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World Bicycle Relief: Microfinance

Published November 12, 2009

For Dave Neiswander, director of World Bicycle Relief's Africa operations, WBR's microfinance program speaks to his financial background. A former investment banker in Washington, D.C., who moved to Zambia three years ago, Neiswander said combining the best practices of microfinance with quality bicycles is a way to spread millions of bicycles across Africa.

WBR has partnered with Harmos, one of the largest microfinance institution in Zambia, to loan individuals money over the short-term to purchase bicycles. The pilot program began in the Chongwe district in January 2008 with 1,000 bikes. It appears to be working. In the short amount of time required for individuals to pay back the loan on a bicycle, generally three to six months, the program has seen a remarkable 100 percent repayment rate.

In the past microfinance made little sense for bicycles because poorly constructed bicycles wouldn't last as long as the terms of repayment. By supplying durable bicycles that are built to last, WBR is making microfinance a viable solution. Through payment installments, bicycles become accessible to people. By increasing business productivity, bicycles are a powerful tool for economic development.

Joseph Tembo and Christopher Tembo carry charcoal from Chongwe to Lusaka to market. They pay 10,000 kwacha per bag and sell it for 18,000 to 20,000 kwacha. The 10,000 margin is roughly equivalent to $5. But in order to make this profit, they have to travel around 15 km to pick up the charcoal and another 45 km to bring it to the market in Lusaka. A bicycle makes it possible to make the round-trip in a single day and increase their output. Joseph and Christopher say that the bicycles purchased through Harmos are stronger and break down less often than their old bikes. Their work is the ultimate test of bike strength—each carries six bags of charcoal, weighing a total of 90 kg, on their bike.

Nowadays, it's easy for Olipa Bakari to bring her chickens to market. She used to carry them on her head in a basket but now she uses her bike. She can take 10 chickens by bike compared with 5 to 6 by foot. She also sells the tomatoes, maize and bananas she grows on a lush, well-kept farm behind her home. Olipa was one of the first recipients of a Harmos bike loan, sixty percent of which are given to women. Olipa repaid her bike loan in four months and has taken out another loan for a water pump to supply her garden. An energetic 62 years old, she is a model entrepreneur trying to lift her family out of poverty.

Joe Envoy Mundainawa displays the handmade crate in which he can carry two goats to market in Lusaka on the back of his bike. He started his business with a loan for one bike in January 2008 and has since purchased two more bikes through Harmos to expand his business. At 67 years old, he says he doesn't stay idle. A sharp businessman, he is already diversifying his business with the profits earned from selling goats. He recently bought six sewing machines and intends to sew shirts for kids. And he is building houses on his property that he plans to rent to school children who live too far away to commute to school each day.

Albert Sinkwaya was trained as a field bicycle mechanic at TATA Zambia in 2007. He has returned to his hometown in Chongwe and plays a vital role in keeping the WBR bikes properly maintained. Harmos refers clients that need bicycle repairs to Albert. A high school graduate who had no career prospects after finishing school, he said he has been given so much through bicycles. As a result of his mechanic training, the 27-year-old has managed to send his wife to school, feed his family, and send his late sister's three kids to school. And he has more hope for the future of his 1-year-old son, Albert Jr.

One of Albert's two bike shops in Chongwe market is nestled in the midst of a buzzing hive of activity. Alongside stalls that sell everything from dried fish and nuts to clothing to furniture, his stall is stocked with tubes, saddles and replacement parts for bikes. He says he can repair five bikes per day maximum and works on three bikes a day on average. The most common repair is to service the hub.



Harmos Chongwe branch currently has 665 active clients and is aiming for 1,000 clients by year-end. Three-quarters of its loans are to repeat clients. Previously set up solely for money lending, the Chongwe branch was the first branch to loan money for bicycles. Branch supervisor Juvenalis Mulimbika said he is proud to be involved in the project. "Giving the asset to somebody, you see the impact," he said. For myself and the rest of the Million Dollar Riders pictured here who had the privilege of visiting Zambia, the impact of bicycles was very clear. A bicycle provides mobility, self-sufficiency and a window to a better tomorrow.

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