Village Savings and Loan Associations (VS&L) have helped a lot to improve the living standards of people from rural areas. By pooling their funds together, participants of VS&Ls are able to create the capital from which they can borrow and establish fledging businesses.

Samson Chitsokwe, 27, one of the participants of the Mwaiwathu Farmer Field School in Mponda in Lilongwe District is now a proud owner of a small store selling different groceries. Samson is married to Emilida 25 and together the family has three children, Alinafe aged 7, Maligelita 5 and Alfonso aged 4. All these children are in primary school.

Samson is also a smallholder farmer growing different crops like maize groundnuts, soya beans and other vegetables. Although Samson has been growing these different crops, he still could not financially support his household. Samson also wanted to diversify his income base by not only relying on farming but also by engaging in small scale business during times of low harvest, but was not able to raise enough capital to start a business.

“My dream to start a small business came to pass when CPAR-Malawi through the Farmers First Project introduced village savings and loan associations in our FFS,” said Samson. I was selected to represent my Farmer Field School as the village agent and I underwent a one-week long training in village savings and loans in May 2011.

One week after my training, I also went back home and trained my fellow farmers in my FFS about village savings and loans. My farmer field school has 15 members including six males and nine women who all expressed interest to venture into these village savings and loans. Members started purchasing shares the same month in May and after two months of contributions we started giving each other some loans at an interest rate of 10% and this went on for the next nine months until January 2012.

After completing the first cycle of nine months, we shared our accumulated savings and dividends and from all my share contributions and interest, I received a total of K16, 000.00 ($104). With this money I started my business. I opened up a small grocery right in my village selling groceries like soap, cooking oil, sugar, salt and others.

Through profits from my store, I am able to support my family. I am able to buy all the basic necessities, school materials for my kids like writing pens, notebooks and uniforms and now I am also able to pay hospital bills when one of the family members gets sick.

Although the sums saved and borrowed from VS&Ls are on the small scale it still gives one a chance to start a business and make real difference to the lives of many.  The most important lesson is to have many different strategies for making a living and not relying only on crop production.

“Today, I am very proud to have successfully passed on the knowledge of village savings and loans management to all my FFS members as well as help build the spirit of saving among my peers that was never there before.”

CPAR initiated the establishment of 44 village savings and loan groups across the Farmers First project catchment area reaching a total of 1150 participants.  Over 50% of these groups shared their money in January 2011 which started improving their livelihoods.