Gender-inclusive financing to scale up fish processing technologies
Women working in Malawi’s fish value chain have less control over and access to business resources, including financing and market information, than men. This makes it difficult for women to acquire improved technologies that can increase their production and enhance their incomes. Although solar tent dryers, improved smoking kilns, and other improved fish processing technologies are environmentally friendly, effective, and economically viable, scaling these technologies in Malawi has seen limited success due in part to the financial challenges facing the women and youth who work in the fish value chain.
Researchers are designing and promoting an innovative business model to increase the adoption of improved fish processing technologies among value chain actors, particularly women. The model comprises a gender-inclusive financing mechanism as part of a package that includes a solar tent fish dryer or improved smoking kiln, certification of the processed fish products, formal market access, and transforming gender norms within communities.
The features of the project’s gender-inclusive financing mechanism were negotiated and approved with the FDH Bank Limited in Malawi. They include the following terms:
- a lower interest rate to be paid by women than by men;
- active encouragement of women’s participation in the loan scheme;
- a letter of support from the project is required to be eligible;
- the loans will be disbursed primarily through the purchase of materials from trusted suppliers and payments to approved contractors (to construct improved fish processing technologies);
- the processors will be organized into groups of 10 to provide social collateral and the group will collectively encourage each other to repay loans on time; and
- beneficiaries will deposit an upfront commitment fee (contributions will vary depending on capacity).
The mechanism is ready to be rolled out and the project has identified 16 potential beneficiaries (eight men and eight women) who have already initiated the process by opening bank accounts with FDH Bank Limited.
To measure the change in women’s economic empowerment during the project, the team is using the Project-Level Women’s Empowerment in Agriculture Index (Pro-WEAI), a survey-based index for measuring empowerment, agency, and the inclusion of women in the agriculture sector. The Pro-WEAI data collection questionnaire was modified to suit the fisheries sector. It was translated into Chichewa, Malawi’s national language, and baseline data was collected from 621 participants (176 men and 445 women). The same survey will be repeated at the end of the project to capture the project’s impacts on empowerment.
Targeted communications materials, including leaflets, brochures, and policy briefs, were developed and distributed to increase awareness and adoption of the technology among women and youth. The project’s communication messages are also being delivered through dramatic role playing, videos, and facilitated discussions and advocacy meetings that help address underlying power inequalities and social norms. A monitoring and evaluation tool will assess the effectiveness of the communication strategy by collecting qualitative data after information dissemination sessions.
Profitability and post-harvest losses
According to data on the monetary value of fish purchased at local markets, the effect of solar tent dryers on post-harvest economic losses is substantial. Open air, sun-dried fish garner low prices at the market, which can be attributed to the poor quality of the products. In contrast, solar tents yield quality fish products that translate into good prices with established stores. The total economic losses for traditionally sun-dried fish, from processing to marketing, is estimated at 35.4%. Using the solar tent technology can reduce product losses by half, to 17.7%. When compared to open air sun-drying, solar tent driers can also reduce physical losses during the rainy season from 7.9% to 1.9%, and quality losses from 9.2% to 1.4%.
Based on data collected from processors using the solar tent dyers, a profit margin analysis (measured as total revenue minus the total variable costs) was developed to assess profitability for fish processing. The results show that, on average, when using the solar dryer, fish processors make a gross margin of 635,850 Malawian kwacha (approximately CA $1,215) per month. The analysis further shows that fish processors can manage to pay back a loan of 2,500,000 Malawian kwacha (approximately CA $4,780) to purchase the technology within 20 months, which demonstrates that the improved processing technologies are bankable.