Money can grow...

By Chikondi Madikiza-Madumuse – Communications and Advocacy Officer

The introduction of Village Savings and Loans (VS&L) looks to be a strategy that would enable Malawians especially those from the rural communities to have savings of their own and potentially to invest in small scale business or other investments ideal to them.

Last year, ADRA Malawi introduced this concept to some communities in the district of Mulanje. Mulanje is an area adorned with coffee and tea plantations and crowned by Mulanje Mountain and the Sapitwa peak. Yet, despite its beauty Mulanje is also densely populated; leaving a lot of people with only small pieces of land, while its adornments, the tea and coffee estates and land and wildlife conservation areas occupy most of the arable land.

Since Malawi’s main income generator is agriculture, the small pieces of land have made it difficult to make ends meet for the communities. At the end of the day they find that they do not have enough income to save after selling their produce. With the money they earn they cannot open a bank account; they resort to keeping the money at home and as problems arise the money is used before they can invest it.

But this is slowly changing. VS&L has brought in a different dimension in the attitude of villagers towards money; they realize they can save and make investments with the little that they have. All they need is a group, a cash box with three locks and keys and agreement within their group on the minimum cost of a share.

One group that was formed last year with ADRA Malawi’s efforts is singing praises for VS&L and more groups are emerging. The outcomes are overwhelming.

Secretary for the Sitigonja (literally meaning we won’t give up)VS & L group in Group Village Headman Manyumba, Stella Banda, says she had never received or owned Mk 6, 000 as her own before, but VS&L has allowed her to see and have that much money. The group comprising of 25 women saved their money for 9 months, at the end of these nine months, the members invested up to Mk 103, 360.

Ms. Banda says, “It was unbelievable; the first person – one with more shares- received Mk 10, 000. I received Mk 5, 800 and I was able to pay school fees for my three children two are in form two and one is in form four. One of our friends managed to renovate her kiosk with this money. We are happy that ADRA brought this idea. As I am speaking people are forming their own groups there are over ten groups in this area. Thanks to the training we received from ADRA Malawi we are also able to help other groups organize themselves to begin VS&L."

ADRA’s technical Officer on Food Security and Livelihood Mrs. Elsie Mwimba, says the response from communities has been overwhelming. “More groups were formed, more than we had planned and could physically handle, so instead of stopping these new groups we encouraged the groups that we had trained to share their knowledge with the self organized groups for VS&L," she said.

Apart from Mulanje, ADRA has also introduced this concept in Neno District and intends to do the same in other target areas like Lilongwe, Machinga and Mzuzu.

The popularity of these groups because of the contribution VS&L makes to improved livelihoods has resulted in groups spreading beyond ADRA’s target areas.