Saturday, March 7, 2009

MUSCCO Wrap Up and “So Long Malawi!”


Whelp, today is my last day in Malawi. At 2:15pm Malawi time, we fly out to Johannesburg, where Nicky and Bruce leave us. Nicky’s parents live in Johannesburg, so she’ll be staying with them for a quick visit and Bruce is headed to Nmibia (sp?) to visit a friend for a week. From Jo-Bourg, Paul, Brad, Dennis and I fly to London, where we once again split up. I think Paul is still planning on exploring a couple of tourist attractions in London to kill off his 9 hour layover. 6 hours after arriving in London, I depart the group and fly out to Calgary and then finally to Lethbridge!

I thought I would include a couple of pictures of the FINCOOP staff and their mobile banking truck. Their significant growth (26,000 members in 5 years) is largely due to the success they have seen with their mobile banking program. They drive their mobile banking vehicles (4 in total) to the rural areas of Malawi to work with farmers by offering them deposit, withdrawal, new account and loan services. This program is very successful because the majority of Malawians are farmers in some capacity and live in rural areas.

Last night, we went out for dinner with the MUSCCO staff at a restaurant called the Green House. We ate outside; probably for the last time until June or July. The meal wasn’t great but the company was terrific. Paul has the pictures of the group, so I won’t be able to post them until later. Oh, and I decided to check the weather in Lethbridge this morning and I ended up shedding a single tear: High of -15C, Low of -23C?!??! Ugh………………………………………………………..

Today, I am headed to the markets for the last time. I have to buy my wife something!!! Haha! Whoops… ok, anyways… Yesterday, I did VERY well at the markets. My strategy is brilliant (or so I think…) – bypass the salesman and barter directly with the boss. The way the Markets are set up, there are 10 salespeople at each table and a couple of guys sitting in the shade behind the table. The guys in the shade are the bosses. When the salesman checks with the boss to see if the price is ok, the boss will mumble a number to start at; usually 2 or 3 times the price I ended up paying. As soon as the boss states a number, I start shaking my head “no” and start walking away; regardless of the offer. Some sellers let you walk; others don’t! If the sellers are hungry for the sale, the situation intensifies and the salesman goes back to the boss frantically trying to get a better price. At this point, the boss gives the person the lowest price to sell at; in English. I bypass the salesman altogether and approach the boss with my next offer. The 3 times I tried this, the bosses look caught off guard and the salespeople don’t know what to do! It probably goes against the rules of the Markets, but whatever… If you can find out the lowest price, be prepared to walk away at any time and brace yourself for a 20 minute dickering process, you’ll do great in the Markets! I have to admit, though; sometimes it’s worth paying a little more to get out of there without the attention. For interest sake, the shop I'm headed to today is in the middle of the picture above. Look for the garbage bags on the ground under the big tree. When it rains, the sellers pull garbage bags over their stuff to keep it dry.

No more blogging or internet until London!


PS: I had to include this photo as well. This is a preacher that stands on handrails downtown Lilongwe and preaches at the top of his lungs! We walked by him to convert some US Cash and when you're close to him, it's DEAFENING! He's there everyday, straddling the hand rails near the cross walk. I wish I could speak Chichewa so I could understand what he is saying...

The Creatures of Malawi

I don’t like bugs.

Let me explain. I don’t necessarily have a problem with bugs that can’t harm me. You know… mosquitoes, flies… I have no problem with these insects! It’s the bugs that look like they have come straight from a Sci-Fi movie that I have a problem with. You know the ones I’m talking about! The ones with pincers the size of their bodies, teeth the size of small daggers and stingers filled with toxic venom.

Well… I have been lucky (or unlucky…) enough to come into contact with many odd insects of Malawi, and I thought I would take a moment to share my findings with you.

The Flying Red-Ant-Thing

The Green Grasshopper

The Sand Beetle

I almost stepped on this one!


What a great name for bug spray, hey? DOOM! That’s ultimately what these bugs face when they come into contact with this spray. DOOM! Haha! Ok, sorry… Anyways… Happily, I’ve only had to use it once; on the flying red-ant-things, which were fluttering around my room in Dwangwa. The rest of the bugs and I had an agreement; don’t kill me and I won’t kill you.

We met with MUSCCO representatives (Sylvester and Dickson) this morning to present our findings of the work we have been doing with the SACCOs over the past two weeks. It was a great meeting and very interesting to hear about the other groups experiences around Malawi.

Nicky and Dennis were stationed in Blantyre; Malawi’s largest city. They had great stories about the small SACCOs they worked with and even experienced a thief in the markets (whom, by the way, was chased out of the markets by a mob of people with sticks! It seems in the presence of no police, the Malawian people band together and police their own areas!).

