Leaving loan sharks behind 

In 2020, as part of the Kuwala initiative and with training provided by ETP, 38-year-old tea worker Fanny Paul joined a Village Savings and Loans Association (VSLA).

As a single mother of three, Fanny is economically vulnerable, and supports her children’s welfare and education through one income – her work in the fields of Ruo tea estate, southern Malawi. Before joining the VSLA, Fanny found that her wages were not sufficient to cover her family’s basic needs. Faced with the risk of falling deeper into poverty, she turned to loan sharks – but experienced their dangerous consequences.

“I used to borrow money from people, and the loans came with very high interest,” she explains. “As such, I often used my wages to settle the loans.

“I remained stranded, with nothing to support my family, as all I earned was taken away from me [by] loan repayments.”

Knowledge and confidence

In 2021, again using money she saved from the VSLA, Fanny was able to purchase a motorcycle, which she rents out to provide transport for others. Her next plan is to expand her transport business by buying a pickup truck.

“I owe my present, improved life to the financial education we received under the Kuwala project,” she explains. “Previously, I joined other VSLA groups in our village that were operating without financial knowledge, and I ended up losing my savings.”

“With Kuwala, however, I can support my children. [I am] paying school fees for my firstborn, who is in secondary school, and I am not struggling for food, because I can save and manage my finances well.

“I can also access a soft loan at my VSLA whenever I am in need,” she says. “Importantly, I am investing my money, [and] that multiplies within a short period at the VSLA.”

Economic empowerment

In Malawi, 67% of the country’s population still live in what the World Bank defines as extreme poverty. With many tea workers’ pay still falling below the Living Wage benchmark, community savings groups provide an opportunity for workers to diversify their income sources.

Nearly 2,500 tea workers have joined a community savings group through Kuwala. And of the women participants, 70% have reported increased agency and decision-making power in their household’s economic decisions – the start of a new chapter in their financial independence.