5. Table of Contents
Part 1: Women on the Move
Where and How the Voluntary Savings and Loans Methodology Started 1
The Rwandan Context 3
Financial Sector Reform and Microfinance in Rwanda 4
What Does Financial Access Mean? 5
Taking One Step at a Time 7
A Simple Methodology 7
Linking VSL Groups to Banks 9
The Social Fund 11
Changing Mindsets and Promoting Development from the Bottom Up 12
Saving in Rwanda 17
ACCESS AFRICA: CARE’s Program for Scaling up Microfinance 18
Part 2: Expanding Sustainable Access to
Financial Services for Investment 19
SAFI Innovations 19
Starting Afresh: Four Case Studies of SAFI Participants 23
One Step at a Time i
6. Map of Rwanda
CARE International areas of intervention
ii Empower ing Rwandan Communities
7. Part 1
Women on the Move
Where and How the Voluntary Savings
and Loans Methodology Started
CARE launched the Village Savings and Loans (VSL) methodology in 1991 in the villages
of southern Niger, in West Africa. In the early 1990s, women in this part of the world
had little prospect of improving their lives. Nearly everyone in these villages struggled to
survive on subsistence farming.
Initial funding for the project came from far away thanks to a nation-wide fundraiser event
by a network of women’s organizations in Norway who wanted to raise money for women
in developing countries. CARE Norway had already worked successfully with CARE in
Niger on a tree-planting project, so the two organizations decided to partner again, this
time on a financial service project targeting women.
When Niger women started to organize into groups, they called themselves Mata Masu
Dubara, which, in Hausa language, means “Women on the Move.”
Since then, the VSL experiment has taken on a life of its own. It has become a model for
self-sustaining, village level microfinance that has been gaining momentum through a
growing number of similar programs throughout sub-Saharan Africa and in Asia as well.
Since 1991, CARE has launched VSL programs in 21 countries, for an estimated total of
more than 54,000 VSL groups on the continent, serving more than 1 million members,
the majority of whom are women.1
Experience has demonstrated that it is women in VSL groups who are the first to reap
the benefits of this approach. As VSL members, women receive training, benefit from
group solidarity, earn their own income and invest in what matters most to them: their
families. The result is enhanced self-esteem, greater participation in public life, better
nutrition, health and education for children, and new dynamics in their relationships
with men.
The model has now spread and been adapted around the world. Other development agencies
are carrying out similar projects across the subcontinent.2
1 Bringing Financial Services to Africa’s Poor, State of the Sector Report by CARE International, April 2009, pg.71.
2 Bringing Financial Services to Africa’s Poor, State of the Sector Report by CARE International, April 2009.
One Step at a Time 1
8. My VSL Learning Trip to Niger
by Ephron Hakizamungu, CARE Rwanda Staff
“I traveled to Niger in September 2000. I was with Louise
Muteteli who was responsible for mobilizing communities in
the Rwanda CLASSE project. The objective of our trip was to
explore the practical impact of the “Mata Masu Dubara” (MMD)
methodology, the Hausa language name used for VSL in Niger.
We wanted to understand the challenges they encountered in
the communities and their successes.
My first impressions were related to the size of the country, its large tract of desert and how its
agricultural production was entirely dependent on rainfall. I was impressed to see that even the
most destitute members of the community were committed to finding small sums of money to
save. I also noticed that the majority of VSL group members were women (ie: 95%) and most of
them were illiterate. There was strong group cohesion and this I will not forget, given the post war
context I was coming from.
The three things that struck me most about the VSL program in Niger were the systemic use of
data gathered in the field, the integration of the VSL methodology and its application throughout
CARE’s work in Niger.
First, when it came to collecting data, CARE Niger had developed a template that served as a map
for each project, each project had to systematically provide detailed information and data. Finally,
those in charge of monitoring and evaluation consolidated this information into a sort of Master
template that were then shared with all program managers for further discussion and reflection
about impact and charting a way forward.
Secondly, I recall that in CARE Niger income generating activities were integrated into all CARE
projects because there was a need to compensate losses in the agricultural sector due to precarious
climatic conditions. Income generating activities were part and parcel of all CARE projects in Niger.
Finally, all projects that had a formal VSL component had a focal person that was trained in the
methodology, was responsible for following its implementation and provide feedback on progress.
There was also a policy that favored retaining staff with VSL expertise and appreciated such
experience in CARE Niger.
Like all NGOs working in Rwanda in the post-war period, CARE Rwanda was focused on rehabilitation
and reconstruction of the social fabric. One of the favored approaches was precisely that of
facilitating the creation and supporting community groups. The VSL methodology gave us the
opportunity to introduce something innovative into community groups that already were forming.
We basically introduced the methodology in the interventions that were already happening at the
community level and in the associations that already existed.
Since the literacy rate in Rwanda was higher than that in Niger, we actually introduced additional
elements to the VSL Kit used in Rwanda. For instance, we added a calculator, a booklet to record
savings and loans, an account logbook, a pen and a ruler.
As in Niger, the VSL methodology enabled participants to address some of their basic needs including
education for children, health needs, clothes and food. VSL members also developed solidarity
towards each other, a major accomplishment in post war Rwanda, they even lent to one another if one
could not make their weekly savings contribution. Members also learned how to manage their income
generating activity successfully and of course they became role models in their communities.
Another important achievement that I have noticed in Rwanda is the appreciation of the VSL
methodology by the local authorities both at the household and at the community levels. Once
local authorities realize how much progress community members make, they regularly want VSL
representatives to enlist more people and to form more groups. What is even more stunning is that
many VSL members, who were once marginalized in their own community due to their poverty
status, gain confidence, are respected and even elected to hold community posts.”
2 Empower ing Rwandan Communities
9. The Rwandan Context
“CARE’s methodology is to work
Rwanda is one of the poorest countries in the world and is still recovering
from one of the worst humanitarian catastrophes in the history of closely with the local authorities
humankind, the 1994 genocide and the extended periods of ethnic violence who are tasked to invite poor people
prior to and following the genocide. Its productive and institutional capacity to attend community sensitization
has been severely damaged and almost no one has escaped the trauma. meetings on the Voluntary Savings
and Loans approach. People then
Beyond the genocide and a history of conflict, there are a number of organize themselves in groups
factors contributing to widespread poverty in Rwanda. The country is and we start our first training
small (26,338 square kilometers), land-locked in Central Africa, with a
phase. Trainings focus on conflict
population of over 10.5 million people.3 It has a very high population
resolution, group management,
density of 328 inhabitants per square kilometer.
record keeping, saving and loans
Rwanda’s Human Development Index (HDI) for 2009 is 0.460 (rank of 167 management. It is very critical to
out of 182 countries but still refers to 2007 data), and the country has a involve local authorities and to
GDP/capita at purchasing power parity of US$ 870 (HDI 2009). The HD identify the poorest people in the
Index estimates that close to 33% of the population lives below US$ 1.25 community.”
a day. The proportion of people who are not expected to survive to the age Glycerie Niyibizi, Economic Security
of 40 is equal to 34.2%. The adult illiteracy rate (above 15 years of age) and Development Program Manager
CARE International in Rwanda
is estimated to be 35.1% while 35% of the population is not using an
improved water source.4
The economy consists largely of subsistence agriculture, with the majority of the population
(85%) living in rural areas. The prevalence of HIV/AIDS is estimated at 2.8% among adults
aged between 15-49 years.5 Rwanda has a very high proportion of orphans and vulnerable
children (OVC): a total of 613,000 orphans (21%), 43% of whom have been orphaned by
AIDS, and an estimated 101,000 children living in child-headed households. One-third of
households are headed by women.6
In terms of gender relations and improvements for the girl child, Rwanda ranks high
compared to many countries around the world. The gender-related development index
(GDI), introduced in Human Development Report 1995, measures achievements in the same
dimensions using the same indicators as the HDI but captures inequalities in achievement
between women and men. It is simply the HDI adjusted downward for gender inequality.
