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American Journal of  Applied 
Statistics and Economics (AJASE)

The Nexus Between “Village” Banking Model & Women’s Financial Inclusion 
in Zambia

Richard Mulenga1*, Ng’andwe Namfukwe Muuka2

Volume 3 Issue 1, Year 2024
ISSN: 2992-927X (Online)

DOI: https://doi.org/10.54536/ajase.v3i1.3793
https://journals.e-palli.com/home/index.php/ajase

Article Information ABSTRACT

Received: September 09, 2024

Accepted: October 17, 2024

Published: December 18, 2024

This study explores the relationship between the ‘Village’ (cooperative microcredit) Banking 
Model and the financial inclusion of  women in Zambia, using the AFRIZAM CO-OPER-
ATIVE as a case study. Multiple regression and correlational analyses were employed as 
quantitative approaches, while the thematic analysis, elucidated via the saturation strategy, 
constituted the qualitative approach. The study employed a mixed-method approach, with 
a sample size of  109 individuals. Findings indicate that co-operative society models signifi-
cantly promote financial inclusion among women in Zambia.  Specifically, savings, access to 
credit and social capital indicate that holding other factors constant, a 1% increase in each 
variable significantly increases financial inclusion by 25.5%, 28.1% and 44.3%, respectively. 
Among the challenges that hinder the financial inclusion of  women at Afri-Zam, the study 
revealed that administrative inefficiencies and inadequate policy support persistently hinder 
the optimal financial inclusion of  women. To mitigate these challenges and augment finan-
cial inclusion prospects, the study recommends policy actions that include strengthening 
savings initiatives among village banking microcredit institutions, enhancing access to credit 
among women, building and leveraging social capital, addressing administrative inefficiencies 
by streamlining bureaucratic processes and continuing financial literacy campaigns among 
women, among others.

Keywords

Cooperative Microcredit, Frizam 
Co-Operative, Village Banking 
Model, Women’s Financial 
Inclusion, Zambia, E21, G28, 
B54

1 Department of  Economics, ZCAS University, Box 35243, Lusaka, Zambia
2  School of  Business, ZCAS University, Box 35243, Lusaka, Zambia
* Corresponding author’s e-mail: richardmulenga2@gmail.com

INTRODUCTION
This study explores the link between the Village Banking 
Model (or Cooperative Microcredit) and women’s financial 
inclusion in Zambia, focusing on the AFRIZAM CO-
OPERATIVE as a case study. Access to financial services 
is vital for economic development and poverty reduction 
(Omar & Inaba, 2020). However, women in developing 
countries often face barriers to formal banking, such 
as limited collateral, discriminatory practices, and 
low financial literacy (Morsy, 2020). Micro-financing, 
especially through village banking, has proven effective 
in enhancing women’s financial inclusion (Gideon et al., 
2020). Micro-financing provides small loans and savings 
to those excluded from traditional banking (Bhusare & 
Chanda, 2017). Village banking involves community 
members forming a savings and lending group and 
pooling resources to offer financial services, particularly 
to marginalized women (Sibeso, 2022). This model fosters 
mutual trust and cooperation, allowing members to 
contribute to a common fund for loans aimed at business, 
education, healthcare, or emergencies (Chisenga, 2018; 
Yan et al., 2024). By improving access to credit, village 
banking empowers women to manage their finances, 
build assets, and enhance their livelihoods (Fula, 2023).
Grameen Bank, founded by Muhammad Yunus in 
Bangladesh in 1983, is a pioneering microfinance 
institution recognized for its innovative approach to 
poverty alleviation. It provides small, collateral-free loans, 
or microcredit, primarily to economically disadvantaged 
women who struggle to access traditional financial services. 
Yunus (1983) developed the concept of  microcredit in 
the 1970s, believing that financial access is crucial for 

empowering the poor. The bank operates on principles of  
trust and community, with borrowers organized into small 
groups to support each other in loan repayment. A notable 
model that has emerged is Village Banking, which focuses 
on localized, community-oriented microfinance services 
(Yunus, 1983; Asif, 2021).
Chisenga (2018) notes that Village Banking emphasizes 
group lending and social collateral, allowing community 
members to form savings and lending cooperatives. 
In Zambia and many African countries, women face 
significant barriers to accessing formal financial services, 
including limited banking access, low financial literacy, 
socio-cultural norms, and gender discrimination (World 
Bank, 2017). As a result, women often rely on informal 
financial systems that may not meet their needs or provide 
adequate security. Village banking offers a grassroots 
approach to improving financial inclusion by delivering 
banking services directly within communities (Mponzi et al., 
2023). Village banking programs often prioritize women as 
beneficiaries, recognizing their role as key agents of  change 
in their families and communities (Sibeso, 2022). Village 
banks in Zambian context are operated as “Chilimba” 
in the Zambian informal financial sector (Mukulu & 
Qutieshat, 2021). Chilimba rotational savings groups have 
been found to be easy to operate despite their high risk. 
On a more regulated and formal platform, Village banks 
in Zambia are registered as financial cooperatives under 
the Ministry of  Commerce, Trade and Industry (MCTI), 
which are seen as a more suitable structure to support poor 
people in rural areas with financial services in their farming 
activities (DFID, 2012).
The Government of  Zambia has acknowledged the vital 



