan’s ultimate goal is to move his customers away from dependence on social enterprise and into the formal banking system. The second reason is to make the Microloan Foundation both sustainable and profitable. Profits are used to pay administrative staff at the Foundation’s 20 branches and for expansion of the organisation. “We want to make a million loans a year across sub-Saharan Africa”, he says.

Exporting capitalism to third-world communities requires sensitivity, no matter how good your intentions. Although the Foundation’s record of repayment is good, there are other, more important measures of success to consider. “What you have to do is get your social mission right,” says Ryan. “It’s easy to say we get 99 per cent repayment, but if you’re leaving a community in a worse state than they were before then that’s not success. You don’t want to drive people into the ground by eradicating the weak, you want to support the weak so that if it doesn’t work for them they don’t come out of the process slaughtered.”

Ryan takes care to measure the social impact of the Foundation’s work, tracking and monitoring the ways in which poverty is alleviated through enterprise. “You might call it TQM, but with a social mission,” he says. But assessing progress can be a challenge when borrowers only deal in good news. “It’s about communication. If you ask an African a question you’ll get an answer. But is that really the true answer? It’s a continual process of pealing away the onionskin,” he says.

Ryan’s success in Africa seems ripe for duplication in the UK. With an estimated 250 graduates chasing every available job, many are seeking start-up capital to fund their own ventures. But despite governmental pressure on banks to make more loans, many applications are unsuccessful. Ryan says microloans, backed by his Foundation’s peer lending model, would reduce risk for lenders and help stimulate enterprise. “If people are brought together they can form a community of self-support,” says Ryan. “Two to three hundred pounds is not a lot of money, but that would enable someone to get into painting and decorating, garden maintenance, something quite simple.”

Simplicity is also the key to success in Africa, says Ryan. Most entrepreneurs start trading in areas they know well, “buying rice and beans and fish to sell at market.” Some progress by opening teahouses at the side of the road, starting knitting and sewing businesses, buying livestock, or even setting up poultry operations.

The profits pay for secondary education, which in sub-Saharan Africa costs around £5 a term, much-needed medicine, home repairs and extra food. “Before these loans they might have one meal a day, afterwards they can have two to three meals a day,” he says. “It’s about improving quality of life.”

Alternative Rich List: Life isn’t just about money…
July 23, 2010, 4:09 pm
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Dear Followers,

Please help us nominate Peter Ryan, the founder and CEO of MicroLoan foundation, for Alternative Rich List. If you are not already aware, Alternative Rich List (unlike the conventional Rich List that recognize individuals for their monetary wealth) recognize people who have brought a wealth of GOOD to the world. Peter Ryan is one of those individuals. Please visit:    and vote for my boss, Peter Ryan!

If you visit the above website, you will find that, Peter Ryan empowers women in rural Malawi, Namibia and Zambia to work their way out of extreme poverty through the MicroLoan Foundation (MLF). Quitting his job as manager of a French food company, Peter started MLF in 2002 with £25,000 of his own money, recognising a need for microfinance services in sub-Saharan Africa and wanting to put his business start-up experience across EMEA to better use. MLF has helped over 40,000 women start small, sustainable businesses, positively impacting more than 200,000 children. MLF provides women with small loans, typically £50 – £150, to start their businesses, providing business training, ongoing mentoring, and savings and financial planning. Independent studies show the vast majority of women who borrow from MLF can now afford healthcare and to educate their children, and no longer suffer food shortages. MLF won Highly Commended in the International Aid and Development category at the 2010 Charity Awards.

Please vote for Peter Ryan at:


Emmie Kamchere, 52: Trainee at the MicroVentures Sewing and Knitting Training Centre
July 15, 2010, 2:39 pm
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A visit from our volunteers Lottie and Yusef:

Emmie lives in a village 4km from Kasungu. Five times a week she makes the journey into town to attend a two hour sewing lesson at the Micro-ventures training centre. “When I can afford it, I take a peddle-bike taxi,” she tells me during my visit to the centre; “usually I walk”.

