Over the period 2009-2013, the Rockwool Foundation supported a microfinance project in Malawi implemented by DanChurchAid and the Malawi NGO SOLDEV. The intervention centered on the establishment of Village Savings and Loan Associations (VSLAs) in 46 rural villages in northern Malawi. Each group consists of 15-25 people who save money each week in order that group members can borrow from the funds saved. The groups set the interest rate on loans themselves, and pay out the money earned as interest on savings. The VSLAs are given intensive training during the start-up phase, but receive no other support, and no external start-up capital.
The intervention was set up in such a way as to allow a quantitative impact evaluation to be carried out. The evaluation was based on a randomised controlled design. Random allocation of villages to participant and control groups ensured that the evaluation provides reliable documentation of the effects of the VSLAs in terms of a number of predetermined measurements, including measurements of food security and welfare. Internationally, it was among the first ever impact evaluations of VSLAs based on a randomised controlled trial. For more information about the impact evaluation, click here.