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role of  cooperatives in national development through 
the Seventh National Development Plan (7NDP), 
which emphasizes their potential for job creation and 
poverty alleviation. The government aims to expand 
the cooperative model beyond agriculture, positioning 
cooperatives as viable business entities. Since 2015, 
all cooperative activities have been moved from the 
Ministry of  Agriculture to the Ministry of  Commerce, 
Trade and Industry (MCTI) to encourage diversification. 
Additionally, the government is revising the Cooperative 
Act to strengthen the legal framework for cooperatives. 
New empirical data are also needed to better understand 
the current landscape of  cooperatives (7NDP, 2018). 
Financial cooperatives have long served as a key savings 
option for Zambians. 
Recently, Zambia has made significant strides in financial 
inclusion, with the percentage of  financially included 
adults rising from 33.7% in 2005 to 59.3% in 2015, 
surpassing the 2013 target of  50% and aiming for 80% 
by 2022. Urban areas saw a notable increase from 42% 
in 2009 to 70.3% in 2015, while rural areas rose from 
34.4% to 50.1%. Informal financial services, such as 
savings groups and ‘Chilimbas,’ have been key drivers 
of  this growth, with informal inclusion increasing from 
22% to 38% during the same period. Many find these 
services more accessible and beneficial than formal 
financial institutions, with village banks being easy to set 
up and typically charging only a minimal membership fee 
(ZIPAR Policy Brief  No. 30-2019). For many years, the 
popular savings group that Zambians have known pre- 
and post-independence are the financial cooperatives. At 
the time of  independence, Zambia had an estimated 6 
financial cooperatives registered during the colonial era. 
By 1976, the number of  registered financial cooperatives 
had risen to approximately 500. The growth in financial 
cooperatives saw the need for the creation of  a regulating 
body to oversee the operations of  the cooperatives in 
the country, and in 1977, the Credit Unions and Savings 
Association (CUSA) was born (7NDP, 2018).  
Recent studies have highlighted the positive impact of  
Village Banking models on financial inclusion, particularly 
for women (Addai, 2017; Rahman et al., 2017; Pakkanna 
et al., 2020). Access to financial services can empower 
women economically, allowing them to start or expand 
small businesses, invest in education and healthcare, and 
improve their overall quality of  life (Magali, 2021). Village 
banks in Zambia are a form of  informal credit unions 
(CU) or savings and credit cooperatives (SACCOs) and 
have improved the economic status and quality of  life for 
women (Chisenga, 2018). In addition, the Bank of  Zambia 
(BOZ) and other key stakeholders have been working 
towards greater financial inclusion and gender equality, in 
line with the Zambia Vision 2030 (7NDP, 2018; Bank of  
Zambia, 2022). These efforts have been integrated into 
the country’s first national financial inclusion strategy 
(FNFIS), which aims to halve the gender gap and increase 
women’s financial inclusion to 70 per cent by 2025 from 
30 percent in 2015. 

Efforts to improve financial inclusion have been made 
globally, but women in developing countries like Zambia 
still face significant barriers to accessing formal financial 
services due to socioeconomic inequalities, cultural 
practices, and poor banking infrastructure (Sibeso, 2022). 
Village banking has emerged as a promising solution 
to enhance financial inclusion for women. Research by 
Mbiro and Ndlovu (2021); Bhatia and Singh (2019), 
for instance, shows that access to financial services can 
significantly improve women’s economic status and 
quality of  life, enabling them to start or grow businesses, 
save, and invest in education and healthcare. The 
AFRIZAM Co-operative in Lusaka is an example of  a 
village banking initiative aimed at supporting women’s 
financial well-being. However, there are still gaps in 
understanding the effectiveness and linkages of  such 
initiatives, particularly regarding the African Financial 
cooperatives. While studies have highlighted the benefits 
of  saving groups for women’s empowerment, more 
research is needed to explore the relationship between the 
village banking model and women’s financial inclusion in 
Zambia.  Therefore, this study fills this gap by conducting 
a thorough assessment of  the effects of  village banking 
on financial inclusion for women, focusing on the Afri-
Zam Financial Co-operative in Lusaka. This research 
presents important ramifications for the microfinance 
sector and the financial inclusion of  women in Zambia. 
The following objectives guided the study.

i. To analyse the factors that tend to promote financial 
inclusion (via the Women Co-operative models) such as 
the Afri-Zam co-operative.

ii. To assess the level of  financial inclusion for women 
in Zambia using Women’s Cooperative models, such as 
the Afri-Zam co-operative Society in Lusaka.

iii. To unravel the challenges that hinder financial 
inclusion for women at the Afri-Zam co-operative.
The study tests the composite hypothesis that savings, 
access to credit, and social capital have a significant 
negative impact on the financial inclusion of  women in 
Zambia.

LITERATURE REVIEW
Theoretical Review
The Microfinance Theory of  Change 
In “Banker to the Poor,” Muhammad Yunus (1983) 
presents a transformative view through the Microfinance 
Theory of  Change, critiquing traditional banking’s neglect 
of  marginalized populations. He argues that conventional 
banks often exclude low-income individuals from 
essential financial services, perpetuating poverty. Yunus 
(1983) introduces microfinance as a solution, offering 
small, collateral-free loans to those deemed too risky 
by mainstream banks, particularly empowering women 
facing additional barriers to financial inclusion. These 
microloans enable women to invest in small businesses, 
fostering economic resilience and self-esteem. Yunus 
emphasizes community trust and mutual accountability 
through group lending, where borrowers support 



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each other in repaying loans, reducing default risk and 
promoting financial discipline. This approach enhances 
social connections and support networks, amplifying 
microfinance’s positive impact on individual and 
community welfare. In the short term, microfinance helps 
borrowers improve their living conditions by addressing 
urgent needs like food security, housing, and healthcare. 
Microfinance offers benefits beyond individual financial 
security, as Yunus suggests it can drive societal progress 
in education, health, and gender equality. In the context 
of  Village Banking for Women’s financial inclusion in the 
Afrizam Co-operative Lusaka, the Theory of  Change is 
vital for understanding how these initiatives can lead to 
positive outcomes. This framework outlines the steps 
that lead to lasting impacts, such as improved financial 
literacy, increased access to credit, and income-generating 
activities. Utilizing the Theory of  Change is crucial for 
designing and evaluating village banking programs, 
providing insights into how specific actions can foster 
economic improvement and reduce poverty. Ultimately, 
microfinance empowers individuals, particularly women, 
to take control of  their finances, contributing to a more 
equitable and just society.

