Savings groups build on social cash transfers
“We encourage each other to do business and save for tough times,” Felix Cassim
When night falls, Elliot Mbewe, a standard three learner at Chilanga Primary School in Balaka district, southern Malawi, fetches his books and his seven-year-old sister, Hafiza, to study under solar-powered light bulbs on the wall.
The glow shines a light on the benefits of the Social Cash Transfer Programme (SCTP).
"We study beyond sunset like our colleagues in town. The lights also give us more time to do homework and prepare for the next day's lessons. We no longer sleep just after dusk," says Hafiza.
Their mother, Zainab Wazili, belongs to Tikondane Savings and Loan Group (SLG) in Chibwana Nsamala Village, Traditional Authority Amidu, in Balaka district. She obtained a MK45000 (U$26) loan from the group to buy the solar lighting system in monthly instalments. She repaid the loan with a 20 percent interest within two months and winding up the year-long payments for the home lighting system.
Zainab’s economic rise began with her enrolment in the Social Cash Transfer Programme in 2021.
The SCTP provides unconditional cash transfers to vulnerable households, such as Zainab’s household, offering critical consumption support.
However, through the Social Protection for Gender Empowerment and Resilience (SP-GEAR) programme - an action supported by the European Union, and the Government of Ireland, through UNICEF and implemented by the Government of Malawi- beneficiaries like Zainab gain access to complementary initiatives such as Savings and Loans Groups. These cash-plus interventions amplify the impact of cash transfers by fostering resilience and economic empowerment.
Tikondane Savings and Loans Group, established in August 2024 under the SP GEAR programme, promises more possibilities towards enhanced resilience and economic empowerment for the SCTP beneficiaries for the next three years.
"When my husband left for South Africa in 2017, we were eating once a day and my children were skipping classes due to hunger and poverty. However, with the social cash transfers and loans from the village banking group, we can afford two meals a day, uniforms, fees, learning materials and other basic needs. In tough times, I borrow from the group," says Zainab.
Zainab has also plastered her house with cement and replaced a leaky grass-thatched roof with iron sheets. About 25 chickens roam the homestead on the roadside, where the mother of six sells maize and fruits.
"We no longer worry about heavy rains or darkness. I invested the loan in the business and the profits are changing our lives," Zainab explains.
Enthusiasm is rising in the group of 25 who save MK500 (U$0.3) per share every Sunday. During the weekly meetings, they share tips on nutrition, gender equality, sanitation and hygiene and early childhood tips.
"We want to end poverty. We've stopped wasting money or borrowing from loan sharks. We encourage each other to do business and save for tough times," says Tikondane SLG Chairperson Felix Cassim.
SLGs like Tikondane are central to the cash-plus interventions the Ministry of Gender, Community Development and Social Welfare is implementing under SP-GEAR programme.
The Department of Community Development in Balaka district has established 464 SLGs to build the capacity of 10,070 vulnerable households to transition from poverty through financial literacy, tailored mentorship, entrepreneurship and social cohesion.
