July 16, 2024


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Malawi’s only Women led Dairy Processing factory Founder lauds UNCDF support in her business growth

By Ange de la Victoire DUSABEMUNGU

It is often the case that a person needs to start a business but lacks the capital or security that can facilitate him/her to get Bank loan. This affects Business ideas that are not being implemented, especially among women and young people.

This is a problem that is common in many countries but especially on the African continent where the situation is worse.

Dingi chirwa, founder and CEO of Kombeza Dairy Processing Factory in Malawi, is one of the entrepreneurs who have met similar challenges, but was fortunate enough to receive a support from the United Nations Capital Development Fund (UNCDF) and UNDP to help her achieve her dream as explained on 8th March 2022 during a webinar organized by UNCDF on investment in women’s businesses.

Ms. Chirwa explained that her business started early in 2018.

During the same year, she was awarded a grant by UNDP Malawi and with that grant, after several sessions of training, she decided that she would use the funds to build a factory.

“Initially, we were going to build a very small factory that would allow us to process 400 litres of yoghurt. But after those training sessions, we were enlightened, and we were taught to dream big and to think big, and to plan big and they taught us to understand that we can actually achieve things and through that, we decided to build a big factory that would eventually enable us to process 10,000 to 15,000 litres of yoghurt per day.” She said

After finishing the building, they started to look for financing for the next step, which was to get equipment that would then allow them to produce 15,000 to 20,000 litres.

“It was a very big challenge. And it was very difficult for us. Our balance sheets were not good… we had no collateral to offer for the commercial loans that were available on the local market. Thirdly, the loans that were available were also very expensive and so, with our business with the cash flow that we had, it wasn’t going to be possible for us to obtain the kind of money that we needed in order for us to realise our dreams.” She explains.

After realizing those challenges, they started knocking on doors, and true to their word UNDP kept following them.

“They kept on checking on us to see how we’re doing and how we were progressing as a business. So, over the years, they were able to see us from our infancy and from us taking steps going into the supermarkets, they were able to see some of our sales strategies on how we’re able to grow and our determination.” She added.

“And they came back to us to say look, we’ll try and help you to see if you can get additional funds. So, whilst we’re looking for the commercial financing, we’re also in discussions with UNDP, creating our reports, etc, until they introduced us to UNCDF.

So UNCDF will work for UNDP for a number of months, maybe 12 months, just going through our documentation and due diligence until we get to a level where they were able to give us this concessional loan to build our balance sheet so to buy equipment, etc.” Narrates Ms. Chirwa.

“UNCDF loan to us is almost like a gift, it is a loan, but we take it as a gift, a very valuable gift that we have to pay back. I’m saying this because the interest rate is half, maybe about 45% of what we could have paid on the commercial rates. So, there’s a 15% but out there, banks charge up to 25% interest rate which is almost detrimental to the business, especially a business in its infancy.” Ms. Chirwa explains.

Dingi chirwa, founder and CEO of Kombeza Dairy Processing Factory

“Number two, they’ve given us flexible rates. So, we’re able to report to them what is happening with the business, and what challenges we’re facing, and how else we’re going to move forward. So, because of that, you know, you can have two bad months, where you’re not able to make a repayment, but you can make it up in the other month, which is very good for us. I’ll give an example. At the beginning of this year, we had a cyclone and electricity was down for several days, especially in the southern region of Malawi. And with that, we also experienced challenges with electricity, our generator wasn’t working properly, there was low voltage, we ended up blowing our cold rooms. So, all our products for three or four days went bad. It affected our operations; it affected our cash flow. And, you know, so January and February because that was the end of January, and it was very difficult for us to make up for that loss. But again, we’ve sorted that out. And in march, our sales have picked up again, we’ve managed to clear everything. So, by the time we get to our next payment in June, we will be able to pay back what we’re supposed to pay back. Whereas if we had taken a commercial loan, and we’re supposed to pay on a monthly basis, we would have had to default, and there would have been issues with the bank for two months until we would have picked ourselves up and that would have incurred more interest, etc.” She deeply added

“But with this type of loan, and with this type of flexible repayment, we know that by June, we’ll be able to cover up and we’ll be able to make those repayments. The last big issue that we really benefited from was the fact that we didn’t need any collateral for a small business that’s starting up. You don’t want to have the pressures of putting your primary house or your main house on the line while you’re experiencing other issues in the business. So, for us, this was the biggest thing and this is one of the issues that made it difficult for us to get a commercial loan because the amount of money that we needed with the amount of security that we’re offering was not matching. So, in a couple of months, in about six weeks, our equipment will be in and will increase our production.”

Since we’re operating on a manual basis 100% with the machines, our quality will improve, our sales will improve, we’ll be able to support more farmers because we will now be able to buy from about 500 to 600 farmers as opposed to the 180 or 200 farmers. We will employ more people to do various jobs, sales. We have agents in different districts. So, we’ll be having more people earn more as a result of just having this equipment. So, for us, as a female business as a female led business to be empowered in this way to go forward with confidence with no worries on my back about how we are going to repay this despite these challenges, the support from being checked upon, how are you doing at the issues that you’re facing? What help can you get? Really this puts us at ease and also gives me that platform to go forward without any fear.

Because right now in Malawi, Kombeza is the only female led dairy processing business. All the other dairy processing businesses are led by men and men lead as men and they have their way of doing things.

But having this advantage and this platform really puts us at the front and really gives us the confidence to really push and to focus on other things, other strategies like marketing, etc, which we’re currently doing.” Ms. Chirwa ended her story.


The UN Capital Development Fund makes public and private finance work for the poor in the world’s 46 least developed countries (LDCs). UNCDF offers “last mile” finance models that unlock public and private resources, especially at the domestic level, to reduce poverty and support local economic development

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