Assessment of the Self Help Group and Village Savings and Loans Approaches
An assessment of a Tearfund-funded HIV/AIDS program in Malawi compared Village Savings and Loans (VSL) and SHG approaches. The study found that both methods enhanced savings culture, investment in businesses, asset accumulation, social interaction and increased members’ knowledge base. SHGs had a relatively higher potential for long-term economic growth and sustainability, socio-political empowerment of women on issues affecting their community, and enhanced leadership and self esteem. This was due to a longer loan repayment period, flexible loan repayment, a greater accumulation of savings since SHGs did not share out at the end of each saving cycle, shared leadership and responsibility among members, intensity of management and technical support, as well as a clear purpose and vision. SHG members were however very dependent on their facilitators for support and guidance and there was a high initial cost of training and supervision of groups relative to VSLs.