Saturday, 23 April 2011

POVERTY: Malawi: Village Savings and Loan

In the small region of Chakhaza in Malawi, a group of women sit around a table. The majority of them never had the chance to finish primary school and they live in one of the poorest communities in the countries. But today they’re discussing business plans, loan repayments and meeting minutes. Thanks to CARE, these women – like hundreds more in Malawi’s countryside – are members of a village savings and loan group, investing small amounts of their own money into a fund from which they can eventually borrow.
“After we started saving, the money in savings had grown and we started lending to each other,” says Margaret, the group’s treasurer. “The money I borrowed I invested in a small business selling second-hand clothes. After making some profit I returned the loan and continued with the business.”

The principle of the group is simple: save and share together. Margaret’s group of nine meet weekly and everyone who attends is required to buy at least one share valued at 25 kwacha ($0.22). Then they can either borrow from the group or wait for the returned dividends. With the annual dividends, Margaret bought nine pigs, fertilizer for her maize field and is now using the profits from her business to send her children to school.
For Margaret, and many other women throughout Malawi, the savings and loans groups have given them the opportunity to change their own lives and find support within their communities. “We rely on each other and have become friends through the village savings and loans group. We are always together, just like one, to share our ideas and support each other.”
CARE launched our first village savings and loan program in Niger in 1991. From the beginning, clients – predominantly women – defined their own needs and capabilities. CARE’s comprehensive program supports the group for up to one year, and includes financial and business skills training. Since 1991, CARE has established more than 54,000 such groups in 21 African countries and served over 1 million members.

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