Rwandan landscape: the Land of a Thousand Hills.
3 CIA World Fact Book 2010
4 Human Development Report 2009, Rwanda Fact Sheet
5 CIA World Fact Book 2010
6 The Republic of Rwanda, Economic Development and Poverty Reduction Strategy, 2008-2012, September 2007.
One Step at a Time 3
10. The greater the gender disparity in basic human development, the lower is a country’s
GDI relative to its HDI. Rwanda’s GDI value, 0.459 should be compared to its HDI value of
0.460. Its GDI value is 99.8% of its HDI value. Out of the 155 countries with both HDI and
GDI values, 15 countries have a better ratio than Rwanda’s.7
Remittances, which are usually sent to immediate family members who have stayed behind,
are among the most direct benefits from migration; their benefits spread broadly into local
economies. In 2007, US$51 million in remittances were sent to Rwanda. Average remittances
per person were US$5, compared with the average for Sub-Saharan Africa of US$26.8
Over the past 15 years however Rwanda has experienced rapid recovery from its devastating
past. Over the last five years, the country has seen economic growth over and above 7% per
year and increased political stability. This scenario has contributed to opening up the market
space for small and medium sized entrepreneurs as well as established regional players.
Financial Sector Reform and Microfinance in Rwanda
In the last decade Rwanda has followed an economic liberalization program, privatized the
financial sector, encouraged market determined prices of financial services, encouraged
entry of international players and enhanced market competition. However, in spite of these
reforms, Rwandan authorities recognized that the financial sector’s ability to play its role
of mobilizing savings, conducting effective intermediation, and financing its ambitious
economic reform agenda would be difficult to achieve.
The Rwandan Government invited the World Bank/IMF Financial Sector Assessment Program
(FSAP) to carry out a diagnostic of the Rwandan financial sector and make recommendations
for further reform. In 2005 a report was produced that identified a number of weaknesses in
the financial sector and paved the way for the financial sector reform process in 2006.
The “Rwandan Vision 2020” statement which articulates the Rwandan Government’s
commitment to “transform Rwanda into a middle income country as well as an economic trade
and communications hub by the year 2020” set the stage for the financial sector reform
process in Rwanda and the Rwandan Financial Sector Development Program (FSDP),
which constitutes the Rwandan Government’s response to the report recommendations,
was launched in 2006.
Making a weekly contribution to a Voluntary Savings and Loans group.
7 Human Development Report 2009, Fact Sheet
8 Human Development Report 2009, Rwanda Fact Sheet
4 Empower ing Rwandan Communities
11. What Does Financial Access Mean?
Financial access is a complex term. Making financial markets work for the poor requires an
understanding of what will make access lead to effective usage, i.e. usage that allows an individual
to use the financial system for economic activities, good cash management, and risk mitigation.
Effective access can be defined as occurring when the dimensions of access are optimized.
Dimensions of access include for example:
Physical access – i.e. being able to access a financial service within an acceptable time and with
minimized “opportunity costs”;
Affordability – i.e. the cost of the service is perceived to be within the price range the individual
is willing to pay. The concept of affordability is complex as an individual may be willing to pay
more for a service when there is little choice or competition (this has often been noted in micro
lending and microfinance) whereas with greater competition, the amount an individual might
be willing to pay might be lower. The important point is that price is a factor that needs to be
considered in understanding access;
Appropriateness – i.e. the service is designed and delivered in a manner that makes it usable for
an individual. For example, low-income households might want a safe place to put their money
but they also might want to be able to make small deposits on a regular, even daily, basis. A
service that restricts transactions, where office hours do not permit deposits, is not appropriate
as it does not meet the needs in such a case. Understanding needs is thus very important in
designing appropriate and usable financial services.
Information on the dimensions of access is important to determine how best to improve financial
access.
Source: FINSCOPE Rwanda 2008, Draft Technical Report, November 2008; Prepared by FinMark Trust for The
Government of Rwanda, Banque National of Rwanda and DFID Rwanda.
The vision of the FSDP is to “develop a stable and sound financial sector that is sufficiently
deep and broad, capable of efficiently mobilizing and allocating resources to address the
development needs of the economy and reduce poverty”.9
The FSDP has been made one of the key components in the Economic Development and
Poverty Reduction Strategy 2008-2012 of Rwanda and has four core objectives:
1) To enhance access and affordability of financial services by developing a strong,
efficient and competitive banking sector offering a diversified array of financial
products and services. This includes support for the development and broad outreach
of a healthy, well-regulated and professionally managed microfinance sector as a tool
to extend financial services to the unbanked and to contribute to poverty reduction;
2) To enhance savings mobilization by creating the appropriate environment, developing
institutions and fostering market incentives for the development of long-term
financial instruments and an efficient capital market;
3) To develop an appropriate policy, legal and regulatory framework for nonbank financial
institutions; and
4) To develop an efficient, secure and technology-based modernized national payment
system.10
It is in this context that the national microfinance sector has been growing rapidly.
According to a sector assessment undertaken in 2005, close to US$ 100 million was
mobilized in the sector and $85 million was extended to over 600,000 MFI clients as
credit.11 Despite a relatively high penetration rate compared to other African countries,
only 21% of the active population has access to formal financial services.
9 FinScope Rwanda 2008, Draft Technical Report, November 2008; Prepared by FinMark Trust for The Government
of Rwanda, Banque National of Rwanda and DFID Rwanda.
10 Ibid.
11 Rwanda Microfinance Sector Assessment 2005, Enterprise Solutions Global Consulting, LLC.
One Step at a Time 5
12. Analysis and interpretation of the FinScope Rwanda 2008 data reveal
“I would call the work that CARE that:
does with Voluntary Savings and
More than half of the Rwandan adult population (52%) manage their
Loans the nursery school level. lives without using any kind of financial product (formal or informal);
Microfinance would be primary
More than three-quarters (77%) of the 48% of Rwandan adults who do
school and when you become
use financial products, use informal products whilst 26% of Rwandan
a big client you can go to the
adults use only informal financial products;
upper level or to university. It is
very important to prepare people Of those who are using formal financial products, most (67%) are
using formal bank products with insurance and micro finance product
because otherwise many would be
penetration being significantly lower;
scared of approaching financial
services. They are scared mainly Of those who are banked, more than a third do not hold any additional
because they don’t know them, informal or other formal financial products;
don’t know how to use them, what Bank usage is dominated by the Union des Banques Populaires du
services to demand and how to do Rwanda (UBPR). Excluding UBPR, only 1% of the adult population use
so.” commercial bank products.
Claudine Zaninka
Executive Secretary of the Association Member-owned savings and credit cooperatives (SACCOs, COOPECs) are the
of Microfinance Institutions of most numerous financial institutions in Rwanda. The Union des Banques
Rwanda (AMIR)
Populaires du Rwanda (UBPR) is the most significant among them, serves
36% of the total microfinance market and holds 60% of deposits and
loans. Thus, UBPR is a net lender to the rest of the financial sector, while at
the same time the rural sector is still constrained in access to finance. The low level of rural
financing undertaken by UBPR is more of a reflection of the limited absorptive capacity of
the real sector, due to lack of bankable projects, and the lack of organized cooperatives.
Microcredit institutions are concentrated in urban areas, with the major ones (RIM SA,
URWEGO, Duterimbere, Vision Finance, Gisubizo) offering loans that range anywhere
from 50,000 – 500,000 FRW (US$90-US$900) with monthly interest rates between 2-3%.
