#585 Zimababwe Micro-Credit

Tinashe Mawokomayi, Mobile phone sales & repairs
Sekai Simango, Cross Border Trading
CECILIA KATSANDE, Buying and selling of household cleaning materials
Fungai Mhindo, replacement candidate
GILBERT MAGUREYI, Market gardening and poultry production

Challenges in Zimbabwe

Zimbabwe has been going through a turbulent period of hyperinflation, drought and economic instability. Many companies have closed or downsized, leading to widespread loss of jobs. As a result of unemployment of well over 80%, many people have resorted to running small businesses such as food stands, hair salons and sewing in order to earn a living.

These small businesses cannot access the capital they need to grow from traditional banks. This is because the amount of money they require is too small and they often lack physical items to provide as collateral. Through access to micro-loans, which are small loans that are invested into income-generating activities, small business owners are able to grow their businesses and better provide for their families.

Project Overview

Impact Nations is partnering with One Way Ministries International in a micro-credit program in Zimbabwe. The program is intended for social development and the funds will be managed through a registered financial institution. One Way Ministries International is a Christian Ministry based in Harare, Zimbabwe. Its church network includes over 30 urban and rural centers, and its annual Prayer Networking Conference ministry mobilizes prayer among Christians from various nations.

This partnership connects individuals who want to invest in the lives of others with hard-working entrepreneurs in Zimbabwe. Contributions to the program will be used to fund micro-loans which will be repaid over six months. As each micro-loan is repaid it can be recycled as a new loan, thus multiplying the impact of your donation.

Project Coordinators

Michael Mandiveyi is a businessman with interests in agriculture, distribution and development consultancy. He is a member of One Way Ministries International, and serves as Coordinator of its Prayer Networking Conference series. Michael’s recent work experience involved project management for an International Development Agency operating in Zimbabwe.

Greg Skowronski is serving as an adviser to Impact Nations and One Way Ministries International for the development of the micro-credit program. He recently held the position of National Director of Micro-credit with Paradigm Shift in South Africa. His prior work experience includes private equity and investment banking in Atlanta and on Wall Street in New York City.

Please make a long-lasting investment in lives of these entrepreneurs today!

Michael Mandiveyi and Greg Skowronski

Updates to This Project

Permalink Update from Doug Penner on June 1, 2011 at 11:21am

In Skyping with Greg and Mike, here are some notes I made....

Each borrower will be set up with a mentor, who is also their guarantor. Each mentor must earn a regular monthly salary at least one third the loan amount. And for starters, they will be church members who are known to the borrowers (who are also church members).

Permalink Update from Pretty Garakara on June 1, 2011 at 12:21pm

hallo Doug .My name is Pretty Garakara I am from Zimbabwe, I am 34 years old. I would like to improve my income and start my own business. Unfortunatly I would need some financial support for a start . As I heard about Micro credit, I am wondering about what exactly it is and how it works. could get some access. I would be very thankful if you could give me some informations about.

Yours sincerely

Pretty Garakara

Permalink Update from Mike Mandiveyi on June 8, 2011 at 11:38pm

Pretty Garakara said:

hallo Doug .My name is Pretty Garakara I am from Zimbabwe, I am 34 years old. I would like to improve my income and start my own business. Unfortunatly I would need some financial support for a start . As I heard about Micro credit, I am wondering about what exactly it is and how it works. could get some access. I would be very thankful if you could give me some informations about.

Yours sincerely

Pretty Garakara

Permalink Update from Joyce Langton on July 18, 2011 at 6:31pm

Hello again Mike.

Was wondering if Pretty Garakara has gotten in touch with you about getting involved in the Micro-Loans program you are starting?

Mike Mandiveyi said:

Pretty Garakara said:
hallo Doug .My name is Pretty Garakara I am from Zimbabwe, I am 34 years old. I would like to improve my income and start my own business. Unfortunatly I would need some financial support for a start . As I heard about Micro credit, I am wondering about what exactly it is and how it works. could get some access. I would be very thankful if you could give me some informations about.

Yours sincerely

Pretty Garakara

Permalink Update from Mike Mandiveyi on July 19, 2011 at 6:46am

Mike Mandiveyi said:

Hi Pretty, Please excuse me for a very late response. There are issues we are finalising in house, and should be able to get back to you soon.

Pretty Garakara said:
hallo Doug .My name is Pretty Garakara I am from Zimbabwe, I am 34 years old. I would like to improve my income and start my own business. Unfortunatly I would need some financial support for a start . As I heard about Micro credit, I am wondering about what exactly it is and how it works. could get some access. I would be very thankful if you could give me some informations about.

