In a bid to improve accountability and streamline operations, authorities have highlighted the significance of embracing digital transactions for savings and loans groups (SLGs).
Tenneson Gondwe, Chief Executive Officer of COMSIP Cooperative Union Limited, emphasized this point during a digitization training session for extension workers trainer of trainers aimed at facilitate proper tracking of the revolving fund targeting the beneficiaries under the Social Support for Resilient Livelihoods (SSRLP) who were affected by cyclone Freddy in Malawi.
In March 2023, over 50,000 households in southern region were affected by Cyclone Freddy with 576 people confirmed dead and 567 still missing.
Gondwe said the cyclone’s impact caused severe disruptions to livelihoods in the affected districts, including COMSIP’s activities under the Social Support for Resilient Livelihoods Program, necessitating the need for deliberate initiatives meant to help them rebuild their lives and communities
Recognizing the urgent need to help these communities rebuild, COMSIP Cooperative Union Limited has introduced digitization for its savings and loans groups as part of efforts to recapitalize loanable funds for those affected by cyclone Freddy.
“When the cyclone happened most of our groups lost their records because they used paper. Membership also lost their savings. This could not have happened had their being digitization of records, hence this time we would like to introduce digitization to the groups that we are going to work with under Cyclone Freddy Livelihoods restoration” he said.
According to Gondwe, digitization is a shift from manual system of recording financial transactions of the SLGs to a digitalized system and that the cyclone Freddy livelihoods recovery programme will be used as a pilot, after which it will be rolled to all SLGs that COMSIP works with.
He added that through digitalization, COMSIP will be able to track the funds in real time from the village savings and loans groups, making it easier to track performance.
Under the Cyclone Freddy Livelihoods Recovery Programme, COMSIP has invested MK188 million kwacha in the revolving grant that will see members of Savings and Loan Groups from Climate Smart Enhanced Public Works Programme (CS-EPWP) under the Livelihood Support sub component of the SSRLP having access to the funds that will establish them in business so that they recover their productive and income generating activities.
The introduction of digitization follows a comprehensive training program in Blantyre attended by 74 extension workers, COMSIP case workers, and Community Development Assistants from the southern region’s nine districts, including Balaka, Blantyre, Chikwawa, Chiradzulu, Mulanje, Nsanje, Phalombe, Thyolo, and Zomba.
Facilitated by Einsibuuko, a Ugandan firm, the four-day training aims to equip trainers to subsequently train animators from 202 clusters with a total membership of 6,518.
Tumwa Arnold, Financial Institutions Manager at Einsibuuko and one of the trainers, stressed the benefits of digitization, including accurate records of financial transactions, enhanced savings mobilization, and the ability for groups to generate credit scores.
“Digitization brings security to the savings of SLGs because we are moving from keeping paper money to digital transactions. The natural calamities that affected Malawi is a big lesson as people lost properties including actual money which they were keeping in boxes in their homes,” said Arnold.
The digitization initiative aims is to empower SLGs, foster economic resilience, and create a more robust financial ecosystem through secure and efficient digital transactions
The cyclone Freddy recovery programme is being implemented with funding from the World Bank and the Multi Donor Trust Fund while the digitization technical support is being implemented by Einsibuuko, with funding from the United Nations Capital Development Fund.