The Strategic Default Theory 
In “The Subprime Solution,” Shiller (2008) explores 
strategic default, where borrowers stop mortgage 
payments despite being able to pay. This often occurs 
when a property’s market value drops below the 
mortgage balance, leading borrowers to view continued 
payments as economically unwise. Shiller (2008) argues 
that strategic default is typically motivated by self-interest 
rather than true financial hardship, as homeowners with 
underwater mortgages may find it more advantageous 
to stop payments and face foreclosure rather than invest 
further in a declining asset. Economic factors like the 
housing market, interest rates, and personal finances affect 
decision-making regarding mortgage defaults. Shiller 
(2008) notes that societal attitudes towards defaulting have 
changed, with a diminished stigma prompting borrowers 
to consider this option more readily. As perceptions 
shift, individuals may feel less moral obligation to meet 
mortgage commitments, especially when facing financial 
challenges. Strategic defaults not only impact borrowers 
but also challenge financial institutions, as lenders often 
underestimate the likelihood of  such defaults, leading 
to unexpected losses and increased systemic risks in the 
housing market.
 
Empirical Review
Microcredit schemes have been practised in many parts 
of  the world to alleviate poverty. According to Sharma 
(2000) and Harvey and Cristani (2022), many microcredit 
services in Asia and Africa target women on the assumption 
that empowering women and providing services to them 
leads to better allocation and use of  household resources. 
Microfinance, as defined by Meki and Quinn (2024), 
provides banking services to low-income individuals and 

the unemployed, aiming to integrate the unbanked into the 
financial system by offering access to credit and savings. 
Van Maanen (2004) asserts that microfinance helps those 
without adequate collateral. Kagan (2024) describes 
village banking as offering small loans to low-income 
individuals who cannot access traditional credit. Tria et al. 
(2022) contends that microfinance or microcredit often 
targets women facing financial barriers, while Wakunuma 
et al. (2019) highlight that this limited access significantly 
excludes women from the financial system. Additionally, 
inadequate financial literacy among women is a major 
challenge, with Adera and Abdisa (2023) contending 
that financial literacy initiatives are often underfunded 
or poorly executed, leaving many women unprepared to 
manage financial transactions.
Mchembe et al. (2023) highlight significant challenges 
women face in accessing financial resources, primarily due 
to cultural and social barriers that hinder their participation 
in microfinance. Deep-rooted cultural norms often 
restrict women’s economic involvement and mobility, 
leading to resistance from family and community leaders 
when they seek financial services. These constraints, along 
with the requirement for collateral—which many women 
cannot meet due to a lack of  asset ownership—further 
marginalize them economically. To address these issues, 
innovative solutions like group lending and character-
based lending are essential to enhance women’s access 
to financial services.  Many conventional microfinance 
models require collateral to secure loans, a stipulation 
that many women are unable to meet due to insufficient 
ownership of  personal or real property. This condition 
greatly restricts their capacity to acquire loans and other 
financial products, consequently limiting their potential 
to invest in businesses or engage in income-generating 
activities (Banerjee & Jackson, 2017).
Niaz & Iqbal (2019) studied the impact of  microfinance 
on women’s empowerment and poverty alleviation in 
Pakistan using robust methodologies like Ordinary Least 
Squares (OLS) and Propensity Score Matching (PSM) 
with a dataset of  670 participants. They developed a 
Multidimensional Poverty Index (MPI) to assess poverty 
dimensions. The findings showed that microfinance 
significantly enhances women’s empowerment, reduces 
poverty, and improves social status through increased 
income. The study concluded that microfinance and 
Microfinance Institutions (MFIs) effectively promote 
Sustainable Development Goals (SDGs) in Pakistan.
Pare (2021) conducted a study investigating the 
effectiveness of  microfinance in empowering women, 
specifically analyzing the correlation between women’s 
autonomy and microfinance initiatives. This research 
provided valuable insights into both the potential benefits 
and drawbacks of  microfinance. Utilizing ordinary least 
squares (OLS) regression analysis, the study examined data 
from 45 developing countries, drawing on information 
from the World Bank and the United Nations. To ensure 
the robustness of  the findings, women’s autonomy 
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rates of  female secondary school enrolment, women’s 
involvement in decision-making processes, and statistics 
on female unemployment and labour force participation. 
The results revealed that microfinance has negligible 
positive effects on women’s autonomy. Evidently, the 
only significant factor associated with microfinance was 
the proportion of  female borrowers, which influenced 
both female secondary school enrolment and the poverty 
headcount ratio.
Islam et al. (2020) examined the impact of  financial 
inclusion on female entrepreneurs in SMEs in Bangladesh, 
involving 207 women. Data was collected via a structured 
questionnaire using a 5-point Likert scale and analyzed 
with multivariate techniques. Key findings identified 
factors influencing financial inclusion, such as accessible 
payment methods, simple transactions, job creation 
through agent roles, minimal network challenges, and 
broad geographical coverage, all significantly affecting 
female SME entrepreneurs.
Frisancho and Valdivia (2020) investigated the effects 
of  implementing savings groups on poverty alleviation, 
vulnerability reduction, and financial inclusion in rural 
Peru. Employing a cluster randomized control trial and 
utilizing both survey data and administrative records, 
the research assessed the impact of  savings groups 
over a two-year period. The results demonstrated that 
savings groups enable households to make significant 
investments, such as improvements to housing, while 
also mitigating their vulnerability to specific shocks, 
particularly in economically disadvantaged districts. 
Maganga (2021) aimed to explore the impact of  village 
savings and loan associations (VSLAs) on the socio-
economic development of  women and their resilience to 
vulnerabilities in Malawi. The study utilized a descriptive 
research design, collecting data through household 
surveys in two districts: Chiradzulu Traditional Authority 
Maoni and Blantyre Rural Traditional Authority Kapeni. 
A multi-stage sampling method was employed to identify 
a sample of  70 women from VSLA groups. The findings 
revealed that VSLAs positively influence the economic 
and social status of  women. However, the research also 
pointed out that VSLA members encounter difficulties in 
obtaining loans from external financial institutions and 
face a significant lack of  training opportunities. 
Adai and Rashid (2023) conducted a study titled “A 
Study on Sociocultural Features among Turkish and Iraqi 
Women,” published in the Journal of  Current Research on 
Social Sciences. The research explores the sociocultural 
similarities and differences between women in Turkey 
and Iraq, focusing on gender roles, family dynamics, 
traditional customs, and modern influences. Key findings 
indicate that while both groups face gender inequality, 
their experiences differ due to varying political, economic, 
and historical contexts. Turkish women generally have 
better access to education and job opportunities, whereas 
Iraqi women face more limitations due to sociopolitical 
unrest and cultural conservatism. Traditional gender 
roles persist in both societies, impacting women’s 

