Introduction

In Malawi, women and smallholder farmers face persistent barriers to accessing financial services. Long distances to banks, manual processes, and inaccessible repayment systems have limited their ability to secure timely loans. Recognizing these challenges, the Microloan Foundation (MLF), supported by Amarante Consulting, under the Smallholder Safety Net Upscaling Program (SSNUP), introduced mobile money services to transform financial inclusion. These innovations address structural barriers and deliver quantifiable, sustainable impacts for marginalized communities.

This mobile money implementation assistance is part of a broader technical assistance effort that Amarante has been carrying out with MicroLoan Foundation and SNNUP since August 10, 2023. This two-year project aims to accelerate financial inclusion for small agribusinesses and smallholder farmers by:

• Developing tailored agricultural loan products
• Refining credit assessment methodologies with an automated credit scoring system
• Integrating mobile money services to optimize operational procedures.

What We Did and the Impact It Had

The Problem Women and farmers in rural Malawi have historically struggled to access loans due to the lack of nearby financial services touchpoints and inefficient manual repayment processes. This resulted in delayed loan approvals, missed opportunities to invest in agriculture, and high operational costs for MicroLoan Foundation.

The Solution To tackle these issues, MicroLoan Foundation through the support of Amarante Consulting, deployed a USSD-based mobile repayment system (4272#) – configured on the Airtel Malawi Mobile Money platform. Amarante provided technical assistance in integrating mobile money services between Airtel Malawi’s Mobile Money system and MicroLoan Foundation’s loan management system. Additionally, Amarante optimized  in-house operational procedures at MicroLoan Foundation to ensure seamless implementation.

Initially planned for six (6) branches, the mobile money repayment system was piloted in eight (8) branches. Following a  successful pilot, the system was scaled to all twenty-two (22)  branches. Supporting both English and Chichewa, it enabled clients to make repayments without traveling long distances. This innovation not only simplified the repayment process but also drastically reduced operational inefficiencies for MicroLoan Foundation Malawi.  The assistance on repayment through mobile money closes the loop on the pre-existing loan disbursement process MicroLoan Foundation had put in place through Airtel Malawi.

Lessons learned during the assistance provided

One of the key aspects of the integration process was the collaboration with the telecom provider, ensuring smooth alignment on technical and operational fronts. While the process required significant coordination and effort, valuable lessons were learned, particularly in streamlining technical workflows for future integrations.

Key Insights Gained from the Project:

• Simplicity is key: The service had to be as simple as possible for widespread adoption.
• Menu availability in local language facilitates adoption: Ensuring USSD accessibility in Chichewa was crucial for adoption, though further validation from the field is needed to confirm the extent of its impact especially as word of mouth publicity spreads.
• Awareness and digital literacy in using the service is an important pre-requisite: Some clients mistakenly enter their client ID or Airtel PIN instead of their mobile number, leading to repayments being routed to incorrect accounts. Although this issue occurs in less than 1% of cases, proactive steps are being taken to mitigate it. A solution is being implemented to restrict input fields to mobile numbers only, preventing errors at the entry stage. Additionally, targeted awareness initiatives are being conducted through MicroLoan Foundation client officers to reinforce correct usage and minimize errors.
• Staff training and engagement drive service uptake: The uptake of MicroLoan Foundation’s new service was significantly higher in areas where staff were well-trained and confident in using the system. Their ability to guide clients effectively played a crucial role in adoption .
• Training focus areas for improved efficiency: Key training areas included the digitised loan repayment process, repayment monitoring, and internal client underwriting on mobile money, particularly ensuring that client mobile numbers were correctly added to the MIS. In some low-uptake regions, additional sessions were needed to reinforce these aspects.
• Mobile money adoption is a key enabler: In one branch where mobile money repayments were low, it was identified that mobile money penetration itself was low at the time. To address this, additional training and communication strategies were introduced to educate customers on the benefits of mobile money, leading to improved adoption of both mobile money usage and MLF loan repayments through the platform. In this particular case, by encouraging clients to adopt mobile money, MicroLoan Foundation Malawi becomes a sales pipeline for Airtel Money.
• An informed hosting strategy is critical to have in place at launch of a pilot: Hosting the application and database in a different country introduced an additional risk of internet outages, impacting service availability. It was with this assumption that the system was migrated to Malawi to mitigate this issue, but technical constraints (system errors, crashes due to low server capacity) required a reversal of the decision until a stable, long-term solution can be implemented in-country.
• Vendor selection matters: The system developer responsible for the USSD repayment system had limited deployment experience, which led to challenges in ensuring stability and seamless integration. A more experienced and agile system developer could have facilitated a faster and smoother rollout.
• Strategic vendor partnerships enhance efficiency:These challenges underscored the importance of working with implementation partners who have strong technical expertise, deployment capabilities, and adaptability.

