MicroLoan Foundation Zambia

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About MicroLoan Foundation Zambia (MLF-Z)

Zambia Map

The MicroLoan Foundation Zambia (MLF-Z) is a not-for-profit specialist microfinance provider that was established in 2008. Its activities are overseen by the Microloan Foundation which has its headquarters in the UK and is regulated by the Charity Commission. MLF-Z’s main activity is providing low-income women living in predominantly rural areas of Eastern, Southern and Central Provinces of Zambia with short-term loans of between 4-6 months for productive purposes. It lends exclusively to women.


What is MLF-Z’s mission?

The MLF-Z defines its mission as being to ‘significantly reduce the depth and breadth of poverty in the communities within which it operates.  It does this by lending money to groups of women to help them build sustainable businesses, and by providing meaningful training and on-going mentoring support.  The MFZ’s organisational culture is entrepreneurial and it believes in applying the principles of good business management to charitable work.’


What types of financial services does MLF-Z provide?

Primarily MLF-Z offers short-term loans for productive ventures accompanied by a strong training component.  Most borrowers live in relatively isolated rural areas.  It does require borrowers to deposit 10% of the loan amount on the first loan  cycle, and 20% on later cycles as savings and these are held with a third party commercial bank. Savings cannot be accessed until the loan is repaid in full but the savings do attract interest.


How much interest does MLF-Z charge?

Microfinance institutions (MFIs) charge higher rates of interest for several reasons. Firstly, the administrative costs of making many small loans are much higher than making fewer larger loans; secondly, they take more time assessing the feasibility of applications and thereby reducing risk because borrowers cannot offer traditional forms of collateral nor do they have salaried incomes; thirdly MFIs often operate in geographically remote areas with low population densities and this means that they incur greater operational costs; and fourthly they often accompany loans with a range of training and technical advice. In addition, inflation is generally higher than in countries such as the UK, the rate of inflation in Zambia is shown below. MLF-Z charges a flat rate of interest of 5% or 6% per month.


Does MLF-Z provide any training?

Yes, MLF-Z does provide extensive training for borrowers, often as frequently as every two weeks in their villages. Prior to disbursing the loan, training is in the following areas:

· Products, procedures, interest rates and savings

· Loan application and disbursement

· Constitution planning or drafting

· Leadership and responsibilities

· Avoiding delinquency

· Rights and responsibilities


After receiving the loan, training continues in the following areas:

· Group support and what happens when things go wrong

· Setting savings goals

· Market research

· Costs, profits and pricing

· Doing a business plan

· Appropriate loan sizes

· Revision of constitution and loan application


Where can I find out more information about MLF-Z?

Further information about the organisation can be found at https://www.microloanfoundation.org.uk and the MLF-Z also posts its profile on Mix Market.


Microloan Foundation Zambia : Basic facts and figures

Full name:   MicroLoan Foundation Zambia
Established:   2008
Average loan size:   US$121
Total number of active borrowers:   8,409
Proportion of loans given to women:   100%
Total loan portfolio:   US$690,005
Portfolio at Risk (PAR) at 30 days:   6.70%

This information was updated in June 2018


Zambia: Basic facts and figures

Population:   15.96 million
Life expectancy at birth:   52 years
Adult literacy rate:   63.4%
Access to improved water source:   65%
Infant mortality rate:   64.7 per 1,000 live births
Maternal mortality rate:   224 per 100,000 live births
GDP per capita:   US$1,721
Inflation:   7.8%

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