Microfinance in Zimbabwe
Imagine a Zimbabwean woman trying to run a very small chicken farm amid the rising inflation of Zimbabwe’s unstable economy. Prices are constantly shifting, making it harder to buy the chickens and feed she needs to keep her business afloat. Her name is Nyachi and she is constantly struggling to stay ahead of the rocky economic situation in Zimbabwe.

Partners Thrive Microfinance and Whole Planet Foundation provided her with a loan of $50, equivalent to 500 Zim. Nyachi was able to buy more chickens and feed, allowing her to remain open for business. With the boost from the loan, she can pay back the money and even take out another loan. Thrive Microfinance also provides courses in business and economics, so Nyachi can be more prepared to handle the complex financing of being an independent entrepreneur. She is an example of how microfinance in Zimbabwe can change the country. Her story is just one of many featured on Whole Planet Foundation’s website, illustrating hard times for many small business owners as well as stories of hope.

The Situation in Zimbabwe

Zimbabwe is currently experiencing an economic crisis. Recent natural disasters, the COVID-19 pandemic and poor economic and financial leadership contribute to the country’s current situation. High inflation rates and the rapid devaluation of the Zimbabwean Dollar plunged the population into poverty and food insecurity. In 2015, The World Bank estimated that around 72% of Zimbabweans lived in poverty. In 2019, it was reported that 50% of Zimbabweans were food insecure and 49% were living in extreme poverty.

More and more women in Zimbabwe are taking on small-scale entrepreneurial roles. However, the male-dominated traditions make it difficult for women to get the loans needed to start and run a business. Without a bank account or the proper collateral for a loan, female entrepreneurs have a challenging road to success. These low-income businesses often struggle to profit since, without loans to start or expand a business, it is often impossible to procure necessary equipment and workers. In Zimbabwe, 52% of the population is female, yet women earn only 10% of the country’s income. This disparity is why most organizations for microfinance (MFIs) in Zimbabwe and worldwide cater specifically to women.

Simple Solution but Complicated History

Microfinancing is not an especially new concept, but its history is complex. In 1997, the wild success of Grameen Bank in Bangladesh sparked global attention. Unfortunately, many MFIs popping up in the wake of that success failed to improve or even worsened situations in their countries. Low-income borrowers in India and Nigeria were victims of MFIs with ultra-high interest rates and other issues that made paying them back difficult or near impossible, especially for those who were not financially literate.

Zimbabwe faced similar challenges when introducing MFIs into the economy and still struggles with some of those issues today. However, with more NGOs and nonprofits becoming involved in microfinance in Zimbabwe, interest rates and other predatory lenders are more scarce. Additionally, with organizations like Thrive working to teach financial literacy to aspiring entrepreneurs, the likelihood of borrowers being taken advantage of is much lower.

Today’s Goals

In 2018, the non-banking financial institution Thrive Microfinance partnered with Business Call to Action, an alliance bringing together multiple governments to address the need for low-income business owners to have the ability to engage in their country’s economics more fully. This alliance aims to provide loans and business management training to 16,500 women and girls in Zimbabwe.

The global nonprofit Kiva uses donated funds to finance small loans. Once a loan is repaid, donors can either withdraw their funds or recycle them back into the revolving lending system. Kiva is currently able to crowdsource an average of $2.5 million in renewable funds every week, making for a total of $1.4 billion in loans given to date. Their mission is a financially inclusive world where everyone is capable of improving their situation.

Programs like these lend more than money. The satisfaction of running a business, the empowerment that comes from education and the security of financial stability lend hope for the future, a loan that never has to be repaid.

– Kari Millstein
Photo: Flickr

Multidimensional Poverty

Low-income families in Mexico have struggled for years to acquire and maintain affordable housing. In fact, 34% of Mexican families live in poor-quality homes, many of which are self-constructed. Patrimonio Hoy was created in 1998 to address this problem. The program provides low-income families with building materials, microfinance, technical assistance and logistical support so that they can acquire livable housing.

Patrimonio Hoy is a subsidiary of the multinational Mexican cement manufacturer CEMEX. After joining the Business Call to Action in 2014, its goals are to offer a market-based solution to meet the needs of low-income families, provide at least 125,000 low-income families in Mexico with affordable housing and replicate the model in other developing countries.

How it Works

Technical Assistance

A Patrimonio Hoy architect visits a family in their home to assess their house structure, discuss their building plans and evaluate their financial situation. After the assessment, the architect develops the building plan. This plan includes the design type and quantity of material needed to meet the required construction standards.


Families receive customized financing products according to their financial needs. New customers can choose a schedule with multiple deliveries of building materials. This schedule is then customized to each customer’s needs, ability to pay and the desired construction timeline.

Building Materials and Construction Services

Patrimonio Hoy has created additional demand for construction materials. This, in turn, has enabled local distributors to increase their sales without any additional investments.

In addition to helping customers acquire proper building materials, Patrimonio Hoy supervises the entire construction process. The program acts as a professional contractor and manages the legalization of land titles. This lightens the administrative burden on low-income families.

How Patrimonio Hoy Addresses Poverty

Patrimonio Hoy is addressing Millennium Development Goal 1: To eradicate extreme poverty and hunger. The program improves the lives of more than two million individuals through more than 3.3 million square meters of home construction. It also empowers families and encourages local economic development.

Patrimonio Hoy also addresses Millennium Development Goal 3: to promote gender equality and empower women. The program has trained more than 3,000 women promoters and their families in low-income communities.

Patrimonio Hoy also increases local employment and improves the local public school infrastructure. This brings greater responsibility in households and encourages better learning and health for children.

Expansion and Success

More than 750,000 low-income families in Latin America have benefitted from the project. Patrimonio Hoy has attained national coverage in Mexico (29 states, 56 cities) and has expanded across Latin America to Costa Rica, Colombia, the Dominican Republic, Nicaragua and Panama.

Patrimonio Hoy is constantly innovating and creating new business initiatives to further improve the quality of neighborhoods. Already the program has empowered families, and improved their general quality of life, ultimately preparing participating countries for steady economic and social growth.

Liliana Rehorn

Photo: Flickr