Group savings and loan scheme is a time-bound accumulating savings and credit activity. It is an informal microfinance where there are no financial intermediaries. Self-selected persons in a group of at least 15 to 30 people form a group to mobilize their own savings regularly in a pool and borrow from the pool fund and repay back the borrowed funds hereby referred to as loans with interest, after a period usually between one and three months. On a date chosen by the members, usually after about a year, all the financial assets are divided among the members in proportion to each one’s savings.
This pay-out is called the “action audit”. The groups normally reform immediately and start a new cycle of savings and lending. Non-governmental organisations normally build the capacity of these groups to operate efficiently by training them on financial education especially on savings and loan management. More recently, the significance of Savings and loan services reaching financially excluded populations with low cost, easily accessible financial services has attracted interest of many stakeholders globally.
There has been a move by nongovernmental organisations to improve the outreach to reach the very poor in remote areas of Malawi and Africa as a whole. Use of different delivery channels have been employed to achieve this objective. One of the key failures of the conventional microfinance has been its limited outreach to remote areas and poorer people in them, especially in rural areas of Malawi. The study aimed at assessing the efficacy of the delivery channels in group savings and loan scheme outreach in Nkhata bay district in specific areas of Traditional Authority Mbwana.
Four aspects of savings and loan outreach were assessed: people reached with the group savings and loan, members’ satisfaction with the savings and loan services, financial performance of the groups and effects of the group savings and loan to participating members. The study used Rostow stages of economic growth and the graduation model theories. These theories were used to measure if VSL members’ economic status grow from under development to development, that is from traditional society, to pre-conditioning, to take-off, then drive to maturity and finally to maturity; and to further experiment if indeed families that are engaged in VSLAs, are to graduate from extreme poverty to sustainable livelihoods.