The Banque Populaires are spread out in the entire country and while they have focused
traditionally on less poor people (such as salaried people, traders, and cash crop farmers),
they are taking up a large share of the microfinance market. These credit unions mobilize
member savings (with 55% of clients having balances on their accounts between FRW
1,000 and 10,000 (US$1.834 - US$18.34) and provide loans at 1.16% interest per month
(14% per year).12
Comparing Savings and Loans Associations between Rwanda and Niger13
RWANDA – CLASSE INTAMBWE NIGER MATA MASU DUBARA
Group Size 7-30 people, average 16 Groups tend to be bigger, average 29
Gender Mixed gender Women only
Type of association Not time bound Time bound (9-12 months)
Loan duration One-three months One-three months
Interest rate Typically 10 percent per month Typically 10 percent per month
Internal loan use Mostly for productive use Mostly for productive use
Social Fund Yes Yes
Record keeping Written Oral often, written sometimes
Bank account Yes Not common, but increasing
Market Rural accessible with cash crop Rural landlocked with food producing potential or
environment production activities accessible with cash crop production activities
Population density Very high Very low
12 CARE Canada project proposal on Sustainable Access to Financial Services for Investment.
13 Linkages between CARE’s VS&LAs with Financial Institutions in Rwanda, Case Study by Jan Maes, Consultant,
August 2007.
6 Empower ing Rwandan Communities
13. Taking One Step at a Time
The VSL methodology first developed by CARE in Niger was introduced and adapted
to the Rwandan context in 1999. The methodology itself became known as CLASSE-
INTAMBWE. CLASSE stands for Community, Learning and Action for Saving Stimulation
and Enhancement, while Intambwe is a Kinyarwanda word term that figuratively means
‘Step by Step’. This approach was first piloted through the Rural Livelihood Diversification
project in the former province of Gikongoro.
Like in Niger, the methodology consists of organizing vulnerable individuals into Voluntary
Savings and Loans groups not larger than 30 people, in order to strengthen their livelihoods
security. The usual target is rural and poor people who do not qualify for accessing the
formal financial system. Close to sixty-seven percent of the group members are often
illiterate, living under the poverty line and the majority of them are women.
The main obstacles encountered by poor people when attempting to access financial
services are related to the fact that they do not possess property or capital to be given as a
guarantee to the micro-finance institutions. Poor people are also perceived to be ‘high risk’
for many formal institutions and thus barred from the start from entering the market.
A Simple Methodology
The CLASSE-Intambwe methodology in Rwanda is implemented in five phases. A VSL Field
Officer guide, produced by CARE, sets out the basic VSL principles, which focus on savings-
based financial services, self-management, simplicity and transparency of operations,
flexibility in loan amounts and terms and conditions for lending, low group management
cost and retention of group earnings within the group or in the community.
Phase I is the start up phase and it entails identification and selection of group participants.
This is usually done with the assistance and support of the local authorities that invite
community members for a sensitization meeting on the VSL methodology itself.
A Voluntary Savings and Loans group during a weekly meeting.
One Step at a Time 7
14. Preparatory Meetings for Implementing VSL Methodology
Meeting A Meeting B Meeting C
Type of meeting Supervisor orients local leaders Field Officer introduces First meeting with newly
and government officials VSL to the community formed groups
Introduction of the implementing How the methodology Step-by-step description of how
Organisation. works. VSL works.
Target group to be served How interested Quality of good members.
Content individuals can form new
Services offered. VSLA and FO obligations
VSLAs.
Role of local leaders and Training schedule
administrators Date and place for First Training
This may take more than one meeting Open meeting. Anyone can Attended only by people who are
and may involve Regional, District attend. Usually at a public committed to joining a VSLA and
Comments and Locational/Ward officials before place like a market, school, who show this by having formed
reaching communities. church, mosque etc. themselves into a group.
Phase II focuses on supporting newly established groups and training two representatives
on the VSL methodology. The criteria for selecting these representatives include the
ability to read and write, the capacity to facilitate change, and the trust they elicit from
other group members. It is during this phase that group members develop their internal
regulations and elect their management committee.
Group members meet on a weekly basis and contribute a small sum of money to their
collective fund. The weekly contribution is around 80 Rwf or (10 to 15 cents of 1US$)
and is to the discretion of each individual, depending on their capacity to save. The more
one saves, the more one is entitled to borrow at a later date, although the total amount
borrowed cannot exceed three times the amount that one is able to save. During the first
year, VSL group members can borrow up to a maximum of three times.
It is during this Phase that groups create bylaws during a general assembly and fix
the interest rate for internal loans. The accumulated interest is shared among group
members. The system is relatively simple and easy to follow as it is specifically designed
to meet the needs of people who are for the most part illiterate.
During Phase III the trainers facilitate learning about the savings and loans methodology.
After at least three months of savings and loans activities, the groups are encouraged
to form their networks or Intergroupments with other groups. During Phase IV a three-
day training on Selection, Planning and Management of income generating activities is
provided to the trained representatives. The objective of this training is to improve group
member’s investments before the group is linked to the bank.
Members are trained over a period of eight to ten months on the below modules and
usually start saving after a few months:
Training Schedule
Module 1 Module 2 Module 3 Module 4 Module 5 Module 6 Meeting C
groups,
leadershipand Social Fund, share- Development First
share-purchase First loan First loan Firstmeetingwithnewly
elections purchase and credit of Association meeting disbursement repayment formed groups
policies constitution meeting meeting
Individualself- SocialFund:policies/ Association Supervisionof per
As per
As placeattheend
Take
selection. rules. governance. firstmeetingin Module 4, Module 5, of the cycle, or at
RoleofGeneral Share-purchasepolicies Combining Module which cash is butwithfirst butwithfirst pointswherethere
Assembly and rules 2policiesandrules handled. disbursement repaymentof is a large excess
Rolesofleaders. Credit:policiesand withgovernance Contributionto of loans. loans. of unused Social
Preparationfor rules. decisionsintosingle social Fund.. Fundsavailablefor
election Repayment:policies constitution. Share-purchase. distribution.
Elections and rules.
Week 1 Week 4 Week 8 End of cycle
8 Empower ing Rwandan Communities
15. Each VSL group has an elected and
trained management committee.
“The Voluntary Savings and Loans approach is much more then a way to become financially
independent. It is about changing the mentality of the people, encouraging them to
become self-sufficient and to think for themselves,” says Alphonse Munyantwali, Mayor
of the Nyamagabe District in the Southern Province. “The impact is especially visible on
women. Those who are in these groups are more outspoken about community issues and
bring their concerns to the local authorities. This is an important achievement.”
Phase V is usually after eight months of intensive training and is when groups graduate and
the eligible ones are formally linked to the bank.
Linking VSL Groups to Banks
CARE Rwanda’s CLASSE-Intambwe model is different from the original model developed
in Niger in that Savings and Loans groups are linked together through federations, called
Intergroupments (IG). In the past, these federations were in turn linked to external loan
funds (provided by CARE) held at the Banque Populaire, a network of credit unions located
across the country. This is one of the most innovative features of the VSL model in
Rwanda. Recently, the Banque Populaire has become a commercial bank therefore CARE
will explore new partnerships with microfinance institutions over the coming years.
These structures consist of 25 to 30 Savings and Loans groups that create value by
effectively linking demand for loans with the credit supply. “CARE Rwanda realized that
the majority of members of CLASSE-Intambwe wanted larger loans than their internal
loan fund could provide,” explains Glycerie Niyibizi, Economic Security and Development
Program Manager for CARE International in Rwanda. “The link to external credit was
provided to open new economic opportunities within and beyond the farming sector. In
target districts, CARE deposited a credit fund with the Banque Populaires.”
