Village Savings & Loans Associations

VSLA

Village Savings & Loans Associations

Most people in the Saboba district live from subsistence agriculture. Many have only little experience in dealing with money and are forced to take loans on bad conditions when faced with unexpected expenses. If someone in the family falls ill or suffers an accident, the consequences may be particularly bad for the children: They might have to stay at home to work and thus miss school. Some are even threatened by starvation.

Therefore the SYC has established 14 so-called Village Savings and Loans Associations. These VSLA groups are composed of 20-30 families each that meet weekly to save money. Each week, one can deposit money into the common bank, which is kept in a metal safe box secured by three locks.

The box and the keys are kept by different people to prevent fraud. The members of the group can take a loan from the group’s savings – on conditions decided on by the group itself – to start a business, pay for their children’s school fees or buy food when faced with hardship.

At the end of the year, the participants are returned their saved money along with their share of the profit generated by the interest on the loans.

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