Coming from Chimkwenda village in Traditional Authority Malengachanzi in Nkhotakota district, Phembele Village Savings and Loan (VSL) group is a Community Based Farmers Organisation with a membership of 25 people; 7 men and 18 women.
The group was founded on 5 September in 2020 through the Poverty Reduction of Vulnerable Beneficiaries through Community Based Financial Organization and small scale Enterprise Development (PROVED) project which is being implemented by DAPP Malawi in the district under the Financial Access for Rural Markets, Smallholders and Enterprises (FARMSE) programme. The program is funded by IFAD via the Ministry of Finance.
The group said they learnt about VSLs through a Community Assistant working with DAPP Malawi who introduced the VSL concept, working together and establishing group businesses and linked them to formal financial institutions in order to access loans.
With expectations that they will improve their households’ income through individual and group businesses; be able to access loans from reputable financial institutions, the group came up with a constitution as a guiding tool on how to run their VSL and agreed that each member will be expected to buy shares at the price of 200 to 1000 kwacha.
In their first cycle, which ran from September to December 2020, the group raised about 185 thousand kwacha through shares buying, profits realised from businesses and loan interests from the group members. Currently, the group has cumulative savings of over 600 thousand kwacha.
As a group, they are currently running two businesses, selling fresh fish and vegetables which they grew in their garden.
Phembele VSL also indicated that apart from learning about the VSL concepts, the project has also opened their eyes to practice conservation farming as they are able to produce organic manure for their gardens.
The group has drafted action plans to save and generate enough profits from their activities so that they can purchase a motorbike for easy mobility and use it as a source of income to the group. They have also been linked to FINCA, a formal financial institution through which they can access loans as a group and as individuals.