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Ppt VSLAs
- 2. • Social Support Clubs (recovery) Funeral Clubs and Associations • Rotating Savings and Credit Associations (ROSCAs) Merry-go-round • Accumulating Savings and Credit Association (ASCAs) Village Savings and Loans Associations (VSLAs) Savings, Investment and Loans Communities (SILCs) 2 What are Savings Groups? Photo credit: CARE Niger
- 3. 3 - A Savings group is a group of people who save together and take small loans from those savings. The activities of the group run in cycles of one year, after-which the accumulated savings and the loan profits are distributed back to members. - The purpose of a VSLA is to provide simple savings and loan facilities in a community that does not have easy access to formal financial services. - Additionally, VSLAs provide a platform for its members to discuss socio-economic issues that affect them as a part of their community. • First gateway to financial conversation among the poor • First point where ‘women say they feel heard’ Village Savings and Loans Associations (VSLAs) Photo credit: CARE, ‘SHOUHARDO III’ Program
- 4. A walk down memory lane… • ‘Mata Masu Dubara’ Women on the Move; • Established in 1991, Niger by Moira Eknes (CARE) 4 Quick facts: • There are over 200,000 SGs in over 35 countries • The average return on assets is 29.1% • Cost per member $22.2 average • Women comprise about 78% of the membership • The repayment rates are some of the highest in the MF sector (99%) • 98% of members return into the next cycle • 89% of the groups remain in operations 5 years later Village Savings and Loans Associations (VSLAs)
- 5. Saving Groups Core-Principles • Self-selection of membership: • Savings-led model • Transparency of decision making • No external capital injection / start-up funding • Accurate record keeping accessible to all members • Democratic governance structure • Annual / Cyclical “Action Audit,” which is a Share Out 5 Photo credit: Palladium, ‘Enclude’ program: http://encludesolutions.com/rise-vslas-mobile-money/
- 6. 6 How VSLAs are formed. Credit: CARE USA (2015) ‘VSLAs at 25’
- 7. 7 IMPACTS LIMITATIONS Agency: • Increase in the feeling of economic and social independence and confidence • Increase in participants' livelihood security • Maintenance of existing levels of economic investment Household: • Improvement in diet and nutrition (Zambia, Madagascar) • Greater capacity to spend money on healthcare (Tanzania) • Increase ability to keep children in school (Ethiopia) Community: • Increase in the ability to create and maintain social support networks (Niger) Financial: - Limited amount of loans available for members and; - Limited timeframe for loan repayment that makes it challenging for larger investment opportunities. Social: - Does not work in vacuum; the social successes of VSLAs require careful and deliberate layering of additional content and support- to be done well. Image credit: thoughtco.com
Editor's Notes
- Self-selection of membership: Group formation is fully left to members, they decide what group to join and in-turn, who to invite to save with me. This is important because it builds and fosters trust between members, which is key, both for the financial success of the group but also for group cohesion. The strength of the cohesion of a group is a strong determining of group sustainability. Savings-led model: It is critical that the basis of the groups’ activities be savings-based. This ensures that each member is invested in the success of the group. Transparency of decision making: All transactions are done in the presence of all members. Group funds and records are stored in a central box, with locks that require more than one member of the ‘key bearers’ to open. Specific members are selected as ‘money counters’ to collect an Additionally, all records are made in a language and system that even the least literate member of the group can understand. No external capital injection / start-up funding: All the money circulating through loans come from the members’ own savings. Accurate record keeping accessible to all members: All group recording is done in the presence of all members. Individual share purchase, loan and repayment is recorded in a stamp-based passbook, complemented with a recording in a central ledger. Democratic governance structure: Groups are encouraged to hold an election at the beginning of each cycle, to elect the leadership structure, based on roles that are clearly defined in the group’s constitution. Annual / Cyclical “Action Audit,” which is a Share Out: This is a way for everyone to see what is ‘in the pot,’ and get affirmation that they are getting what they are due.