Village loans concept keeping Malawi women poorer -official

A government official has hinted the famous village savings and loans concept is pushing some women deeper into poverty as they fail to come out of their loan bondages prompting them to sell off property to clear debts.

Village savings group

Village savings group

A Malawi Village Savings and Loan group

A Malawi Village Savings and Loan group

Lucy Vumu, Nsanje District Community Officer has since asked non government organisations advocating for the concept to place measures that would help women get out of their loan trap without selling off their property to repay debts.

“These loans have put some families in problems, some women have landed themselves in problems. In some instances, women grouos confisticate property of families when a woman fails to settle debts, this is bad,” she said.

She said this defeats the whole purpose of the concept to raise the welfare and living standards of women.

Vumu said NGOs advocating for the concept should always liaise with community district offices on how best to implement the concept.

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27 thoughts on “Village loans concept keeping Malawi women poorer -official”

  1. I had to bailout my sister from such loans. Miserable thing indeed. However a few women and NGOs are benefiting from this.

  2. Phiri says:

    We are indeed in the last days of the earth’s history. 2 Tim 3:3, “Anthu adzakhala okonda ndalama.” Anthu ena anasiya kukumana m’milaga, m’miphakati ,m’ma Jesus way chifukwa cha mabanki amudzi or ma share. Ndizomvetsa chisoni kwambiri kuti zalowanso mumipingo.Opemphera pamodzi kulandana katundu chifukwa cholephera kubweza ngongole, mpingo ukhalapo?

  3. Enukweni says:

    Malawians, lets accept that VS and L have helped many women and has also exposed the weakness the Malawians have on saving. saving culture in Malawi is very poor but you can ably see a local Malawi who is doing local business having MK300 000 by December. That’s an achievement. I am working but I also joined workmate and doing VS and L, as am talking am getting MK1, 7 million from the savings and interests. We just need to put capacity building to these women on how to use the money after borrowing. Fancy, borrowing from the bank now, how much interest do you pay? How about a woman who do not have collateral? I agree that some women do not follow procedure or guidelines in terms of borrowing. You will see that a woman has MK10 000 as shares but borrows MK 100 000 in the month of October 2 months before sharing the moneys, how can she pay back that ?This is just a thing which need to be rectified by capacity building. We can do better than that. We need to encourage women on the concept.

  4. Mark Liwonde says:

    I disagree with you, Lucy Vumu. If there are such issues in Nsanje they must not be generalised. Those groups have not properly trained. But the real concept of VSLA cannot result into what is happening there.

  5. Tman says:

    I totally agree with this. Women are plunged into deep poverty because of this. December is a month of cries and discomfort in the village. Better assessment is required. Problem with Malawi is that we copy everything from outside without differentiating the social and economic implications. Haven’t you heard of people killing themselves, casual sex to pay loans, selling hard won property to pay loan and obtain peace? Yes there are successes. But I know in Malawi we only focus on good things when writing reports and hide pertinent issues which have a bearing on project impact evaluation.

  6. ngongoliwa says:

    Wot happens if the sem women went to the bank? Firstly, the banks won’t give them the loans n if they do, they would also confiscate property if these women don’t pay back.
    So I think this Government Official ndi wabodza,fake weniweni, akufuna anamidze ndani? Amutuma amabank chifukwa pano anthu slowly are leaving Banking WITH these banks.

  7. Captain says:

    Just making conclusion from one sample that is not representative. Hope you know what banks require to trust somebody with loans?

  8. Kamuzu Banda says:

    The concept is good but there are 3 main challenges these women face
    1. most women borrow to give money to women ( helping their mens business) and its these men that dont return the money
    2. For those that choose to do business on their own, the challenge has been to find a viable business which would give them returns. and this is not simple, because not even business people in town are able to diverse.
    3. for single women, after failing to square the loan, the next business option is to sell themselves.
    APM waika dziko pa moto…Merry Christmas

  9. Nangozo says:

    Not all women get poorer due to these village savings groups. Most women’s are being empowered through such associations. Otherwise the banks cannot lend money to such individuals who do not have any collateral.

    Grabbing of property due to defaults in loan repayment is common issue even with men and women borrowing from banks. We see houses, cars etc being sold by banks to clear loans.

    So please do not discourage village banks. Rather encourage women to work hard to repay loans, or they should avoid to take loans without doing business.

  10. Chilucha says:

    This one is kind of reporting hearsy, check out on the google and see how these programes are benefiting many through many ways. I have been involved in credible research studies that shows the many benefits these groups are doing. people who cant access loans through formal institutions are able to get loans and money circulation in villages has been increasing. these incidents are just few and normal which are not worth making a conclusion out of it.

  11. Ross says:

    Vumu is not entirely wrong. Lending out money to people is a risky business, obviously. Her office should turn off from being a spectator to a front line player.

  12. advisory committee says:

    This is true the women are compelled to return huge instalments monthly for example if you borrow 100,000 kwacha you are requored to pay back 120000 kwacha in four months by 30000kwacha each month if you fail amakulanda mbuzi and all you possession zoona anthu akuvutika mmidzimu nosense

  13. Wankulu says:

    This is pathetic in my area. KAPONYA akubweretsa umphawi and enmity among the locals. Palibe akutukuka ndi Vge Savings. Ppo have sold property, they have been forced to leave their homes, they have sold already-planted fields, subsidised fertilizers, even their livestock have been taken away/sold in attempt to relieve themselves from Vge Loans & Savings. The NGOs promoting this should make an evaluation and check if this is benefiting villagers. Surely, December is apainful mouth to those who participate in Kaponya. Mukutipweteka kumudzi kuno m’malo motithandiza….