And… Brad and Bruce were stationed in Northern Malawi (Karanga and Mzuzu). When they arrived in Karanga, it had been pouring rain for hours and their hotel rooms were almost flooded! They have these GREAT photos of them walking through knee-deep waters to get to their hotel rooms. Classic! Oh, and who could forget Bruce's hilarious "bathroom" experience. It's not quite PG-13, so it won't make the blog... you're welcome! :)

We are meeting MUSCCO representatives this evening for a dinner to wrap up our week. This is our last night in Malawi! Awww…



Thursday, March 5, 2009

3 Days Left!

Greetings! Today is Thursday, March 5, 2009… And we fly out on Sunday, March 8, 2009. Only 3 days left in Malawi! Time flies when you’re having fun…

We have had a good time working at FINCOOP (short for Finance Cooperative) over the past couple of days. Maybe I’ll take a moment to introduce FINCOOP to you… FINCOOP is the largest Financial Cooperative in Malawi. It has four branches, +25,000 members and services over 50 communities across the country of Malawi; all formidable accomplishments, given the fact that FINCOOP has been open a mere 5 years (established in 2004)! Unreal, hey?

FINCOOP is an open bond financial cooperative, which is a big reason why they have been very successful at obtaining new members and growing their business. The other reason is a strong rebranding campaign they ran in the early years of their operation. I have been using the term “financial cooperative” when defining FINCOOP because that is how they have branded themselves and preferred to be seen as. FINCOOP opened in 2004 and saw marginal growth as a SACCO over their first few years in business. The General Manager (Anthony) did some research and came to the conclusion that the people in Lilongwe were skeptical and had a general sense of mistrust with SACCOs, as many had been victims of failed SACCOs in the past. They re-branded as FINCOOP (ie: dropped the SACCO brand), changed the signage and went out into the community to market the “new business”. It’s interesting… Apart from the name, absolutely nothing about the institution changed, yet the people perceived FINCOOP to be a completely different and new financial institution. FINCOOP has been growing ever since. In fact, at any given time of the day, there are probably 30 – 40 members in the branch either waiting in line to make a deposit or withdrawal some cash, or waiting to see a loans officer or accounts officer to get a loan or open a new account.

Hopefully that gives you a general idea of the financial cooperative Paul and I are currently working with. Over the last few weeks, we have worked with two of the larger financial cooperatives in Malawi and it is interesting to see the similarities the micro-finance system has with the Canadian financial sector. Similar to Canadian FIs, SACCOs have to grow in an environment saturated with competitors, while trying to manage liquidity and delinquency issues. I came into Malawi with very low expectations and have been blown away by the infrastructure in place with the SACCO and financial cooperative we have worked with.

Paul and I went to the markets today! Round 2! Paul did some major dickering and bought a bunch of stuff. I won’t ruin it for you Paulette… You’ll have to wait and see what prizes Paul is bringing home! :) Anyways, while Paul was paying up, I took advantage of the seller’s euphoria of making a huge sale and dickered like crazy! In the end, I scored some pretty sweet Malawian swag for a price I thought was fair. That’s the beauty of dickering; if I think a hat is worth 3,000 MK and someone else thinks it’s worth 5000 MK, it doesn’t matter if the item is only worth 1,000. Everyone is happy with the price they paid/sold the item for! That is, of course, as long as the buyers are kept “in the dark” of the actual price of that hat… That’s when things get complicated! Haha! If I found out a hat and 3 bracelets are worth less than the price I paid, I will not be a happy camper!

I will be participating in the hiring of a new loans officer tomorrow morning, which I am really looking forward to. Paul was able to participate in the hiring of an internal auditor this morning and it sounded like he had a great experience! Afterwards, Paul and I will present our report to the board and we will be finished with our second and final financial cooperative.

Ok, time to call it a night! Thanks for reading!!!


Wednesday, March 4, 2009

The Markets 1, Bobby 0

Hey! I took a moment to review all of the comments you have left on my blog! Thank you for all of the wonderful messages! I love hearing from you, so thanks a lot!

Yesterday was Martyrs Day in Malawi; a national holiday celebrating those that fought for Malawi’s independence from the United Kingdom. Malawi officially became an independent nation in 1964. Paul and I, along with the majority of local businesses in Lilongwe, had the day off yesterday, so we decided to check out of a couple of things within the city: A wildlife sanctuary and the markets.

