Audrey Mwala talks about Microfinance Strategy For Small Businesses

Access to credit is the real sustenance for any small business. As a business owner, credit enables you to acquire your needed resources, hire more staff, buy more inventories, and more to meet your customer’s demands and remain in the business ecosystem. 

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What is microfinance and how does it work

Microfinancing is a type of financial service that provides small loans, grants, and other services to help low-income earners start businesses or get out of poverty. Microfinance institutions are organizations that provide these services.

The process of microfinance is broken up into several steps, beginning with the moment that a lending decision becomes final, and ending when the loan is repaid in full.

The fundamental principle of sustainable microfinance is the requirement to recover the costs of the loan. With small loan sizes and personalized service, the costs per loan are high and require interest rates significantly higher than traditional microfinance.

In today’s episode of the Obehi Podcast, we are going to be considering Microfinance Strategy For Small Businesses With Audrey Mwala, a Malawian Business Consultant and founder of Sycamore Credit, Malawi.

More About Audrey Mwala

Audrey Mwala Holds a Bachelor of Accountancy and a Masters in Business Administration from the University of Malawi. She is a Public-Private Partnership (PPP) expert with over 20 years of experience in the field. She is currently the Director of Project Finance & Risk Analysis at the Public-Private Partnership Commission (PPPC), a role she has served in since 2009.

She is a fellow of the Chartered Institute of Management Accountants (CIMA) and is registered with both the Malawi Accountants Board and the Institute of Chartered Accountants in Malawi (ICAM). She brings valuable experience to the board having served on the boards of NBS Bank, Inde Fund and Alliance Capital amongst a few.

She founded Sycamore Credit in 2018

The Sycamore Credit started in 2018 when Audrey, who had spent over 20 years working in public finance, saw the struggle that many Malawians were faced with when attempting to access short term credit.

She was taken aback by the stories of everyday Malawians who, having failed to gain credit from financial institutions resorted to loan sharks and other informal sources. These were stories which, so often ended in heartbreak and strife for the people involved.

To counter this, she sowed the seed of Sycamore Credit Limited in April of 2018 and by August, had been given a license to operate by the Reserve Bank of Malawi.

Along the way on this journey, the company has managed to assist over 1,000 customers with over K600mn which has gone towards growth. We have done this by offering them the opportunity to access amounts that fit their requirements and the opportunity to repay in terms that they are comfortable with.

Sycamore Credit currently operates in Blantyre with a team of compassionate and dedicated team members to expand its physical presence to the rest of Malawi over the coming years.

Your key takeaways microfinance strategy for small businesses with Audrey Mwala

Microlending is a great option for those who don’t have access to traditional loans. These are small, short-term loans that often come with low-interest rates. Microloans can help people get out of debt or buy new things such as a car or home appliance.

A lot of microfinance institutions focus on women, who account for up to 95% of some loan products in developing countries.

Microfinance is absolutely fantastic in that some women have the opportunity to have their own finances and make a difference in their communities.

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