Village Savings and Loans Associations
Project Description
ACF introduced village savings and loans associations (VSLA) methodology in ElBarde district in December 2016, before this the community members did not have a saving culture and always spent their income as soon as they received it. Although the VSLA groups were established and implemented to enhance the financial access of the pastoralist community, the groups have helped not only provide simple savings and loans facilities but also created very good business services according to their respective developed business plans which have helped both to create savings culture and for running business. According to the VSLA group members, the main benefits of savings and loans scheme was access to loans when they are faced with problems and difficulties related to emergency situations, family members’ sickness and poverty related issues and undertaking communal income generating activities, that is, buying food items during drought using group saved money and selling items to members with subsidized costs including credit and get marginal profits for the group collectively.
“Our VSLA group members savings culture has been changed totally, as we develop better coping mechanisms during times of drought due to the use of the saved money which gave us easy access to small loans, while before we joined the Sayid1 VSLA Group in ElBarde we used to sell our animals in unplanned sales with less money as we had limited diverse sources of incomes, but now we used to cover such kind of expenses with the loans we received from our savings which we are able to support members during emergency situations such as shortage of food, during delivery, funeral ceremonies and other social issues using the social fund saving says Amiino Adan Xasan, a VSLA group member in Sayid1.
Our savings culture has totally changed, before we did not save at all in our area. We spent whatever we got the same day. After joining the VSLA group we got very important knowledge on how to save as well as wise use of money. I feel that this is a great change for me personally and the community’’ says Hawo Ali, a VSLA group member in Ato 1 village. Hawo Ali joined the group because she was interested in learning how to save and to better her life by starting an income generating activity. She has been a member of her group for 8 months now. She now has easy access to credit especially when compared to when she was not in VSLA group. Before I joined the VSLA group, whenever I needed to borrow money, I used to ask so many women in my neighborhood and often they wouldn’t be in a position to lend me money. Since I joined the savings group, I do not have any trouble accessing credit, all I need to do is to ask the group at the right time and always when I ask I get the amount I need,’ I will never forget this year. I have learnt a lot and achieved unexpected success in my life because of joining a savings group”
Hawo Ali jointly and her group members now run a business, a shop that sells food commodities and offers money exchange services. She is extremely happy with the choice she made to join a VSLA group as her life has changed for the better as she saves more, accesses credit easily and with her group now runs of the biggest businesses in her village.