Programme to lessen burden of the poor

About 400 000 rural people are expected to graduate out of poverty in three years, thanks to the Malawi Government’s seven-year programme dubbed Financial Access for Rural Markets, Smallholders and Enterprise (Farmse).

The programme, funded by the International Fund for Agricultural Development (Ifad) to the tune of $42 million (about K31 billion), seeks to reduce poverty, improve livelihoods and enhance resilience of rural households through increased access and use of a range of sustainable financial services.

Ministry of Finance, Economic Planning and Development deputy director for Pensions and Financial Sector Policy Division Nancy Mpita believes that the programme, which runs from 2018 to 2025, has come at a right time when citizens are debating on poverty alleviation, particularly in the financial sector.

She said: “This is a critical programme coming at the right time when the whole country is discussing  poverty alleviation with the financial sector at the centre stage to the effect that there are so many people that are not accessing financial services and most of them are in the Village Savings and Loans Access (VSLAs) and they need to be uplifted into the formal financial sector.”

Mpita admitted that the targeted number of 432 774 is not enough, considering the magnitude of extreme rural poverty, but remained optimistic that it will lessen the burden of the ultra-poor.

Outlining the framework of the programme, the ministry’s deputy director responsible for poverty reduction and social protection Dalitso Kalimba said there will be two phases of implementation with institutions that manage VSLAs to implement 100 percent form of grant aid to the ultra-poor .

The other component will involve private sector financial institutions that will be required to pay 40 percent with the government committing 60 percent of the programme funds.

“For Malawi, it will mean many things if this programme is implemented successfully. You can see that the amount of resources that have been committed are huge and it means there will be a lot of foreign exchange,” he said.

Community Savings and Investment Promotions (Comsip) monitoring and evaluation officer Fred Kazombo described the Farmse as a game-changer for the country’s socio-economic development.

He said the money at their disposal as an organisation working to graduate the ultra-poor from extreme poverty is not enough to reach out to many deserving beneficiaries. n