Women are saving money in Malawi!

Women are saving money in Malawi!

In my 9/27 blog post I wrote about what I learned from Nancy Kimani Hinga, program coordinator for the FRB/CRWRC-World Renew food security program in Nkhoma, Malawi. We attended a harvest festival in SW Michigan together, where she spoke about her work. Here is another uplifting story Nancy told us about the Nkhoma program.  

The women who participate in the Malawi-Nkhoma program really “get” saving money using a method called Village Savings & Loan (VSL). Nancy said that saving money has not been part of the local culture. People who have very little money generally spend what they have as soon as they have it. But, encouraged by the program, women have formed a number of VSL groups with their friends and meet weekly. They receive no initial money from the program, just training and a box with three locks and three keys held by three different members; a fourth keeps the box in her home. 

The groups decide the value of a “share”   – in some cases, a share is the equivalent of 30 cents – and how many shares each member can save per week. Generally, it’s a minimum of one, a maximum of five. Each member has a passbook which is kept in the lockbox. Even if she is unable to read and write, she and her friends keep track of her savings with an arrow-shaped stamp in her book for every share she puts into the box. The groups meet weekly and keep meticulous records. There’s lots of visual and auditory encouragement! Sitting in a circle, one by one the women hand over their shares and get their passbooks stamped. If a woman is saving one share, the group claps once; if three, they clap three times, and so on. The meetings are also a time for these friends to discuss their ideas and challenges and to support each other.

The women may initially feel reluctant, doubtful, even nervous, about parting with their money, earned variously by working as laborers, by having sold something, or however they can. Nancy says that soon, however, the women just cannot believe how quickly their shares add up. The group quickly has real sums to work with. Members can apply for loans of $20 or $30 dollars to buy, for example, fish to sell for a profit, and pay them back with interest (amount determined by the group) within a month. Because group members are friends, they feel great responsibility toward one another.

The group’s savings continue to grow, and in September there’s a share-out, a special ceremony at which each member receives her savings and her portion of the interest earned. Nancy’s face was joyful as she described the celebratory dancing and excitement of the women at share-outs. Some women, even in their seventies, say they had never had this much money in their lives! The September share-out is just in time to buy maize for the family to eat, seeds and inputs, and other household necessities. Even though, due to the drought, the price of a bag of maize has gone up from $10 to $20, and is expected to double or even triple by year’s end, these diligent savers and farmers are better able to cope with the situation and have hope for the coming year.

VSL groups require their members to contribute to a “social fund” as a sort of insurance against times of trouble. A fire, a death in the family, a medical emergency … The friends are better able to support each other now. And one of the most encouraging signs is that the husbands are starting to “get it” too. They see that the women’s savings are good for the whole family, and sometimes, if the wives are unable to come up with the required 30 cents that week, the husbands are stepping forward to contribute. That is very welcome news!

Laurie Kaniarz, FRB Staff

10/01/2012 | Comments: 0 | Add Comment