Centre-based village and savings loans as effective community-driven microfinancing of early childhood development and education in rural Malawi
Abstract
Early childhood development and education (ECDE) financing in Malawi remains low. Only 4% of the total education budget was allocated to ECDE in the 2023/24 financial year, compared to primary (52%), secondary (18%), and tertiary education (24%). This threatens Sustainable Development Goal 4 attainment. The study explored the viability of centre-based village savings and loans (VSLs) as an alternative and viable mechanism for financing ECDE in rural Malawi. Drawing on a two-year Child-to-Child Project which focused on children’s learning through play in Zomba and Chiradzulu districts in southern Malawi, we conducted a qualitative study involving six focus group discussions with centre-based VSL members in six community-based childcare centres (CBCCs). Thematic analysis was utilised to interpret the data. The findings showed that centre-based VSLs had several benefits, including addressing critical needs affecting children's well-being, reducing operational challenges at the CBCC, and contributing to poverty reduction through shared investments. However, challenges, including insufficient funds, conflicts within the group, and caregivers' limited time for business activities were also reported. Members employed mitigating measures like penalties for non-compliance and defaulters, mediation from higher authorities, and supporting each other in entrepreneurial activities, skills and opportunities. Despite reported challenges, centre-based VSLs proved a viable mechanism for financing ECDE in rural Malawi. Considering that government-based ECDE financing in Malawi remains low, the paper advocates for the centre-based VSL to capacitate CBCCs to meet their economic needs without relying on external support. Ultimately, this would help children in their early years.
Keywords: community-based childcare centre, early childhood development and education, microfinancing, rural Malawi, village savings and loans
