MicroLoan Foundation Malawi is a non-profit microfinance institution established in 2002 that is dedicated to reducing poverty in Malawi. MLF-Malawi serves women in rural areas through a range of products targeting agriculture and small enterprise.

Headquartered in Kasungu, the organization provides agricultural loans, solar loans, and business starter loans using a solidarity group methodology, lending to groups of 10 to 25 women. Additionally, MLF-Malawi provides training to cover business, financial, and technical knowledge before issuing loans.

A unique lending approach:
MLF-Malawi provides three different loans to impoverished women:
     • Agricultural loans target farmers that are committed to investing in sustainable farming and producing commercially viable cash crops.
     • Solar loans issued in partnership with Barefoot Power light homes and charge phones.
     • Business starter loans provide women living below the poverty line of $1.25/day with startup capital for small businesses.

With Kiva’s support, the organization will scale some of their already existing loan products to a more significant portion of their portfolio. Additionally, Kiva funding will allow the organization to provide loans with lower interest rate.
A Note on MLF Malawi’s Portfolio Yield:

We care deeply about the cost that Kiva borrowers pay for their loans, which is why fair pricing is a core part of our initial due diligence process for Field Partners. With Kiva's 0% capital, many of our Field Partners are also able to add additional value to their loans by reducing interest rates, offering non-financial services or creating new loan products.

For partners with reported portfolio yields or average APRs higher than 50%, Kiva takes steps to check that the high rates are justified by the impact of the loans. Kiva also verifies that the partner is not generating unreasonable profits or paying inflated salaries, and that the partner’s elevated operating costs are justified by its operating environment and/or the design of its loan products.

We seek to support loans that don’t impose an unjustifiable cost burden on hard-working borrowers. We nevertheless recognize that in order to reach vulnerable and excluded people with high-impact products and services, some of our partners incur high costs that necessitate charging higher-than-average costs to borrowers in order to allow for sustainability and scale. With this partner, Kiva capital is supporting a loan product that costs less than the partner's typical products.

Factors that drive up the costs that this partner organization charges its borrowers include:
  • They operate in a market with high inflation, which means that the rates you see on Kiva are overstated, since loans are given in local currency, which lost value much more quickly than the U.S. dollar.
  • They provide very small loans. This leads to higher operating costs, since providing each individual loan presents a minimum per-unit cost.
  • They provide very short term loans, which leads to higher operating costs, since each short-term loan generates a smaller amount of revenue than a longer-term loan.
  • They provide more than just cash to many of their borrowers, including costly wraparound services such as healthcare, financial or business training, agricultural extension services, insurance or access to education.
  • They work in areas with very poor infrastructure, such as limited roads. This increases the costs of finding clients and maintaining branch offices.
  • They’re based in an area with a high cost of living and doing business. This is often due to the high demand and low supply of adequate housing and goods.
  • They’re a small company or organization that hasn’t yet achieved the scale and efficiency necessary to reach sustainability and reduce pricing, but the impact of their services merits the opportunity to prove their business model.
  • They pay high interest rates on the loans they take from banks and other funders, given the market in which they operate. This means they need more support from innovative sources like Kiva to reduce costs and pass savings on to borrowers.
  • They work extensively in rural areas, which requires their employees to engage in costly travel to find and serve their clients.
  • They operate in a region known to be at risk of natural disaster, which increases the cost of doing business.
  • They operate in an area with a limited or poorly functioning banking system. This makes it difficult to access funding locally, and makes it more challenging to send and receive payments on loans from outside the country.

Repayment Performance on Kiva

    This Field Partner All Kiva Partners
  Start Date On Kiva Sep 4, 2014 Oct 12, 2005
Total Loans $3,944,875 $1,542,666,845
Amount of raised Inactive loans $0 $539,100
Number of raised Inactive loans 0 360
Amount of Paying Back Loans $284,800 $159,388,945
Number of Paying Back Loans 45 194,211
Amount of Ended Loans $3,660,075 $1,382,738,800
Number of Ended Loans 2,052 1,821,780
Delinquency Rate 0.00% 17.65%
Amount in Arrears $0 $17,487,295
Outstanding Portfolio $260,850 $99,094,934
Number of Loans Delinquent 0 58,569
Default Rate 0.00% 1.71%
Amount of Ended Loans Defaulted $0 $23,625,429
Number of Ended Loans Defaulted 0 58,905
Currency Exchange Loss Rate 0.39% 0.40%
Amount of Currency Exchange Loss $15,398 $6,567,113
Refund Rate 0.00% 0.61%
Amount of Refunded Loans $50 $9,393,625
Number of Refunded Loans 1 8,726

Loan Characteristics On Kiva

    This Field Partner All Kiva Partners
  Loans to Women Borrowers 100.00% 77.17%
Average Loan Size $122 $391
Average Individual Loan Size $911 $604
Average Group Loan Size $2,039 $1,778
Average number of borrowers per group 17.8 7.9
Average GDP per capita (PPP) in local country $900 $5,692
Average Loan Size / GDP per capita (PPP) 13.55% 6.87%
Average Time to Fund a Loan 1.44 days 7.93 days
Average Dollars Raised Per Day Per Loan $84.41 $49.37
  Average Loan Term 5.32 months 11.35 months

Journaling Performance on Kiva

    This Field Partner All Kiva Partners
  Total Journals 187 950,401
  Journaling Rate 8.67% 42.89%
  Average Number of Comments Per Journal 0.00 0.03
  Average Number of Recommendations Per Journal 0.00 0.69

Borrowing Cost Comparison (based on 2017 data)

    This Field Partner Median for MFI's in Country All Kiva Partners
  Average Cost to Borrower 81% APR 76.00% PY 25.79% PY
  Profitability (return on assets) 0.1% -1.7% -1.09%
  Average Loan Size (% of per capita income) N/A 12.00% 11.51%

Country Fast Facts

Field Partner Staff

Bisani Banda
Newton Botolo
Saulos Mhlanga
Kate Nkhwimba
Randall Williams