Table of Contents
CHAPTER 1 INTRODUCTION
1.0 Research Review
1.1 Background of the study
1.2 Problem statement
1.3 Objective of the study
1.3.1 Main Objective
1.3.2 Specific objectives
1.4 Research question
1.5 Significance of the study
1.6 Structure of the Paper
CHAPTER 2: LITERATURE REVIEW
2. 0 Introduction
2.1.1 General review of literature around the topic of study
2.1.2 Group savings and loan Delivery approaches
2.1.3 Savings and the poor
2.1.4 Changes by GSL&As
2.2 Theoretical Framework
2.2.1 The Graduation model theory
2.2.2 Rostow Stages of Economic Growth Theory
2.3 Empirical Review
2.3.1 Measuring delivery channels performance in terms of quality of outreach
2.3.2 Group savings and loan Delivery approaches
2.3.3 The operating efficiency of the savings and loan scheme
2.3.4 Measurement of GS&L impact
2.4 Conceptual framework
2.5 Intervening variables
2.5.1 Chapter Summary
CHAPTER 3: RESEARCH METHODOLOGY
3.0 Introduction
3.1 Research Approach
3.2 Research design and strategy
3.2.1 Quantitative design
3.2.2 Qualitative design
3.3 Population of the study
3.4 Sample size
3.5 Sampling technique
3.6 Data Collection
3.7 Data Collection tools
3.8 Data Analysis
3.9 Ethical considerations
3.10 Limitations of the study
3.11 Chapter Summary
CHAPTER 4: SURVEY FINDINGS AND DISCUSSIONS
4.0 Introduction
4.1.0 Findings from the primary data
4.1.1 Demographic information of the VSL members
4.1.1.0 Age range of the respondents
4.1.1.1 Marital status of the respondents
4.1.1.2 Gender of the respondents
4.1.1.2.0 Relationship between Gender and Marital status-cross tabulation
4.1.1.3 The level of education you have attained
4.1.1.3.0 The level of education you have attained
4.1.2 Demographic information of VSLs Delivery channels
4.1.2.1 The level of education for the individuals operating as Delivery channels
4.1.2.2 Source of living & HH income for the individuals operating as Delivery channels
4.1.3 Demographic information of Village Savings and Loan groups
4.2 The performance of delivery channels in terms of quality of outreach (objective)
4.2.0 Period for conducting VSLA trainings
4.2.1 Mode of transport used when visiting Village Savings and Loans Associations
4.2.2 Happy with role in the community
4.2.3 VSLAs able to follow your guidance
4.2.5 The current performance for the VSLA under your supervision
4.2.6 Also make savings with VSLAs
4.2.7 Whether currently having VSL loan
4.2.8 Category of Delivery channel
4.2.9 Group of people difficult to mobilize them to participate in VSLAs
4.2.9 Challenges faced during day to day work
4.3 The VSL scheme members’ satisfaction with the service delivery approach (objective)
4.3.0 Descriptive Statistics for Group membership
4.3.1 Group management
4.3.2 Type of training received in the last 12 twelve months
4.3.4 Often do delivery channel conduct monitoring visits to VSLs
4.3.5 Involving the delivery channel at any level of decision making
4.3.6 Level (s) of the decision of involve
4.3.7 Group satisfied with the presence of any of the delivery channel
4.3.8 The possible challenge that you encounter in your VSL group
4.4 The operating efficiency of the savings and Loan Schemes (objective)
4.4.0 The Year the Group Started
4.4.1 Descriptive statistics for the VLS membership
4.4.2 Descriptive presentation for savings and loans and financial status
4.5 The effects VSL scheme on member’s well-being (objective
4.5.0: Period for being member of the VSL
4.5.1 Saving before joining VSLs
4.5.3 Continuing saving in other ways
4.5.4 Access to VSL Loans
4.5.6 Loan value and Share pay-out status
4.5.7 Household consumption
4.5.8 Members’ perception on the Delivery channel
4.5.9 Household status since joining VSL scheme
4.5.10 Member status and confidence in the community
4.5.11 Income Generating Activity
4.5.12 Income Generating Activity financial capital
4.5.13 Profit and Loss in IGAs
4.5.15 Main purpose for IGA profits
4.6.0 Confidence interval
4.6.1 Confidence interval mean for members’ participation in VSL
4.6.2 Confidence interval mean for members’ perception on delivery channels
4.7 Findings from Secondary Data
4.8 Extensive Discussion of Findings
4.8.1 To determine the performance of delivery channels in terms of quality of outreach
4.8.2 To assess the VSL scheme members’ satisfaction with the delivery approach.
4.8.3 To determine the operating efficiency of the savings and loan scheme
4.8.4 Assess the effects of group savings and loan scheme on member’s well-being
4.9 Chapter Summary
CHAPTER 5 – CONCLUSIONS & RECOMMENDATIONS
5.0 Introduction
5.1 Brief Discussion of Primary & Secondary data findings
5.2 Conclusions
5.3 Recommendations
5.4 Areas for further research
5.5 Practical Contributions
5.6 Chapter summary
Research Objective and Scope
The primary goal of this research project is to evaluate the efficacy of various delivery channels—specifically church youth groups, peer educators, lead farmers, and local entrepreneurs—in promoting group savings and loan schemes within the Senior Chief Mbwana area of the Nkhata Bay District in Malawi.
- Evaluating the quality of outreach performed by different delivery channels.
- Assessing the level of participant satisfaction with the existing service delivery models.
- Analyzing the operating efficiency of savings and loan schemes in the study area.
- Determining the overall impact of participation in these schemes on members' household well-being and economic status.
Extract from the Book
1.0 Research Review
The vast majority of the world’s poor live in rural areas of developing countries with little access to financial services. Setting up Village Savings and Loan Associations has become an increasingly widespread intervention aimed at improving local financial intermediation. Group savings and loan arrangement is a time-bound accumulating savings and credit activity. It is an informal microfinance where there are no financial intermediaries. The approach is characterized by a focus on savings, asset building, and the provision of credit proportionate to the needs and repayment capacities of the borrowers (Beck 2012:13). Self-selected persons in a group of at least 15 to 30 people form a group to mobilise their own savings regularly in a pool and borrow from the pool fund and repay back the borrowed funds hereby referred to as loans with interest, after a period usually between one and three months (Allen, 2006).
On a date chosen by the members, usually after about a year, all the financial assets are divided among the members in proportion to each one’s savings. This pay-out is called the “action audit.” The groups normally re-form immediately and start a new cycle of savings and lending. Non-governmental organisations normally build the capacity of these groups to operate efficiently by training them on financial education especially on savings and loan management. More recently, the significance of Savings and loan services reaching financially excluded populations with low cost, easily accessible financial services has attracted interest of many stakeholders from both public and private sectors (Sherraden, 1999).
Summary of Chapters
CHAPTER 1 INTRODUCTION: This chapter provides background information, problem statement, research objectives, and the significance of the study regarding informal microfinance in Malawi.
CHAPTER 2: LITERATURE REVIEW: This chapter reviews theoretical and empirical literature covering microfinance models, delivery approaches, and the conceptual framework for the study.
CHAPTER 3: RESEARCH METHODOLOGY: This section details the research design, data collection tools, population sampling, and the mixed-method approach used to gather data.
CHAPTER 4: SURVEY FINDINGS AND DISCUSSIONS: This chapter presents the primary and secondary findings, covering demographic profiles, delivery channel performance, and member outcomes.
CHAPTER 5 – CONCLUSIONS & RECOMMENDATIONS: This final chapter synthesizes the findings, provides conclusions, and offers actionable recommendations for stakeholders and future research.
Keywords
Village Savings and Loan, Delivery Channels, Microfinance, Outreach, Financial Inclusion, Rural Development, Nkhata Bay, Economic Empowerment, Graduation Model, Savings, Credit, Income Generating Activities, Household Welfare, Sustainability, Malawi.
Frequently Asked Questions
What is the core focus of this research?
The research examines the effectiveness of various delivery channels (such as local entrepreneurs and church groups) in implementing and supporting village savings and loan schemes in the Nkhata Bay District of Malawi.
What are the primary themes investigated?
The study focuses on outreach quality, member satisfaction, operational efficiency, and the socioeconomic impact on household well-being.
What is the ultimate research objective?
The main objective is to assess the efficacy of these social mobilization/delivery channels to understand how they can scale up financial inclusion for the rural poor effectively.
Which scientific methodology was applied?
The study employed a mixed-method approach, utilizing both quantitative household questionnaires and qualitative tools like focus group discussions and in-depth informant interviews.
What topics are discussed in the main body?
The body covers literature on microfinance, the specific graduation models used, detailed survey findings of the respondents, descriptive statistics of group management, and an extensive discussion on the overall impact on local life.
What keywords characterize the report?
Key terms include Village Savings and Loan (VSL), delivery channels, financial inclusion, and rural poverty reduction.
How is the "Graduation Model" relevant here?
It provides a theoretical pathway for families to slowly progress from extreme destitution to sustainable livelihoods through sequenced interventions like skills training and asset building.
What role do "Delivery Channels" play in these programs?
They act as local intermediaries—often working voluntarily—who mobilize community groups, conduct training, and monitor financial discipline in remote areas where formal banking institutions are absent.
- Citar trabajo
- Jericho Nyirenda (Autor), 2021, An assessment on the efficacy of delivery channels in group savings and loan scheme in Malawi, Múnich, GRIN Verlag, https://www.grin.com/document/1341850
