Tanzania Mining Digest had the opportunity to sit down with Jonathan Malengo, the visionary CEO of ASM Finance Ltd. This soon-to-launch microfinance company aims to revolutionize financial access for artisanal and small-scale miners (ASM) in Tanzania. In this exclusive interview, Malengo shares his insights on the challenges miners face, the innovative products ASM Finance will offer, and his vision for the future of the ASM sector.
Tanzania Mining Digest (TMD): Jonathan, thank you for speaking with us. Could you start by telling us what inspired you to establish ASM Finance Ltd?
Jonathan Malengo (JM): Thank you for having me. The inspiration for ASM Finance Ltd came from a deep understanding of the critical role that artisanal and small-scale miners play in Tanzania’s economy. Despite their contributions, these miners often face significant barriers when it comes to accessing financing. Traditional banks are hesitant to extend credit due to the perceived risks, and this leaves a massive gap in the market. I saw an opportunity to create a financial institution that could cater specifically to their needs, offering products that are both accessible and tailored to the unique challenges they face.
TMD: What are some of the main challenges that artisanal and small-scale miners encounter when trying to access financial services?
JM: One of the biggest challenges is the lack of formal financial records. Many artisanal miners operate informally, without the kind of documentation that traditional banks require for loan applications. Additionally, they often lack collateral, which makes it difficult to secure loans. The fluctuating nature of their income also poses a challenge, as most financial products are designed with fixed repayment schedules in mind. These factors combined make it nearly impossible for many miners to access the financing they need to grow their operations.
TMD: How does ASM Finance Ltd plan to address these challenges?
JM: We’re developing a range of innovative financial products specifically designed for the ASM sector. For instance, we offer revenue-based financing, where repayments are tied to the miner’s income, allowing for flexibility. This means that during slower periods, miners aren’t burdened with unaffordable repayments. We’re also introducing microloans that don’t require traditional collateral, instead focusing on the miner’s potential and the viability of their operations. Additionally, we’re working closely with miners to build their financial literacy, helping them understand how to manage loans and grow their businesses sustainably.
TMD: Insurance is another critical area for miners. Can you tell us more about the insurance products ASM Finance will offer?
JM: Absolutely. Mining is a high-risk occupation, and having access to insurance is crucial for the security and well-being of miners and their families. We’re introducing several insurance products, including accident and health insurance, equipment insurance, and life insurance. These products are designed to provide miners with peace of mind, knowing that they’re protected against the unexpected. For example, our equipment insurance covers the cost of repairs or replacement if machinery is damaged or stolen, ensuring that miners can quickly get back to work after a setback.
TMD: What impact do you hope ASM Finance Ltd will have on Tanzania’s ASM sector?
JM: Our ultimate goal is to empower artisanal and small-scale miners, helping them to grow their operations and improve their livelihoods. By providing access to financing and insurance, we’re giving miners the tools they need to invest in better equipment, increase their productivity, and ensure their financial security. We also hope to contribute to the formalization of the ASM sector, making it easier for miners to access markets and participate fully in the economy. In the long run, we believe that ASM Finance Ltd can help transform the mining landscape in Tanzania, driving economic growth and social development.
TMD: What are your plans for the future? Where do you see ASM Finance Ltd in the next five years?
JM: In the next five years, I see ASM Finance Ltd becoming a key player in the microfinance sector, not just in Tanzania but across East Africa. We plan to expand our operations, reaching more miners and introducing additional products tailored to their evolving needs. Our focus will remain on innovation and impact, ensuring that we continue to offer solutions that genuinely improve the lives of our clients. We’re also committed to building strong relationships with industry stakeholders, including the government and other financial institutions, to create a supportive ecosystem for artisanal and small-scale miners.
TMD: Finally, what message would you like to send to the miners who might be considering working with ASM Finance Ltd?
JM: My message to the miners is simple: We’re here to support you. ASM Finance Ltd is committed to understanding your needs and providing you with the financial tools necessary to succeed. We believe in your potential, and we’re ready to walk this journey with you, helping you to grow your operations and secure a better future for yourselves and your families. Together, we can achieve great things.
TMD: Thank you, Jonathan, for sharing your vision with us. We wish you and ASM Finance Ltd the best of luck as you embark on this important journey.
JM: Thank you. It’s been a pleasure.
Also, read how artisanal and small scale miners finance their operations
