Virginia Sibanda, the dynamic CEO of VIRL Financial Services, has established herself as a key player in Zimbabwe’s microfinance sector. With more than 28 years of experience in banking and microfinance, Sibanda co-founded VIRL in 2010 with the mission to provide tailored financial services to underserved communities, especially smallholder farmers, women, and youth.
Her leadership is rooted in a strong background, holding a Master of Business Administration from the University of Wales Bangor in association with the Manchester Business School. An alumnus of the Bouder Microfinance International Leadership Visitors Program, she has also been part of the African Women Entrepreneurship Cooperative, further cementing her passion for developmental work.
The Birth of VIRL Financial Services
The journey of VIRL Financial Services began in 2010, when Virginia Sibanda and her team set out to bridge a significant gap in Zimbabwe’s financial landscape. The company’s early focus was on providing financial solutions to smallholder farmers, micro, small, and medium enterprises (MSMEs), with a particular emphasis on empowering women and youth. The aim was to offer customized loans and financial products that addressed the unique challenges faced by these communities, especially in rural areas.
“The company’s commitment to rural development and financial inclusion has driven its growth, with a strong emphasis on empowering women and youth,” she says.
From its inception, VIRL sought to be more than just a lender. It aimed to create lasting change by ensuring that financial services were accessible to those traditionally excluded from the formal banking sector. This vision led to the expansion of VIRL’s offerings, including the introduction of solar products and financial literacy programs aimed at enhancing the financial independence of clients.
A mother of 4 and in a 36 year marriage to Jethro Sibanda, Virginia’s inspiration for entering the microfinance industry stems from both personal and professional experiences. During her MBA, her thesis focused on ways Barclays Bank could effectively build capacity for small and micro-enterprises in Zimbabwe. This academic exploration ignited her entrepreneurial spirit, but it was the story of her maternal grandmother, a seamstress who worked with limited resources, that truly motivated her to pursue a career in financial inclusion. Growing up, Virginia often wondered how her grandmother’s small business could have flourished with proper financial resources and education. This curiosity became a driving force behind the creation of VIRL Financial Services.
“I have always been deeply involved in the financial services sector. When I completed my master degree in 2001, my thesis focused on how Barclays Bank could build capacity for small and micro-enterprises and lend to these sectors profitably. Revisiting my thesis inspired me to establish VIRL Financial Services in 2010.
“The true inspiration also came from my maternal grandmother, who owned a Singer sewing machine. During the week, she made garments from leftover materials, and on weekends, we sold them at the bustling Mbare Musika market. I often wondered how much more successful she could have been with proper financial resources and education. This curiosity fueled my passion for financial inclusion,” she said.
Having worked in commercial banking, Virginia realized the impact that tailored financial products and information could have on the growth of SMEs. However, she saw that more could be done for rural communities, and it was this realization that led to the founding of VIRL, a company that sought to make a significant difference in Zimbabwe’s most underserved communities.
“I always felt that more could be done for rural communities. This realization led me to VIRL Financial Services and I shared this idea with my colleague Farai Rose Mpofu, who agreed to invest in the venture. Thus, VIRL Financial Services was born, driven by a mission to empower underserved communities with financial tools and knowledge,” she reflects.
Since its inception, VIRL Financial Services has faced numerous challenges, especially economic instability and competition in Zimbabwe’s increasingly crowded microfinance sector. Between 2018 and 2020, VIRL lost substantial value due to the reintroduction of the Zimbabwean dollar after a period of using the US dollar, forcing the company to rebuild from the ground up.
Despite these setbacks, Virginia and her team remained steadfast in their mission. They adapted by restructuring the business, retrenching some staff, and reconfiguring their business model to align with the changing economic landscape. Their perseverance paid off, and the company began to recover, with the support of key partners.
“Other challenges have been securing funding for the venture and differentiating VIRL Financial Services in a competitive market. I overcame these obstacles by leveraging my extensive experience in the banking sector, building strong partnerships with developmental partners working in Zimbabwe (Care International Zimbabwe, FAO, USAID, International Youth Foundation, Technoserve, SOS and Mercy Corps) with donors like AECF and EEP and well as commercial impact lenders like SPARK and SIMA Funds. Nduna Foundation was critical in the stabilisation of VIRL Financial Services as well during 2012 to 2016 through the efforts of Farai Rose Mpofu who connected VIRL to Amy Towers,” she recalls.
Key Milestones and Projects
VIRL Financial Services has made significant strides in improving financial inclusion and supporting rural communities. One of the standout initiatives is the Mukando Initiative, a group-based savings and lending program that empowers women in Chitungwiza. By pooling their resources, women are able to access small loans to grow their businesses, leading to enhanced community development. The success of this initiative has also led to collaboration with Mercy Corps Zimbabwe in scaling similar programs in Manicaland.