In the past, CARE provided a Credit Fund of up to 100 million Rwf (approximately US$
20,000) per IG structure for loan disbursement to its Voluntary Savings and Loans group
members. Groups applied for loans as soon as one year after they had begun their weekly
One Step at a Time 9
16. Francine Uwimana, VSL Group Member, VSL
Network President and Community Leader
“I have been a member of a VSL group since 1999. My
group is in the District of Gatsibo and is a member of
the Twisungane Intergroupment. We are now 22 people
in my group. Only a few left since the beginning and
one person died. When CARE staff came to sensitize
us back in 1999, we were already organized into an
agricultural association. After we were trained on the
VSL methodology, we started to save 50 Rwf (0.1 US$)
per week, not more than that. Initially, everyone saved
the same amount of money. Now we can easily save
200 Rwf (0.4 US$) per week.
When I started, I was really poor. My husband was killed
during the genocide and my children had abandoned
school because we could not afford it. I have five
children and I care for two of my sister’s children; she
also died during the genocide. The first time I borrowed
from the VSL group, I asked for 2,000 Rwf (4 US$). With
that money I cultivated my plot of land and got a very
good harvest.
I became more hopeful about the future and started to
think that I could have a normal life again if I worked
hard. I was so excited about our VSL group that I
reached out to other women and encouraged them to
form VSL groups and to start saving money together.
Years later, these same women nominated me as their
representative to the Women’s Council.
When I started to participate in decision-making processes, I started to learn many important
things, for instance, the importance of educating my children, the boys but also the girls. All
my children went to school. At one point I even opened an education account for them so that
I could specifically save for their schooling. My participation in the women’s council also taught
me to leave money in the bank and get some interest over the long-term. I learned how to save
better.
When we first organized ourselves into a VSL group, we learned how to effectively work together.
After about one year, we created an Intergroupment (IG). Shortly afterwards I was elected President
of our network. Our Intergroupment consists of 15 VSL groups. The Intergroupment functions as an
intermediary between the groups and the bank.
The bank has a CARE Fund that loans to VSL groups but as I said single individuals now also
ask for loans directly from the bank and sometimes get them. Over the years, the bank has seen
how much the groups are able to save and how diligently people pay back their loans. Small
credit amounts come from the Savings and Loans boxes but as the groups become economically
stronger, they ask for larger amounts of money and that is when the bank steps in.
All of my groups have now opened an account with Banque Populaire so that their money is kept
in a safe place. We really could not keep large sums of money in a box and that is when, little by
little, groups started to open bank accounts and to deposit their savings in there. Individuals can also
directly ask for loans to the bank. I too have a personal account with the bank. I used to be afraid of
banks. Today I can approach Banque Populaire without any fear.
In 2003 I asked the bank directly for a loan without going through my group. As an emerging
entrepreneur, I got Rwf 500,000 (1,000 US$). One year later I asked for 1,000,000 Rwf (2,000
US$). I have invested in the sale of beans, sorghum and maize. I store the food in my home and
sell it to intermediaries who come directly to my doorstep. I am basically in the business of food
commercialization. I have paid for my children’s education and built myself a home. Recently, I bought
another home as an investment for my children.”
10 Empower ing Rwandan Communities
17. savings. Rather then apply directly to the bank, groups submit their business plans to the
IG, which reviews it and determines if it is a solid and viable proposal.
The Voluntary Savings and Loans group can decide whether the loan from the bank is used
for a group income activity, which is most common, or for individual income generating
activities by one or several members. Regardless, all group members are responsible for
repaying the loan through a group solidarity mechanism.
As a VSL association, the most popular investment sectors have been corn, sunflower,
animal husbandry, pineapple, basket weaving, tree tomatoes and the commercialization of
bananas. (See box on pg.14)
As of August 2008, on a total of 4484 trained VSL groups, 3959 are operational, 1575
are linked to a bank and 673 got a credit from it. The average credit amount given to a
group is around US$ 576. The total credit value is US$ 381,531 and the outstanding
amount is currently US$ 64,812. The repayment rate on the credit from the bank is
93%.
Featuring Mariam Mutesi, Food seller
“I have been part of a VSL group
since 1999. I have five children of my
own and take care of three orphans.
I initially borrowed 10,000 Rwf (20
US$) for trading sorghum. I got the
idea when CARE came to sensitize us
about the VSL methodology. I wanted
to invest in something productive.
After many years I was able to open a
bank account. For me the advantage
to have money in the bank is that
I am not tempted to use it and I can
therefore save more. I used my first
profit to pay for school fees. Later I
built a home near me so that I could
expand my business and store food
supplies and the sorghum.
I only worked in the field before joining the VSL group but I never made enough to pay for all the
expenses. My husband is now very proud of me and of the income I bring home. He only finds work
occasionally so what I bring home is very useful. We used to have more conflict at home but now we
have peace. ”
The Social Fund
The majority of Voluntary Savings and Loans groups have a Social Fund, which is
established thanks to additional member contributions. Often the nominal amount of this
contribution is the same as the weekly savings to the rotating loan fund, but it is only paid
once per month instead of weekly. The Social Fund can be used to help members with
social emergencies (such as sickness or death), in which case a member receives a grant
that does not have to be paid back. The Social Fund can also be used to respond to social
needs such as medical insurance or school expenses, in which case a member receives
an interest-free loan that needs to be paid back with a flexible repayment period.
One Step at a Time 11
18. Changing Mindsets
and Promoting Development from the Bottom Up
Perhaps one of the greatest contributions of the VSL methodology, apart from enabling
poor people to achieve a more sustainable source of livelihood, is the impact it has on
group member’s self esteem, their level of confidence and even their relationships at
home. This is particularly evident among women group members.
“I have been really impressed with this methodology when it comes
“The Intambwe methodology is to women’s empowerment,” says Jeannette Nduwamariya, Governance
very good because it brings people Manager for CARE International in Rwanda. “Initially I was skeptical. I
together, it mobilizes them around could not believe that by saving only 50 Rwf (0.1 US$) per week, women
small sums of money and enables could achieve much but the impact has been unbelievable. I have seen
many, especially poor women, many cases of women that, by saving a little every week over a period of
to have a return on their small
two years, have managed to buy animals and eventually even a home for
themselves. I think this is because women are more patient than men.
businesses. This methodology has
They don’t mind taking their time to achieve their long-term goals, which
a big impact in terms of changing
is why this methodology seems to work particularly well with women.”
mindsets, rendering people more
autonomous and self sufficient Women VSL members often say that after setting up their own businesses
instead of dependant on external and regularly contributing to the household income, they gain more
assistance.” respect from their husbands.
Governor Fidèle Ndayisaba,
Governor of the Southern Province
In modern Rwanda, another important contribution of the VSL methodology
is that it promotes social cohesion and solidarity in a context that only
15 years ago experienced civil war. CARE staff points out that in some
groups there are both survivors and people whose relatives are in jail for
genocide. The more people work together for a common goal, the higher the likelihood that
they will learn to be together again and rebuild the social fabric of their country.
Vsl Data Summary
No. Items
1 Number of Women in VSL groups 51,804
2 Number of Men in VSL groups 19,883
3 Of the above number of People Living with HIV/AIDS in VSL groups 14,877
4 Number of older children heading households in VSL groups 3,856
5 Out of women and men # of Nkundabana (OVC mentors) in VSL groups 457
6 Number of VSL groups 4,484
7 Number of VSL groups linked to Banque Populaire 1,575
8 Internal Loan repayment rate 93%
9 Bank loan repayment rate 93%
10 Average individual weekly saving RWF 80
11 Cumulative saving for social needs e.g. RWF 36,001,570
12 Total value of all SLGs savings RWF 145,074,074
13 Total value of all SLG loans for investment RWF 237,829,170
12 Empower ing Rwandan Communities
19. Emmanuel Ahimana
Sub Branch Manager of Rulindo
Banque Populaire
We started to work with CARE in 2006. CARE
gave us a credit fund of about 9 million Rwandan
Francs to disburse to VSL groups. We have
worked with associations that CARE has trained
in savings and credits.
Working with CARE and these associations we
found people were well informed and trained in
credit and savings. We like to have well informed
clients who know how to invest their loans. CARE
provided a credit fund and this is also important
to us and good for the bank.
We do provide from 10,000 to 50,000 Rwf to individual members of the associations. After the
members get to know how people can access credit, they themselves as individuals ask for credits.
