To support economic growth in Malawi, USAID began funding OIBM as part of a program that provides financial opportunities to small business owners in twenty-five developing countries. Programs like these cover a range of financial services like small business loans and savings accounts, especially for the poor.
Already, OIBM’s activities show that even if people have only a few dollars, given the opportunity to save money, they will. The minimum deposit for the account is 500 Malawi kwacha (approximately $5). With harvest time right around the corner, Mr. Mkandawire quickly convinced other farmers in his community to open an account. He is happy and the whole process had taken less than an hour.
Mr. Mkandawire is just one of more than 7,000 Malawians for whom opening an account at OIBM is a big accomplishment. Since the bank’s opening in May 2003, the number of clients has increased each month - 50% of whom had never before had a bank account. By emphasizing savings, OIBM has taken a less common path for financial institutions, which can rely on donors to fund loans.
Through OIBM, a community’s excess resources are collected and saved, and then cycled back into the community in the form of loans, which when repaid are recycled into new loans. OIBM plans to expand its lending and make its services more accessible, with more locations and products. Through financial programs for very small business owners, USAID is helping thousands of Malawians to invest in their own livelihoods and provide for their families.
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