Appendix 8 ~ Malawi financial training six month project review report

Shared Interest Foundation

Malawi Financial Training Project

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Contents Project Overview .................................................................................................................................. 2 Six months later.................................................................................................................................... 2 Results ................................................................................................................................................... 2 Case Study ............................................................................................................................................ 4 Conclusions .......................................................................................................................................... 5 Thank You ............................................................................................................................................. 5

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Malawi Financial Training Project Project Overview In 2015, the Charles Hayward Foundation chose to support Shared Interest Foundation’s Financial Training Project in Malawi with a Grant of £10,000.

In February 2016 an end of project report was submitted stating that nine cooperatives had taken part in the project resulting in;    

Enhanced capacity of nine smallholder farmer co-operatives in the tea and sugar sectors in financial management systems Targeted farmer co-operatives being equipped with modern record keeping techniques to improve their compliance to Fairtrade standards Introductions to social lenders as providers of fairer finance who will discuss the finance needs of the co-operatives on an individual basis Improved co-operative financial management leading to greater product efficiency and, in the longer term, increased farmer incomes

Six months later In order to assess the long term impact of this project, £800.00 from the original budget was used (as originally planned) for a final study to take place six months after the project had finished. This study consisted of collecting both qualitative and quantitative data through structured interviews for collecting case studies and the repetition of the baseline survey.

Results Referring to the four aims listed above, this section will compare the end of project results reported in February 2016 with the six month later review to illustrate any further impact or maintained change. 

Enhanced capacity of nine smallholder farmer co-operatives in the tea and sugar sectors in financial management systems

The repetition of the baseline survey didn’t show any major shifts following the February 2016 report. This illustrates a consistent level of financial management capacity and the use of record keeping techniques. The table below indicates how the examples given in the end of project report have been validated at the six month review: End of project impact report Eastern Outgrowers Trust, Msuwadzi and Sukambizi did not have their books externally audited prior to the training, but now they realise the importance of this and do get them audited externally.

Makandi have introduced a range of financial statements, prior to the training

6 month review quotes by participants “Financial statements (balance sheet, income statements etc) are now prepared on a monthly basis. This has led to farmers knowing the financial standing of the organization. If our association is successful, it translates to sustainability, our children will be able to benefit from the co-op too” Eastern Outgrowers Trust.

“The finances are for the moment being managed by the company accountant. We

3 they were not keeping any of these records in a systematic way. This will enhance their financial systems.

Sukambizi only used to prepare management reports on their finances when there was a problem, now they are doing them regularly so that they can keep a better track of their business.

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aim for the workers to manage the finances by themselves very soon. When we do this we expect to see an improvement in the farming management” Makandi.

“We now have an Internal Committee that oversees our financials. Everything is being done transparently and democratically” Sukambizi.

Targeted farmer co-operatives being equipped with modern record keeping techniques to improve their compliance to Fairtrade standards

Many of the participants at the end of project report stated their understanding of how and why they must comply with Fairtrade financial record keeping standards. Six months later, three out of the nine businesses were able to demonstrate how they had put these lessons into practice.

Business

Participants quotes at Sep 2016

Kawalazi

“We intend to purchase Bookkeeping software. This decision was reached after being taught about the easiness in preparing financial statements of bookkeeping software’s during our training”

LCGA

“All five associations use filing system of keeping records.

During mentoring, the mentor emphasised on this and we improved our record keeping by purchasing shelves, lockable cabinets and files/folders where we keep or records safely”

SATEMWA

“We are able to back up our records via emails and hard drives”

Five other businesses

These businesses gave reasons for not adopting the modern record keeping techniques. Some of these are listed below;    

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Lack of computer skills Lack of finance to buy software Investing in accountant instead Lack of time yet to adopt these modern techniques

Introductions to social lenders as providers of fairer finance who will discuss the finance needs of the co-operatives on an individual basis

100% of participants felt that their knowledge on social lenders had been built as a result of this project. They each state that they now know what is needed in order to access finance but at the same time none of the nine businesses are wishing to pursue finance applications. Many of the businesses stated that they do not have projects that currently need external finance but know where to seek advice when they do.

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Improved co-operative financial management leading to greater product efficiency and, in the longer term, increased farmer incomes

For many of the businesses, being able to analyse their own financial records and data has allowed them to better plan for the future. The structured interviews with each business

4 enabled us to ask participants the question: How has the project impacted your organisation’s plans and aspirations for the future? The answers are listed below; Business

Participants quotes at Sep 2016

Satemwa

“We are looking at diversifying our business to start growing flowers and herbs. If these plans materialise, we know where to ask for financing”

Sukambizi

“Preparing financial statements, pricing, loan repayments, total project costs and budgeting. But I found the business plan of paramount importance. Almost all the associations at the training had no business plan. so its training was so meaningful”

Phata

“It is our wish to have the business 100% run by the farmers. At the moment we are managed by Agricane. The trainings were a stepping stone towards achieving this as we first need to understand financials before anything else”

Msuwadzi

“We are a cooperative of elderly people with little business and financial knowledge. In future, we need to have an administrator who can work fulltime for us and put our house in older”

Makandi, kcga

No

LCGA

Frequently training our members on financial management

Kawalazi

“We anticipate Fairtrade Premiums this year. We intend to do a refresher course on financial management with our members so that we become ready to manage our premiums well”

EOT

“Financial management – we have started training our farmers to take the cooperative as a business and not just like farming. We intend to provide more financial literacy and business management trainings so as to improve their business understanding”

Case Study As part of the six month review, we held structured interviews with each business. Below is a case study based on the response of Kawalazi in order to provide some deeper context.

Kawalazi is a Fairtrade tea producer. It was founded in 2011 following a large demand for Fairtrade certified tea. Since 2011, they have used their Fairtrade premiums to invest in their local community and benefit their 1800 members. Community issues range from disease and hunger to early marriages and gender based violence.

As part of this project, Kwawlazi has invested in new computers on to which they intend to install book-keeping software onto. They also intend to train their members how to use the computer and software to improve their financial management systems. Instead of wishing to apply for finance at the moment, they are instead focusing on building their internal financial management capacity. The chairman of the premium committee stated “This

5 evaluation has been done sometime after [the training], but I can easily point out the practical application of the business training.” The mentoring was particularly welcomed by the members as it meant that people unable to attend the training could be involved and learn too. Kwawlazi has learnt the importance of financial management and intends to use its next Fairtrade Premium to purchase more training for their members. Their request to the donors of this project is to buy more tea! “If you do this more, our livelihoods would surely improve”.

Conclusions The six month review has given us an insight as to the long term impact of this project. All four aims of the project have been achieved to varying degrees. Whilst we initially set out to achieve those four aims, this project has also:  

Supported five co-operatives overcome severe flooding in 2015 Enabled an additional co-operative to take part in the programme.

Whilst none of the participants have chosen to apply for finance at this point, Shared Interest Foundation has provided MFTN with the knowledge of relevant social lenders so that they, as a network organisation, can provide the necessary support as and when the co-operatives are ready to take that step.

We are already starting to talk to MFTN about delivering a new project, building on the learning from this one, which would provide different levels of training, at different levels within the co-operatives.

Thank You At this time we would like to thank the Charles Hayward Foundation for your continued support. We will be sending you our annual review in the New Year and look forward to working with you again in the future.