Yours sincerely

Pretty Garakara

Permalink Update from Mike Mandiveyi on July 22, 2011 at 2:19am

Hi Pretty, Would encourage you to contact our Ministry Offices, located on 910A Sherwood/Notley Road in Mabelreign, Harare for details of the micro credit scheme during working hours.

Permalink Update from Doug Penner on August 2, 2011 at 10:03am

1. Name :Tinashe Mawokomayi
Business Name : Haven Enterprises
Business Location : Harare, Zimbabwe
Type of Business : Mobile phone sales & repairs
Loan amount : 75,740 ZWD
Interest at 3.31% per month over a period of 6 months
Tinashe has been in the mobile phone business for three years, and it has been his full time business. His main line is servicing and repairing cell phones, selling hand handsets, and airtime recharge cards. Although he has a desk top computer, he currently has to sub contract when a handset requires unlocking or flashing, as he does not have the necessary software to carry out this, thus losing revenue that would ordinarily accrue to him. His current income from his business is currently about $360 per month, but this could be increased significantly by about 15%, if he is able to secure software for ‘unlocking’ handsets.
Findings
The business is located strategically on a busy area, and the potential to grow does exist. From our assessment, the capacity to repay the loan exists, as the young man is sound and professional. We would certainly vouch for him to receive a loan.

Permalink Update from Doug Penner on September 23, 2011 at 1:49pm

Permalink Update from Doug Penner on January 2, 2012 at 7:33am

Mike Mandiveyi:

"Tinashe Mawokomayi used the $200 loan money to buy software box for ‘unlocking’ or enabling the smaller Sony-Ericsson handsets. The box cost $250, thus he had to top up an additional $50. With this acquisition, his daily average income has increased by $5-$8 per day, something that he is quite excited about. His plan now is that, by the end of January 2012, he should be able to purchase using these profits, a ‘test card’, that costs $40 that should now enable him to unlock any type of Sony-Ericsson cell phone, regardless of size, or version. Such a development would afford him to even further raise his average income.

Loan repayments have not been a problem to Tinashe as he feels he is making enough income to be able to pay office rentals, home rentals and also enough for subsistence. He has already paid the initial $25 interest, and $40 as the second installment well on time. Tinashe is most grateful to Impact Nations and its Partners for affording him this opportunity to grow his business, which he feels is going to soar."

Permalink Update from Doug Penner on August 2, 2011 at 10:04am

2. Name : Sekai Simango
Business Name : Haven Enterprises
Business Location : Dzivaresekwa, Harare, Zimbabwe
Type of Business : Cross Border Trading
Loan amount : 75,740 ZWD
Interest at 3.31% per month over a period of 6 months
Sekai crosses the border to neighboring South Africa and Botswana to purchase mainly blankets, winter wear, and hair products for re-sale to clients in Zimbabwe, mainly Harare. She usually sells the first two on a 30 day credit, and re-packages the hair products and sells cash. Her net income is usually $100.00 per month. The loan money would help her order more stock per trip, thus reducing her travel bill, in that trip frequency is reduced, while also realizing more revenue from increased stock. The loan would likely raise he net earnings by about 20%.

Findings
The market for her products is good, although winter wear is seasonal and she then changes to other products. The re-packaged hair products find a ready market especially with the existence of a lot of ‘home’ or ‘backyard’ and do it yourself salons in the area, besides the more formal ones. Growth potential exists, especially with the credit incentive she uses, although there is some risk margin. From our assessment, the capacity to repay the loan exists, as the husband is on a salary, and the woman is honest and a strong Christian, with good business practices in that she keeps records of all she does already. She certainly is a good candidate to receive to receive a loan.

Permalink Update from Doug Penner on September 23, 2011 at 1:48pm

Permalink Update from Doug Penner on January 2, 2012 at 7:44am

Mike Mandiveyi:

Sekai Simango imports hair products and clothing items for re-sale. The loan of $200 was very helpful in that it increased the capital available to buy stock so that the returns for a stock procurement trip were increased. Normally, she would have about $200 - $250 available to buy stock. After getting the loan, she had $450 available to buy stock. This means that she did not have to make very frequent trips abroad bringing limited amounts of stock but instead one trip brings a large amount of stock. This is such a great saving thanks to the loan.
The only challenge she had was when she had underestimated the amount that was required for import duty but she eventually managed to clear her wares with the customs authorities. She has also had problems with bad debtors who default on agreed payment dates and it takes long to recover these moneys. She has, however, accepted that this is part of the risks of the business and has tried to keep at a minimum.
Hair products provided good business this festive season and other product lines brought reasonable sales. The business is expected to bring enough income to cover school fees for her three children and to pay off the loan. She does not expect to have problems of repayment. She has so far paid the first installment of $25 and $40, and is expected to pay the third of $40 mid January without problems.