The Effects of Savings and Internal Lending Communities (Silc) Loans on the Well-Being of Vulnerable Children in Kenya

ABSTRACT
Access to appropriate financial services remains a challenge for low-income caregivers responsible for vulnerable children. This study examined the relationship between Savings and Internal Lending Communities (SILC) loans and the well-being of vulnerable children in Kenya. A cross-sectional mixed-methods design was employed. Quantitative data were analysed from 393 SILC participants using descriptive statistics and multiple regression, while qualitative evidence was obtained through focus group discussions and interviews. The study assessed perceived loan terms, savings capacity, borrowing capacity and four dimensions of child well-being: access to education, food, shelter and care, and healthcare. Respondents generally agreed that SILC loans were accessible on relatively favourable terms for food, healthcare, and shelter, while education-related loan items received lower ratings. The quantitative analysis further showed that the amount borrowed was significantly associated with access to education, food, and healthcare, but not shelter and care; the direction of association varied across outcomes. Savings amount was not statistically significant in the regression models. Qualitative accounts indicated that caregivers used SILC loans for food, healthcare, education, and livelihood activities, while limited savings and borrowing capacity constrained the amount that could be obtained. The findings suggest that SILC loans can complement household coping capacity, but their contribution to child well-being is constrained by the scale of available credit, repayment considerations and competing household needs. Strengthening sustainable livelihoods, savings capacity and appropriately designed community-based credit mechanisms may therefore improve caregivers' capacity to meet children's needs.
Keywords: SILC loans; savings groups; vulnerable children; child well-being; financial inclusion; Kenya.

Development Studies

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