We took a taxi to the wildlife sanctuary, paid the entrance fee and were informed by the employee that there were no tour guides to show us around the park and that none of the animals were caged. At first, I think both Paul and I were a bit worried at the thought of lions and tigers tracking us around the park, waiting for a prime opportunity to pounce. However, as we walked around, it became quite clear that the sanctuary was not saturated with wild animals at all. Apart from a cool looking centipede, an African toad and ridiculous amounts of ants, we didn’t see a thing… We found out today that we went to the wrong wildlife reserve and are hoping to attend the one WITH animals before we leave this week.

After lunch, we walked a couple of blocks to the markets. There are probably 40 different selling areas/tables at the markets and about 200 sellers present. There are at least 5 – 10 sellers at each table at any given time. All of the items for sale are kitschy tourist items (exactly what I’m looking for!!!) and look identical from seller to seller, so it really comes down to price. (ie: What is the cheapest price I can buy this item for?). I recall learning about basic economics in one of my introductory economics courses I took in college. Since there is no differentiation between products and plenty of supply, it would make sense that these items should be very cheap. While in theory this makes sense, in reality, the sellers will have you believe quite the opposite!

In Canada, there are very few items you can “dicker” on. An example would be larger items, like a house or a vehicle; items where the seller serves to gain a large margin if he/she sells it at the asking price. Furthermore, in Canada, when you are bartering on an item, you are usually working with an individual one-on-one or at the most a very small group of individuals.

In the markets in Malawi, you are able to deal on every item. You can’t ask “how much do the bracelets cost?” because each bracelet has it’s own price, depending on how bad the seller thinks you want it. I’ll paint you a picture of one of my bartering experiences yesterday…

Robert: How much are the bags?
Black Moses (his real name): Which bag?
Robert: The bags…
Black Moses You pick bag, I give price!

At this point, I get a bit frustrated and carelessly point at the closest bag to me and say “this one”. As soon as I picked one, 6 other men approached me and started shouting things like “which one?” or “you like this one instead? I give you good price!” etc. Before I knew it, there were a handful of people talking to me all at the same time trying to sell me different products.

Black Moses: You like that one?
Robert: Yes… (I didn’t… It was an ugly bag. I just wanted a price!)
Black Moses: I give it to you for… 3,000 Kwacha
Robert: (confused look) 3,000 Kwacha?! Nooooo! I don’t want the Azungoo (white/foreigner) price. I want a good price. I’ll give you 1,000 Kwacha

We went back and forth for about 10 minutes and I couldn’t get him lower than 2,500, so I walked. It’s a very intimidating situation because you are surrounded by people who frown, shake their heads and even gasp when you throw in a low-ball bid. The seller’s offer is praised loudly and publicly by the group when presented (ie: “That’s a great deal boss!”), and the buyers low-ball offers are shamed equally as loud and publicly. Everything about the sales process in the markets is strategic.

I had similar conversations like the one noted above with Black Elvis and Black George Bush (both names the two individuals introduced themselves to me as) about a couple of other items I was interested in. Everything, including the names they choose, is strategic and part of the sales process. It appears many of them choose names (ie: aliases) that are catchy, not easily forgotten and slightly amusing to aid in the sales process. Oddly enough, Black George Bush stopped using that name when he saw the Canadian flag on my backpack. Stephen Harper clearly is not as recognizable as George Bush, as he dropped the gimmick after a while.

After Round 1, I came out empty handed and had zero success with my dickering… The Markets 1, Robert 0. I’m here for a few more days, so I expect to fight a few more price battles before I leave Lilongwe. If I don’t come home with souvenirs, you’ll know how I made out! :)


PS: I asked Black Moses and Black Elvis if I could get photos of them, knowing that this story would be a hit on my blog and with friends when I come back home to Canada. Moses and Elvis looked at each other, spoke in Chichewa back and forth, and agreed that 1,500 (about $10 US) Kwacha was a fair price… Nothing comes for fr
ee in the markets! For 1,500 Kwacha, I had better get autographs with the photos of these iconic figures! Thanks so much for reading! :)

Monday, March 2, 2009

Banker to the Poor

Muhummad Yunnus, a Nobel peace prize winning Economics Professor turned Banker (founder of Grameen Bank), wrote a book called “Banker to the Poor”. A friend of mine, Randy Tate, recommended it to me when he had heard I was headed to Malawi on this trip. I struggled, at first, reading about the poverty in Bangladesh, where Yunnus grew up. I thought I knew what poverty was… I’ve seen the poor that live in Canada. I’ve helped out at food shelters in the past and volunteered at “in from the cold” events sponsored by church organizations in the past. I have now come to believe, however, that this is not real poverty. Poor Canadians may be “poor” in relative terms, when compared to other Canadians; but I certainly would not classify them as “poor” when compared to the poor living in Malawi. The poor whom live in Canada are entitled to basic health care and have government and social assistance programs available to them. That is much more than what people living in Dwangwa have available to them. Let’s look a bit further into this…