Delinquency rate for this branch is 4 %. Banks should not go above 5% of a delinquency rate. For
CARE clients the delinquency rate is even less, around 2%. We work with an Intergroupement,
network of VSL groups. Their role is to train such associations and evaluate whether or not their
proposals are well thought through. They then send us a letter introducing the proposal of the VSL
group. They verify whether or not the project is viable and solid.
We then call in the actual group to discuss their proposal. The Intergroupement still follows them
up and monitors their activities. Since 2006 we have given out 80 loans, 38 million francs total
and they have already reimbursed 35 million. We only have 600,000 francs in delinquency out of
38 million.
Most associations pay back on time. Our penetration rate increases by the day. Association members
work directly with us as clients. We have about 4900 clients in this branch, 300 of them have arrived
from CARE.
The most popular business ideas and credits we give are for animal husbandry, agriculture,
handicrafts and commerce.
Note: Banque Populaire has recently become a commercial bank and may therefore no longer be able to operate as a cooperative
that serves clients for small loan amounts. CARE is looking to diversify its microfinance partnerships.
Maize field that belongs to a VSL association group supported by CARE
One Step at a Time 13
20. Select Vsl Associations that have Received a Bank Loan
Names of Voluntary Savings and Credit Amount
Loans Group District of Location Chosen Activity Received in US$
IMBARUTSO NYAGATARE Opened a shop 909
TWISUNGANE Food Product Sale 10,901
DUTABARANE Food Product Sale 909
JYAHABONAMTGRUGORE Food Product Sale 909
ABAHUJUMUGAMBI Food Product Sale 909
TWISUNGANE Cows 909
DUFATANYE Opened a shop 909
HAGURUKAMUNYARWANDAKZI Handicrafts 273
JYAHABONAMTGRUGORE Handicrafts 273
TERIMBEREMUTEGARGRE Maize production 909
ABADAHEMUKA Cows 909
ABAGABO GATSIBO Animal husbandry: goats 909
AEBU Sale of food products and agricultural inputs 2,028
JIJUKAMUNYARWANDAKAZI Handicrafts 364
TWITEZIMBERE Tailoring 1,091
ABAGORORASUKA GICUMBI Chickens 818
TWUBAHANE Irish potatoes 727
ABAGIRIWUBUNTU Cows 909
CECANGAHU Sunflowers 10,800
UMUBANO Irish potatoes 455
URUMURI Goats 2,028
TWUNGURANE Sale of food products 727
ABISHYIZEHAMWE Maize and wheat production 1,091
IMPUSEMU Irish potatoes 400
CVRU Goats 900
DUFATANYE Goats 909
ABAKORA ITUMBA Sale of food products 909
DUTABARANE GISIZA Irish potatoes 364
ABAKORANABUSHAKE Opened a shop 909
DUFATANURUNANA Goats 2,028
TERIMBERE MWOROZI Goats 1,055
DUTERANINKUNGA Windmill 900
TUGANAMAJYAMBERE Maize production 873
ABAKUNDASUKA Sale of food products 909
ABAKUNDASUKA B Goats 909
TWIZERANE Sale of food products 1,091
ABARIKUMWE Maize and sorghum production 273
INUMAYANOWA II Goats 909
ITIGANDA Sale of food products 909
TWIZERANE Sale of food products and agricultural inputs 909
TURWANEKUBUZIMA Windmill 1,164
TURWANYUBUKENE Pineapple growers 2,166
ABANYAMURAVA Goats 727
GUTABARANA Agricultural inputs 545
ABARIKUMWE Goats 727
AMAJYAMBERE Goats 549
TWUZUZANYE Cows 1455
14 Empower ing Rwandan Communities
21. The Isaro Program: Investing in Women’s Economic
Empowerment
Isaro is an eight-year program funded
by Norwegian Agency for Development
Cooperation (NORAD) that aims to
improve Gender equality and social,
political and economic empowerment for
100,000 people (80% women) by 2013.
The initial Isaro design focused on
women economic empowerment through
the establishment and capacity building
of Voluntary Savings Loan groups.
Monitoring and evaluation reports from
the first phase of the program confirmed
that access to financial services and the
resultant transfer of financial resources to
poor women, over time, has led to these
same women becoming more confident,
more assertive, and better able to
confront systemic gender inequities.
Findings also confirm that men participating in Village Savings and Loans groups admit their families
are now stronger than before, hence the acceptance of Isaro participants to integrate governance,
policy and advocacy around Gender Based Violence (GBV) in phase II of the Isaro project.
Phase II, which goes from January 2010 to December 2013, aims to achieve the following six
outcomes:
Solid Economic Opportunities and Linkages to Markets: 100,000 VSL group members (80% of
whom are women) are able to participate in sustainable economic opportunities and are linked to
market and financial services at local and national levels;
Sexual and Reproductive Choices: women have an increased capacity to make decisions
regarding their sexual and reproductive health;
Preventing and Addressing Gender Based Violence (GBV): community-based managed
mechanisms and strategies to prevent GBV are established and supported by local authorities.
Support services for victims are also created and supported by local authorities;
Increased Capacity for Effective GBV Advocacy: women and men at the grassroots level, as
well as local civil society organizations, have increased skills and capacities to carry out evidence-
based advocacy on GBV and on the impact of conflict;
More Women in Decision Making Positions: there is increased participation and representation
of women in decision-making processes and structures at household and local levels (village, cell,
sector, and district);
Investing in Partners’ Institutional and Technical Capacity: implementing partners have
increased institutional and technical capacities.
The program, which started in January 2006 and expects to end in December 2013, is implemented
in the Southern Province of Rwanda. Since the beginning of Isaro in January 2006, CARE has been
able to reach 37,036 new clients through 1786 VSL groups. Below is a table showing Isaro districts
and Vision Umurenge Program 2020 sectors in the Southern Province of Rwanda.
South GISAGARA Gishubi CARE Direct Implementation
HUYE Maraba CARE Direct Implementation
NYAMAGABE Kibumbwe CARE Direct Implementation
NYANZA Kibirizi CARE Direct Implementation
NYARUGURU Rusenge CARE Direct Implementation
Ruhango Mwendo CARE Direct Implementation
One Step at a Time 15
22. Care Rwanda Projects Where Vsl Methodology has Been Replicated
Project Name Donor Implementation Period Areas of Focus
Rural Livelihood USAID 1999-2000 Southern province: Nyaruguru,
Diversification Project Huye and Nyamagabe districts
(RLD)
Community Learning USAID 10/2000 to 11/2002 Western, Northern and Eastern
and Action for Savings Provinces
Stimulation and
Enhancement Project
(CLASSE)
Expanding USAID 05/2003 to 06/2006 Northern and Eastern Provinces:
Competitive Client- Gicumbi, Rulindo, Gatsibo and
Oriented Microfinance Nyagatare districts
Services in Rural
Rwanda (ECOCOMF)
Project d’Appui à la IFAD through the 01/2007 to 12/2008 Eastern Province: Gatsibo and
Microfinance Rural/ GOR Nyagatare districts
Support to Rural
Microfinance Project
(PAMFR)
Strengthening New CIDA 08/1999 to 11/2001 Eastern Province: Nyagatare and
Community (SNC) Gatsibo districts
Comprehensive USAID through 08/2008 to 11/2009 Southern Province: Huye and
Closeout Strategy Catholic Relief Gisagara districts
(COSA) Services
Promoting Norway 06/2006 to 07/2011 Southern Province: Nyamagabe,
Opportunities for Nyaruguru, Huye, Gisagara,
Women Empowerment Nyanza and Ruhango
Project (ISARO)
Sustainable Access to Master Card 02/2009 to 03/2012 Eastern, Northern and Western
Financial Services for Foundation and CIDA Provinces: Burera, Musanze,
Investment Project Rubavu, Nyabihu, Gicumbi,
(SAFI) Rulindo, Gakenke, Karongi,
Ngororero, Kirehe, Bugesera,
Nyagatare, Rwamangana,
Kayonza and Gatsibo districts
Community-assisted European 01/2008 to 12/2010 Southern Province: Nyamagabe,
Access to Sustainable Commission, Nyaruguru, Huye and Gisagara
Energy in Rwanda Austrian districts
(CASE) Development
Agency, CARE
Austria
16 Empower ing Rwandan Communities
23. Saving in Rwanda
Over half the adult population (54%) in Rwanda claim to be saving. However, most (70%) of
those who claim to be saving keep cash at home in a secret hiding place and are not using any
formal or informal financial product for the purpose of saving – indications are that in most
cases this form of “saving” merely serves to have cash at hand to cover daily living expenses
and could not be regarded as “savings” in the true sense.