public participation and financial inclusion. The study 
underscores the importance of  understanding these 
sociocultural factors to promote gender equality and 
improve women’s financial inclusion. The authors call for 
enhanced policy initiatives and cross-cultural dialogue to 
empower women and address cultural barriers.
Mbiakop and Oyekale (2017) highlight that access to 
credit is crucial for enhancing agricultural productivity and 
reducing poverty among smallholder farmers. This study 
investigated the impact of  village bank membership on 
the welfare of  smallholder farmers in the Ngaka Modiri 
Molema District Municipality (NMMDM). Using cross-
sectional data from three villages with active village banks, 
a sample of  200 farmers was surveyed through structured 
questionnaires. Data analysis employed descriptive 
statistics and a simultaneous equation model (SEM). 
Findings indicated that village bank membership led to 
an 83.85% increase in per capita expenditure, significantly 
influenced by income per capita and technology use. The 
study concluded that village bank members exhibited 
improved socio-economic characteristics, suggesting that 
establishing more community-based village banks could 
greatly enhance welfare in South Africa. 
Fula (2023) examined the effects of  village banking 
on women’s economic well-being in Lusaka district 
through a qualitative survey of  21 women—12 village 
banking members and 9 non-members. Descriptive 
statistics revealed that participation in village banking 
significantly improved women’s livelihoods, leading to 
increased business revenue, better access to credit, and 
enhanced social connections. Additionally, members 
reported boosts in self-esteem and decision-making skills, 
positively impacting their entrepreneurial activities. 
Lwengo (2021) conducted a study on the effects of  village 
banking on the financial inclusion of  women marketers at 
the Main Masala market in Ndola, Zambia. The research 
aimed to identify the socioeconomic challenges faced 
by women marketeers (small-scale women traders), 
evaluate village banking’s potential to reduce poverty, and 
assess its benefits. Employing a qualitative methodology, 
data was gathered from 80 women marketers and five 
stakeholders through questionnaires and interviews, 
which were analyzed using descriptive statistics. The 
findings underscored the necessity for stricter regulations 
to address loan defaults, suggesting police involvement 
to ensure compliance. The study concluded that effective 
village banking can empower women economically and 
improve financial inclusion for those without banking 
services. 
Banda et al. (2022) studied the impact of  village banking 
on the financial well-being of  women in the formal sector 
in Lusaka’s Matero zone, Zambia. The research aimed 
to assess the benefits of  village banking and its role in 
enhancing savings. Using a descriptive multiple-case 
study approach, the study focused on two village banking 
groups with a purposive sample of  25 participants. 
Data was collected through telephone interviews with 
14 participants and a focus group discussion with 11 



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participants during a monthly meeting. Thematic analysis 
revealed that village banking significantly improved 
the financial status of  these women, enabling them to 
start businesses, access affordable loans, build homes, 
pay for education, and purchase household items. It 
also encouraged savings, as women anticipated sharing 
investment returns after the project cycle.  
While numerous studies have explored the impact 
of  microfinance and village banking on women’s 
empowerment and financial inclusion globally, there is 
limited research specifically focusing on Zambia. Extant 
literature, including works by Niaz and Iqbal (2019) in 
Pakistan and Pare (2021) across various developing 
nations, fails to address the unique context of  Zambia, 
where socio-economic and cultural dynamics may vary 
considerably. While numerous studies highlight the 
beneficial effects of  microfinance and village banking, 
such as enhanced income and greater financial autonomy 
(Islam et al., 2020; Mengstie, 2022), there remains a 
notable gap in the thorough examination of  the socio-
economic obstacles encountered by women involved in 
village banking groups in Zambia. Mwaka (2020) briefly 
acknowledged this issue in the Katete district but did not 

explore the in-depth specific challenges faced by women 
marketers in other areas, including the Ndola district. 
A significant portion of  current research utilizes 
quantitative methodologies (Niaz & Iqbal, 2019; Islam et 
al., 2020). Although these approaches are rigorous, they 
often overlook the intricate, qualitative dimensions of  
women’s experiences and perceptions. Banda et al. (2022) 
initiated a shift towards this area by conducting qualitative 
interviews; however, there remains a significant need for 
more extensive and detailed qualitative investigations 
to fully understand the lived experiences of  women 
participating in village banking in Zambia. The beneficial 
effects of  village banking on financial inclusion and 
poverty reduction have been acknowledged in the 
literature (Frisancho & Valdivia, 2020; Mbiakop & 
Oyekale, 2017). However, there remains a significant gap 
in empirical research regarding the nexus or link between 
village banking models and women’s financial inclusion 
within the Zambian context, combining both qualitative 
and quantitative methods. 

