Malawi: "Too risky to save in my hut"

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07.01.2010: Being a single mother of two in rural Malawi is no easy task for Joyce. Her income is highly unstable, and she has to rely on loans from friends and relatives during tougher times, since she has no means of accumulating savings. For poor people like Joyce, access to microsavings is the way to a better, more stable future.

Although life is tough for 36-year-old Joyce, she does not complain. Like many others in the Karonga district in Malawi's far north, she relies on Lake Malawi to provide for her small family. She dries and sells small fish, which she buys from the local fishermen. But Lake Malawi is not always calm enough for the fishermen to go out in their wooden canoes, which means Joyce's income is highly uncertain, and often she must borrow from friends and relatives just to get by.

The highly volatile income is a problem inensuring payment of school fees for her sons. She must rely on friends and relatives as the accumulation of savings is difficult in this little village:

Too far from the bank

"I have no means of saving. It is too riskyto save money in my own hut, and the bank is too far away and takes a large fee for opening a savings account," Joyce states. Instead, any money left over when paying of old loans from family and friends is used for buying burnt bricks forthe new house she has been building for quite some time now.

Joyce's economic life is typical for poor people. Because she does not know if she will have any income tomorrow, she needs to save. However, the only option available to her is informal financial instruments like familiy or local businesses.

Education is the way out

Joyce (36) lives with her two sons Frackson(20) and Vincent (16) in the small village of Bunganiro.

Despite her uncertain income, Joyce prioritizes the education of her two boys. Frackson is in secondary school and completed primary school a couple of years ago, while Vincent is in his final year of primary school. Joyce believes education is the way to move out of poverty. If she is able to provide for the education of her sons, they just might be able to hold a regular job and earn a steady income.

"What makes me happy is to see my sons excel at their school work. Even though I have had a hard day trying to sell fish at the market, having my sons come home to tell them about a good grade they got for their work at school makes it all worthwhile", Joyce says.

Beer business is bad business

Joyce would like to put her hard earned money in other assets than bricks for her house, to save money as an insurance against any shocks the household might incur and to be able to take advantage of the business opportunities that she might come across. However, she does not want to take on any business opportunity simply for profit:

"I could earn more by brewing beer. But I do not want to do that. I have seen what alcohol can do to men in this village", says Joyce, who was recently divorced.

By Jonas Helth Lønborg