Dairy farmer in Zambia stands beside his bike

Setting things in motion.

A “micromobility” initiative provides microloans to dairy farmers in Zambia so they can buy bikes to bring their milk to dairies – all thanks to a project launched and implemented by three BMW Bank employees.

Zambia is one of the poorest countries in the world. More than half of its roughly 17 million inhabitants subsist on just a few US dollars a day, and one in two Zambians is considered undernourished. Nevertheless, people in this southern African inland country, including dairy farmers around the capital, Lusaka, are working hard to improve their situation. Many of them, for example, possess their own land and herd of cows. To sell the cow milk produced on a daily basis, however, they must transport it to the dairy as quickly as possible, as without refrigeration or processing, fresh milk will spoil within a matter of hours in the tropical climate. Day after day, farmers and their family members must therefore set off on a long march with the milk over dusty, unpaved roads. There are no vans, cars or motorbikes. Most farmers cannot even afford to buy a bicycle.

This is where the BMW “micromobility” project comes in. The idea was developed and implemented by Florian März, Vittorio Guerrero Mercado, and Kilian Kaiser at BMW Bank in Munich. They have created a system enabling local dairy farmers to obtain so-called “microloans” to pay for urgently needed bicycles. Microloans provide credit for very small amounts not normally handled – and certainly not approved – by banks.

Using a system set up by the young team and backed by BMW Group funding, farmers are now able to take out a microloan – which can generally be paid back within a year – to buy a special bicycle. “Since this makes transporting the milk 25 to 30 percent more efficient, it also significantly increases the farms’ income and makes it easier to pay off the loan,” says Florian März.

The bicycles are produced by World Bicycle Relief, an international aid organisation recognised worldwide for its social commitment and efforts to enable greater mobility for people in rural developing countries. “The bikes are kept simple, but they are specially designed for local conditions,” explains März. For example, they are much more robust than conventional bicycles so they can cope with potholes and stony terrain. The luggage rack alone has a load capacity of 100 kilos to allow larger quantities to be carried. The bearings and gears are also set up to avoid damage from dust off the roads. “We wanted to be sure the bike is still serviceable after years of intense use,” adds Vittorio Guerrero Mercado.

The team has made paying loan instalments as simple as possible. The dairies withhold a small portion of the farmers’ profits earned from milk sales and then transfer the money directly to the umbrella organisation, the Dairy Association of Zambia (DAZ), which ensures that the money is paid correctly. One of the tools for this was developed and managed by the Swedish Embassy in Zambia. The software is mainly used to accurately record financial business transactions in the dairy industry.

“At the moment, we are starting out with around 100 bicycles financed through microloans,” says Kilian Kaiser. But, as soon as these 100 bikes have been bought and the loans paid off – ideally, after a year – this money will be available again for new annual “rounds”. The idea is to initiate a cycle that will enable more and more farmers to use bicycles in the future.

If the BMW Team has a say, however, this will not be the end of the road. “We want to set a system in motion that uses microloans to help people help themselves,” says Kaiser. Right now, it’s bicycles for dairy farmers in Zambia. However, the ultimate goal is to gain experience and learn how further ideas of BMW Group employees and other companies can be implemented effectively in the future.