MATERIAL AND METHODS
Conceptual Framework

Figure 1 shows how the variables interact in this study .
Financial inclusion refers to the availability and use 
of  financial services by individuals and businesses, 
particularly in underserved communities (World 
Bank, 2023). It ensures access to affordable financial 
products like savings accounts, loans, insurance, and 
payment systems, which are vital for effective financial 
management and risk mitigation. Access to credit is a key 
component, enabling individuals and businesses to secure 
loans from financial institutions, thereby supporting goals 
such as starting or expanding a business, buying a home, 
or handling unexpected expenses (Tomaselli et al., 2013).
Savings denote to the portion of  income that is not spent 
on immediate consumption of  goods and services but is 
instead set aside or stored for future use (Aidoo-Mensah, 

2018). In the context of  financial inclusion for women, 
savings are a relevant factor as they reflect women’s 
ability to accumulate financial resources and build assets 
over time. A higher savings indicates a greater capacity 
for women to save and invest in their future, which 
can contribute to their financial stability and well-being 
(Adera & Abdisa, 2023).
Social capital refers to the networks, relationships, 
and norms of  reciprocity and trust that exist within a 
community or group (Kenton, 2022; Oyinloye, 2024). 
In the context of  financial inclusion for women, social 
capital plays a crucial role in facilitating access to 
financial services and resources. Women who are part 
of  strong social networks are more likely to have access 
to information about financial services, receive support 

Figure 1: Conceptual Framework
Source: Author’s elaboration



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from others in accessing credit or saving, and benefit 
from collective action and advocacy efforts (Ikhar et al., 
2022).

Research Design, Data Collection and Data Analysis 
This research employed a case study methodology, 
focusing on the members of  the Afri-Zam Cooperative 
located in Lusaka, Zambia. A case study methodology is 
characterized by a thorough and detailed investigation of  
a singular case or a limited number of  cases within their 
authentic context (Priya, 2021). The selection of  the case 
study methodology is justified by its capacity to yield a 
profound, contextualized, and nuanced insight into the 
effects of  village banking on the livelihoods of  women 
in Lusaka, rendering it a suitable research strategy for 
this investigation. The target population for this study 
was all members of  the Afri-Zam Cooperative in Lusaka, 
Zambia, comprising 150 members. In this study, the 
sample size for the quantitative analyses was determined 
using the Yamane’s (1967) formula:

Where:
N = 150
e = 0.05
n = 109
At 95% confidence interval. 
Therefore, the sample size that was used was 109. 
In this study, purposive sampling was employed. This 
method, also referred to as judgmental or selective 
sampling, is a non-probability sampling technique wherein 
the researcher intentionally selects participants based on 
characteristics, knowledge, or expertise that are relevant 
to the research focus (Campbell et al., 2020). By utilizing 
this sampling strategy, the study aimed to ensure that the 
sample is representative of  the population. The qualitative 
analysis was guided by the principle of  saturation, which 
refers to the stage at which the collection of  additional 
data ceases to yield new insights or themes pertinent to 

the investigation. Both primary and secondary data were 
used. Primary data were collected through a survey of  
selected respondents. Secondary data was collected 
through document review of  relevant documents.

The Econometric Model
The study adopted a cross-sectional design, capturing a 
snapshot of  financial inclusion at a single point in time. 
Econometrically, the overall regression model is specified 
as shown in Equation 1:
Fin_Inclusiont= β0+ β1Access_Creditt + β2Savingst + β_3 
Social_Capitalt + β4 φt+ β5δt + εt                                      (1)
Where; Fin_Inclusiont is financial inclusion at time t, 
Access_Creditt  is access to the credit at time t, Savingst 
refers to the savings by the participants, Social_Capitalt 
is social capital, at time t. The parameter β0 represent 
the different intercepts for the independent (predictor) 
variables, 
β1 - β5  represent the coefficient estimates for three 
dependent variables (Financial inclusion, Access to 
Credit and Savings) and the two control variables, marital 
status and gender represented by the parameters  φt and 
δt respectively. Finally, the  εt denotes the error term or 
the impact on the model of  estimates of  the unobserved 
variables.
The regression models were estimated separately as model 
1, model 2, model 3 and model 4. The regression models 
are estimated separately, and variables were progressively 
added. Regressions in model 1 only included control 
variables. In In model 2, saving as an independent variable 
was added to model 1. In model 3, access to credit as a 
predictor variable was added to model 3. Finally, in model 
4, all the independent or predictor variables along with 
the control variables were all regressed on the financial 
inclusion simultaneously.

RESULTS AND DISCUSSIONS
Quantitative Analysis
Demographic Profile
Table 1 shows the demographic profile of  the people in 
the sample of  this study.

Table 1: Demographic Profile
Variables Description Frequency Per cent
Gender Male 28 25.9

Female 80 74.1
Total 108 100

Age 18-24 years 6 5.6
25-34 years 53 49.1
35-44 years 41 38
45-55 years 8 7.4
Total 108 100

Marital Status Single 55 50.9
Married 41 38
Divorced 11 10.2
Widowed 1 0.9
Total 108 100



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Educational Level Less than High School 2 1.9
High school graduate 11 10.2
Certificate 20 18.5
Bachelor's degree 63 58.3
Masters 12 11.1
Total 108 100

Occupation Employed (Full-time) 5 4.6
Employed (Part-time) 45 41.7
Unemployed 46 42.6
Student 11 10.2
Retired 1 0.9
Total 108 100

The investigation into village banking’s impact on 
women’s financial inclusion revealed that 80 participants 
(74.1%) were female, while 28 (25.9%) were male. The 
age distribution showed a majority of  younger adults, 
with 49.1% (53 individuals) aged 25-34 and 38% (41 
individuals) aged 35-44. Young adults aged 18-24 made up 
5.6% (6 individuals), and those aged 45-55 were the least 
represented at 7.4% (8 individuals). Majority participants 
were single (50.9%, 55 individuals), followed by married 
(38%, 41 individuals), divorced (10.2%, 11 individuals), 
and widowed (0.9%, 1 individual). In terms of  education, 
the largest group held degrees (58.3%, 63 individuals), 
followed by certificate holders (18.5%, 20 individuals), 
master’s degree holders (11.1%, 12 individuals), and 

those with less than a high school education (1.9%, 
2 individuals). Regarding employment, 42.6% (46 
individuals) were unemployed, 41.7% (45 individuals) 
worked part-time, 10.2% (11 individuals) were students, 
4.6% (5 individuals) were full-time employees, and 0.9% 
(1 individual) were retired.

