VisionFund Malawi Impact Survey for Saving Group Linkage Loans

Malawi SG

By Martina Crailsheim, Director, VisionFund Savings Group Linkage

VisionFund is making a bold strategic move to reach more vulnerable, rural communities by providing an uncollateralized loan straight into the cashbox of savings groups. The loan is to the group as a whole, not individuals. Helping clients avoid the long, time-consuming walk to a branch office, our field officers serve them at their meeting place, and mobile banking allows them to receive and pay back via their phone. Learn more about Savings Group Loans.  

The intent of the saving group linkage loan is to improve the lives of children by increasing household income. This is done by:

  • Targeting rural clients, especially women, and increasing their access to formal financial services
  • Increasing the income of those saving group members, as the loan is intended to boost their livelihood activity

To evaluate the targeting and efficacy of the program, an initial study was conducted in Malawi to determine whether we were reaching the intended client group and whether the microcredit product had the intended impact. Research organisation 60_Decibels conducted the survey; responses were collected between June and July 2021 from 357 participants, 88% of them women. A follow-up survey will be done December 2021.

Summary of findings


The savings group linkage loan reaches vulnerable, rural, female clients

The survey shows that 87% of the respondents live below the international poverty line, meaning they live on less than $3.20 a day. Of those, 72% are extremely poor, living on less than $1.90 a day. The average loan client is a 39-year-old woman who supports four children. Traveling on foot, the nearest paved road is around 40 minutes away and the main income source is from farming activities.

“I am able to pay my children´s school fees. I was also able to open a new retail shop that will enhance my income.” - Female, 40

“The main reason I got this loan was to boost my hawker business and at this moment, the business has blossomed. Thanks to the injection of capital through this loan."  - Female, 26

The product increases rural financial inclusion

The product uses mobile transactions, and an overwhelming 81% of the respondents possess both a phone and sim card – showing a very high percentage of phone penetration. The research found a clear correlation between the ability to save, the ability to repay the loan and the ability to handle unexpected expenses. This confirms the financial capacity of saving groups as a whole unit to receive a loan. When asked whether savings group members could find a good alternative to the VisionFund cashbox loan – 87% responded “no.”

The loan increases the income of the household

87% of the respondents said that they use the loan for business purposes. The main activities and investments are selling agricultural produce, selling food products, and selling clothes. The loan helps to buy more stock and therefore sell more for a longer period. 85% of respondents confirmed that the loan helped them achieve increased income from their business.

“I paid school fees for my child. The remaining balance was added to my business because I wanted it to grow. My child did not drop out from school due to lack of school fees. My business has also grown, and I am able to pay the loan back without struggling.” - Female 29

The saving group loan improves the lives of children  

Nine out of 10 respondents reported improved living situations for their children. The increased income was mainly spent on the provision of food, paying of school fees and other basic needs such as soap.

“These days, my children do not lack basic needs. I can afford to get them decent clothing, get them necessary medical attention when they get sick, and I buy their school supplies on time.” - Female, 29

"I am able to provide better support to my children such as food, notebooks, and uniform. Also, one of my children is disabled. The loan has helped me to get him a school uniform this school term." - Male, 48

Next Steps

VisionFund is targeting the most vulnerable populations by providing access to financial services via savings groups. This initial study confirms that cashbox loans are being given to the target population and that the outcomes to income, improved health, education, and well-being of children are improved.

VisionFund Malawi currently reaches 900 savings groups with more than 15,000 members: 79% of them women. Throughout Sub-Saharan Africa, VisionFund reaches more than 3,300 groups with 79,000 clients and 220,000 children.

Moving forward, the follow-up survey will enquire more about the service to the client, the use of the product, and the impact of the (assumed) increased income on the well-being of children and the family/household. We will study whether clients are more resilient to shocks and whether our financial literacy training empowers our clients, especially women to take informed financial decisions.

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