Save the Children has said its Village Savings and Loans (VSL) Initiative under the Wala Project has accumulated K118 million (about $472 000) savings since November last year.
Save the Children village savings and loans officer Bernard Kambeja told journalists last week during a media tour of the organisationâ€™s projects in Zomba and Chiradzulu that the increased shares mean a lot of rural people are now involved in income-generating activities as the initiative offers them an opportunity to access start-up capital for businesses.
“The initiative also increases household security through accumulation of assets, access to basic insurance services and offer loans for emergencies,” he said.
On the operation of the bank, Kambeja said villagers from the same community organise themselves into groups of not more than 20 people each.
“That done, they start depositing their money into the groupâ€™s funds from which they borrow when they have needs. The money is paid back with interest, thereby causing the fund to grow,” he said.
He said some groups deposit their money into the fund for nine months while others do so for 12 months before the money is shared out among them.
“This is called share-out and after that, they immediately regroup. Of course, members have the right to leave the group if they wish and new members are inducted,” he said.
Kambeja said some groups have gone a step further by using their money as capital for a group business.
Anne John, treasurer for Titukulane Village Bank in Zomba, said her group loans out money at an interest rate of 30 percent and there have been no cases of default.
The group has 20 members who are involved in small-scale businesses such as poultry, bakery and second-hand clothes.
“Since we started the bank, our lives have tremendously improved as we are now able to pay school fees, buy clothes and food for our children,” she said.