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Bangladeshi micro-credit model helps empower Zambian women

micro credit model

Elizabeth Sakala-Banda used her loan to stock up her grocery store with more goods. Photo: UNDP

Just two years ago, Elizabeth Sakala-Banda, a mother of seven in Zambia’s eastern Petauke district, was unemployed and had no way of knowing that an Asian micro-credit scheme could turn her life around, and help put her children through school.

During 2010, Elizabeth and some 829 other women joined a local fund, modelled after the Bangladeshi Grameen Bank, which provides small loans to the poor, particularly women, without requiring collateral.

The Towards Women’s Economic and National Development through Empowerment scheme is supported by the United Nations Development Programme (UNDP) and the United Nations Volunteers (UNV) Programme delivered the personnel who carried it out. Teams of national volunteers were trained as loan officers, and travelled by motorcycle to outlying communities of each city introducing micro-credit financing to potential clients.


    The loans range from US$50 to US$400 and are exclusively given to under-privileged women in Zambia’s Eastern Province. An estimated 15,000 women across Zambia are members of this micro-credit financing scheme, far exceeding the project’s original target membership of 3,000. UNV contributed US$650,000 towards the project, UNDP $100,000.

Elizabeth’s group of women received loans ranging from US$60 to $120 with a bi-weekly repayment plan over

a year. Part of the interest was used to cover the fund’s operational costs, and the rest revolved back to the loan fund. If the women repaid on time, they qualify to borrow a larger sum the next time.

With an initial loan of US$100, Elizabeth stocked up her grocery shop with a wider variety of products, including soft drinks. Within six months, she had paid off her loan, and made a profit of US$315.

Since then, she has taken a second loan to purchase maize and fertilizer, enabling her to participate in her local farmer’s co-operative, and opening up a whole new income-generating activity for her family.

“The extra money I make helps me buy school uniforms, books and other items for my children,” Elizabeth says. “I am glad I have been able to supplement my husband’s income.”

So far, none of the women have defaulted on their loans, and between January and March 2011, an additional $22,618 was disbursed to 218 more women.

UNDP also provided HIV and AIDS awareness and counselling courses to the women and all other staff involved in running the loan fund. One in seven of Zambians are living with HIV, and by March 2011, more than 30,000 people had received information and counselling through this initiative.

Category: Payday loans

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