Thursday, June 21, 2007

Microfinance in Malawi

Lack of credit is possibly the biggest challenge for small enterprises attempting to survive in markets of impoverished nations. To respond to this, the UNDP has set up several microfinance programs in the developing world, to be managed and implemented by each individual country office.

Yesterday, the Government of Malawi and the UN agreed upon a microfinancing project to increase access to financial services for low income population groups.

In Malawi, only 3% of the population has access to saving services while a marginal 1% access credit. Insurance services are virtually absent, and the percentage of poor families with access to any financial services in rural areas is even lower.
The UNDP's newly approved microfinance project will hopefully respond to these problems by providing basic services, such as loans, savings, payment services, money transfers and insurance to poor and vulnerable people in Malawi. The UNDP and the UN Capital Development Fund will each contribute 2 million dollars to the project, which will run from 2007-2011.