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Impact of Village Savings and Loan Associations: Evidence from a cluster randomized trial

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  • Ksoll, Christopher
  • Lilleør, Helene Bie
  • Lønborg, Jonas Helth
  • Rasmussen, Ole Dahl

Abstract

The vast majority of the world's poor live in rural areas of developing countries with little access to financial services. Setting up Village Savings and Loan Associations (VSLAs) has become an increasingly widespread intervention aimed at improving local financial intermediation. Using a cluster randomized trial we investigate the impact of VSLAs in Northern Malawi over a two year period. We find evidence of positive and significant intention-to-treat effects on several outcomes, including the number of meals consumed per day, household expenditure as measured by the USAID Poverty Assessment Tool, and the number of rooms in the dwelling. This effect is linked to an increase in savings and credit obtained through the VSLAs, which has increased agricultural investments and income from small businesses.

Suggested Citation

  • Ksoll, Christopher & Lilleør, Helene Bie & Lønborg, Jonas Helth & Rasmussen, Ole Dahl, 2016. "Impact of Village Savings and Loan Associations: Evidence from a cluster randomized trial," Journal of Development Economics, Elsevier, vol. 120(C), pages 70-85.
  • Handle: RePEc:eee:deveco:v:120:y:2016:i:c:p:70-85
    DOI: 10.1016/j.jdeveco.2015.12.003
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    2. Diego A. Vera-Cossio, 2017. "Targeting credit through community members," Development Research Working Paper Series 07/2017, Institute for Advanced Development Studies.
    3. repec:eee:deveco:v:134:y:2018:i:c:p:1-15 is not listed on IDEAS
    4. Beaman, Lori & Karlan, Dean S. & Thuysbaert, Bram, 2014. "Saving for a (not so) Rainy Day: A Randomized Evaluation of Savings Groups in Mali," Center Discussion Papers 187189, Yale University, Economic Growth Center.
    5. repec:eee:deveco:v:135:y:2018:i:c:p:176-198 is not listed on IDEAS
    6. Janina Steinert & Juliane Zenker & Ute Filipiak & Ani Movsisyan & Lucie Cluver & Yulia Shenderovich, 2017. "Do Saving Promotion Interventions Help Alleviate Poverty in Sub-Saharan Africa? A Systematic Review and Meta-Analysis," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 226, Courant Research Centre PEG.
    7. Baborska, Renata & Hernandez-Hernandez, Emilio & Magrini, Emiliano & Morales-Opazo, Cristian, 2018. "The impact of financial inclusion on rural food security experience: a perspective from low-and middle-income countries," MPRA Paper 89249, University Library of Munich, Germany.
    8. Aggarwal, Shilpa & Francis, Eilin & Robinson, Jonathan, 2018. "Grain today, gain tomorrow: Evidence from a storage experiment with savings clubs in Kenya," Journal of Development Economics, Elsevier, vol. 134(C), pages 1-15.
    9. Rachel Cassidy & Marcel Fafchamps, 2015. "Can community-based microfinance groups match savers with borrowers? Evidence from rural Malawi," CSAE Working Paper Series 2015-13, Centre for the Study of African Economies, University of Oxford.
    10. repec:spr:ssefpa:v:10:y:2018:i:1:d:10.1007_s12571-017-0754-3 is not listed on IDEAS
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    14. Cassidy, Rachel & Fafchamps, Marcel, 2018. "Banker My Neighbour: Matching and Financial Intermediation in Savings Groups," CEPR Discussion Papers 12715, C.E.P.R. Discussion Papers.
    15. repec:ags:afjare:258601 is not listed on IDEAS

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