The major employer on the Dwangwa estate is the sugar cane company. While we were at DWASCO, we asked Davison to see a few loan applications he had processed recently. He provided them along with the income verification (paystub) for the individuals applying for the loans. According to the paystub, the individuals we looked at make about 6,000 Malawian Kwacha (MK herein)/month. That sounds like a lot more than it actually is! The current US$/MK exchange rate is $1:160 MK. That means that the average worker at the factory makes $37.50/month or about $450/year! Davison mentioned that this job is actually a well paying job because the owners of the Estate pay for the housing of the staff. The houses are 1 bedroom, 200 sq/ft tin boxes, and usually house a family of about 6 – 10 people. In Davison’s case, he houses 14 people in his home!

Health Care and Statistics:

There are centers in Dwangwa, who are sponsored by various religious institutions, which offer free health care benefits to patients. Unfortunately, these free health care benefits consist only of care for AIDS patients in the last remaining weeks or days of their lives. You pay for everything else… We were informed that the HIV/AIDS infection rate is down from 22% 5 years ago to 14%. That means that 1 in 7 Malawians are believed to be infected with HIV. Many families have lost both parents to HIV/AIDS, and households are often headed by older children or the elderly. In our cultural training, David Mhango mentioned that we may be invited to a funeral while we are in Malawi. We were informed that it is a great honor to be invited to a funeral and that they happen quite often in this country. We were not informed of any deaths in our short stay in Dwangwa; however Davison did mention that 40 - 60 members of his SACCO die from AIDS every year. The average life expectancy, according to Foreign Affairs and International Trade Canada, is 46 (male) and 47 (female); with 5 females infected for every 1 male (ie: females are 5x as likely to be infected with HIV).

Why do SACCOs exist in Malawi?

Like banks, SACCOS provide two main services to Malawians: Savings and Loans. Unlike banks, SACCOs provide these services to the poor. You see, the banks in Malawi are pleased to do business with the wealthy. They likely bank the majority of the South African Managers and Owners of the sugar cane companies and undoubtedly make a lot of money off of these individuals all throughout the process. The banks, however, are not so interested in banking with the poor. The poor are deemed “too risky” by the banks, as their income potential is weak and they usually can not afford to pay the minimum service charges for the accounts and loans the banks offer. This is where the two primary services SACCOs offer come in (Savings and Loans).


In order to become a member with DWASCO, you have to commit to saving 200 MK/month. No exceptions! Every month, 200 MK comes off of your pay cheque and is used to purchase common shares in your name at DWASCO. These shares have historically yielded a return of about 12% and allow members access to loans.

Note: For those of you “gaffaw’ing” about that return, allow me to put it into perspective for you. The GST equivalent in Malawi is 16.5% and a suggested inflation rate of about 8%. Still, the 12% return on shares is much better than the 2-3% return on bank savings accounts.


Every member is required to save up 1/3 rd of the amount of loan they wish to receive. For example, if the member is seeking a 300 MK loan, he/she would have to have at least 100 MK in his/her share account. Other loan criteria exists (for all you bankers out there, SACCOs use the 5 C’s of credit, just as Canadians do!), but for the most part, the average member is able to have access to credit.

Simply put, the 6000 MK/month the factory workers receive in pay is just over the amount they need each month to buy basic necessities and survive. Without SACCOs, the people living in Dwangwa would not have access to banking, would have no savings or access to credit for an emergency, and would have nothing to leave their family after passing away. SACCOs fill this void for members. SACCOs rarely turn people away, set members up to save on a monthly basis, allow them access to credit and offer insurance, through MUSCCO, to pay off any outstanding loans and pass the common shares of the deceased, in cash, to his/her designated beneficiaries. This means that when the bread-winner of a family passes away at a young age, he can leave his family debt free and with his life’s savings. The need for SACCOs is great in Dwangwa and DWASCO fills that need.

Paul and I thoroughly enjoyed our stay in Dwangwa and now understand why Malawi is referred to as “the Warm Heart of Africa”. Everyone we have encountered thus far has been very kind to us. We are looking forward to spending the next week in Lilongwe, working with FINCOOP; the largest SACCO in the country. For interest sake, DWASCO is the 4th largest SACCO in Malawi; a formidable accomplishment, given that they are a closed bond SACCO!

Thanks for reading!!!


Photo of the wonderful staff of DWASCO Employee SACCO (Davison is in the front, in the red)