Palm Capital Ltd is a Malawian-owned Lilongwe-based microfinance institution that was established in 2019 with the aim of providing innovative financial service solutions to SMEs. The company’s initial focus was on post-revenue start-ups that demonstrate high potential for growth and impact in the short- to medium-term. Originally, Palm Capital’s services were centered around financial education and short-term soft loan packages for start-ups looking to expand operations in any sector. The uptake during the first two and half years of operation was much slower than planned because of the difficulty in identifying the right type of SMEs that would fit in the original delivery model while providing adequate risk mitigation measures for the company. The underlying reason was that most of the targeted SMEs were also struggling with the negative impacts of Covid-19 and failed to make meaningful growth traction.

The company has two substantive directors who are also the shareholders (Mr Dennis Chinkhata and Mr Donnie Tonthozo Lazaro), and a legal counsel, Mr Hope Innocent Mvonye, who serves as the company secretary and secretary to the board. The directors have equal voting power, but the company secretary may be required to cast a deciding vote whenever the two fail to agree on a matter. Mr Lazaro also serves as the managing director who is in charge of the day-to-day operations of the company, overseeing a team of five full-time staff.

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Facilitating Access to Working Capital Finance for Smallholder Farmers

The project demonstrated to investors, SMEs, donors and policymakers the available alternative financing models targeting SMEs and smallholder farmers as a means of influencing market-led incentives for investing in downstream offtaking relationships by emerging anchor firms.

Through this 27-month project (October 2022 – December 2024), CASA ventured into a tripartite partnership with Palm Capital and Viphya Chambo to pilot the implementation of a smallholder inputs financing model and subsequently facilitate its scale-up. The model involved Palm Capital providing inputs credit to 1,000 contracted farmers by directly paying suppliers of fingerlings and feed required by contracted producers based on their verified pond areas. After the delivery of the inputs by the suppliers, Viphya Chambo would step in to start supporting farmers in managing the production process through the provision of the necessary technical and extension coaching. At the time of harvest, Viphya Chambo would buy the aggregated fish for onward supply to its urban market. The model was designed to allow for the harvesting of fish within six months of stocking compared to the normal production cycles that go up to 10-12 months, and that fish would be harvested at a conservative average weight of about 130 grams each. The estimated additional net profit was about £129 for a typical participating smallholder producer after paying off Palm Capital, the principal, and the interest premium on the contracted inputs loan. Of the total project cost of £88,738 in technical assistance and grants, CASA contributed £44,990.

Palm Capital seeks blended investment of £88,000 for upscaling of the inputs financing model.

Updated: February 2025