Financial Capability Community Intervention and Quality of Life: A Quasi-Experimental Evaluation In Southern Africa

Background: Community-based financial capability (FC) approaches have been employed to improve a range of life outcomes, including determinants of QoL, while also enhancing women’s agency. Through these community-driven FC approaches, this study aims to examine the Village Savings and Loan Group (VSLG) intervention outcomes linked with QoL, which may help break the cyclical effect of poverty. VSLGs play a significant role in addressing economic disparity, social capital, health, and food security among low-income populations, particularly rural women in Africa.

Methods: This study utilized de-identified data gathered in February 2023 as part of an ongoing program evaluation for a livelihood intervention in Central Mozambique. A post-test quasi-experimental design was employed, with VSLG members serving as the treatment group (N = 5,909) and non-VSLG members on the waiting list as the comparison group (N = 2,814). A total of 653 participants were included, with 317 individuals randomly selected from the treatment group and 336 from the comparison group. Descriptive statistics, multiple linear regression, and Structural Equation Modeling (SEM) were applied for hypothesis testing and to examine the relationships between participation and duration in VSLG participation with QoL. Additionally, four main mediating variables; household assets, neighborhood social capital (NSC), general health, and household hunger, were included, along with theoretically and empirically linked confounders.

Results: The intervention sample showed a significantly higher mean score in QoL compared to the total study population and the comparison group. The linear regression analysis revealed a significant positive association between the duration of participation in the VSLG program and women’s QoL. QoL had a significant positive association with both household assets (Model 1: β = 0.42, SD = 0.13, p < .001; Model 2: β = 0.43, SD = 0.13, p < .001) and general health (Model 1: β = 0.61, SD = 0.23, p < .001; Model 2: β = 2.93, SD = 0.35, p < .001). The SEM further indicated that participation in VSLG had both significant direct and indirect impacts on QoL through household assets (Indirect: β = 0.32, p < .05) and general health (Indirect: β = 0.35, p < .01). Similarly, the duration of VSLG participation also had direct and indirect significant effects on QoL through household assets (Indirect: β = 0.09, p < .01). SEM Models 1 and 2 explained 49% of the variance in women’s QoL (R² = 0.49). The direct path analysis between participation in the intervention and mediators revealed statistically significant positive associations with household assets and general health, and an inverse correlation with household hunger. However, the role of VSLG in relation to NSC and household hunger was not consistent.

Conclusion: In contexts where rural women face structural economic and social marginalization, VSLGs provide a critical platform for enhancing their control over their lives. This empowerment enables them to make informed decisions that can lead to improved financial and non-financial outcomes, contributing to broader efforts to reduce economic inequality and promote sustainable development.