Types of savings products used by Rwandan adults who save
Savings % of Adults who save
Keep cash at home or in a secret hiding place 70
Membership or tontine/ikimina/umuryango 39
Savings at a bank 26
Give to someone else for safe keeping 14
Savings account at a agricultural co-op 10
Savings at a MFI 5
Membership of Caisse de l’Entree 1
Employer savings schemes 1
Savings at a post office 0
Capital/stock market 0
Retirement/pension 0
Pension fund 3
Apart from keeping cash at home the most common form of saving amongst Rwandans
18 years and older is through tontine or ikimina membership (39% of those who save).
[Editorial Note: These memberships associations are informal Savings and Loans groups].
The most important benefits for these individuals who use these informal savings products
seem to be social rather than financial in nature i.e. membership provides them with the
opportunity to exchange ideas (57%) or to socialise (52%). Other types of informal savings
products include “giving cash to someone for safe keeping” (14%), Agricultural co-op savings
(10%) or employer saving schemes (1%);
Formal saving products used by Rwandans who save include savings at a bank (26%) and
savings at an MFI/SACCO (5%);
The most common reason why Rwandans save is “to cover unexpected medical expenses (49%
of those who save, save for this reason).” Other reasons for saving include “putting money away
to ensure that daily living expenses could be covered during hard times” as well as for “dealing
with other emergencies which are not medical/health related when they occur.”
In Kigali reasons for saving differ significantly from other areas – more than half of people in
Kigali who save claim to be saving for being able to cover their expenses in the case of loss of
employment.
Barriers to saving are mostly financial in nature. Almost all people who do not save refer to some
form of financial exclusion as the reason for not saving e.g. “I don’t have money left to save after
covering daily expenses” (81%) and “I don’t have an income – no money to save” (24% of those
who do not save).
Attitudinal exclusion is also significantly mentioned – 1 in 5 adults who do not save prefer spending
their money when they have it rather than saving and 1 in 4 who do not save regard it or regard
saving as “for rich people who have money left after covering daily expenses.”
Source: FINSCOPE Rwanda 2008, Draft Technical Report, November 2008; Prepared by FinMark Trust for The Government
of Rwanda, Banque National of Rwanda and DFID Rwanda.
One Step at a Time 17
24. ACCESS AFRICA
CARE’s Program for Scaling up Microfinance
In 2008 CARE launched an ambitious new program, ACCESS AFRICA, a 10-year
investment whose returns are expected to be dramatic. This program aims to create
access to financial services for 30 million people in 39 sub-Saharan countries by rapidly
expanding Voluntary Savings and Loans Associations (VSLA), strengthening Microfinance
Institutions and making them more responsive to the needs of existing and potential
low-income clients.
There are more than 300 million economically active individuals in sub-Saharan Africa,
yet only 20 million of them have access to any kind of formal services. Reasons cited by
traditional financial institutions for not targeting this huge slice of the market include
high operational costs, the fact that most enterprises operated by the poor are in the
informal sector and the perception that the poor are not creditworthy.
If African countries are to achieve faster, sustainable rates of development, the poor in
Africa must have access to savings, credit and insurance, and other financial products
and services targeted to their needs. CARE believes that the ACCESS AFRICA program
will give Africans the means to break the vicious cycle of poverty and transform into
a virtuous cycle of rising incomes, improved health, better education and greater
participation in their communities and nations.
ACCESS Africa will pursue this ambitious goal at three distinct levels: micro, meso
(intermediate), and macro.
MICRO LEVEL: At this level, which will remain the cornerstone of the program, CARE
expects to increase VSLA membership from just over 1 million in 21 countries to 30
million in 39 countries. New systematic efforts will be made to reach the very poorest,
more marginalized individuals.
INTERMEDIATE LEVEL: At this level linkages will be established to strengthen
microfinance institutions by 1) improving the capacity of microfinance institutions
(MFIs) to reach downward to clients and upwards to formal banks; 2) Helping MFIs
mitigate and overcome chronic blockages in their finance systems due to lack of
access to sources of loan funds by establishing predictable streams of capital through
instruments such as MicroVest, a capital-mobilizing intermediary for MFIs; 3) Developing
an Africa financial grid of electronic and wireless technologies to fill vast hardware,
software, and information gaps in the region.
MACRO LEVEL: Access Africa will conduct ongoing research on national policies that
affect access to financial services on the part of the poor and incorporate the findings
in order to aggressively promote financial environments that serve the needs of the
poor.
“CARE Rwanda has been a pioneer in many areas of the Voluntary Savings and Loans
Associations. They are the first country in the CARE family to experiment with linking
to formal financial institutions. The lessons we have learned from them are now being
spread across the Access Africa program. The SAFI project is giving CARE Rwanda
the opportunity to do some exciting work on developing models to reach the poorest
households.”
Lauren Hendricks,
Executive Director of Access Africa for CARE USA
18 Empower ing Rwandan Communities
25. Part 2
Expanding Sustainable Access to
Financial Services for Investment
The Sustainable Access to Financial Services for Investment (SAFI) project started in
February 2009 and will run through to March 2012. The MasterCard Foundation and the
Canadian International Development Agency (CIDA), are the main donors behind SAFI. This
initiative is implemented in three out of four provinces of Rwanda (Eastern, Northern and
Western) and aims to work with 5000 voluntary savings and loans groups.
The goal of the SAFI project is to enhance the financial literacy and access to financial
services to at least 108,000 Voluntary Savings and Loans members in selected sectors
of rural Rwanda, 70% of whom are women. This step will contribute to greater livelihood
security for at least 541,000 people. It is anticipated that at least 30% of new and existing
members of Voluntary savings and Loans groups will be keen to access financial services
from formal institutions like banks and microfinance agencies.
The SAFI project will achieve the overall goal through the implementation of three specific
objectives:
1) Scale up the Voluntary Savings and Loan methodology already in use in Rwanda for
the past decade and improve access to financial services through a multi-pronged
model led by CARE’s Technical Support Unit;
2) Further develop sustainable linkages with formal financial institutions to ensure that
Voluntary Savings and Loans groups can access savings, lending, insurance and
other services that cater to their needs;
3) Facilitate learning and knowledge management among VSL groups, local authorities,
implementing partners, other agencies, donors, microfinance institutions and
relevant government ministries.
SAFI Innovations
Improved Targeting: SAFI intends to reach the poorest of the poor, the most destitute
and vulnerable people in the communities. This is done with the help of local authorities
and community members. CARE Field Officers also go door to door to provide further
information about the VSL groups, criteria to join, expectations and level of commitment
required.
One Step at a Time 19
26. To be able to reach the poorest category of the population, the project will give priority
to some of the 30 poorest sectors selected by the Rwandan Government under the Vision
2020 Umurenge Program. The Government of Rwanda has selected the poorest sector per
district as a priority geographical area for public works, direct social support and financial
services. In Rwanda there are 30 districts and 416 sectors.