Emmie is a determined woman. When I ask her what motivates her to keep making the long journey she begins telling me about her family: “they are all proud of me; especially the girls.”

“You have daughters?” I ask her.

Grand-daughters!” she laughs back. “I want to be able to teach them to sew so that they can find success.”

The MicroVentures project relies on this spirit of teaching. Emmie’s adult life has been a struggle; she has had no income since she lost her catering job in Lilongwe fourteen years ago, and moved back North to live with family. But if she can complete her course, she will be able to help the most vulnerable members of her family break the pattern for women in Malawi.

Emmie hopes to start a clothing business, sourcing her own materials and selling her clothes to nearby villages. When I ask if she’s going to start up a family business, she smiles broadly:

“that would be an incredible thing. But first I have to finish my course.”

The course is structured to cover seven areas: machine work, pattern work, actual sewing, cutting, design, sewing skills, ironing and business skills. Emmie is two months into the three month course and as I watch her practicing she is clearly very comfortable on the machine. I ask her if she has sewn in the past:

“only by hand, never with a machine. I did all the sewing for my family, but now I will have skills to teach them.”

However, skills are not everything, once Emmie’s training is complete she will have access to a MicroVenture loan to spend on initial overheads. To prepare her for this transition, she is taught business skills in the last two weeks of her course.

Many of the women at the centre already demonstrate an understanding of business. “I have to purchase my own loom,” says Jin Ulalo, who is halfway through a knitting course: “I have a cheap source of materials, but without my own machine, it is not profitable.”

Women like Jin and Emmie are already planning the details of their future businesses, finding applications for their skills even as they learn them. However, Jin is also aware that the MicroLoan Foundation can’t give her everything she needs: “a machine is expensive. I will get help but it won’t be enough. I have to find a way to save.”

For Jin, saving is difficult. Like most of the villagers here, she relies on unstable forms of income, selling fish and tomatoes in an environment of fluctuating supply and demand. “I have moved to Kasungu to attend this course,” says Jin. “I am lucky because I have a relative here. It was worth moving for the chance of owning a loom.”

MicroLoan can’t do everything for women like Emmie and Jin, but their determination coupled with the opportunity MicroLoan is giving them means they are on track to create earnings not just for themselves, but for future generations.

Welcome our new Social Impact officer!
July 12, 2010, 10:18 am
Filed under: Uncategorized

From Daniella, our Mazungu in Kasungu:

I’m very pleased to report that we have found my replacement! His name is Chikonzero Undi and he comes to us with lots of relevant experience and bags of enthusiasm for making sure MicroLoan Foundation is achieving its social mission. Chikonzero’s background is in research and monitoring & evaluation, and he’s also set up his own community based organisation working on a voluntary basis with vulnerable people.

Chikonzero is being kept extremely busy not only learning the ropes of what MicroLoan Foundation does on a day to day basis – all the way from clients and Loan Officers up to management at Head Office – but also shadowing me on my various Social Performance Management activities. He’s already taken on an active role in carrying out some social assessment questionnaires and a business assessment. Next week there’s a 3-day internal Participatory Rural Appraisal (PRA) course taking place for him, the internal audit staff and regional managers. He’ll use the people-centred research skills he learns in his ongoing work with clients, ensuring that MicroLoan’s operations are always working hard to meet their needs. Just as well he’s able to soak information up like a sponge! When I leave (in just over a month) I know that Chikonzero will keep the momentum up on the SPM activity.

Funny Mbewe: Grocery Store Owner and member of the Chikondano Credit Group
July 6, 2010, 3:24 pm
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Our two newest volunteers Lottie Heales and Yusef Salehi are currently in Malawi asking women around the country just how MicroLoan has made a difference for their families. This is their first installment

Like many of the industrious women in the Chikondano Credit Group Funny Mbewe has enjoyed a lot of success in her retail business since the start of her first loan cycle with the MicroLoan Foundation.

