Experiment Results

[Experiment Results]: SoCon Malawi - Village Banks (2/4) - Margin Analysis - December 2018

Link to adopted experiment:


Lean Phase: Channel Testing


Assumption: interest rates being charged in these village banks provides sufficient margins to operate a scalable business.



Average gross margin for the 8 village banks that we collected data for was 60.80%.

5 of the 8 village bank survey had gross margin above 60% indicating that there is sufficient margins to operate a scalable business. 

One village bank did not charge interest on loans. Excluding this outlier from the data brings the average gross margin to 69.49%.


 Validated Learning

Overall, this experiment was able to validate the assumption that interest rates charged by village banks provide sufficient margins to operate a scalable business.

Default rates were difficult to determine in some cases as village banks allowed for flexibility in the repayment on a case by case basis. Overall, default rates were very low.

Length of loan in many cases were not exact. For example, repayments were due before the end of 6 months ubt could be repaid sooner. In these cases, we calculated the average length of a loan as the midpoint of the length of the village bank being open and the shortest repayment period.

Next Move

Green light: proceed to offer testing experiment

Link to data:

Kurt Michl 4 months ago

When you Refer to Gross Margins, is this over the life of the loan, or is it monthly, annually?

I think it would be good to have a standardisable scale>

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Ella Grier 4 months ago

Status label added: Experiment Results

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