Impact in Numbers

The implementation of a USSD-based mobile money repayment system provided MicroLoan Foundation with improved control and real-time visibility of repayments. The impact was significant:

• Before the pilot, mobile money accounted for 25% of total repayments. Following implementation, 98% of repayments now occur via mobile money, demonstrating a seamless transition and a high adoption rate.
• Operational efficiency improved for MicroLoan Foundation’s back-office team, with only 1% of transactions requiring manual intervention. The automation of reconciliation has significantly reduced the need for manual processing, allowing HQ to assign staff for working on more value added tasks thereby optimizing staff bandwidth.
• A “Train the Trainer” approach was adopted  to ensure the sustainability of MicroLoan Foundation’s digital financial services training program by Amarante’s Mobile Money Expert. The approach ensured that HQ and Field staff adapted quickly to the new digital tools, enhancing service delivery:

Insights from the Field: Screenshots in Action

To illustrate the real-time impact of mobile money integration, we have included screenshots from the Client Officer Dashboard, Branch Manager Dashboard, and the Head Office USSD Portal. These dashboards highlight the improved monitoring, transaction tracking, and operational efficiency that mobile money has brought to Microloan Foundation’s financial services.

Client Officer Dashboard – Tracking Loan Transactions and Repayments

This dashboard allows client officers to track loan disbursements, monitor repayments, and assess outstanding balances in real-time. With instant access to financial data, field officers can identify overdue payments, reconcile accounts efficiently, and provide better support to clients.

Branch Manager Dashboard – Monitoring Loan Status and Repayment Trends

This dashboard provides a comprehensive overview of loan disbursements, repayments, and outstanding balances. Branch managers can track real-time payment activity, identify overdue loans, and ensure better financial oversight across multiple clients.

Head Office Dashboard – Real-Time USSD Transaction Monitoring

The head office dashboard enables instant tracking of USSD-based loan repayments, offering a centralized view of completed and pending transactions. This tool enhances transparency, reduces reconciliation delays, and streamlines financial operations.

These images provide a visual representation of how digital solutions are driving change across different levels of the organization.

Testimonials: Voices from the Field

The impact of mobile money has been felt across MicroLoan Foundation Malawi’s footprint, transforming the way MicroLoan Foundation staff and clients interact with financial services. Here’s what they have to say:

Bringing Efficiency to Loan Repayments

“I’ve seen a significant improvement in our collections process since implementing the new credit scoring system. With real-time updates, I can instantly see when a client makes a repayment, allowing me to focus on those who need attention. The system has streamlined our process, reduced errors, and enabled me to provide better service to our clients!”

