The United States Agency for International Development (USAID)-funded Improving Market Partnerships and Access to Commodities Together (IMPACT) program in Madagascar supports health commodity suppliers working with Population Services International’s (PSI) social marketing distribution network in communities around the country. This supply chain includes regional hubs (district-level volunteers, called PARCs, and community-level volunteers, called PAs) that provide health commodities to community health volunteers. The PAs procure medicines and health supplies from the PARCs at the district level and transport them back to their rural villages, which requires them to travel long distances (often between 20 and 50 kilometers) at their own expense. For PAs without their own means of transportation, it can be challenging for them to fulfill their role in the health commodity supply chain.
IMPACT and AccèsBanque Madagascar (ABM) wanted to find a way to help address this problem. The two partners collaborated to create a new financial product, the “motorbike loan,” designed to help PAs purchase an affordable mode of transport. After discussions with IMPACT and USAID, ABM agreed to leverage a loan guarantee provided by USAID to reduce the amount of collateral usually required and offer a 40-day grace period for the first loan payment. IMPACT helped connect eligible PAs with the bank, and once ABM had approved the loan applications and disbursed loan funds to the motorbike dealership, the project coordinated the delivery of the motorbikes to the respective PAs. IMPACT was even able to negotiate 24-month warranties on the PAs’ motorbikes from the dealership.
The motorbike loans allow PAs to purchase their own means of transportation, which is beneficial for three key reasons:
- With motorbikes, PAs can more easily travel the long distances to regional supply points and transport vital health supplies back to their local communities. The motorbikes increase the availability of health products in remote areas.
- PAs can reduce costs incurred by cutting out transportation fees and other intermediary costs so that, over time, the motorbikes will help improve PAs’ incomes.
- Because the PAs serve volunteers in the health commodity supply chain, they also have separate, income-generating activities, which the motorbikes can also be used to support. For example, a PA/farmer can use the motorbike to transport products to market, saving on the costs of using an intermediary.
In 2020, three PAs procured motorbikes using this new loan product: one in Fandriana, one in Ambanja, and one in Toliara II. The motorbike loan recipients have expressed their appreciation for this opportunity.
Mariama, a PA for the Ankatsaka commune in the Ambanja district since 2012, explained that before getting the motorbike, travelling to Ambanja to procure health supplies at the PARCs was challenging. She had to take the bus and wait a long time at the bus station. In addition, she needed to pay fees for commodity transportation. She added: “Using the motorbike is more economical and less time-consuming. I have more time to serve my community and I can also save money to expand my business.” In addition to serving as a PA of Ankatsaka, Mariama is also a cocoa and coffee farmer.
Razafimahatrata Alpher, the PA for the Alakamisy Ambohimahazo commune in the Frandiana district, is also very happy with his new method of transportation and the benefits it provides: “Through the acquisition of motorbike, I can guarantee the continuous availability of health products in my community and also use it for my personal needs.”
Due to the COVID-19 pandemic and related travel restrictions, ABM has decided to limit the geographic zone for piloting the “motorbike loan” product to a range of only 15 kilometers from an ABM bank branch. Moving forward, IMPACT will work with the bank to increase the geographic coverage area to 50 kilometers from their branches and to increase awareness of the product to encourage other PAs to apply.