Village Savings and Loan groups

Village Savings and Loan Associations (VSLAs) are autonomous self-managed groups of 15-25 individual members from within the community who met regularly to save their money, access small loans, and obtain emergency funds. The Village and savings Loan associations create resilience, enhance livelihood opportunities, and help members access healthcare. Membership is open to both men and women, but three out of the five elected officials should be female. Members who hold public office are not eligible for committee position. Below are some of the key components of VSLAs:

  • Village Savings and Group comprise of 15-25 members. The groups are autonomous and self-managing. Membership is open to men and women but at least three out of five elected leaders should be female.
  • Members purchase shares the value of which is set by the group members. The purchase of shares is made every time the group holds a regular meeting. The value set by the group allows everyone, even the poorest member of the group, to contribute at least one share during meeting.
  • Savings from members form a pool from which members can borrow loans based on the number of shares one has. A small additional small charge is included when repaying the loan.
  • Usually, the associations meet weekly. The groups can however change this to once every two weeks or monthly as agreed upon by consensus.
  • Groups ordinarily create a social fund that is used in emergencies to help group members or members of the community.
  • All financial transactions of group members during the meeting are carried out in front of members for complete transparency and accountability. Members us a lockable cash box to ensure transactions do not take place outside the regular meetings and to prevent misappropriation of cash or tampering with records members.
  • All members have a passbook to track their individual savings and loan information which may range from a simple exercise book to a more complicated cash register.
  • The savings and loan groups follow a cycle, usually a 12-month cycle, previously determined by members of the group. At the end of the cycle the members share out the accumulated savings and service charge. The amount of money to each member is determined by how many shares they have accumulated over the period. A new cycle begins with the members who want to continue with the group and the group can make new decisions on rules and procedures as necessary.