Another milestone is the recognition of VIRL Financial Services with the Most Rural Outreach award by the Zimbabwe Association of Microfinance (ZAMFI) for its exceptional work in reaching remote communities. The company has used technology and a network of agents to extend its services to rural areas, helping bridge the financial inclusion gap.
Additionally, the VIRL Green Solar project, launched through the AECF Solar Sun initiative, is a prime example of how VIRL is leveraging sustainable energy solutions to empower rural communities. The project offers green loans for solar products, including home systems, water pumps, and fridges, helping to increase access to clean energy while promoting environmental sustainability.
The FAO Livelihoods and Food Security Project is another example of their commitment to supporting rural livelihoods. By helping smallholder farmers access financing for the paprika value chain, VIRL supported the cultivation of 400 hectares of paprika. Despite some setbacks, this project led to a 90% Grade A crop quality, showing how access to finance and technical support can help farmers thrive, even in the face of challenges.
The Evolving Microfinance Landscape
The microfinance industry in Zimbabwe has evolved significantly since Virginia first entered the sector. Notably, the introduction of the Microfinance Bill and the implementation of perpetual licenses by the Reserve Bank of Zimbabwe (RBZ) have improved the operating environment for microfinance institutions (MFIs). Additionally, measures like the establishment of the Credit Bureau and the Security Registry have helped to reduce information asymmetry, making it easier for institutions to assess the creditworthiness of potential clients.
However, the industry has become more competitive, with over 250 registered MFIs operating in Zimbabwe as of 2024, including institutions owned by large banks, insurance companies, and corporates. Despite this growth, Virginia believes that the sector has reached a “red ocean” stage, where differentiation and innovation will be key to future success.
One of the most exciting trends in the industry is the rise of nano loans, small loan amounts that can be disbursed rapidly via digital platforms. While still in its infancy, this development has the potential to revolutionize how microfinance institutions serve their clients, especially in rural areas where access to financial services has been traditionally limited.
“I am particularly interested in the evolution of nano loans, as they may one day enable significant loan amounts to be on-lent to clients without the intensive high-touch model we currently employ. These are indeed exciting times, and VIRL Financial Services is fortunate to have a young team that is closely following these trends and exploring ways to improve operational efficiency through IT,” she says.
The Role of Technology and Future Innovations
The rapid growth of ICT and digital financial services is another area of interest for Virginia. While she is excited about the potential for technology to enhance financial inclusion, she is also cautious about its challenges. In rural Zimbabwe, access to the internet is still limited and costly, which hinders the ability of many to engage with digital financial platforms. However, with the arrival of services like Starlink, there is hope that internet access in remote areas will improve, enabling clients to access digital financial services more efficiently.
“The rapid development in ICT excites me, though it also brings a certain level of anxiety. The core market we serve primarily faces the challenge of enhancing productivity and earning additional income before demanding goods and services. Often, IT advancements focus on providing access to transactional portals, but these require funds to be useful. Rural Zimbabwe is not yet at a stage where there are sufficient information points to make substantial lending decisions,” Virginia says.
As VIRL Financial Services continues to evolve, Virginia remains committed to leveraging technology to improve operational efficiency while keeping the company’s focus on the needs of the communities it serves.
“Although we have digitized all our processes, most of our rural clients lack access to stable internet, and the costs remain high. Therefore, we are closely monitoring the potential impact of Starlink, which could revolutionize digital engagement with our clients in rural areas,”
Virginia Sibanda’s journey as an entrepreneur has been shaped by resilience, adaptability, and a deep commitment to making a difference. Her leadership at VIRL Financial Services is a testament to her ability to navigate challenges and seize opportunities in an ever-changing business environment. She believes in the power of listening to clients, adapting products to meet their needs, and building long-term relationships based on trust and reliability.
Her advice to aspiring microfinance entrepreneurs is clear: focus on understanding your target market, build strong partnerships, and be adaptable in the face of challenges. With a clear vision and a strong sense of purpose, Virginia Sibanda has proven that microfinance can be a powerful tool for social change and economic empowerment.
As the microfinance sector in Zimbabwe continues to evolve, Virginia is optimistic about the future. Despite the competitive landscape, she believes that VIRL Financial Services’ dedication to innovation, rural outreach, and client-centered solutions will continue to drive its success. Through strategic collaborations, technological advancements, and a relentless focus on empowering Zimbabwe’s underserved communities, Virginia Sibanda is poised to continue making a lasting impact in the years to come.