Correlational Analysis
Table 2 reports the correlation matrix. It provides insights 
into the relationships between financial inclusion and the 
independent variables (savings, access to credit, and social 
capital) while considering gender and marital status as 
control variables.

Table 2: Correlation Matrix
Mean Standard 

Deviation
1 2 3     4 5 6

1. Financial Inclusion 4.288     0.56 -0.008
2. Gender 1.74     0.44 0.043
3. Marital Status 1.61     0.71 0.614 -0.21*
4. Savings 4.33     0.56 0.64** 0.133 -0.132
5. Access to Credit 4.36     0.49 0.69** 0.143 -0.21* 0.65**
6. Social Capital 4.41     0.53 0.53** -0.086 -0.071 0.511** 0.61**

Note: * and ** denote that the correlation is statistically significant at 0.05 and 0.01, respectively (2-tailed).

In terms of  the correlation of  the control variables, 
gender has a very weak and non-significant negative 
correlation with financial inclusion (r = -0.008). Marital 
status shows a weak positive correlation with financial 
inclusion (r = 0.043), which is not statistically significant. 
The correlation between savings and financial inclusion 
is positive and significant (r=0.614**, p<0.01). This 
suggests that higher savings are associated with greater 
financial inclusion. Participants who have higher levels of  
savings are more likely to experience enhanced financial 
inclusion, indicating that savings play a crucial role in 
accessing financial services and opportunities. 
Access to credit also shows a strong positive correlation 
with financial inclusion (r=0.640, p<0.01). This indicates 
that individuals with better access to credit are more 
financially included. This relationship highlights the 

importance of  credit availability in enabling individuals 
to participate more fully in the financial system, likely 
by providing resources for investment and economic 
activities. Social capital has the highest positive 
correlation with financial inclusion (r = 0.693, p < 0.01). 
This significant relationship underscores the critical 
role of  social networks and community connections in 
promoting financial inclusion. Strong social capital can 
facilitate trust, information sharing, and collective action, 
which are essential for accessing and utilizing financial 
services.

Regression Analysis
A series of  regression models were constructed to 
examine various predictors, including gender, age group, 
savings, access to credit, and social capital. The models 



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are progressively added, with each additional predictor 
contributing to the explanatory power of  the regression. 

Table 3 reports the overall regression outcomes of  the 
four (4) models.

Table 3: Additive Regression Outcomes
Control 
Variables

MODEL 1 MODEL 2 MODEL 3 MODEL 4 VIF
Beta SE Beta SE Beta SE        Beta    SE 1.112

Gender
Marital Status
Savings
Access to credit
Social Capital

0.001 0.126 -0.088 0.099 -0.102* 0.089       -0.009* 0.082 1.083
0.034 0.078 0.088 0.063 0.13*** 0.056        0.124** 0.05 1.829

0.633*** 0.077 0.35***       0.090        0.255** 0.082 2.212
0.103       0.281*** 0.102 1.731

       0.443* 0.085
F 0.096 22.82*** 27.248*** 2.704***

F change 0.096 68.15 24.833 27.008

R 0.043 0.63 0.717 0.785

R2 0.002 0.39 0.514 0.616

Adj R2 -0.017 0.37  0.117 0.597

R2 Change 0.002 0.36 0.102

Notes: VIF denotes variance inflation factor, *, ** and *** denote statistically significance at 5%, 1% & 0.1% respectively

Financial inclusion was taken as the dependent variable 
across the four models. The regression examined the 
impact of  savings, access to credit, and social capital 
on financial inclusion, with gender and marital status as 
control variables.
Regressions in Model 1 regressed only control variables. 
The beta coefficient for gender is 0.001, which is positive 
but not significant, indicating that gender alone does 
not significantly influence financial inclusion. The beta 
coefficient for marital status is 0.034, which is positive 
but also not statistically significant. This suggests that 
marital status alone does not significantly impact financial 
inclusion. 
In model 2, saving was added as an independent variable. 
The beta coefficient is positive (0.633) and significant, 
indicating that savings have a significant positive impact 
on financial inclusion. This suggests that increasing 
savings by 1% causes a positive increase in financial 
inclusion by 63.3%, holding other factors constant. 
However, gender, statistically significant at the 5% level, 
has a negative impact on financial inclusion. 
In model 3, adding access to credit yielded a significant 
positive beta coefficient of  0.512, showing a significant 
positive effect on financial inclusion. This implies that a 
1% increase in access to credit is likely to cause a positive 
increase in financial inclusion among women of  51.2% 
ceteris paribus. 
In model 4, the study regressed all the independent 
and control variables on financial inclusion. For every 
1% increase in gender differences, financial inclusion 
significantly reduces by 0.9% ceteris paribus. However, 
marital status, savings, access to credit and social capital 
indicate that holding other variables constant, a 1% 
increase in each variable significantly increases financial 
inclusion by 12.4%, 25.5%, 28.1% and 44.3%, respectively.  
In model 2, saving was added as an independent variable. 
The beta coefficient is positive (0.633) and significant, 

