Village banks, solution to poverty—Women

Four years ago today, Steria Eliko (32) from Village Head (VH) Demba, Traditional Authority (T/A) Kayembe in Dowa District, Central Region of Malawi did attest that when poverty strikes, friends run away.

Steria, her husband Stanley—plus their five children faced mockery because they had no good shelter, food and clothes.

“As a family, we could not afford bathing and washing soap, eat regularly and live in a corrugated iron sheet house,” says Eliko.

Her family failed to harvest enough maize, the country’s staple food crop. The reason being that they could not afford farm inputs such as fertiliser.

“We could only harvest less than 10 bags per year. Malnutrition was a challenge and each time we went to the hospital with children, medical officers blamed us of not providing our children with nutritious food,” says Eliko.

She says: “In some instances, we spent more time doing piece works in other people’s farms to make ends meet.”

Community voice

Eliko’s story is just a tip of the iceberg. More community members had challenges in their upkeep later on meet nutritional, health and educational beings of their children.

But now such challenges are history, thanks to the business skills training and introduction of village banks by World Vision Malawi.

Arguably, there are more than 10 village banks in the area located within the catchment area of World Vision’s Chisepo Area Program (AP).

The AP gets funding for food security, education and health, among other projects from its support office in Australia.
Upon seeing the need from the masses, World Vision Malawi with funding from its support office in Australia responded by financing the training which is now social economically transforming communities in the area.

They were also trained in financial literacy and business management. Suffice it to say that their new skills have helped improve their business performance and leverage more savings.

The major issue was to empower communities with technical expertise and so that they form village banking clubs in the local chichewa language it is called banki mukhonde.

To say the least, investing, growing, and benefiting as one is now song for thousands of poverty-stricken women who are achieving economic gains village savings and loans.

Through the initiative women contribute a small amount of money as shares on a weekly basis. Members buy shares at (K200 (3 cents).

After contributing shares for some months, every shareholder qualifies to take out a loan using funds from the group shares at a 20 percent interest rate when settling the loan.

How members use loans

Group members strictly use the loans for small scale businesses since the objective of the initiative is to combat abject poverty.

It is a secret as to who keeps the keys as a matter of security. In other in instances five or six members keep different keys so that if one is tempted to unlock the box, it should not work.

“We did not know how beneficial village banks are financially. The reason being we had limited knowledge in such a field. We thank World Vision for coming to train us. This is why we did not hesitate to join village banks,” says Steria, a member of Kawere Club since 2012.

At the moment Kawere club comprises 20 members and most of them are women. During their meeting, it was proved that members now have pigs, goats, cattle and poultry. They are able to send their children to private schools.

With such others have gone full throttle in dairy business, poultry and butchery businesses. Those who were not able to cultivate enough maize to last year due to lack of fertilizer, speak highly of such banks.

Fruits of village banks

For example, the family of Eliko now has two dairy cows and eight cattle as a result of the village banking and improved farming. At their house, they also grow tobacco, and beans.

“I use such money to buy fertiliser each year and that is why I harvest bumper harvests this time around. I am no longer a beggar or victim of poverty because village banks have greatly assisted me,” says the family of Eliko.

And at the meeting before Steria finished narrating her story, various community members alluded that the group has managed to save K1 million ($1,533) just in the last three months, which they shared in the form of loans and started engaging in small scale businesses of their choice.

She also joined a group of 15 fellow poverty-stricken women in the area. She started with a low share contribution of K200 (3 cents) every week.

The group meets every Thursday to discuss how to promote their shares while at the same time getting loans. As they meet, the amount of money each has in the bank is not made public to visitors for security purposes.

“My children eat balanced meal and do pay school fees for them at a nearby primary school. You know at this primary school, there are only five teachers and we pay volunteers,” said Zelifa Chawala during their Thursday meeting.

Chawala is widowed and takes care of the whole family. She too has four children (two boys and two girls). Due to her joining the bank, she has this year harvested more than 45 bags of maize up from last year’s 30.

“I owe it to village banking championed by World Vision. I joined in 2014 following numerous trainings in health, food security, nutrition, among others,” says Chawala.

According to Chawala, she has since 2015 bought iron sheets, bicycle, goats and other household materials so she lives a decent life than before.

“Don’t remind me of the past. Let us talk about the current situation because life was miserable for me,” states Chawala.

During the visit it was discovered that some primary school learners (names withheld for privacy sake) indulge in village banking so they meet their financial needs such as buying notebooks and school uniforms.

For them, they don’t want to be subjected to what they call poverty. Interviews with them exposed plans to venture into livestock production once their shares have multiplied.

Their bank is called Tikondane. “I appreciate World Vision because when my parents were training in village banking, they imparted such skills in me; hence, my involvement in the field.

“We are five of us in our group and we save and share according to our shares. We do this whenever the opening of schools is around the corner,” says one of the children.
Village banks’ notion

World Vision is implementing such village banking programs in various districts across Malawi. Even in Kalira AP, Ntchisi, which gets funding from Hong Kong support, village banks are typical.

Such development recently impressed Leader of Southern Africa Region (SAR) for World Vision Rudo Kwaramba.

She urged people to develop a spirit of ownership towards all water and Village Savings and Loans projects for the betterment of their livelihoods.

This, according to the SAR leader, is expected to ensure that children and the community at large benefit from such projects.

Kwaramba was accompanied by some board members of World Vision Malawi, national and deputy director Robert Kisyula and Fordson Kafweku, respectively, to the tour of water and village savings and loans (VSL).

“This is a good initiative and it has to be promoted,” said Kwaramba before appreciating some of the fruits communities have gained through village banks and farming.
Locally, leading women’s activists hail the initiative, saying it reduces cases of domestic violence against women in Malawi as most of them are no longer dependent on their husbands.
With a population of about 17 million, women in Malawi account for 60 percent. Most of them according to economists say live in rural areas where access to economic activities is a challenge due to high poverty levels.
Malawi authorities report that the village banking model has reduced poverty levels for about 75 percent of women in the country.
“Poor education and limited vocational training programs mean there are few opportunities for women to deal with poverty levels, especially in rural areas.
“However, we are happy that this initiative is economically transforming women in the country,” explains Dr. Mary Shawa, secretary of Ministry of Gender, Children and Community Development was quoted in the quoted recently.

Kwaramba (R) was impressed with outcomes of the village savings
Steria (L with her husband) seems to say I live a happy life