Yohane Wisted, a father of two and full-time plumber at the Makwasa Tea Estate factory in Thyolo district, Malawi, used to experience financial hardship. His low wages forced him to access loans – locally known as Katapila – from uncertified lenders charging extreme interest rates. He regularly struggled to repay them.
That changed when he joined the Engineering and Carpentry VSLA at his estate, a savings group set up as part of our Kuwala initiative with Tata Consumer Products, Ltd.
Yohane Wisted’s motorcycle, which he hires out to neighbours from his community. His purchase of it was made possible by a VSLA loan. Thyolo district, Malawi. Image: ETP
Yohane Wisted’s diesel-powered maize mill, made possible by a VSLA loan. Thyolo district, Malawi. Image: ETP.
Yohane Wisted and a neighbour who has come to use his diesel maize mill. Thyolo district, Malawi. Image: ETP
Yohane Wisted and a neighbour use his diesel-powered maize mill, purchased through a VSLA loan. Thyolo district, Malawi. Image: ETP
Community solutions
Village Savings and Loans Associations (VSLAs) are informal self-managed groups of 15-20 people that provide their members with skills training and coaching on financial literacy and management.
Members like Yohane put individual savings into a joint fund, which they then borrow from at an agreed interest rate. The group makes profits as members repay their loans.
“Kuwala took us through training on how we can run an effective and productive VSLA, and how we can share the money, depending on our contribution,” Yohane told us. “At first, each member saved K60,000, which grew with interest. [When we shared the profits] I used the money as a top-up to other money I had, and bought a motorcycle.”
VSLA savings occur in cycles, typically every 6-12 months. After his experience with the first cycle, Yohane was inspired to enter a second. This time, he used the profits to buy a diesel-powered maize mill. Today, Yohane hires out his motorcycle and mill as services to people who need them – creating two successful local businesses in the process.
New choices, new opportunities
The 320 VSLAs set up across two tea estates by Kuwala are now helping 5,612 other members like Yohane change their own lives. Thousands of people are saving money, diversifying their incomes, and avoiding the financial insecurities of using money lenders.
But their impact doesn’t stop there. “Kuwala is indirectly impacting the lives of other people I employ,” explained Yohane. “Each month, I pay these people a salary, which they use to support their families.”
Through the VSLA, Yohane could now also give back to his community.
Watch Yohane tell his story below.