Previously Funny and her husband, Emmanuel were workers on the local tobacco farm that surrounds their village, but this job could not provide them with a sustainable income. The local landowner paid them only annually and they lost out if the crop failed that year, regardless of how much work they had done. Funny and the rest of the workers were left to bear all of the risk of their employer’s financial endeavours; when we asked her about the relationship between the workers and the farm owner Funny replied “there is no relationship, only working”.

Because of this, Funny and Emmanuel need additional income. Emmanuel started riding a peddle-bike taxi – this is a physically demanding job and Emmanuel feels that, as he gets older, it will become a less and less viable way to feed his young family. Because of this the family has opened a grocery store, but with very little stock and no ability to expand, the family has found it difficult.

Since taking out the loan of MK10,000 (£43) Funny has been able to buy new stock and expand her business. Their Grocery is now the biggest in the area selling everything from food and stationary to pain medication. Emmanuel is in no doubt that, without the loan, the Grocery store would have had to close, as they would not have been able to grow it to a sustainable business.

While at the Chikondano Group meeting some women cannot attend because of a measles outbreak in the area. Sickness is a real problem in Malawi and can lead to people facing serious financial problems. This is why Microloan encourages people to save when they might not otherwise. Funny and the other women in her group often save more than the minimum amount recommended by the Microloan Foundation (with some saving double the recommendation). In this way the women are helping to guarantee their own financial security and that of their families.

Funny tells us that her husband is very encouraging of the loan. He is grateful that their business is improving and that he can scale back the physically stressful bike-taxi business. Funny is able to take a more active role in the business dealings of her family. Previously, like many women she knows, she had no input into the family’s financial welfare but microloan, by lending to women, gave her a role in her family’s financial success. Her Loan Officer Luciana tells us: “We are trying to empower women. It gives women more power in the relationship and the husbands are supportive because it helps the whole family”.

There is also a growing supportive network within the Credit Groups themselves. Funny tells us that the women encourage one another and this has been an important element of ensuring that everyone in the group can keep up with their repayments and remain eligible for future loan cycles. The microloan system provides not just help for individuals but for whole communities.

Funny tells us that the Microloan Foundation has made a remarkable difference to her life and she looks forward to making even more progress with her next loan cycle: “Come back when I have my next loan and I will have even more stock than before. My Grocery store will be better than ever.”

Plea For Twitterers To Give Unwanted Pennies
June 28, 2010, 3:47 pm
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Twitter and Facebook users are being urged to turn their unwanted pennies into a gift for charity.

More than £500m worth of unwanted change is lying undiscovered in British homes, according to research from micro finance charity the MicroLoan Foundation.

Cash-strapped Britons are most likely to find loose change in the bedroom, with more than £143m left in bedside tables and stashed under mattresses, it said.

The kitchen is the next place for discovering loose coppers, with an average of £108m expected to turn up.

Old clothes are another odd place to find cash – one in five of us forget to empty our pockets and more than £250,000 is left lying in old socks.

And the sofa still comes up trumps when it comes to loose change, with £2m trapped down the back of the sofa last year alone.

The MicroLoan Foundation is trying to encourage Britons to cut back on the sweets and cigarettes and give any newly found coins to charity instead.

It has launched the Pennies For Life campaign, asking for pennies to be donated through Twitter and Facebook accounts.

The charity claims the unwanted cash is enough to fund 21 million businesses in Africa.

The foundation works by giving an average of £67 to women to start their own businesses and lift themselves out of poverty.

When they pay it back – and 99% of the women do – the charity lends the money again to another group of women.

Charity founder Peter Ryan said: “We’re really excited to have developed a new a way for people to give.

“By harnessing the power of social media, we want to create a culture in which giving becomes a part of everyday life.”

“Even if only a tiny fraction of Twitter and Facebook users donate a penny each time they update their status, we can engage hundreds of thousands of people to make a massive difference for poor women and their families in Africa.”

Pennies for Life on Twitter

Twitter users can donate through the microblogging website