indicating that savings have a significant positive impact 
on financial inclusion. This suggests that increasing 
savings by 1% causes a positive increase in financial 
inclusion by 63.3%, holding other factors constant. 
However, gender, statistically significant at the 5% level, 
has a negative impact on financial inclusion. 
In model 3, adding access to credit yielded a significant 
positive beta coefficient of  0.512, showing a significant 
positive effect on financial inclusion. This implies that a 
1% increase in access to credit is likely to cause a positive 
increase in financial inclusion among women of  51.2% 
ceteris paribus. 
In model 4, the study regressed all the independent 
and control variables on financial inclusion. For every 
1% increase in gender differences, financial inclusion 
significantly reduces by 0.9% ceteris paribus. However, 
marital status, savings, access to credit and social capital 
indicate that holding other variables constant, a 1% 
increase in each variable significantly increases financial 
inclusion by 12.4%, 25.5%, 28.1% and 44.3%, respectively.  
In summary, the regression analysis shows that savings, 
access to credit, and social capital all significantly enhance 
the financial inclusion of  women, with social capital 
having the strongest effect. Gender difference seems to 
have a negative effect on women’s financial inclusion. 
Table 4 reports a model summary of  regressions. This is 
basically the analysis into the overall model fit.
The model regression summary indicates the progressive 
improvement in the predictive power of  the model 
as additional variables are included. Starting with an 
R-squared of  0.002 in the initial model with marital status 
as a control variable, the R-square steadily increases with 
each subsequent model iteration, reaching 0.607 in the 
final model incorporating marital status, gender, savings, 
access to credit and social capital.
Table 5 reports a summary of  the analysis of  variance 
(ANOVA). It is observed from Table 5 that the F-statistic 



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is not significant in the first model. In model 2, 3 and 4 
(p < 0.001) indicate that the models collectively explain a 
significant portion of  the variance in financial inclusion. 

As predictors are added, the F-statistic and significance 
levels consistently improve, suggesting that the expanded 
models better capture the variability in financial inclusion.

Table 4: Regression-Model Summary
Model R R2 Adjusted 

R2
Standard Error 
of  the Estimate

Change Statistics
R2

Change
F 
Change

df1 df2 Sig. F 
Change

1 .043a .002 .017 .56202 0.002 0.096 2 105 .908
2 .063b .397 .380 .43892 0.395 68.135 1 104  .000
3 .717c .514 .495 .3959 0.112 24.833 1 103 .000
4 .785d .616 .597 .35375 0.102 24.008 1 102  .000

Source: Authors’ elaboration
a. Predictors: (Constant), Marital Status, Gender
b. Predictors: (Constant), Marital Status, Gender, savings
c. Predictors: (Constant), Marital Status, Gender, savings, Access to credit
d. Predictors: (Constant), Marital Status, Gender, Savings, Access to Credit, Social Capital

Table 5: Summary of  the analysis of  variance (ANOVA)
Model Sum of  Squares df Mean Square F Sig.
1 Regression .061 2 .030 .096 .908b

Residual 33.166 105 .316
Total 33.227 107

2 Regression 13.191 3 4.397 22.823 .000c

Residual 20.036 104 .193
Total 33.227 107

3 Regression 17.083 4 4.271 27.248 .000d

Residual 16.144 103 .157
Total 33.227 107

4 Regression 20.463 5 4.093 32.704 .000e

Residual 12.764 102 .125
Total 33.227 107

Source: Authors elaboration on Data

Testing the Main Hypothesis of  the Study
The study set out to test the composite hypothesis that 
savings, access to credit, and social capital have a significant 
negative effect on women’s financial inclusion in Zambia 
as the null hypothesis. The findings from the regression 
analyses indicate that savings, access to credit and social 
capital indicate that, ceteris paribus, a 1% increase in each 
variable, significantly increases financial inclusion by 25.5%, 
28.1% and 44.3%, respectively. The study, therefore, rejects 
the null and accepts the alternative because savings, access 
to credit, and social capital have significant positive effects 
on the financial inclusion of  women in Zambia.

Qualitative Analysis 
Under this section, data collected from the 10 participants 
using the interview guide was presented and interpreted 
into the specific objectives, which were; to analyze the 
factors that tend to promote financial inclusion for the 
women in micro-credit co-operative models such as the 
Afri-Zam co-operative, to assess the level of  financial 

inclusion for women in Zambia to investigate the 
challenges that hinder financial inclusion for women at 
the Afri-Zam co-operative. Under each objective, a theme 
was developed.

Perceived Benefits of  Financial Inclusion Initiatives 
on Women’s Empowerment
Table 6 presents a thematic analysis of  the perceived 
benefits of  financial inclusion initiatives on women’s 
empowerment and financial independence in the Afri-
Zam Co-operative. The analysis revealed five main 
themes, as reported in Table 7. 

Access to financial services (B1) 
Eight (8) Participants reported that access to loans and 
savings accounts significantly affected their ability to 
expand businesses and support their families. Participant 
3 highlighted that financial inclusion initiatives provided 
essential resources for business growth, thereby 
contributing to economic stability and empowerment.



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Table 6: Thematic Analysis of  the Perceived Benefits of  Financial Inclusive Strategies
Theme Code Representative Statement/Quote
Access to financial services B1 “Access to loans and savings has enabled me to expand my business and 

support my family."  Frequency score: 80% (8/10)
Increased financial security B2 “Having a savings account gives me a sense of  financial security and 

stability." Frequency score: 60% (6/10)
Enhanced financial literacy B3 “The training sessions have improved my understanding of  financial 

management and budgeting."  Frequency score: 50% (5/10)
Economic empowerment B4 "With the financial support, I have been able to start a small business 

and generate income."  Frequency score: 90% (9)
Improved standard of  living B5 "My family’s standard of  living has improved significantly due to the 

financial resources provided by the cooperative." 80%
Source: Authors’ elaboration

Increased financial security (B2)
Six (6) participants, or 60% of  the sample size, emphasized 
the sense of  financial security and stability gained from 
having a savings account. This theme underscored the 
importance of  financial inclusion in fostering a secure 
financial environment for women, enabling them to 
better manage their resources and plan for the future.

