Malta’s only micro-lender has disproportionate impact

People who want to run their own business but lack financial support may find it difficult to bring their ideas to life, especially without a bank account. But Malta Microfinance, a volunteer-run financial service, helps those determined to help themselves with small loans and good advice. Mario cacciottolo reports.

Customers at Moshair Rahman’s market stall in Floriana arrive armed with numbers – the models of their cell phones.

Once it’s called, it digs through heaps of phone cases and skillfully snaps the correct one around devices of all shapes and sizes. An elderly man looks impressed as he slips a new, tight-fitting case into his top pocket, before handing over five euros.

This thriving business started with funding from Malta Microfinance (MMF), which lends small amounts to those who do not have access to regular banking services.

Mr. Rahman borrowed € 2,500 to start, repaying it at € 210 per month. He describes the finance department that got him started as a “business friend”.

“I bought my first stock of cell phone cases with the first loan. It meant that I could earn enough to feed my family and pay rent.

Then he borrowed the same amount again to buy more stock, some brightly colored phone cases and awesome bluetooth speakers, handy chargers and little radios, all imported from Italy.

With his booming market stall, he is now considering opening a convenience store and has just successfully applied to run a money transfer business.

Mr Rahman, 32, married with two children and another expected in May, spent nine years in the Bangladeshi army. But he had to leave the country for “political reasons”, and now Malta is his home.

“The support of Malta Microfinance was very important to me,” he says.

I bought my first stock of cell phone cases with the first loan. It meant I could earn enough to feed my family and pay rent

Malta’s only micro-lender

Malta Microfinance’s offices are located on Old Bakery Street in Valletta, next to St Andrew’s Church in Scotland. It is the first and only registered microfinance service in Malta. The Church is the largest shareholder – it has raised funds, through a European-wide charity project, to help migrants and vulnerable communities in Malta, and in 2013 some of these funds were allocated at the start of MMF.

Registered with the Malta Financial Services Authority as a financial institution, it is not an NGO, nor a charity. She has a loan portfolio and she needs to recoup her unsecured loans to stay in business. Interest is not charged, but its clients pay a 10% arrangement fee on their contract.

The president of MMF is Christina Lejman, whose full-time job is responsible for fundraising at the Migrant Offshore Aid Station, which organizes aid at sea for migrants crossing oceans around the world.

“We are focusing on vulnerable communities, those who cannot access a bank,” Ms. Lejman said.

“Migrants do not have access to traditional banking services. Women, even Maltese, with low incomes and secure housing, have difficulty obtaining bank accounts.

“So really, if you have a bank account and you could go to BOV for a small loan, you’re not really our target customer. “

Financial assistance is “absolutely” available for Maltese as well as for migrants who are stable here and plan to stay. Besides Maltese, MMF has so far loaned money to Somalis, Libyans, West Africans, Nigerians and Europeans.

Loans from 100 €

MMF loans are capped at € 5,000 but can go up to € 100. Applicants must have a clean criminal record, ID, and proof that they can repay what they borrow.

Muse Abdekadir, left, and Abdul Mohamed were each able to purchase a laptop computer thanks to Malta Microfinance. They are now studying programming at Mcast.

The loans fall into three categories: the first is for small businesses, while the second is for those who want to continue their education, who have to pay for job training and equipment such as laptops, books or books. welding kits.

The third category is for rent, to help people move out of temporary accommodation or – in most cases – poor quality accommodation.

Rental loans are usually between € 300 and € 700, which covers a deposit and the first month’s rent. These are reimbursed over one year. Some people only reimburse € 8 per month.

“It is not in our best interest to give loans to people who are already in financial difficulty,” said Ms. Lejman. “Thinking that we could put people in debt is one of the main reasons we turn down a loan. “

She explains that her favorite part of the process is “when you see people flourish”.

“When they arrive and repay part of their loan, they are proud to have collected this money, they take ownership of the whole a little more.

