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Loans that chased away loan sharks

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John Mikana has no kind words for the country’s loan sharks, calling them heartless people.

Mikana, 34, who sells Irish potatoes inside Zomba Produce Market, used to borrow money from the money lenders which he injected into his businesses, hoping they would grow.

“But my businesses remained stagnant even after I had repaid the loans because of their exorbitant interest rates. Loan sharks are a heartless people,” the father of one told Mana.

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Mikana says he was forced to borrow money from katapila people, as loan sharks are locally known, because money lending institutions normally attach prohibitive conditions to their loans.

“I was always at the mercy of usurers,” says Mikana. “As a result, I was mired in poverty.”

But as the saying ‘there is light at the end of the tunnel’ goes, his woes began to ebb away after the Malawi Carer Office for Zomba introduced him to an organisation called VisionFund Malawi.

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Mikana is also Malawi Carer (Centre for Advice, Research and Educat ion on Rights) Community-Based Facilitator (CBF) for Zomba Central.

VisionFund Malawi offered Mikana and 11 other Malawi Carer volunteers in his group business management training. Upon completion of the two-day training, VisionFund gave them loans.

VisionFund is a Christian organisation that provides small loans to small scale entrepreneurs, according to Tionge Mphombo Kalua, VisionFund Malawi, Zomba Branch Manager.

“Our loans are divided into three categories,” Kalua told Mana. “We have individual, agriculture and business loans. We target clients that are doing small scale businesses across the country.”

She says VisionFund started operating in Zomba in 2013 and have so far provided small loans totaling K70 million.

VisionFund’s loans may be described as small, but they are making an impact on the lives of Malawi Carer volunteers in the district and many other less privileged people that the organisation assists.

To date, slightly more than 1,700 people in Zomba, Machinga, Mangochi, Liwonde and Balaka–areas that fall under VisionFund Zomba Branch– have benefited from the organisation.

“Our main agenda and priority number one is to improve lives of children through their parents and guardians by offering small loans and other financial services,” says Kalua.

She adds: “We believe that the loans that are given to these parents help them to boost their businesses, thereby enabling them to realise profit.

“When they make profit, they are able to live meaningful lives as they can send their children to school, hospital, or buy clothing and obtain other necessities.”

As one of the beneficiaries of VisionFund’s loan scheme, Mikana is full of praise for the organisation. He says the fact that their interest rates are on the lower side is a great relief to borrowers.

“What pleases us even more is that we service the loans monthly,” says the former dog handler who also once worked as an office messenger. “We are very thankful to VisionFund.”

Mikana, who wanted to be a medical doctor but failed to bring his ambition to fruition as he had 36 points after writing his Malawi School Certificate of Education exams, says his business is now growing.

“This is because we are not under pressure to repay our loans as often happens when you borrow money from loan sharks or other money-lending institutions,” he says.

And the money he earns now selling Irish potatoes is a lot more than the K3000 monthly salary the security company he worked for in the early 2000s as a dog handler used to give him.

Mikana says he borrowed K80, 000 from VisionFund after paying K18,000 as collateral. He then started going to Ntcheu on a weekly basis to buy Irish potatoes.

“I normally buy six or seven 90kg bags of Irish potatoes,” says Mikana, who hails from the village of Kazembe, Traditional Authority Chikowi in Zomba.

“Each bag gives me around K5,000 profit.”

He says should his business continue to grow, he will have a large sum of money in his bank account by the end of the year and then “I will build my own house.”

Pacharo Namatumbo, Malawi Carer Paralegal Officer for Zomba, is also grateful to VisionFund Malawi for assisting some Malawi Carer volunteers and other less privileged people in the district with loans.

Beneficiaries of VisionFund’s business loan scheme include 196 members o f Malawi Car er Commu n i ty Rig h t s Committees (CRCs) in Zomba.

“VisionFund Malawi loans are benefiting many people,” says Namatumbo. “Bearing in mind that many financial institutions attach tough conditions to their loans, Vision Fun d Malawi must be applauded.”

Another beneficiary of VisionFund’s business loan scheme is Alice Nengula who owns a stall around Zomba Produce Market that sells small grocery items.

The 41-year-old divorcee and mother of two says she set up her stall with K10, 000 when she arrived in Zomba from Blantyre after her marriage collapsed.

“A close female friend of mine felt sorry for me and gave me the money to start a business so that I could support myself,” says Nengula.

She says to promote her business, she got a loan from a money-lending organisation but to her dismay, things did not go according to plan as the business began to take a nose-dive.

“I was servicing the loan weekly and this made it very difficult for me to run the business,” says Nengula. “I also borrowed money from loan sharks, but the move plunged the business into greater problems.”

She joined village banks in the hope of resuscitating her business, but to no avail since their loan repayments were also made weekly.

It was not until Malawi Carer linked up Nengula with VisionFund Malawi that she breathed a sigh of relief when she got a loan of K30, 000.

She was pleasantly surprised after she was told she would repay the loan in four months, plus K6,000 as interest.

“I could not believe my ears when they told me I would repay the loan in four months,” Nengula says. “It was just too good to be true.”

Kalua says their loans are repaid monthly because they want their clients to be given enough time to do their businesses so that they have enough returns to pay back their loans without stress.

“We really appreciate the support we get from Malawi Carer,” says Kalua. “And working with Malawi Carer, we will be able to increase the number of beneficiaries and amount of money disbursed.”

A few weeks had elapsed after Nengula obtained the loan when Mana visited her at her ‘shop’, a tiny makeshift structure roofed with thatch stocked with goods worth less than K100,000.

“Since I got the loan three weeks ago, I have become the centre of attraction as my business is picking up,” Nengula told this writer, grinning from ear to ear as she served customers. “It is unbelievable.”

She says were it not for VisionFund, her business would never have picked up.

“I owe VisionFund a debt of gratitude. My plea to them is that they should continue assisting women so that we are economically empowered to avoid getting into mischief,” she said.

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