Enhanced financial literacy (B3)
Training sessions conducted by the cooperative played 
a mild role in enhancing participants’ financial literacy 
as only five (5), representing 50% of  the sample, 
Participants noted an improved understanding of  
financial management and budgeting, which contributed 
to better financial decision-making and planning.
Economic empowerment (B4) 
Financial support from the cooperative empowered 
participants economically by enabling them to start or 
expand small businesses. 90% of  the participants reported 
that such initiatives were instrumental in generating 
income and fostering economic independence.

Improved standard of  living (B5)
The financial resources provided by the cooperative 
significantly improved participants’ standard of  living. 
Eight participants, or 80%, reported that their family’s 
quality of  life had improved due to the financial stability 
and opportunities created through the cooperatives’ 
support.

Challenges Hindering Financial Inclusion
The analysis revealed several themes regarding the 
challenges faced by women in accessing financial 
services. Table 7 presents a thematic analysis of  the main 
challenges hindering financial inclusion for women at the 
Afri-Zam Co-operative.

Lengthy loan application process (C1) 
Up to 80% of  the participants (8/10) reported that the 
loan application process was often lengthy, causing delays 
in accessing the necessary funds. Participant 1 mentioned 
that the extended application periods hindered timely 
financial support.

Table 7: Challenges Hindering Financial Inclusion
Theme Code Representative Statement/Quote
Lengthy loan application 
process

C1 "Sometimes, the loan application process is lengthy."  
Frequency score: 80% (8/10)

Delays in loan disbursement C2 "There are occasional delays in loan disbursement." 
Frequency score: 60% (6/10)

Limited availability of  
financial products

C3 “Limited availability of  financial products.”
Frequency Score: 80% (8/10)

High demand for loans 
causes wait times

C4 "High demand for loans causes long waiting periods."
Frequency score: 90% (9/10)

Difficulty understanding 
financial terms

C5 "Difficulty in understanding some financial terms and conditions."
Frequency score: 60% (6/10)

Delays in loan disbursement (C2) 
Participants (60%) reported occasional delays as a 
significant challenge. Such delays affected participants’ 
ability to use the funds effectively for their intended 
purposes.

Limited availability of  financial products (C3)
Eight participants, or 80% of  the sample, expressed 
concerns about the limited availability of  financial 
products. These participants reported that the cooperative 
needed to offer a wider range of  financial products to 
meet diverse needs.



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High demand for loans causing wait times (C4)
Up to 90% of  the participants (9/10) reported that the 
high demand for loans resulted in waiting periods delaying 
access to financial resources. This theme underscored 
the need for the Afri-Zam cooperative to manage loan 
demand more efficiently.

Table 8: Strategies for Overcoming Barriers
Theme Code Representative Quote
Financial education and 
awareness

S1 "Providing more financial education and awareness programs."  
Frequency score: 70% (7/10)

Family support for women's 
involvement

S2 "Encouraging family support for women’s financial involvement." 
Frequency score: 60% (6/10)

Increased outreach and 
information dissemination

S3 "Increasing outreach and information dissemination." Frequency 
score: 70% (7/10) 

Training in financial management S4 "Offering more training on financial management." 90% (9/10)
Inclusive and supportive 
environments

S5 "Creating more inclusive and supportive environments." 100% 
(10/10)

Source: Authors’ elaboration

Suggested Strategies for Overcoming Barriers to 
Financial Inclusion for Women
Table 8 reports the suggested strategies by participants 
for overcoming barriers to financial inclusion for women 
at the Afri-Zam Co-operative.

CONCLUSION
This study explores the link between the “Village” 
(microcredit) Banking Model and women’s financial 
inclusion in Zambia, using the AFRIZAM CO-
OPERATIVE as a case study. It employs multiple 
regression and correlational analyses for quantitative 
data alongside thematic analysis for qualitative insights. 
The findings reveal that cooperative models significantly 
enhance women’s financial inclusion, with key factors 
like savings, credit access, and social capital contributing 
to a 61.6% explanatory power in the regression model. 
Specifically, a 1% increase in these variables correlates with 
increases in financial inclusion of  25.5%, 28.1%, and 44.3%, 
respectively. Additionally, gender disparities negatively 
affect women’s financial inclusion, supporting previous 
research by Frisancho & Valdivia (2020) on the positive 
impact of  savings and credit access in rural Peru. The 
study identified challenges to women’s financial inclusion 
at Afri-Zam, particularly administrative inefficiencies and 
lack of  policy support, aligning with the broader literature 
on microfinance limitations (Pare, 2021). Qualitative data 
underscored the importance of  capacity-building and 
policy advocacy in promoting inclusive financial practices 
for women. Similar issues were noted in Village Savings 
and Loan Associations in Zimbabwe and Malawi (Mbiro 
& Ndlovu, 2021; Maganga, 2021), highlighting the 
need for regulatory reforms and community solutions. 
Policy recommendations include enhancing savings 
initiatives, improving women’s credit access, streamlining 
bureaucratic processes, and continuing financial literacy 
campaigns. The study’s context in Zambia may not reflect 
the diverse experiences of  women in other regions or 
countries. The study recommends that future studies 
conduct longitudinal studies that will employ diverse 
sampling strategies beyond convenience sampling and 
undertake comparative studies.

Acknowledgements
The authors wish to express their sincere gratitude to the 
anonymous reviewers for their constructive criticisms 
of  the earlier versions of  this paper. Their criticisms 
significantly improved the quality of  this research article. 
All errors and omissions are attributed to the authors, not 
the publisher.

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