Village Savings and Loans in Malawi

What is Village Savings and Loans

Village Savings and Loans is a scheme where groups of individuals (primarily women) contribute monetary amounts into a group fund to be used by the participants. They save collectively as well as take small loans to help start businesses or increase their business.

One such group is located Mangochi District! They are the second most successful Village Savings and loans bank in all of Mangochi District! What an impressive group of smart businesswomen. Lorilee Maclean (missionary with her husband Scott in Malawi) was able to visit this group and was privileged to join and learn how they make money work for them and for their families! These women are dedicated.


This group has set high standards and it is working. There is a fine of 200 Kwacha ($0.30CDN) if you’re late and 250K ($0.38CDN) if you have a responsibility and you’re late. There’s a fine for laughing at another friend or for getting into an argument and shouting. They meet twice a month. Once a month to pay into what they call their emergency fund. At the end of the year, they use the money collected to purchase something they all agree they need – pots, pans, mattresses, mats— whatever they agree is most needed among them. The other time they gather, each woman saves money according to their means. They will get back what they save plus interest at the end of the year. Women borrow from both funds at 20% interest, that’s how they make their money, and the interest keeps multiplying each time the loan is not paid back! Even some women’s husbands save money through their wives. The amount they have saved private—no one outside of the banking group knows how much they have saved. One woman keeps the key to the lock on the box, the box is kept at another woman’s house; everything is done in front of everyone. The lady who keeps track of the savings and the loans she means business! Lorilee said “this was a VERY cool experience for me! I’m telling you…these ladies are brilliant. And hilarious! “

Not every village bank is as well-oiled or productive as this one! If a woman doesn’t pay back her loan, the repercussions are significant. Lorilee says “one woman I know had her front door removed from her house because she didn’t pay back her loan. Every group is picky about who joins. A woman with a poor reputation of laziness (their word not mine) or borrowing and not paying back is not welcome!”

There are many Village Savings and Loans connected with Emmanuel International Malawi, this is just one story of how this group works together building each other up, supporting one another in small business opportunities and accountability. We want to congratulate this group for a job well done.