The Role of Savings Group on the Nutritional and Economic Wellbeing of Rural Households: The Case of World Vision’s Savings for Transformation (S4T) in Zambia

Abstract

Smallholders and the poor populations, especially in rural areas, tend to have little or no access to formal credit, which limits their capacity to invest in the technologies and inputs they need to increase their yields and incomes and reduce hunger and poverty. This mainly arises because financial institutions interested in serving this market face a myriad of risks and challenges associated with agricultural production and lending, including seasonality and the associated irregular cash flows, high transaction costs, and systemic risks, such as floods, droughts, and plant diseases. As a solution to the challenge of financial exclusion among the rural poor, several international development organizations have been using Village Savings and Lending Associations (VSLAs) as an alternative option to increasing financial inclusion among the rural communities in most developing countries. Using both quantitative and qualitative methods, this study aimed to assess whether membership to these VSLAs results in significant improvements in household economic status as well as household food security. The results show that compared to non-members, members of these savings groups are more likely to have increased access to alternative and more sustainable financial tools. Membership to these savings groups is also associated with improved nutrition, education, living standards while the likelihood of being poor is also reduced.

Effect and Challenges of an Integrated Nutrition-Intervention Package Utilization among Pregnant Women and Lactating Mothers in Rwanda: An Exploratory Qualitative Study

“…This adds to the empirical evidence that women empowerment and autonomy improves nutritional status of mothers, their children, and other members of the household [ [33] , [34] , [35] ]. Literature shows that social safety nets increase income resilience, especially for the vulnerable groups, which leads to spending more on food and positive change in food consumption for pregnant women, lactating mothers, and children [ 10 , 36 ] through improved access to resources [ 37 ]. However, women empowerment is a multidimensional domain where different domains, such as income, education, gender parity, agricultural production, and group membership empowerment, may influence the nutritional status through various mechanisms [ 26 , 38 ].…”

Brief Review of Informal Financial Services Typologies in Zambia: Investing in Sustainable Savings Groups

“…In Zambia, many nonprofit organizations, including; CRS, World Vision, and CARE, utilize the VSLA model and have been adopted in various rural communities (Bwalya & Zulu, 2021). This has proved that this model indeed provides the much-needed support and benefits that improve families' income sources and living standards.…”

“…According to the goal of World Vision Zambia's Saving for Transformation (S4T) program, informal financial services contribute to improving the resilient livelihood for 45,378 households (232,060 people) in Zambia alone by the end of 2021 (Bwalya & Zulu, 2021). Financial inclusion beyond livelihood's improvement is a key output of various savings groups in addition to providing other financial services to entrepreneurs such as micro-insurance.…”

Harnessing community savings groups for contribution collection in the Zambia national health insurance scheme: an analysis of community perspectives using the motivation and ability framework

“…They are formed by community members who agree to save part of their earnings and have their own guiding principles. They also have different functions including providing credit to members with minimum interest, funeral grants, and giving cash to members when they are sick [17]. Evidence has shown that savings group have functioned quiet well in improving social welfare services including improving the capacity to save for emergences among community members [18].…”

“…Evidence has shown that savings group have functioned quiet well in improving social welfare services including improving the capacity to save for emergences among community members [18]. In terms of healthcare, communities' members have reported to have used part of these savings for transports, purchase of foods as well as other supplies [17]. However, there is little evidence on how they can and should be used in the collection of premiums towards nancing of the NHI.…”