These sectors have the following categories of poor people living below one dollar a day:
the destitute (widows, landless, sick, the elderly and child-headed households); poorest;
poor; vulnerable; surviving; and others. Within these categories there are sub-categories:
those with land, those without land but able-bodied/employable, and those that are
labor constrained. The SAFI project will promote the participation in VSL activities of the
destitute, the poorest and poorer categories of people in the sectors prioritized by the
Government of Rwanda.
Definitions of Poverty and Economic Status Categories
Category of Household Household Characteristics
Umitindi nyakujya Those who need to beg in order to survive. They have no land or livestock and lack shelter,
(Those in abject adequate clothing and food. They fall sick often and have no access to medical care. Their
poverty) children are malnourished and they cannot afford to send them to school.
Umitindi The main difference between this category and the one above is that this group is physically
(The very poor) capable of working on land owned by others, although they themselves have either no land or
very small landholdings and no livestock.
Umekene These households have some land and housing. They live on their own labor and produce, and
(The poor) though they have no savings, they can eat, even if the food is not very nutritious. However, they
do not have a surplus to sell on the market, their children do not always go to school and they
often have no access to health care.
Umukene wifashije This group shares many of the characteristics of the Umukene (The Poor) but, in addition, they
(The resourceful poor) have small animals and their children go to school.
Umukungu This group has larger landholdings with fertile soil and enough to eat. They have livestock, often
(The food rich) have paid jobs and are able to access health care.
Umukire This group has land and livestock, and often has salaried jobs. They have good housing, often
(The money rich) own a vehicle, and have enough money to lend to and to get credit from the bank. Many migrate
to urban centers.
Source: CARE Canada SAFI Project Proposal 2008.
20 Empower ing Rwandan Communities
27. Investing in Village Agents: Village Agents are members of the target community and
are trained to promote the establishment of Voluntary Savings and Loans groups. The
Agents are paid a small fee by the groups themselves (fee-for-service basis) to provide
technical assistance on the core principles of the VSL methodology and to nurture
the groups along. Village agents are trained and supervised by field officers from an
implementing institution over a period of 12 to 18 months.
Introducing Different Implementation Models: In order to ensure program quality,
build greater local capacity, scale up VSL activities and spread this methodology as
widely as possible in Rwanda, CARE will do direct implementation of the project as
well as implementation through four local partners and two international NGO partners,
specifically Norwegian’s People Aid and Plan International. Each international agency will
in turn also work with a group of local partners.
CARE direct implementation will focus on the following Districts: Nyagatare, Kirehe,
Kayonza, Rwamagana, Bugesera and Gatsibo. Through direct implementation CARE is
expected to reach at least 36,300 new VSL clients. The four local NGOs will reach 38,368
new clients while the two international partner NGOs are expected
to reach 28,132 new VSL clients.
“We were approached by CARE
CARE will provide sub-grants to four local NGO partners as well staff and encouraged to identify
as technical support to implement the methodology. The four the poorest people living in this
local NGO partners are: Duterimbere (Kinyarwanda name which district. We organized a meeting
means “let’s progress”, African Enterprise Evangelic (AEE), Eglise and did just that. We hope this
Episcopale du Rwanda (EER) Byumba and Association Rwandaise project will help us to overcome
des Travailleurs Chretien Feminin (ARTCF). It is expected that each poverty. Even today, when I look at
local NGO will be able to hire a full time VSL coordinator and two how far we have come in only 11
Field Officers. Together, all partners are expected to reach 38,368 weeks since the start of this project,
new VSL clients.
I am impressed. The group in my
area has saved a total of 73,000
Strengthening Linkages to Formal Financial Institutions: CARE
Rwf and about 9,000 Rwf for the
Rwanda has significant experience linking members of savings-led
social fund. It is now much easier
groups to formal financial services. More than 1000 VSL groups
to mobilize people. Some got credits
have been linked to financial services offered by Banque Populaire
for the first time in their lives.”
of Rwanda through their networks or Intergroupments (IG).
Donat Habiyakare, Local Authority
Kirehe District, Nyarubuye Sector,
These networks or IGs consist of 25 to 30 VSL groups that Eastern Province of Rwanda
screen proposals for income generating activities and serve
as a representative of the VSL groups vis-à-vis CARE, the local
financial institutions, the local administration and the local authorities. IGs also provide
training and advice to existing Savings and Loans Associations, and often train new
associations in the VSL methodology but their most important function is that of being
an intermediary between Voluntary Savings and Loans groups and the micro-finance
institutions.
“The Intergroupment must monitor the economic activities undertaken by the different
groups,” explains Innocent Rutikanga, SAFI Project Manager for CARE International in
Rwanda. “They must ensure that the VSL methodology works at the group level and
guarantee on behalf of the groups that ask for a loan.”
The linkage to the banks however is not automatic. After the group development phase,
groups are evaluated on their repayment rate, saving use and level of investment in
economic activities. Some of the key conditions for groups to be linked to banks are:
One Step at a Time 21
28. having a repayment rate of 98% and above, investing 100% of the savings in productive
economic activities, ability to implement the training on income generating activities
(selection, planning and management), and having a specific interest
in applying for credit.
“SAFI has been designed
with two issues in mind: one Given that the Banque Populaire has recently become a commercial
is the economic and social bank, CARE Rwanda will explore the possibility of extending this type
empowerment of poor women of collaboration to other Microfinance Institutions and/or banks such
who are marginalized and as Duterimbere, Opportunity International and Vision Finance. CARE
secondly is the need to respond will identify financial service partners who have expressed a desire to
to the demand from local target clients of Voluntary Savings and Loans Associations. CARE will
and international NGOs to work with these partners to develop products and services that are
provide technical support on appropriate for VSL groups and their members and will market them
the Voluntary Savings and
to VSL groups on a commercial rather than a subsidized basis.
Loans methodology developed
However dissimilar from the CARE – Banque Populaire Partnership,
by CARE over the past two
where CARE was depositing funds as collateral the revised VSL
decades. In a sense SAFI is a
linkage methodology under SAFI, VSL groups through their IGs
new model that is being tested
will be linked to banks and Micro Finance Institutions without the
in CARE Rwanda.”
external loan funds from CARE. The reason for this change is that
Josephine Marealle-Ulimwengu findings from the groups that are already linked to Banque Populaire
Assistant Country Director for
CARE International in Rwanda show that the loan repayment rate stands at 93% and therefore the
risk to repay the loan is negligible.
Promote Learning and Knowledge Management: The SAFI project will provide important
tools, models, and lessons on providing access to financial services to poor communities
in Africa. The main activities for this objective will include monitoring and evaluation using
CARE’s Management Information System adapted to VSL programs, impact assessment,
documenting and sharing learning, including an analysis and a comparison of the three
different implementation models.
22 Empower ing Rwandan Communities
29. “In terms of impact, I think SAFI is going to improve considerably the lives of VSL members.
We are, after all, targeting the most vulnerable groups. In this context, we know that they
are going to improve their lives when it comes to education for their children, health, family
assets, shelter and clothing.”
