Developed the Community Banking Model
In cooperation with CARE International Zimbabwe (“CARE”) Virl Microfinance ran a 15-month project which looked at connecting Internal Savings and Loan Schemes (ISALs) Groups with a microfinance company to afford group members the chance to have more access to funding for their income generating activities (IGAs), to open bank accounts and to be trained in basic business practice.
Since 2006 CARE has trained well over 27,000 groups around Zimbabwe in ISALs. Virl developed a group lending methodology which built on what CARE had already done with women in Chitungwiza and the project ran successfully during the project phase. This project was to assess how the private sector and the NGO sector could collaborate, in a tripartite arrangement comprised of Virl, CARE and social enterprise.
- There was a demonstrable high level of financial discipline among Virl clients with 92% of the clients having used their loan amounts entirely for IGA activities
- 79% of the members of the groups realized higher productivity in their IGAs as a result of increased access to capital through the linkage project.
- Cumulatively, 716 loans, worth USD 305,458.00, from the original loan fund of $82,500, were processed during the period. At the time of the evaluation Portfolio at Risk was at 6%.
- 232 women opened bank accounts with Central Africa Building Society (“CABS”) and are now being considered statically as financially included.
Although the project exit strategy was poorly managed, its results demonstrate beyond doubt that Virl successfully developed a feasible business model.
In 2012 Virl with the assistance of SNV through their Inclusive Business Plan commissioned and funded a study on how MFIs can fund rural and small scale farmers. The study concluded that the agriculture value chain presents many opportunities for MFI’s with the ability to create appropriate products. It remains true that Rural and Small Scale farmers have limited access to funding for working capital as well as asset finance.
Zimbabwe Agricultural Income and Employment Development Program (Zim-AIED)
Against the backdrop of the SNV study, Virl Microfinance partnered with Fintrac through the above program and has reached out to rural farmers by offering loan products to the farmers rather than inputs. Farmers are able to access input loans to the tune of $320 per farmer in groups. The uptake of loans is very high and these are well trained farmers located in irrigation schemes.