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Village Savings & Loan

Village Savings and Loan programs are used throughout Malawi to provide small loans to community members, particularly women.
3 min read

Village Savings and Loan programs are used throughout Malawi to provide small loans to community members, particularly women. While the program is supported by the government of Malawi, in many cases, the VSLs don’t have the start-up capital needed to begin their small-scale lending operations. Now, for several communities in Malawi, CQC has provided seed capital to VSLs so that women can access funds to start small businesses and add to their families well-being. The program began in the fall of 2021 and so far 20 women have benefitted from small loans to start a range of businesses. There have been no loan defaults and all but one of the recipients have been able to make regular payments including a small amount of interest back to the VSL.

In Kamphata village Eunice Mkwende, 26, the secretary of the local VSL, Mercy Elomiya, 45, the VSL’s Treasurer and Bezita Cinikombero, 47, a beneficiary spoke of their experiences with the VSL and how it had improved their lives in many ways, both expected and unexpected. Supporting the VSL program in communities which also participate in the fuel efficient stoves program works particularly well as women who cook with efficient stoves experience real time savings due to quicker cooking and, in some case, easier gathering of fuelwood. Many women are eager to use these time savings to run a small business and the start-up loan of 50,000 kwacha (about US$60) provides the initial capital to invest in their enterprise.

Despite the relatively small size of the loans, the new businesses along with the new stoves have begun to make significant changes in the lives of these women and their families. “Previously I was poor,” says Bezita Chinkombero, “I couldn’t afford to purchase food for my family or pay school fees for my children.” Bezita and her husband decided together to purchase tomatoes wholesale, re-package them and sell them in the local market. “Now my life has changed,” she says. “I can pay my son’s fees for secondary school and we have enough food. My husband also works with me in the business. My family’s life has changed a lot.”

Eunice Mkwende also now buys and sells local produce, maize and soy beans. “My husband had no work before, now we work together on the business. We bought a pig with the profits and we’re hoping to breed it and sell the piglets.” Eunice has been able to make all the monthly payments on the loan and is on track to pay back her loan with a small amount of interest in September.

As treasurer of the VSL for Kamphata village, Mercy Elomiya tracks the loan payments and along with the other officers tracks the progress of the payback system. “One woman was having trouble making payments, but we women met together to determine what we should do. We decided that each of us would contribute a small amount to pay off the loan of the woman who couldn’t pay. In this way, the program remains strong.” As a recipient of a VSL loan herself, Mercy, her husband and children decided together that selling cloths would be a profitable business. “With the profits I can pay my child’s school fees, which I had trouble with before. The stove and the business work well together. I cook quickly now and have time to invest in my business.”

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