Catholic Relief Services - Malawi

Village Savings and Loans Associations in Malawi

A Village Savings and Loans Association (VSLA) is a self-selected group of people, who pool their money into a fund, from which members can borrow. The money is paid back with interest, causing the fund to grow. These saving and borrowing activities take place during a cycle of pre-determined length (typically 8 to 12 months), at the end of which the funds are distributed to members, in proportion to their total savings. Members are free to use the distributed lump sum as they wish, including reinvestment for another cycle.

How women entrepreneurs can leverage VSLAs to be economically empowered

o VSLAs provide a basic pool of funds on which participants take loans and start with small business ideas which finally grow and make participants start looking for bigger loans that VSLAs may not be able to provide for

o Access to financial services and the resultant transfer of financial resources to poor women, over time, has led to women becoming more confident, more assertive, and better able to confront systemic gender inequities

o Access to finance has enabled poor women to become economic agents of change by increasing their income and productivity, access to markets and information, and attain greater decision-making power

o Women participating in VSLAs have progressively moved from engaging in petty trade with low initial capital (for example selling doughnuts, tomatoes and fish) and moving to large grocery businesses with more capital investments