– Omega Masula, Client Officer, Lilongwe Branch

 

Making Repayments Easier and Safer “Since introducing USSD repayments, I’ve seen a significant improvement in timely repayments. Clients can easily check if their repayments have been successful, reducing uncertainty. This new system has also minimized risks such as fraud and shortages. With the center model rule, clients can make payments independently before the repayment day, promoting financial discipline. Our operations have become more efficient, as we can process packages on time without waiting for reconciliation in the system. The system automatically deducts payments, ensuring accuracy. Additionally, the flexibility of the system allows clients to support each other. If a client is unavailable or has misplaced their SIM card, others can make payments on their behalf using the USSD. Our only concern is network stability.” – Chisomo Bula, Client Officer, Phalombe Branch

A Game-Changer for Branch Operations “With real-time tracking of repayments in Musoni, I can monitor group repayments instantly, even when our client officers are in the field. This enables me to promptly address any issues, such as missed repayments, and ensure timely follow-up. The immediate processing of payments has also significantly improved our efficiency, saving us two working days compared to our previous system. Moreover, the system’s predictive capabilities allow me to anticipate potential arrears, enabling proactive measures to prevent them. This has been a game-changer for our branch, and I’m excited to see the continued impact of this innovative solution.” – Catherine Sinoya, Branch Manager, Mzuzu Branch

 

Instant Reconciliation for Better Monitoring “USSD repayment is a real-time process—once payment is done, it is reflected in the Management Information System (Musoni). So PAR is real at any time. Work has also been reduced because mostly I am involved in reconciling what has gone into Musoni and which transactions did not pass through, unlike in the previous method where I was capturing manually into Musoni.” – Misheck, Credit Administration Unit Support Officer, Head Office

 

 

Empowering Clients with Financial Convenience “I am excited with the easy repayment method MicroLoan has introduced using 4272#. I can now make repayments from the comfort of my own home, at a time that suits me. The best part is that I still get to meet with my group on repayment days, which is good for motivation and support. Plus, I receive instant confirmation of my payment through a text message, showing the amount paid and my outstanding balance. I appreciate the security and assurance that my payment has been received by MicroLoan, giving me peace of mind. This repayment method has made managing my loan so much easier!” – Meria Chimwaza, Mthundu Group, Phalombe

 

Securing Hard-Earned Money “As a member of the Buppy group in Mzuzu, I’ve had frustrating experiences with our previous system. Unfortunately, some loan repayments were mistakenly sent to a church and were difficult to recover. But with this new system, I have peace of mind knowing that my repayments go directly to MicroLoan Foundation. It’s secure, reliable, and ensures that our hard-earned money reaches its intended destination. Thank you, MicroLoan, for introducing this convenient and trustworthy repayment method.” – Jenifer Kamanga, Client, Mzuzu Branch

 

Eliminating Errors, Improving Satisfaction “I’ve seen a significant improvement in client satisfaction since the introduction of *4272#. Previously, clients would often encounter issues with incorrect organization codes, resulting in misplaced transactions. This not only caused frustration but also led to clients having to make additional repayments to cover the mistake. With 4272#  these errors have been eliminated, and clients can confidently make repayments without worrying about mistakes. As a Client Officer, I also benefit from the instant payment deductions. This real-time update enables me to effectively manage arrears, ensuring that clients receive timely support and guidance to get back on track.” – Felix Mbotwa, Client Officer, Mzuzu Branch

Between the launch of the pilot and the end of 2024, 30,010 clients utilized the USSD platform to make repayments at least once—demonstrating strong engagement with digital financial services. As mobile money adoption continues to grow, these firsthand experiences highlight the real-world impact of financial inclusion initiatives, driving efficiency and empowerment for thousands of women and farmers across Malawi.

Conclusion

The MicroLoan Foundation project in Malawi, supported by Amarante Consulting and funded by GCA, has delivered measurable success, improving loan access for women and farmers while streamlining operations. With mobile money adoption exceeding expectations, this initiative sets a precedent for scalable, inclusive financial solutions. As MicroLoan Foundation looks to the future, ongoing collaboration and innovation will ensure that even more communities can benefit from these transformative solutions.

True to Amarante’s agile approach and methodology centered on leveraging subject matter experts working closely with in-house project direction, we staffed a team of six experts specializing in microfinance and operations, product design and innovation, IT and credit scoring, financial inclusion, risk management, and mobile money integration.

To date, we have made significant progress toward these objectives, and we look forward to sharing more insights in future blogs.