Financial Inclusion Through Village Banks

The Gateway to Women’s Economic Empowerment in Malawi

Abstract

Women economic empowerment is an important aspect towards attaining gender equality in society. Through women-only spaces in self-help village savings and loans groupings, also known as village banks, women in Malawiare able to gain and exercise more personal (power within), relational (power to), and collective (power with) power and control over their own lives. These platforms do not overturn or remove arrangements that institutionalise deprivation, exploitation, and gross disparities in wealth and income but they provide an opportunity towards unmaking some of the effects of gender and economic inequality. Village banks contribute to financial inclusion – a key factor to financial access and resources necessary to interact with others as peers and to exercise agency. This is the feminist goal for women’s economic empowerment. This paper analyses how these village banks operate and contribute to economic empowerment. It establishes that the lack of formal regulatory frameworks directly guiding and controlling these village banks results in opportunities for greater financial inclusion for rural women, thus, contributing to economic empowerment. It argues that the lack of regulatory frameworks also leaves the village banks with the risk of being used as conduits for money laundering by criminals. Through social-legal research, our paper offers an example of how to maximize benefits for women’s economic empowerment through village banks, having regard to the law and its limits.