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Raising rural poor from dearth to riches

Lifting the poor from poverty dumps may be hard but making them millionaires should be miraculous in a country which seems to be losing the poverty fight.

With several programmes on the ground in the combat against poverty, the rate seems to be defying the forces as it soared to 69.9 percent in 2016. However, amid the country’s relapse, some programmes have proven their effectiveness and call for up-scale.

Out of poverty to become a millionaire

Fifty-five-year-old Sylvester Nkhoma was a case of poverty seven years ago. With his poor educational background, he was in the dumps of impoverishment, failing to produce enough food and taking care of children.

Based in Manyamula, Group Village Head Mteyo Ngoma in Traditional Authority Mbelwa in Mzimba, the polygamous Ngoni native has seven children from the two wives who share a plot but living in different houses.

In line with Ngoni custom, the house for Nkhoma’s first wife is bigger than the younger wife’s but almost similar in standards. Both are decent houses, connected with electricity but he has come from a far to afford this luxury.

Few years ago, Nkhoma and his two families were both living in two small leaking grass-thatched houses and despite owning a large expanse of land, he was too poor to use it all, failing to produce enough.

As of 2010, Nkhoma’s family was among the 56.6 percent of rural Malawians living below the national poverty line.

Little did he know that year was the genesis of his migration to a life he only dreamt of when Canaan Gongwe, a former World Vision field officer, mobilised a few villagers to convince them to start village savings concept of banki mkhonde.

The onset of Manyamula Cooperative

Witnessing the prevailing poverty that subjected many villagers to exploitation by what he called opportunistic micro-finance organisations triggered his compassionate initiative.

According to Gondwe, several villagers had lost their property that was used as collateral when accessing loans. This dragged many further into poverty following failure to service loans that had very high interest rates, hidden loan processing costs and unforeseen business challenges.

Nkhoma joined the Manyamula Village banking group in 2010 which later developed into a financial cooperative after being nurtured by Community Savings and Investment Promotion (Comsip) – a World Bank-funded government project.

Comsip Cooperative Union Limited is a member-owned union of savings and investment cooperative societies. The concept is a sustainability plan for the ultra poor who benefit from Masaf Cash Transfer and Public Works programmes.

In order to graduate beneficiaries from the two safety net programmes, Comsip encourages the beneficiaries to voluntarily join savings and credit groups where members save part of the little they get from Masaf III and build capital for small loans that the members use for small businesses.

An initial loan from Manyamula Comsip Cooperative helped Nkhoma start to expand his farming and started a small poultry business. Subsequent loans helped him grow a variety of cash crops and his poultry business also grew. Through the group, he later benefited from dairy cow pass-on initiative.

Today, Nkhoma estimates his net wealth at over K8 million but a proper valuation of his two decent houses, farming, shares and savings in Manyamula Comsip Cooperative, bank savings and many other assets should possibly see a much bigger figure.

“I am now planning to buy a car because I’m making money and I no longer have problems that I used to have before joining the cooperative. I’ve three girls at secondary schools where I pay a lot of money and one of my children graduated (from Catholic University),” explains Nkhoma.

Community approach against poverty

He is not the richest in Manyamula Comsip Cooperative which has 180 members and is the current best performing cooperative in the country.

Several members – 95 percent – have built decent houses and many have electricity while others are driving their own cars.

Manyamula Comsip Cooperative has K22 million assets that include K6.5 million in shares and their collective groundnuts seed multiplication contract with Icrisat is expected to earn them K30 million, having signed for $1.30 per kilogramme.

“We are entrepreneurs. The money that we save and share as loans is used for business purposes which have increased income levels of the members and many are no longer in poverty,” says Gondwe.

With the motto ‘Together we grow’, Manyamula Comsip Cooperative has seen members clearly graduating from public works and social cash transfer and are now self-reliant, a thing which is lacking in other programmes like Farm Input Subsidy Programme where beneficiaries expect to be helped every year and are stuck in poverty.

As a way to create income-generating activities for the cooperative, the members agreed on a number of investments to do, some of which are funded by Comsip with up to 70 percent of the total cost through existing financing window for proactive member cooperatives.

Apart from the seed multiplication, the cooperative built its own office block, a conference facility which is open for hire, guest rooms for rent, a maize mill and is constructing a warehouse for members to store their produce at a fee.

Based in the area with a population of 30 000, the cooperative also has social responsibility programmes targeting the poor who are not even members by giving them goats and pigs in a pass-on arrangement.

A miraculous concept

Comsip’s affiliated member cooperatives increased from 390 in 2015 to 450 last year and that has increased the cooperatives shareholding capital from K27.3 million to K49.1 million.

The share value for member groups also doubled within the year to K100,000 as shares increased from 419 to 547, a reflection of steady growth of the union and the cooperatives.

According to Comsip Operations Manager Susan Khondowe, the concept of Comsip is to make beneficiaries of Social Cash Transfer and Public Works programmes become financially independent even when the donor-funded Masaf programme comes to an end.

“We may not have the donors forever. Comsip is there to make beneficiaries of Masaf programmes become self-reliant financially and we can see many graduating from poverty, the saving culture is increasing and they are doing businesses,” says Khondowe.

Serving 150,000 members in groups, it covers all the 28 districts implementing community livelihoods and skills development sub-component of the productive safety nets component of the current Masaf IV’s strengthening safety nets project.

It has eight functions that include ensuring togetherness, community self-help, improving incomes, creation of assets, improving food security, improving health status, improving education and literacy and elimination of social injustice.

While ensuring food security and higher income levels, members are also trained in nutrition and sanitation to ensure good health for their uninterrupted economic activities and in some places like Kasungu, testimonies were provided on how things have changed among the members of Kadifera Comsip Cooperative.

With this approach, the concept is able to tackle poverty from all angles, making members self-sustainable while addressing social problems in the poor communities.

Should it be a national poverty alleviation approach?

As the Comsip members are graduating from poverty, many Malawians are getting poorer as seen in the poverty trends despite so many development programmes in the country that spend an average of about $950 million annually as captured by the World Bank.

In 2010, Nkhoma’s family was among the 56.6 percent poor Malawians but as the poverty rate soared to 69.9 percent as of 2016, according to the World Bank, Nkhoma and many other members of Comsip groups are no longer poor, perhaps this concept can be a national approach in poverty alleviation.

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