Evaluating village banking and business expansion among Soweto marketeers in Lusaka.

Village Banking has been accepted on a global scale as an appropriate technique of facilitating
financial services that are administered locally rather than centralized in commercial banks. This study analyses village banking and business expansion among Soweto marketeers in Lusaka. The objectives of the study were to: 1) to investigate the policy and institutional frameworks shaping Village Banking in Zambia and their implication for local participation; 2) to examine the organization and significance of village banks among marketeers at Soweto market, and 3) to establish ways through which Village Banking can be strengthened to help enhance business objectives among marketeers in Zambia.
This study employed a mixed-method study design, applying purposive sampling techniques to identify respondents, which was deployed alongside the snowball approach. Data were collected using structured questionnaires from Soweto market village bank marketeers (n=98) while interview guides were conducted with chairpersons of the village banks (n=4), and officers from the department of community development (n=2), officers from the Bank of Zambia (n=2), and officers from the World Vision Zambia (n=2). Ultimately a total 108 participants participated in this study. Results show that village banking has a significant and positive relationship with business expansion. The loans obtained provided necessary capital, driving expansion and diversification of business portfolios. This somewhat financial stability enabled marketeers to provide food, health, education and shelter for their families. Village bank arrangements create access to basic financial services to the marketeers on a sustainable basis through community/village mutual trust, relationships, and participation hence the relevance of village banks. Whereas microfinance appears to be an effective tool for business expansion and financial inclusion, its generally modest marginal impact suggests that poverty alleviation microfinance programmes need to refocus their attention on enhancing the efficiency and diversification of microfinance activities. For an early-stage link between village banking and business expansion among marketeers, this study recommends that various stakeholders should come on board to train marketeers in financial literacy to equip them with business ventures, knowledge and decisionmaking. A wider progressive policy coordination arrangement is promoted for this purpose.
Key words: Village Banking, Business Expansion, Soweto Marketeers, Lusaka, Zambia