Blog article

“I no longer have the problems I used to before joining the co-operative” – Sylvester of Manyamula Co-operative

With a small grass-thatched house that leaked in the rain and a large family to feed, back in 2010 Sylvester Nkhoma was in dire poverty.

Despite having a decent sized plot of land to farm, he was too poor to tend to it effectively. He simply couldn’t produce enough to create a livelihood that his family could live on.

Poverty is more common than not in Malawi, with the number of people living below the poverty line increasing from 60 % to 70% of the population in the last seven years.

But Sylvester is no longer one of them. Since 2010 he has pulled himself out of poverty. How? By joining a co-operative.

Sylvester joined Manyamula Co-operative, one of a network of local financial co-operatives that helps people save small portions of the limited income they receive from work or government programmes. Once a member has invested enough in the co-op, they can then get access small loans with very low rate of interest to help them get small businesses off the ground and create a livelihood for themselves.

“I am now planning to buy a car, I’ve three girls at secondary schools."

Like the much-heralded ‘micro finance’ model for supporting would-be entrepreneurs in developing economies, the financial co-op provides micro loans to help people start small businesses. But unlike that model, there are no external investors or company directors making money from the interest people have to pay back; the co-op is a not-for-profit, with the money loaned out only available because of the collective savings of other members of the co-op. The risks are shared the costs minimised.

An initial loan enabled Sylvester to buy the tools he needed to make good use of his land and turn it into profit. The income from farming allowed him to begin breeding and selling poultry and with subsequent saving and loans from the co-op he was able to grow his business.

It took a few years of gradual growth but Sylvester’s life is changed.

 “I am now planning to buy a car, I’ve three girls at secondary schools where I pay a lot of money and one of my children graduated from Catholic University” says Sylvester. “Because I’m making money I no longer have the problems I used to have before joining the co-operative”.

Sylvester is no longer one of the many Malawians who are forced into living with poverty. Building up his savings and getting access to fair loans allowed Sylvester and his family to lift themselves out of poverty.

With thanks to The Co-op College for their support with sourcing the information in this case study.


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Updated: 25/05/2019