Impact evaluation of the Malawi Union of Savings and Credit Cooperative Organizations project

projects (6120205 and 6120214) to support the Malawi Union of Savings and Credit Cooperatives (MUSCCO). The evaluation covers the period 9/80-2/89. Although MUSCCO has increased the number of its affiliates and the volume of loans well beyond targets, the institution has faced a number of difficulties. Growth in individual membership in the affiliates has been lower than expected, loan delinquency is a persistent problem, the number and size of individual loans are far from meeting the demand, and women have not participated to the extent desired. In large part, these shortfalls have occurred because targeted beneficiaries are too poor to save large amounts, are unfamiliar with financial management practices, and can absorb only limited training due to their low levels of literacy and numeracy. Many rural people have also had adverse experiences with earlier cooperatives and are reluctant to entrust a new and untested organization (even their own) with hard-earned savings. Other constraints include the seasonality of demand for loans and of the availability of cash for loan repayment, occasional corruption on the part of local officials and employees, and difficult communication and transportation conditions. Despite these problems, MUSCCO is helping farmers and small business people (at least those in a relatively high economic stratum) achieve improved nutrition, health, and education levels. By its nature, MUSCCO is unable to benefit the poorest of the poor. Further assistance should be provided to continue to expand MUSCCO's influence.