Social Enterprise and the Malawian Economy

“For too long, information, opportunities, and resources have been constraints, they need to be the bridges” Sharad Vivek Sagar

Malawi is going through its hardest economic run since independence in 1964 and was listed as one of the world’s top 3 poorest countries by the IMF and the World Bank. The high cost of borrowing cannot sustain a venture. Inflation is steep and savings cannot be used as options for capital investments. Unemployment is high. The job market is saturated and offers little opportunity for graduates looking to start their careers. The majority of universities offer courses which lack accreditation. It all looks bleak. However, social entrepreneurship could be an answer to the economic woes that Malawi is going through.

High Inflation Equals Increased Participation

Bank interest rates are around 30% and loan repayment periods are narrow not allowing for enough time for the borrower to properly establish their venture on the market. As a result, ventures die for lack of capital. The answer to the problem lies in increased partnerships. Social entrepreneurs can have increased social impact if they partner with each other and share the cost of doing business. Mayke Harding says “partnerships can do a better job by managing mutual expectations” and assigning roles and responsibilities which complement each partners strengths. Moreover, social enterprises must strive to establish partnerships with other entities like government agencies, NGO’s and private companies. No social entrepreneur needs to go at it alone.

Partnership working

Skill upgrading in agriculture, for example, has helped entrepreneurs find learning and personal capacity development away from the traditional classroom setting. “Many social enterprises in Malawi should strive to provide technically-based occupations to the people it recruits,” says Isabel who runs a small chicken farm. Her business model provides free chicken manure to her feed suppliers, which acts as a fertiliser for their crops. The chickens get a higher quality feed and as part of the arrangement it Isabel keeps the cost of feed manageable and environmental risk minimal as no chemical fertilisers are used. By working together to find a solution for both parties, Isabel has managed to establish her business successfully. She has also shared this insight with other members of the community allowing them to strengthen their business ventures as well, growing stronger together. 

There are many factors which can be identified as “hindrances” but we should try a change of perspective. To see those economic and social shortcomings as opportunities in which a social enterprise can be established and eventually thrive. The goal is to become financially sustainable, create jobs and make a positive impact where we live – but none of this would matter if everything was healthy within our communities. We owe it to challenges which encourage us to innovate and create.

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