Performance of micro and small enterprises in Malawi: do village savings and loans associations matter?

ABSTRACT Village savings and loans has become a prominent financing option for micro and small enterprises in the Lilongwe District, Malawi. Despite this, its impact on the performances of micro and small enterprises (MSEs) are yet to be ascertained. Hence, this study aimed at assessing the effect of VSLAs on the performance of MSEs in Lilongwe, Malawi. The study used a comparative study by comparing VSLA member enterprises with non-VSLA member firms using with and without approach. Test of mean difference and multiple regression analysis was performed on the data obtained. The findings of the study indicated MSEs with access to VSLA services performed better than non-VSLA enterprises. It is, therefore, recommended that owners of micro enterprises join VSLAs to boost their performance through readily available loans and savings and capacity building through training and education.