  14. satopa says:

    I wouldn’t be surprised with such a comment..coming from a Community Development Officer…koma chani adona?? COMSIP…I think your views are based on perception and not concrete research…read research papers dear

  15. mbuli67 says:

    Zoona komanso kulimbikitsa uhule,
    at the end accelerating the spread of HIV in the community, ” we have examples”

  16. Mwamwitu says:

    This is not very true the one who published this is serving the interest of Microfinancing organisation who are really their strongest competetor.Please do your research thoughly otherwise you are misguided

  17. Malipeya says:

    The sentiments are both right and wrong. It is a fact that there a number of women benefiting from VSLs and there is evidence to that. The challenge that i notice is that business require skills and customers. In most cases in rural settings business face so many challenges. The other challenge is the idea to get loans when you have no meaningful business or means of multiplying it.

    The approaches also is another issue. You cant adopt wholesomely without contextualizing.

  18. Mwakipiki says:

    I have seen VS&L implemented by Save the Children in Mchinji and Machinga districts working wonders for rural communities.Groups share substantial amounts of money in December which makes them able to buy fertilizer and other farm inputs as well as ably pass through the ‘difficult’ December – February period. Actually one group was planning to buy a maize mill when I visited them in October last year. Ask Save the Children Malawi Office, they will show you why VS&L is not just a concept but a tool to reducing abject poverty in Malawi

  19. Dzo says:

    How can a group of bush women do banking without training and support.

  20. Diaz sichinga says:

    lets support women so,that needs and their voice be heard,yes malawi women are poor and have been used to those loans on behalf of their husbands becouse most of these micro finince institutions favors women with their policies forgeting that those clients have husbands such breaking marriages in kasungu is due to poor communication between families let those institutions have ajoint application form which both parties signs so that conditions atouched should fall both if one runs away

  21. mbuya says:

    suggest better solutions then. ma bank ndiye esh! better the devil you know

  22. Woyera says:

    I worked for an NGO that implements that type of project. Upon joining the NGO I was approached by some of my new colleagues to join their respective groups. I was sceptical and asked a number of questions, most of which made my colleagues not to approach me on the matter anymore. For instance, who keeps the money and where is it kept? bank account? Who authorizes payments, individual or group? What if someone doesn’t repay-any legal redress for other members? Then I came to learn more about the actual project the NGO was implementing. Basic training was provided but I guess monitoring was a problem. What could stop abiti nsomali from getting a loan to buy that fashionable shoe she has always wanted when she knew very well that she did not have the means to repay? What was the experience of the trainers and community facilitators in running a business? I am not surprised that participants are getting worse – any business, however small, requires a certain set of skills that one cannot acquire in 5 days. Coming back to my colleagues.. Sometimes people almost fought to get someone repay their loan. Every December u would here that so and so have been banned from further participation.

  23. Jah says:

    Go to kasungu and see wat is happening. Women are running away from families coz of debts or engaging in sexual encounters to raise money for loan settlement

  24. mwamwitu says:

    I know this is the making of Micro financing institutions who can not talk good of VS&L as it is their strongest competetor Concept. The challenge is that some of these organizations they just rush into a technology without really understanding the basics.

  25. I agree with comments of Mboga Matoga which partly supports what I have said that sometimes these interventions are just copied without thinking of social economic situation of local Malawians which is completely wrong. The worst is that it takes long time to realise that there is something wrong. We need to investigate as how did it start? who started it? and where did the evidence obtained that these can work for Malawian women? If these were implemented without testing them first then the person who started them should be brought to justice for ruining the lives of local Malawian women or for damaging local community relationships. In this way people will stop just bringing things into the country that ruins our people’s lives

  26. This is a second person to question these interventions. The first time I heard of it is through a student here in the United Kingdom. This student was studying for BA degree with Open university and asked me to help her with tutorial support with some of the elements of economics. I asked her what does she do and she told me about her managing this same intervention and she took the topic of the same for her project. She did mention then that she was working in Zimbabwe but when she finishes her degree, she was meant to go and work in Malawi as a project manager. Hence, her motivation of taking this course. I posed a number of questions in terms of how it is done, how does it work and how do the ordinary people benefits from it. Much of what I heard was theoretical. There was no substantiated evidence. The only good thing I heard from her is that it was still then in the early stage and its impact had not yet evaluated. The bad thing was that there was no evidence that helped to formulate this intervention. Indeed I did develop interest but as it was not much part of what I was doing in terms of tutorial support, I lost the truck of it. I remember having told this Irish lady to send me the evaluation report when it is done. But since then no further communication and she never sent the report. But these negative experiences demonstrate the need to review these interventions before it makes people worse off in terms of poverty and damaging family relationships and loss of lives. I think I have read about the village headman of Mulanje talking about how the scheme is damaging village members relationship in that one person might run away with the money resulting in others facing the music and become more poor. I have seen two calls for evaluation research by Care International but none of them focuses on this problem. I appeal to the local evaluation researchers and funders to take this issue up because its very relevant and important to the lives of local Malawians.

  27. Mbonga Matoga says:

    If these women are failing to pay back their loans it could be becoz the interests rates on these loans are too high or these women lack business skills that could help them run their businesses profitably.

    It is a shame that we are giving these women loans some of whom are illiterate without giving them basic business skills and yet we are expecting them to make huge profits to pay back these loans which have huge interest rates.

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