Shared Interest looks after the needs of Malawian fair trade producers

Posted by Jane

July 10, 2009

The following is a Business Development Update by Rachel Ngondo, Regional Development Executive, Africa

Last time I promised to tell you how the trip I made to Malawi about two weeks ago…

This was my first time to Malawi and I really looked forward to the visit. From Lusaka Zambia it is only an hour’s flight to Lilongwe. When I arrived in Lilongwe I was amazed at the spaciousness of the city. It’s really a nice feeling to be in a city with few high rise buildings and a countryside feeling. And the people are really nice and friendly.

The driver, who picked me up from the airport, said Lilongwe is not the largest city in Malawi as it became the capital city in the 70’s. I could not avoid noticing long queues of trucks carrying bales of tobacco waiting to offload into ware house near the auction house. Malawi is one of the largest producers of tobacco in Africa. In the recent years, farmers have been shifting from tobacco to food products. This is because of high input costs required in tobacco production compared to food products. Also food production in the country has improved tremendously thanks to the government policy to subsidize farmers.

I had an opportunity to visit a groundnut farmers association about 100km from Lilongwe. These groundnut producers are FLO certified and sell to the UK. Some of them have started small businesses, bought cows and improved their homes from the income. They had already harvested the nuts and were now waiting to sell.

From Lilongwe I traveled to Blantyre which is a city south of Malawi and then to Mulanje district about 150 km from Blantyre. It was a really big contrast from Lilongwe. It is cool and very beautiful. At the foot of Mulanje Mountain are lush tea estates owned by private companies as well as by small holder associations. It was one of the small holders associations, Sukambizi, which I had come to visit. Sukambizi Association is the only FLO certified small holder tea producers with about 6000 producers. With the help of Lujeri tea estates, they obtained FLO certification. They had just received their first premium fund and were in the process of selecting their priority projects to implement. It was good to discuss with them about our facilities and they noted that they have spoken to several financiers but they find the Shared Interest lending model as the one that looks after the needs of the producers.

At about 4pm I set off from Mulanje to Blantyre where I spent the night and by 4.30pm it was already dark and very cold! Luckily the hotel rooms are heated, so it was not so bad. I had to set off early in the morning to catch a plane back to Lilongwe and Nairobi. And I kept wishing I had more time in Malawi as there is so much I wanted to see…