“We are only facilitating what someone else is capable of. Finances are almost incidental to what’s really going on, which is when someone takes control of their life and thrives, whether in business acumen or socially.

It’s not just money available, as expertise and advice is also offered. Some of MMF’s volunteers come from financial backgrounds – some have worked at the World Bank – and act as mentors, reviewing business plans and putting people in touch with an accountant.

And, says Ms. Lejman, there is room for even more knowledge on board.

“We would like to invite Maltese and local residents who are retired, or have specific skills related to finance or business, to come and volunteer for us, mentor a company or even some of our committees.

“Because we are registered with the MFSA, we have to do some things that the big banks have to do, like GDPR and quarterly reporting. “

Currently, MMF is particularly focused on reaching women, as they have virtually no female clients.

“It’s difficult to get women to come alone to discuss their finances and sign financial documents,” says Lejman.

“We are trying to make conversations about money more normal and make this environment smoother to visit, so that people don’t go to loan sharks – there’s a problem with that in Malta – who are going to put you in. a bad situation. But we don’t give loans to pay off debts.

MMF’s only full-time staff member is assistant Ritianne Ellul.

“People come to you with a certain situation, they want the money, and then you identify that they have to resolve certain other situations before they can take out the loan,” says Ms. Ellul.

Christina Lejman, left, and Ritianne Ellul.Christina Lejman, left, and Ritianne Ellul.

“We budget everything together. We get their payslips and together figure out how much to rent and what they can afford.

“One thing leads to another for the people who take out our loans – there is better work, better pay. It is very gratifying to see.

If a loan is refused, part of Ms. Ellul’s job is to find an alternative solution for that person by referring them to another department, or to the Church, or to a grant department.

She has worked with refugees and asylum seekers for the past 10 years, and her connections with these communities have led to a ‘snowball effect’, where one person talks to another and rumor spreads about the world. financial assistance offered.

This was complemented by referrals from NGOs and government agencies, all of which are part of Ms. Ellul’s outreach efforts to spread awareness of the MMF. Over the past six months, several social workers have asked if their clients are eligible for loans.

Big dreams

In Gozo, two Somali men have big dreams. Muse Abdekadir and Abdul Mohamed are two migrants who both want to become software programmers. They love Gozo because it’s quieter and it’s a better place to study.

They needed € 500 each for two laptops. So they both borrowed € 300 from MMF, repaying € 27 per month. The remaining costs were paid by an NGO.

Now the couple are studying programming at Malta College of Arts, Science and Technology (Mcast).

“I would like to get involved in my country’s tech community if I ever go back there. That’s why I chose him and I love him, ”says 22-year-old Mr. Mohamed.

“I would also like to help me find a good job and have a good future.

The Maltese government helped us. They gave us clothes, shelter, free education and we are trying to be part of the Maltese community

He says that when he arrived in Malta on a boat “it was a disaster, we had nothing”.

“The Maltese government has helped us. They gave us clothes, shelter, free education and we are trying to be part of the Maltese community. We are no different from others. Some people think we can’t learn anything. This is why we try to show a more positive image for immigrants.

“Malta gave me the chance to study. I still think it’s not my country, but they help me, like it’s my home country. Malta gave me the chance that I did not have in Somalia.

Mr. Mohamed adds that neither of them had any money when they started their course, so MMF’s help was invaluable.

“They believed in us, and believing in someone is very important. We appreciate it and would like to thank Malta Microfinance very much. They are always in our heart.

23-year-old Abdekadir explains that some migrants in Malta “don’t think they can study. They work, work, work and struggle with their difficult lives ”.

“But I preferred to start studying. I am still young, I can do something to improve my future and make my dreams come true. I would like to be a good person, with a future.

He says migrants cannot take loans from Maltese banks and shops will not lend them the money to buy computers or tools.

“Malta Microfinance gave us a good opportunity. We can’t pay all the money all at once, but so step by step we can do it.

“We left Somalia because we were looking for peace. Now we have peace and a life. Thank goodness, and thank you Malta.

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