Innocent Rutikanga, SAFI Project Manager
CARE International in Rwanda
SAFI GEOGRAPHICAL COVERAGE
Province District Vision Umurenge 2020 Implementing partner
Program Sectors9
East Bugesera Kamabuye CARE
Gatsibo Kiziguro CARE, PLAN through PAJER (Parlement des Jeunes Rwandais)
Kayonza Ndego and Nyamirama CARE, NPA through AJEPRODO (Association des Jeunes pour
la Promotion des Droits de l’homme), PLAN trough PAJER
(Parlement des Jeunes Rwandais)
Kirehe Mahama CARE
Nyagatare Rwempasha CARE; NPA through AJEPRODO (Association des Jeunes pour la
Promotion des Droits de l’homme)
Rwamagana Fumbwe CARE
North Burera Norwegian People’s Aid (NPA) through it partner Association
pour le Development et la Transformation Sociale (ADTS)
Gicumbi Rubaya Eglise Episcopale au Rwanda( EER-Byumba)
Musanze Norwegian People’s Aid (NPA) through it partner Association
pour le Development et la Transformation Sociale (ADTS)
Gakenke ARTCF (Association Rwandaise des Travailleurs Chretiens
Feminins)
Rulindo Cyinzuzi AEE (African Evangelistic Enterprise)
West Ngororero Muhororo Norwegian People’s Aid (NPA) though TUBIBAMAHORO
(Semons la paix)
Karongi (NPA) through TUBIBAMAHORO (Semons la paix)
Nyabihu Rurembo DUTERIMBERE
Rubavu African Evangelistic Enterprise (AEE)
Starting Afresh: Four Case Studies of SAFI Participants
Location: Kirehe District, Nyarubuye Sector in the Eastern Province of Rwanda
All individuals featured here joined a Voluntary Savings and Loans group through the
SAFI project that officially started in December 2009. These interviews were undertaken
in February 2010. At the time, each individual group member had been saving for just a
couple of months and for the first time in their lives they had actually borrowed money in
the form of a loan from their group and invested in an income generating activity of their
choice. These same individuals will be followed throughout the course of the SAFI project
to better monitor progress and impact on individual group members.
9 VUP sectors are the poorest sectors in Rwanda. Government of Rwanda prioritized one poorest sector per district
(30 sectors) to receive intensive development support.
One Step at a Time 23
30. Joseph Ruzibiza, Voluntary savings and loans group member and sweet banana
seller.
“I repatriated from Tanzania in 2007. I lived in an area called Kaysho. My wife died three years ago when
we were still in Tanzania. I have four children who live with me. The oldest one is 14 years old and the
youngest one is 5. I don’t own land or a house or anything else, which is also why I cannot remarry.
The environment in Tanzania was not friendly and we were forced out. We lived there as refugees since
1994. I live in a small house of a friend who also used to be in Tanzania. My host returned after one
year, at the end of the war, but I remained in Tanzania because I had elderly parents and I could not
make the return trip to Rwanda with them. My father died in 2004 and my mother two years later
that is when I started to think about coming back to Rwanda. I don’t pay rent but in exchange for the
hospitality, I work in my friend’s field one day per week. I live here with my children. Only one of them
goes to school now because I cannot afford the school uniforms and the school materials for all of
them.
I borrowed from my group 1800 Rwf (US$ 3.13) and I decided to invest in sweet bananas. I buy them
green and I wait until they are ripe before selling them. I usually go door to door. It takes about one week
for the bananas to become ready. With the money I borrowed, I could only buy two banana caskets. The
first time I bought a casket for 700 Rwf (US$ 1.22) and I sold it for 1000 Rwf (US$ 1.73). The second
casket I actually sold for 2000 Rwf (US$ 3.48). I sell to people who come back from working in the fields.
They are hungry and like to eat sweet bananas. I also sell them to children who return from school. I
got the idea of investing in sweet bananas because people around here seem to really like them. It is a
business that has potential. I would like to be able to buy more so that I can make banana juice.
I enjoy attending the group meetings. It is like being in a classroom. I go there with many worries but then
I realize that other people also do not eat at night or they cannot sleep. I feel better because I realize that
I am not the only one with such worries and I can share my thoughts with other group members.
I made many friends through my group. Many people helped me to save when I did not have any money
to save. Now I even have a savings book. I never had a book before that showed how much money I
actually have. It is great. My savings now are only 800 Rwf (US$ 1.39) because one of my children got
sick and for I while I could not save enough.
In Tanzania I had land and a house but the problem was relations with neighbors. We were refugees
and life is hard when you are a refugee. It was good to have a house so I cannot compare my situation
before to now. Life is very hard also now.”
24 Empower ing Rwandan Communities
31. Cecile Nyiramanzi, President of the Voluntary Savings and Loans group and likely candidate
to be recruited as Village Agent.
“My husband died in 1994. I now have a one-year-old child from his brother but his family was not helpful
to me. I also take care of an adopted son whose mother was my older sister. He is now 8 years old. We
were invited by the local authorities to listen to the CARE presentation about the SAFI project. It was after
that meeting that we decided to form a group and to start saving. We hope this group can support us. We
hope to improve our livelihood situation and to involve more neighbors. Before being part of the group
most of us used to sell labor, basically work for others in their fields. It is hard to find such work every
day and the pay does not really satisfy all the basic needs of the household.
We were initially identified through the community meetings as not having land of our own or owning
a home and being very poor. After we organized ourselves into a group, we had four candidates for
President and in the end I was chosen. When I work for others, which I still do now and then, I try to save
as much as possible so that I can put away savings through the group and eventually I can borrow more
and invest in my business. I save a maximum of 400 Rwf (about US$ .70) per week and 100 Rwf (US$
.17) for the social fund.
Now I have an onion business. I chose this activity because the growers are not far from here. They bring
them to my house and I sell a bundle of onions for 50 Rwf (US$ .086). I usually walk around with them
trying to sell them to the neighbors but many people also come by my house now that they know about
my business. I cannot really sell at the market because I do not have a permit and that costs money
so I prefer to sell my onions door to door, directly to my clients. I get suppliers twice per week. I spend
2500 Rwf (US$ 4.35) per week to buy my onions and sell them for 4500 Rwf (US$ 7.82) so I make a
profit of 2000 Rwf (US$ 3.47) on a good week. Of course, when it rains, I cannot sell as much and this
is sometimes a problem. I save on a weekly basis and use some of the money for food and for school
materials for the older child.
I have been President of my group since December 2009. I enjoy this role. I am more confident now
then before and can speak in front of the group without being afraid. I can also teach others. I can do
all of this now. Since I have been elected I feel group members respect me more. I have high hopes for
my group. After one year, we would like to invest in livestock. If we manage to stay together we could
have money to open a restaurant business. People could buy a cell phone or a radio for themselves. On
a personal level I hope to be able to send my children to secondary school.
My group members have high expectations of me. If I am indeed selected to become a Village Agent,
they are worried that I will neglect them but I explained to them that this role is only a one day per
week commitment and that I would not leave them.”
One Step at a Time 25
32. Agnes Nzamukosha, Voluntary and Savings group member and tobacco seller.
“I am an old woman and a widow. I am 67 years old and I live with one of my daughters and
her small child. I am the mother of six children. Four are married and one died. My husband
died before the 1994 war. Before the war I recall seeing many people buying and selling
chewing tobacco. Now that I had the opportunity to invest in a small business, I decided that
I would explore the tobacco trade. I borrowed 1800 Rwf (US$ 3.13). I am not afraid of not
being able to repay the money because the group is careful whom they give credit to and for
what. We know where people live and that they can repay. I did not borrow immediately. I
waited for several weeks and then decided to borrow the money.
I have been doing this business for one month already and of course I too chew tobacco. In
Rwanda this is a woman’s habit and women often come together in the evening to chew on
tobacco leaves. We chew tobacco, we talk and we keep each other company.
People like the tobacco powder I make. I make it really fine. I usually send my daughter to buy
the tobacco leaves. It can take her up to two hours to go in the location where we find them. For
500 Rwf (US$ 0.87) I get 23 leaves and I can make 26 tobacco packets with that many leaves.
I sell each packet for 50 Rwf (US$ 0.087) so I make about 1300 Rwf (US$ 2.26) minus what I
spend to buy the leaves.
I need to dry the leaves so the only problem I have is when there is no sun and it rains.
Sometimes I use banana leaves to make the tobacco packets. My priority needs now are
to buy more clothes, a blanket and to ensure that my daughter’s child can go to school. At
school she needs shoes, which is something she still does not have and I want to buy them
for her.
Before the tobacco business I sold my labor but because I am old I had a hard time to get hired
for manual labor. If my daughter was not living with me I would already be dead by now. She
is 20 years old but does everything at home.”
26 Empower ing Rwandan Communities
