Tipindule SACCO a Route to Financial Independence

Impact Story - INVEST, Malawi

For the last 75 years, CDF Canada has been working to build sustainable and self-reliant communities. We connect and educate low-income communities to enhance their production, provide market access, and train and connect with financial co-operatives. Read the story of the progress made after the closing of the INVEST project and how Tipindule Savings and Credit Cooperative (SACCO) worked together to achieve financial independence.

How it all started?

The INVEST, Malawi project started in collaboration with the Malawi Union of Saving and Credits Cooperatives (MUSCCO), CDF Canada implemented a four-year project in three districts of the central region of Malawi. The project focused on enhancing the capacity of producer, marketing, and financial co-operatives.  One of the most significant impacts of the project was the establishment of Tipindule Savings and Credit Cooperative (SACCO). Established in February 2018, Tipindule SACCO, located in Dowa District, started up with 18 co-operatives and 159 individuals with a total of MWK 761,000.00 (1173.69 CAD) in savings.  Under the Ministry of Trade and Industry, the SACCO was awarded a provisional license on July 30th, 2020, by the Reserve bank of Malawi (RBM) to start some operations.

Despite having all the paperwork in place, the SACCO slagged to begin its operations. But this did not stop SACCO from moving forward; using the skills learned during the INVEST project period, on January 1st, 2021, Tipindule SACCO started to offer complete services to its customers in the district.  Since the end of INVEST, the SACCO has increased its membership to 1301, which comprises 39 co-operatives, 272 Village Savings and Loan Associations (VSLA), and 1108 individual members (642 women 348 men out of which are 118 youths – approximately 11%).

Challenges and Way Forward

Tipindule SACCO faced several challenges after the INVEST Malawi project phased out. One of the major challenges was low capital to support SACCO operations and costs. Considering that the SACCO was not yet fully operational, it had fewer resources to sustain its operating costs. It faced challenges paying salaries, rentals, and providing resources to conduct community awareness campaigns/marketing of its services and products. Through sound leadership and commitment, the board and its employees dwelled on the skills learned through INVEST. This ended up in the SACCO developing new products for the VSLAs, such as introducing Agricultural loans for producer co-operatives to increase savings. SACCO also promoted Fixed deposits for the VSLAs and Co-operatives to increase funds accumulation.

Tipindule SACCO also promotes the integrated Co-operative Model, where it encourages the link between producer, marketing, financial co-operatives, and Micro-insurance. “We are encouraged by Tipindule SACCO that as agricultural producers we need to be members of VSLAs. Through these VSLAs we can access small loans for farm inputs. In addition, as a VSLA we save our money at the SACCO for better security,” says Paul Ganizani, a member of Madanjala VSLA. Madanjala VSLA is one of the new members of Tipindule SACCO.

COVID 19 pandemic has a significant impact on Tipindule SACCO. Restrictions and fear of the pandemic affected most small and medium enterprises. “We do not make a profit from our sales. There are usually fewer buyers on market days, forcing us to sell our commodities at a lower price that sometimes we default loan payments,” explains Fanny Salinda, a treasure of Mthethe co-operative.

Neither the less, Tipindule SACCO appears to be striding in the right direction. Its catchment area has even further widened from INVEST project areas in the district to the entire district. This proves that coming into such financial institutions can positively impact the rural communities, mainly agricultural producers.

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