I felt banks were only for the educated - DOROTHY NYONDO

Dorothy Nyondo, a widow and breadwinner, is a landlady with a monthly earning of K600. Without access to a loan, Ms Nyondo’s dream of becoming a landlord could have been far-fetched as she would not have been able to provide for her family according to Zambia Daily-Mail. 

Like many women, she was scared to approach commercial banks to acquire a loan, which would change her life forever. But with the support of her club, Tikondwele, Ms Nyondo and other women were able to access loans under the Indo Zambia Bank micro-credit programme which aims at providing affordable loans to economically disadvantaged people. 

Ms Nyondo, a resident of Mandevu in Lusaka, accessed a loan of K4,000 from Indo Zambia Bank through the women’s club. She used the loan to build a house to rent out to enable her generate income.  

“I look after four grandchildren and other dependents, and the money I get from renting out the house helps me feed them and take them to school. Before I joined Tikondwele Women’s Club which connected me to Indo Zambia Bank, I had no confidence to enter a bank because I felt banks were only for the educated,” she says. 

Similarly, Mary Mulenga has also been empowered by the bank with a start-up capital of K250 which has enabled her start a small business. 

Ms Mulenga makes munkoyo, a traditional maize meal beverage and chikanda, a traditional snack nicknamed African polony. 

“I make K105 from one pot of chikanda and realise a profit of K55. This business helps me provide basic needs for my family,” she says. 

Ms Nyondo and Ms Mulenga are among the over 3,000 women that have benefited from the micro credit programme which Indo Zambia Bank launched in 2008, and has to date disbursed K4.7 million. 

The first batches of loans amounting to K140, 000, were disbursed to 400 women from 20 women groups in 2011. In 2013, the bank disbursed K2.2 million to 1,700 women from 85 groups while last year, 680 women benefited from the K956, 000 disbursed. 

This year, the bank intends to disburse K2.5 million which will benefit 1,500 women from 100 groups. 

And today, the bank is disbursing the fourth batch of loans amounting to K3.2 million to 85 self-help groups, which will translate into over 1,700 beneficiaries in Lusaka. 

The programme, which is modeled around the micro credit programme of the Grameen Bank of Bangladesh, is helping bridge the financial gap among poor communities through provision of loans to women’s clubs and inculcating in them, a culture of saving. 

The programme, which was approved by the Central Bank in 2008, has a repayment period of between three and five years, depending on the income generation of the activity financed and resource mobilisation of the group. 

The rate of interest for the loan is concessionary, and has no security as the self-help groups are required to deposit their savings with the bank. 

“To operationalise the scheme, we have partnered with the Daughters of Mary Immaculate Sisters who are working with more than 2,000 groups of vulnerable women living in Garden, Mandevu, Chaisa, Chazanga, Chawama, Chipata, Kabangwe, Mulongoti and Lilanda [townships],” the bank says. 

Tikondwele Women’s Club, which has benefited from the loans since the programme was launched, has 20 members who are involved in knitting, tailoring and making peanut butter, among other activities. 

The women are currently constructing a chicken run which will enhance income generated by the club. Susan Banda, a member of the club who bought a small- holder farm in Kabwe from the K500 loan she got from the bank, encourages other women not to shun banks. 

“Women should not be afraid to approach banks if they are to grow their businesses. Most of the banks have friendly staff who explain various banking services and products in local languages for those who might not understand English,” she says. 

Ms Banda also encourages women to develop a culture of saving and borrow for investment and not consumption. Indo Zambia Bank managing director Shankardas Gupta says the financial institution is consistent with its vision of “Supporting you to develop Zambia.” 

“This is a demonstration of our brand promise. We are showcasing our brand by ensuring financial inclusion, moving along with social and economic development,” he says. 

Mr Gupta says the micro credit programme aims at supplementing government’s efforts in alleviating poverty, and achieving a financially literate society. 

“We are empowering women and this is having a positive effect at household level and in communities. These women are turning out to be the bank’s business partners because they have developed a culture of saving. So far, the bank has empowered women in Lusaka, Chilanga, Nyimba, Chipata and Mongu, with a plan of extending the programme to other parts of the country. 

“We are in the process of identifying strategic partners who do community service to help us mobilise women in these other areas where we have not yet taken the empowerment,” Mr Gupta says. 

With high poverty levels and low access to finance in the country, efforts by commercial banks aimed at empowering vulnerable groups are necessary if the country is to attain meaningful development. Photo Credit: Zambia Daily-Mail