Village banking improves women lives in Salima

By Francis Zande, Project Manager, Tsogolo Labwino

What started as a mere experiment in 2009 with 8 groups each composed of an average of 15 women in Salima district has turned out to be a life saver for many households in Traditional Authorities Kambwiri and Kalonga of the district. ADRA Malawi’s Australia funded Tsogolo Labwino Project is now working with more than one thousand women and men who have developed interest to increase their financial bases of their homes by engaging in group money savings and lending.
The project has currently seen an accumulated savings of more than Mk 20 million Kwacha ($75,000) from the 53 groups that are now practicing the popularly known village banking.
A lot of women are now able to start small businesses such as vegetable selling, fritter making or even grocery vending as the initiative offers them an opportunity to access loans to start up their business ventures.
“This initiative has tremendously increased the economic security of my household through the accumulation of assets such as a bicycle and a permanent house”, said  Mary Kasino of Futi village in Traditional Authority Kalonga.

A happy Mary kasino with her bicycle

ADRA has been the driving force for these groups to get established. Beginning with community awareness and sensitization to group formation and training; and training village instructor agents, many women have found a new lease of financial security from the new found banks that are right on their doorstep.
How the groups operate is not a miracle at all. Villagers from within the same community with similar characters organize themselves into groups not exceeding 20 people each. The village instructor agent starts giving them trainings such as group formation, group dynamics, constitutional development and finance management over a couple of weeks. During this period the group members start depositing an agreed upon share value in form of money into the group fund. Overtime the group members start borrowing money when they want to start a business or support their personal needs and pay back the money with an agreed upon interest of course within a given period of time.

Chisangalalo VSL Grocery

The monies are deposited for a period of 12 months during which saving and lending takes place. At the end of the agreed period the money is shared out basing on the number of shares each individual has accumulated and the interests accrued is also shared in the same ratio. The group then restarts the savings soon after shares are given out. Those who want to move out have the right to do so and others may join depending on the statutes laid down by the group.
Umodzi Women Group of T/A Kambwiri had an annual accrued share value of Mk1.3 million ($4,800) by December, 2011. When time to share out the money arrived, one woman, Rhoda Kamai, went away with a whooping Mk150,000 ($555). She has since expanded her business to an extent that she goes into other districts to source commodities such as beans which are not readily available in Salima district. She has since roofed her house with iron sheets, paid secondary school fees for her two children and is also running a small grocery.
What looked like a venture for poor women has now started to attract some government and private sector women too. The Project has been approached by school teachers, Police women and hospital workers to train them in starting up savings and loans groups.

The project has brought back smiles on women faces

There are some groups that have gone further in creating a group business. One such group is Chisangalalo which has opened a village shop and tea kiosk. They mobilized money for the construction of their shelter and payment to the builder. ADRA came in to assist with a starter pack fund of $750 for stocking the shop. Today the group has opened a business account with one of the banks in Salima and at times supports the elderly and orphans in their village as part of social responsibility. The treasurer of the group Mrs Litia Kwamdera said that “we share some profits on quarterly basis to buy some household needs; this has lessened dependency on our husbands who have at times been abusive.”

Each savings and loans group has a different money lending rate which spans between 20 to 30 percent and cases of defaulting repayment of loans have so far been less than 2 percent. This is due to the fact that these people know each other well and live within the same community.
“I have been able to buy a bicycle and a few cloth wrappers for myself. My husband takes me in high esteem now and I have at times given him some money to propel his personal business. I don’t regret joining ADRA groups in savings and loans” Litia says. “Above all, savings and loans groups have helped bond our relationships in this village because as women we share different skills and knowledge when we meet and this has helped build a better life in our homes,” she concludes.
As I leave for home from my routine monitoring visits, a song is tuned up from one of the women saying “wokana ADRA akagwere uko, safuna kutukuka” meaning those refusing or not joining ADRA initiatives should fall off because they don’t want to develop. As the sun sets in the evening, I cherish with satisfaction what I have seen and heard during my monitoring visit.
Tsogolo Labwino Project,  meaning bright future is being funded by Australia to bring about society and individual change in Salima, Central Malawi.