Economic benefits of savings groups in rural Mozambique

Abstract

Purpose The purpose of this paper is to examine the impact of savings and loan groups (SGs), alone and combined with a rotating labor scheme (Ajuda Mútua), on the economic conditions of the rural poor in Nampula province in Mozambique. Design/methodology/approach Three pairs of districts were randomized into receiving SG, SG and AM, or no intervention. The study used a mixed-methods sequential explanatory design. Data from a longitudinal survey of 1,276 households were analyzed using difference-in-difference estimation to assess the impact of SGs on income and asset ownership. Thematic analysis of in-depth interviews with 72 program participants explored specific contributions of SGs to economic outcomes. Findings Survey results show that program participation had a significant, positive impact on income and asset ownership. Qualitative results indicate that SGs allowed households to bridge seasonal food consumption gaps and meet cash needs during crises. Accumulated savings supported asset purchases. Program activities supported agricultural activity, but enterprise development had limited scope. Challenges to economic development included cultural aversion to risk, inadequate agricultural inputs, low market integration, and limited business opportunities. Practical implications SGs helped reduce vulnerability to stress events. Programs should analyze the wider structural context to foster a positive enabling environment, and combine SGs with relevant enterprise development services for additional benefits. Originality/value The importance of savings is increasingly acknowledged, but the contributions and limitations of SGs are not fully understood. This paper also highlights the role of structural context, which remains undervalued in the literature.

A case for integrated development: pathways to improve child well-being

“…Mozambique found increased asset ownership among savings group participants (Brunie et al 2016;. The ACE evaluation also found a positive effect on access to, and availability of, food, while the Mozambique evaluation showed improvements in months of household food sufficiency (Brunie et al 2014;).…”

Village savings and loans association participation and impact on off-farm income among rural women

“…Thereafter, CARE international, as well as other domestic and international Non-Governmental Organizations (NGOs), have pioneered the introduction of the concept in most villages located in Africa and Asia (Maliti, 2017). Central to the concept of VSLA is the reduction of cash dependence on external partners by using members’ savings to leverage the informal financial needs of the rural poor (Brannen, 2010; Brunie et al , 2017). Through the loans from VSLAs, members can access cash that assists in mitigating the volatility of farm income and also improving the ability of farming households (Cant and Obamuyi, 2009; Gash, 2013; Cameron and Ananga, 2015).…”

Caja de ahorro informal, una opción de autoapoyo económico en sectores de bajos recursos

“…Lo anterior, a través de que las personas y empresas normalicen el consumo, administren riesgos e inviertan en educación, tecnología, salud y emprendimiento. Asimismo, en las últimas décadas se han creado instituciones no gubernamentales que fungen como proveedoras del sector formal del ahorro y crédito, dado que han sido excluidos del sistema(Brunie et al, 2017;Lensink et al, 2017;Flynn y Sumberg, 2018;Kim y Yuh, 2018). Tal es el caso del 38% de las personas adultas en el mundo que no se encuentran en el mercado formal, particularmente los individuos que están en situación de penuria, quienes se ven descartados debido a los costos, distancias de camino y por la falta de requisitos para abrir una cuenta bancaria (BancoMundial, 2017).…”