As a way of strengthening their financial muscle, many women have resorted to forming informal financial services dubbed village banks-VB. Such groups comprise women whose goal is to easily access finances without too much paperwork as is the case with most commercial banks. The number of people in a VB differs from one VB to another since it is determined by the willingness of people in that area. Members of the VB save money and use the savings to borrow one another with minimal interest rates then share profits among themselves at the end of the year.
Through a Women’s forum on Facebook, I asked members of different village banking groups to highlight successes and drawbacks of being a member of village banking group. This week we will focus on responses that highlight the advantages of village banking whereas next week we will look at how some people have made huge losses by the same village banks that many feel are the best way to save money.
Can get loan anytime
Village banking is a way to go in saving money because the interests one pays when servicing a loan are given back to the owner at the same time it encourages people to save. You can get a loan anytime you want and no too much paperwork is involved. It also encourages socialisation between members.
Pamela Nakalyoka Chinula
I have never been good at saving money until I joined village banking. Unlike commercial banks where collateral is needed for one to get a loan and usually take their time to give out loans, I can access a loan as and when I wish.
Through village banking, I have been inspired through success business stories members share and have accessed loans without visiting the manager’s office a million times and filling in lengthy forms. I have made new friends and business connections.
Some village banks like ours have reasonable interest rates of 10 percent. This works to our advantage when repaying loans. Tiwonge Namoyo Mpando
It is only at village bank where you get a loan, repay it with a reasonable interest rate and at the end of the year share profits. Which bank has ever done that? VB is very flexible and the loans are easy to get. Our villlage bank has a commercial bank account that doesn’t charge monthly and three signatories to the account so that no member keeps cash at home since its very tempting.
Idah Liwonde Chipula
On top of all what has already been highlighted, VB is competitive against commercial banks in the long run it will force these banks to reduce their interests rates. Otherwise, if they won’t, they will be only a few people going to banks for loans.
Hema Chidzukulu Cha AHeyi
In fact, I went to a certain symposium and a number of banks admitted that VBs are a threat to their business. Even business tycoons have their own village savings and loans and you are talking about huge millions of kwachas circulating outside the banks. A certain village in Ntcheu shared out K23 million. You can imagine all this money could have been in banks.
Village banks are good for business women because after repaying the loans which is done with minimal interests, one is left with enough capital to boost the business.
Dayzee Chiyanjano Msamu
To be continued……